DISTRIBUTION AGREEMENT
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
the "Fund"
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
_______________, 1996
Xxxxx & Xxxx Distributors L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
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 Fund, 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 common stock, $.001
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 common stock as shall then be effectively registered under
the Act. All subscriptions for shares of our common stock 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 common stock
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 common
stock 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 common stock
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
common stock 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 common stock, such
other information with respect to us and shares of our common stock 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. 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. Pursuant to our Shareholder Servicing Agreement with you,
you may make payments to Participating Organizations for performing
shareholder servicing and related administrative functions. Such payments
will be made only pursuant to written agreements approved in form and
substance by our Board of Directors 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 Shareholder
Servicing Agreement 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 common stock
at any time, in the absolute discretion of our Board of Directors, and upon
notice of such suspension you shall cease to offer shares of our common
stock hereunder.
5. Both of us will cooperate with each other in taking such action as may be
necessary to qualify shares of our
common stock 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 common stock under the Act and of
qualification of shares of our common stock, 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; 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 shares of our common stock. 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 shares of our common stock. 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 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 shares of
our common stock 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 shares of our common stock.
8. You agree to indemnify, defend and hold us, our several officers and
directors, 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 directors,
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 directors 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 directors, and any such controlling person is expressly conditioned
upon your being notified of any action brought against us, our officers or
directors 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 directors 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 directors, 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
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 will become effective on the date hereof 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 Directors 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, (i) by
vote of a majority of our entire Board of Directors, and by a vote of a
majority of our Directors who are not interested persons (as defined in the
0000 Xxx) and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan, or (ii) by
vote of a majority of our outstanding voting securities, as defined in the
Act, on sixty days' written notice to you, or 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 or the right of any officers or directors of Xxxxx
& Tang Asset Management, Inc., your general partner, who may also be a
director, 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 dissimilar
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,
CONNECTICUT DAILY TAX FREE INCOME
FUND, INC.
By
Accepted: , 1996
XXXXX & XXXX DISTRIBUTORS L.P.
By: XXXXX & TANG ASSET MANAGEMENT, INC.,
as General Partner
By: ____________________________