DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated July _____, 1999, between
DLJdirect Mutual Funds, a Delaware business trust (the "Trust"), and Xxxxxxxxx
Xxxxxx & Xxxxxxxx Securities Corporation (the "Distributor"). The Trust is
registered as a series investment company under the Investment Company Act of
1940 (the "1940 Act"), and an indefinite number of shares of beneficial interest
in one or more series, without par value (the "Shares"), have been registered
under the Securities Act of 1933, as amended (the "1933 Act") to be offered for
sale to the public in a continuous public offering in accordance with terms and
conditions set forth in the Prospectus and Statement of Additional Information
(the "Prospectus") of the Trust included in the Trust's Registration Statement
on Form N-1A as such documents may be amended from time to time.
In this connection, the Trust desires that the Distributor act
as its exclusive sales agent and distributor for the sale and distribution of
Shares. The Distributor has advised the Trust that it is willing to act in such
capacities, and it is accordingly agreed between them as follows:
1. The Trust hereby appoints the Distributor as exclusive
sales agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Trust further
agrees from and after the commencement of such continuous public offering that
it will not, without the Distributor's consent, sell or agree to sell any
Shares otherwise than through the Distributor, except the Trust may issue Shares
in connection with a merger, consolidation or acquisition of assets on such
basis as may be authorized or permitted under the 0000 Xxx.
2. The Distributor hereby accepts such appointment and agrees
to use its best efforts to sell such Shares, provided, however, that when
requested by the Trust at any time for any reason the Distributor will suspend
such efforts. The Trust may also withdraw the offering of Shares at any time
when required by the provisions of any statute, order, rule or regulation of any
governmental body having jurisdiction. It is under-
stood that the Distributor does not undertake to sell all or any specific
portion of the Shares of the Trust. The Trust acknowledges that the Distributor
will enter into sales or servicing agreements with registered securities brokers
and banks and into servicing agreements with financial institutions and other
industry professionals, such as investment advisers, accountants and estate
planning firms. In entering into such agreements, the Distributor shall act only
on its own behalf as principal underwriter and distributor. The Distributor
shall not be responsible for making any distribution plan or service fee
payments pursuant to any plans the Trust may adopt or agreements it may enter
into.
3. The Distributor represents that it is a member in good
standing of the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by the Conduct
Rules, the Constitution and the Bylaws of the National Association of Securities
Dealers, Inc., and all other rules and regulations that are now or may become
applicable to its performance hereunder. The Distributor will undertake and
discharge its obligations hereunder as an independent contractor and it shall
have no authority or power to obligate or bind the Trust by its actions, conduct
or contracts except that it is authorized to accept orders for the purchase or
repurchase of Shares as the Trust's agent and subject to its approval. The Trust
reserves the right to reject any order in whole or in part. The Distributor may
appoint sub-agents or distribute through dealers or otherwise as it may
determine from time to time pursuant to agreements approved by the Trust, but
this Agreement shall not be construed as authorizing any dealer or other person
to accept orders for sale or repurchase of Shares on behalf of the Trust or
otherwise act as the Trust's agent for any purpose. The Distributor shall not
utilize any materials in connection with the sale or offering of Shares except
the then current Prospectus and such other materials as the Trust shall provide
or approve in writing.
4. Shares may be sold by the Distributor only at prices and
terms described in the then current Prospectus relating to the Shares and may
be sold either through persons with whom it has selling agreements in a form
approved by the Trust's Board of Trustees or directly to prospective
purchasers. To facilitate sales,
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the Trust will furnish the Distributor with the net asset value of its Shares
promptly after each calculation thereof.
5. The Trust has delivered to the Distributor a copy of its
current Prospectus. It agrees that it will use its best efforts to continue the
effectiveness of its Registration Statement filed under the 1933 Act and the
1940 Act. The Trust further agrees to prepare and file any amendments to its
Registration Statement as may be necessary and any supplemental data in order to
comply with such Acts. The Trust will furnish the Distributor at the
Distributor's expense with a reasonable number of copies of the Prospectus and
any amended Prospectus for use in connection with the sale of Shares.
6. At the Distributor's request, the Trust will take such
steps at its own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of America and
in the District of Columbia in accordance with the laws thereof, and to renew or
extend any such qualification; provided, however, that the Trust shall not be
required to qualify Shares or to maintain the qualification of Shares in any
state, territory dependency or district where it shall deem such qualification
disadvantageous to the Trust. The Distributor will pay all expenses relating to
its broker-dealer qualifications.
7. The Distributor agrees that:
(a) It will furnish to the Trust any pertinent
information required to be inserted with respect to the
Distributor as exclusive sales agent and distributor within
the purview of Federal and state securities laws in any
reports or registrations required to be filed with any
government authority;
(b) It will not make any representations inconsistent
with the information contained in the Registration Statement
or Prospectus filed under the Securities Act of 1933, as in
effect from time to time;
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(c) It will not use or distribute or authorize the
use of distribution of any statements other than those
contained in the Trust's then current Prospectus or in such
supplemental literature or advertising as may be authorized in
writing by the Trust; and
(d) Subject to paragraph 9 below, the Distributor
will bear the costs and expenses of printing and distributing
any copies of any prospectuses and annual and interim reports
of the Trust (after such items have been prepared and set in
type) which are used in connection with the offering of Shares
which are incremental to the costs of setting in type such
prospectuses and reports and the costs of printing the copies
of such documents that the Trust prepares for distribution to
its shareholders, and the costs and expenses of preparing,
printing and distributing any other literature used by the
Distributor or furnished by the Distributor for use in
connection with the offering of the Shares and the costs and
expenses incurred by the Distributor in advertising, promoting
and selling Shares of the Trust to the public. Subject to the
approval of the Board of Trustees, such costs may be
reimbursed pursuant to Section 9. The Trust has adopted a
separate plan of distribution (collectively, the "Plan")
pursuant to the provisions of rule 12b-1 of the 1940 Act on
behalf of its shares, respectively, each of which provides for
the payment of administrative and sales related expenses in
connection with the distribution of Trust shares and the
Distributor agrees to take no action inconsistent with said
Plan.
8. The Trust will pay its legal and auditing expenses and the
cost of composition, setting in type, printing and distribution of any
prospectuses of annual or interim reports prepared for distribution to its
shareholders.
9. The Trust will pay the Distributor for costs and expenses
incurred by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of the Plans of Distribution
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(the "Plans") adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act as
such Plans may be in effect from time to time; provided, however, that no
payments shall be due or paid to the Distributor hereunder unless and until this
Agreement shall have been approved by Trustee Approval and Disinterested Trustee
Approval (as such terms are defined in such Plans). The Trust reserves the right
to modify or terminate such Plans at any time as specified in the Plans and Rule
12b-1, and this Section 9 shall thereupon be modified or terminated to the same
extent without further action of the parties. In addition, this Section 9 may
be modified or terminated by the Trustees as set forth in Section 13 hereof. The
persons authorized to direct the payment of funds pursuant to this Agreement and
the Plans shall provide to the Trust's Board of Trustees, and the Trustees shall
review, at least quarterly a written report of the amounts so paid and the
purposes for which such expenditures were made. The amounts paid under this
Agreement are in addition to the amount of any contingent deferred sales charge,
if any, paid to the Distributor pursuant to the terms of the Trust's
Registration Statement as in effect from time to time.
10. The Trust agrees to indemnify, defend and hold the
Distributor, its officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the 1933 Act (each,
an "indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which such indemnitee may be or may have been involved as a party or
otherwise or with which he may be or may have been threatened, while the
Distributor was active in such capacity or by reason of the Distributor having
acted in any such capacity or arising out of or based upon any untrue statement
of a material fact contained in the then-current Prospectus relating to the
Shares or arising out of or based upon any alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or alleged
untrue statement or omission made
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in reliance upon and in conformity with information furnished in writing by the
Distributor to the Trust expressly for use in any such Prospectus; provided,
however, that (1) no indemnitee shall be indemnified hereunder against any
liability to the Trust or the shareholders of the Trust or any expense of such
indemnitee with respect to any matter as to which such indemnitee shall have
been adjudicated not to have acted in good faith in the reasonable belief that
its action was in the best interest of the Trust or arising by reason of such
indemnitee's willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement ("disabling conduct"), or (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, no
indemnification shall be provided unless there has been a determination that
such settlement or compromise is in the best interests of the Trust and that
such indemnitee appears to have acted in good faith in the reasonable belief
that its action was in the best interest of the Trust and did not involve
disabling conduct by such indemnitee. Notwithstanding the foregoing the Trust
shall not be obligated to provide any such indemnification to the extent such
provision would waive any right which the Trust cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the
Trust, its Trustees, officers, employees and agents and any person who controls
the Trust within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities and
expenses, including costs of investigation or defense (including reasonable
counsel fees) incurred by such indemnitee, but only to the extent that such
liability or expense shall arise out of or be based upon any untrue or alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor of the Trust expressly for use in a Prospectus or
any alleged omission to state a material fact in connection with such
information required to be stated therein or necessary to make such
information not misleading or arising by reason of disabling conduct by such
indemnitee or any person selling Shares pursuant to an agreement with the
Distributor.
The Trust shall make advance payments in connection with the
expenses of defending any action with
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respect to which indemnification might be sought hereunder if the Trust
receives a written affirmation of the indemnitee's good faith belief that the
standard of conduct necessary for indemnification has been met and a written
undertaking to reimburse the Trust unless it is subsequently determined that he
is entitled to such indemnification and if the Trustees of the Trust determining
that the facts then known to them would not pre clude indemnification. In
addition, at least one of the following conditions must be met: (A) the
indemnitee shall provide a security for his undertaking, (B) the Trust shall be
insured against losses arising by reason of any lawful advances, or (C) a
majority of a quorum of Trustees of the Trust who are neither "interested
persons" of the Trust (as defined in Section 2(a)(19) of the Act) nor parties to
the proceeding ("Disinterested Non-Party Trustees") or an independent legal
counsel in a written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the indemnitee ultimately will be found entitled to
indemnification.
All determinations with respect to indemnification hereunder
shall be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by (i) a
majority vote of a quorum of the Disinterested Non-party Trustees of the Trust,
or (ii) if such a quorum is not obtainable or even, if obtainable, if a majority
vote of such quorum so directs, independent legal counsel in a written opinion.
11. This Agreement shall become effective with respect to any
class and any series of the Trust on the date set forth above when approved by
the Board of Trustees and shall remain in effect for up to two years from its
effective date (one year in the case of Section 9) and thereafter from year to
year provided such continuance is specifically approved at least annually prior
to each anniversary of such date by (a) Trustee Approval or by vote at a meeting
of shareholders of such series of the lesser of (i) 67 percent of the Shares
present or represented by proxy and (ii) 50 percent of the outstanding Shares
and (b) by Disinterested Trustee Approval.
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12. This Agreement may be terminated (a) by the Distributor at
any time without penalty by giving sixty (60) days' written notice to the Trust
which notice may be waived by the Trust; or (b) by the Trust at any time without
penalty upon sixty (60) days' written notice to the Distributor (which notice
may be waived by the Distributor); provided, however, that any such termination
by the Trust shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of termination
of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in
writing signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the case of
amendment of Section 9, by Section 11(b)). Any such amendment or change shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by either party
and shall automatically terminate upon assignment (as such term is defined in
the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the
laws of the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made
invalid or unenforceable by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected or impaired thereby.
16. Notice is hereby given that this Agreement is entered into
on the Trust's behalf by an officer of the Trust in such officer's capacity as
an officer and not individually. It is understood and expressly stipulated that
none of the Trustees, officers or shareholders of the Trust are personally
liable hereunder. Neither the Trustees, officers or shareholders assume any
personal liability for obligations entered into on behalf of the Trust. All
persons dealing with the Trust shall look solely to the property of the Trust
for the enforcement of any claims against the Trust.
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IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by the Trust's authorized officers as of July __, 1999.
DLJdirect Mutual Funds
for each of its series
DLJdirect Technology Fund
DLJdirect S&P 500 Fund
DLJdirect Growth Fund
By:_________________________________
Name:
Title:
Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation
By:_________________________________
Name:
Title:
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