Exhibit 6
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
_________________, 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 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 common stock Portfolios $.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").
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 the Portfolio's 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.
With respect to the 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 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 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 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 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 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
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 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 Trustees and of a majority of those of our
directors who are not interested persons (as defined in the 1940 Act), 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 Trustees, and by a vote of a
majority of our Directors who are not interested persons (as defined in the 0000
Xxx) 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 & Xxxx
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 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: ________________, 1996
XXXXX & TANG DISTRIBUTORS L.P.
By: XXXXX & XXXX ASSET MANAGEMENT, INC.,
as General Partner
By: _______________________________________
