DISTRIBUTION AGREEMENT
INSTITUTIONAL DAILY INCOME FUND (the "Fund")
U.S. Government Portfolio
Money Market Portfolio
Tax Exempt Portfolio
(the "Portfolios")
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
_________________, 1998
Xxxxx & Xxxx Distributors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We hereby confirm our agreement with you as follows:
1. In consideration of the agreements on your part herein
contained and of the payment by us to you of a fee of $1 per year and on the
terms and conditions set forth herein, on behalf of our Portfolios, we have
agreed that you shall be, for the period of this agreement, a distributor, as
our agent, for the unsold portion of such number of shares of our beneficial
interest Portfolios $.01 par value per share, as may be effectively registered
from time to time under the Securities Act of 1933, as amended (the "1933 Act").
This agreement is being entered into pursuant to the Distribution and Service
Plan (the "Plan") adopted by us in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act").
2. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of shares of our beneficial interest as shall then be effectively
registered under the Act. All subscriptions for shares of the Portfolio's
beneficial interest obtained by you shall be directed to us for acceptance and
shall not be binding on us until accepted by us. You shall have no authority to
make binding subscriptions on our behalf. We reserve the right to sell shares of
our beneficial interest through other distributors or directly to investors
through subscriptions received by us at our principal office in New York, New
York. The right given to you under this agreement shall not apply to shares of
our beneficial interest issued in connection with (a) the merger or
consolidation of any other investment company with us, (b) our acquisition by
purchase or otherwise of all or substantially all of the assets or stock of any
other investment company, or (c) the reinvestment in shares of our beneficial
interest by our stockholders of dividends or other distributions or any other
offering by us of securities to our stockholders.
3. You will use your best efforts to obtain subscriptions to
shares of our beneficial interest upon the terms and conditions contained herein
and in our Prospectus, as in effect from time to time. You will send to us
promptly all subscriptions placed with you. We shall furnish you from time to
time, for use in connection with the offering of shares of our beneficial
interest, such other information with respect to us and shares of our beneficial
interest as you may reasonably request. We shall supply you with such copies of
our Registration Statement and Prospectus, as in effect
from time to time, as you may request. Except as we may authorize in writing,
you are not authorized to give any information or to make any representation
that is not contained in the Registration Statement or Prospectus, as then in
effect. You may use employees, agents and other persons, at your cost and
expense, to assist you in carrying out your obligations hereunder, but no such
employee, agent or other person shall be deemed to be our agent or have any
rights under this agreement. You may sell our shares to or through qualified
brokers, dealers and financial institutions under selling and servicing
agreements provided that no dealer, financial institution or other person shall
be appointed or authorized to act as our agent without our written consent.
With respect to the Class A Shares of our Portfolios, you will
arrange for organizations whose customers or clients are shareholders of our
corporation ("Participating Organizations") to enter into agreements with you
for the performance of shareholder servicing and related administrative
functions not performed by you or the Transfer Agent. You may make payments to
Participating Organizations for performing shareholder servicing and related
administrative functions with respect to our Class A Shares pursuant to written
agreements approved in form and substance by our Board of Trustees to be entered
into by you and the Participating Organizations. It is recognized that we shall
have no obligation or liability to you or any Participating Organization for any
such payments under the agreements with Participating Organizations. Our
obligation is solely to make payments to you under the this agreement (with
respect to the Class A Shares) and to the Manager under the Investment
Management Contract and the Administrative Services Contract. All sales of our
shares effected through you will be made in compliance with all applicable
federal securities laws and regulations and the Constitution, rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD").
4. We reserve the right to suspend the offering of shares of
our beneficial interest at any time, in the absolute discretion of our Board of
Trustees, and upon notice of such suspension you shall cease to offer our shares
hereunder.
5. Both of us will cooperate with each other in taking such
action as may be necessary to qualify our shares for sale under the securities
laws of such states as we may designate, provided, that you shall not be
required to register as a broker-dealer or file a consent to service of process
in any such state where you are not now so registered. Pursuant to the
Investment Management Contract in effect between us and the Manager, we will pay
all fees and expenses of registering shares of our beneficial interest under the
Act and of qualification of shares of our beneficial interest, and to the extent
necessary, our qualification under applicable state securities laws. You will
pay all expenses relating to your broker-dealer qualification.
6. We represent to you that our Registration Statement and
Prospectus have been carefully prepared to date in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder. We represent and
warrant to you, as of the date hereof, that our Registration Statement and
Prospectus contain all statements required to be stated therein in accordance
with the 1933 Act and the 1940 Act and the SEC's rules and regulations
thereunder; that all statements of fact contained therein are or will be true
and correct at the time indicated or the effective date as the case may be;
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and that neither our Registration Statement nor our Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
shares. We will from time to time file such amendment or amendments to our
Registration Statement and Prospectus as, in the light of future development,
shall, in the opinion of our counsel, be necessary in order to have our
Registration Statement and Prospectus at all times contain all material facts
required to be stated therein or necessary to make any statements therein not
misleading to a purchaser of our shares. If we shall not file such amendment or
amendments within fifteen days after our receipt of a written request from you
to do so, you may, at your option, terminate this agreement immediately. We will
not file any amendment to our Registration Statement or Prospectus without
giving you reasonable notice thereof in advance; provided, however, that nothing
in this agreement shall in any way limit our right to file such amendments to
our Registration Statement or Prospectus, of whatever character, as we may deem
advisable, such right being in all respects absolute and unconditional. We
represent and warrant to you that any amendment to our Registration Statement or
Prospectus hereafter filed by us will be carefully prepared in conformity within
the requirements of the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder and will, when it becomes effective, contain all
statements required to be stated therein in accordance with the 1933 Act and the
1940 Act and the SEC's rules and regulations thereunder; that all statements of
fact contained therein will, when the same shall become effective, be true and
correct; and that no such amendment, when it becomes effective, will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading to
a purchaser of our shares.
7. We agree to indemnify, defend and hold you, and any person
who controls you within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all claims, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which you or
any such controlling person may incur, under the 1933 Act or the 1940 Act, or
under common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in our Registration Statement or
Prospectus in effect from time to time or arising out of or based upon any
alleged omission to state a material fact required to be stated in either of
them or necessary to make the statements in either of them not misleading;
provided, however, that in no event shall anything herein contained be so
construed as to protect you against any liability to us or our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties under this agreement. Our
agreement to indemnify you and any such controlling person is expressly
conditioned upon our being notified of any action brought against you or any
such controlling person, such notification to be given by letter or by telegram
addressed to us at our principal office in New York, New York, and sent to us by
the person against whom such action is brought within ten days after the summons
or other first legal process shall have been served. The failure so to notify us
of any such action shall not relieve us from any liability which we may have to
the person against whom such action is brought other than on account of our
indemnity agreement contained in this paragraph 7. We will be entitled to assume
the defense of any suit brought to enforce any such claim, and to retain counsel
of good standing chosen by us
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and approved by you. In the event we do elect to assume the defense of any such
suit and retain counsel of good standing approved by you, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case we do not elect to assume the
defense of any such suit, or in case you, in good faith, do not approve of
counsel chosen by us, we will reimburse you or the controlling person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by you or them. Our indemnification agreement contained in this
paragraph 7 and our representations and warranties in this agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of you or any controlling person and shall survive the sale of any of our
shares made pursuant to subscriptions obtained by you. This agreement of
indemnity will inure exclusively to your benefit, to the benefit of your
successors and assigns, and to the benefit of any of your controlling persons
and their successors and assigns. We agree promptly to notify you of the
commencement of any litigation or proceeding against us in connection with the
issue and sale of any of our shares.
8. You agree to indemnify, defend and hold us, our several
officers and trustees, and any person who controls us within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities, and expenses (including the cost of investigating
or defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which we, our officers or trustees, or any
such controlling person may incur under the 1933 Act or under common law or
otherwise, but only to the extent that such liability or expense incurred by us,
our officers or trustees or such controlling person shall arise out of or be
based upon any alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our Registration
Statement or Prospectus as in effect from time to time, or shall arise out of or
be based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or
Prospectus or necessary to make such information not misleading. Your agreement
to indemnify us, our officers and trustees, and any such controlling person is
expressly conditioned upon your being notified of any action brought against us,
our officers or trustees or any such controlling person, such notification to be
given by letter or telegram addressed to you at your principal office in New
York, New York, and sent to you by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. You shall have a right to control the defense of such action,
with counsel of your own choosing, satisfactory to us, if such action is based
solely upon such alleged misstatement or omission on your part, and in any other
event you and we, our officers or trustees or such controlling person shall each
have the right to participate in the defense or preparation of the defense of
any such action. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to us, to our officers or
trustees, or to such controlling person other than on account of your indemnity
agreement contained in this paragraph 8.
9. We agree to advise you immediately:
(a) of any request by the SEC for amendments to our
Registration Statement or Prospectus or for additional information,
(b) of the issuance by the SEC of any stop order
suspending the effectiveness of our Registration Statement or Prospectus or the
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initiation of any proceedings for that purpose,
(c) of the happening of any material event which
makes untrue any statement made in
our Registration Statement or Prospectus or which requires the making of a
change in either of them in order to make the statements therein not misleading,
and
(d) of all action of the SEC with respect to any
amendments to our Registration Statement or Prospectus.
10. This Agreement (which was re-executed on the date hereof)
became effective on _______ and will remain in effect thereafter for successive
twelve-month periods (computed from each ________), provided that such
continuation is specifically approved at least annually by vote of our Board of
Trustees and of a majority of those of our directors who are not interested
persons (as defined in the 0000 Xxx) and have no direct or indirect financial
interest in the operation of the Plan or in any agreements related to the Plan,,
cast in person at a meeting called for the purpose of voting on this agreement.
This agreement may be terminated at any time, without the payment of any
penalty, (a) on sixty days' written notice to you (i) by vote of a majority of
our entire Board of Trustees, and by a vote of a majority of our Trustees who
are not interested persons (as defined in the 0000 Xxx) and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan, or (ii) by vote of a majority of our outstanding voting
securities, as defined in the Act, or (b) by you on sixty days' written notice
to us.
11. This Agreement may not be transferred, assigned, sold or
in any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the SEC thereunder.
12. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, the
right of any of your employees, officers or directors, who may also be a
trustee, officer or employee of ours, or of a person affiliated with us, as
defined in the 1940 Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or nature, or to render services of any kind to another corporation,
firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
INSTITUTIONAL DAILY INCOME FUND
U.S. Government Portfolio
Money Market Portfolio
Tax Exempt Portfolio
By
Accepted: ________________, 1998
XXXXX & XXXX DISTRIBUTORS, INC.
By: ___________________________
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