DISTRIBUTION AGREEMENT
DAILY INCOME FUND
(the "Fund")
Money Market Portfolio
Municipal Portfolio
U.S. Government Portfolio
(the "Portfolios")
Class O Shares
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 20, 2006
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 compensatory asset-based sales
charge in an amount not to exceed 0.65% per annum of the Class O Shares' average
daily net assets 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 the Class O
Shares, $.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 on behalf of the Class O Shares in accordance with
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act").
2. You will make payments from time to time from your fees
payable hereunder and your own resources and past profits for the following
purposes:
(a) to compensate O Company, with whom you have a
written contract, for providing assistance in distributing the Class O Shares;
(b) to pay the costs of printing and distributing
the Portfolios' Class O Shares' prospectus to prospective investors; and
(c) to defray the cost of the preparation and
printing of brochures and other promotional materials, mailings to prospective
shareholders, advertising, and other promotional activities, including salaries
and/or commissions of sales personnel in connection with the distribution of the
Class O Shares.
The Distributor will in its sole discretion determine the
amount of any payments made by the Distributor pursuant to this Agreement,
provided, however, that no such payment will increase the amount which the
Portfolios, on behalf of the Class O Shares, are required to pay either to the
Distributor under this Agreement or the Shareholder Servicing Agreement or to
the Manager under the Investment Management Contract, the Administrative
Services Agreement, or otherwise.
3. 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 the Class O Shares as shall then be effectively registered
under the 0000 Xxx. All subscriptions for the Class O Shares 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 Class O Shares 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 Class O Shares 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 our common stock by our
stockholders of dividends or other distributions or any other offering by us of
securities to our stockholders.
4. You will use your best efforts to obtain subscriptions
to Class O Shares 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 Class O Shares, such other information with
respect to us and Class O Shares 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 Class O Shares to or through O Company
under the Private Class Sub-Distribution and Service Agreement (the "O Company
Agreement") provided that O Company shall not be appointed or authorized to act
as our agent without our written consent.
With respect to the Class O Shares of our Portfolios, you have
entered into the O Company Agreement which has been approved by our Board of
Directors, pursuant to which O Company is authorized to provide distribution
assistance to you and to provide certain shareholder servicing activities for
customers of O Company in connection with the Class O Shares and pursuant to
which O Company will be compensated directly by you for providing such
assistance and services. Pursuant to our Shareholder Servicing Agreement with
you with respect to our Class O Shares, you may make payments to O Company for
performing shareholder servicing and related administrative functions with
respect to Class O Shares. These payments will be made pursuant to the O Company
Agreement. It is recognized that we shall have no obligation or liability to you
or to O Company for any such payments under the O Company Agreement. Our
obligation is solely to make payments to you under this Distribution Agreement
and under the Shareholder Servicing Agreement (with respect to the Class O
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").
5. We reserve the right to suspend the offering of the
Class O Shares 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
the Class O Shares hereunder.
6. Both of us will cooperate with each other in taking such
action as may be necessary to qualify the Class O 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 the Class O Shares under the 1933 Act and
of qualification of the Class O Shares, and to the extent necessary, our
qualification under applicable state securities laws. You will pay all expenses
relating to your broker-dealer qualification.
7. 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 the
Class O 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 the Class O 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 the Class O Shares.
8. 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 8. 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 8 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 Class O 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 Class O Shares.
9. 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 9.
10. 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.
11. This Agreement will become effective on the date hereof
and shall continue in effect until [July 20, 2007], and thereafter for
successive twelve-month periods (computed from each July 21), 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, (a) on sixty days' written notice to you (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 the outstanding voting
securities of the Class O Shares, as defined in the Act, or (b) by you on sixty
days' written notice to us.
12. 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.
13. 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 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,
DAILY INCOME FUND
Money Market Portfolio
Class O Shares
Municipal Portfolio
Class O Shares
U.S. Government Portfolio
Class O Shares
By: /s/Xxxxxxx Xxxxxxx
------------------
Name: Xxxxxxx Xxxxxxx
Title:Secretary
ACCEPTED: July 20, 2006
XXXXX & XXXX DISTRIBUTORS, INC.
By: /s/Xxxxxxx Xx Xxxxxxx
---------------------
Name: Xxxxxxx Xx Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
