EXHIBIT 15.2
DISTRIBUTION AGREEMENT
AGREEMENT made this____ day of ______________, 1996 between The
Xxxxxxxx Management Co., L.P., a California limited partnership
(hereinafter called the "Adviser"), and Xxxxxx X. Xxxxxxxx, Incorporated,
a California corporation (hereinafter called the "Distributor").
W I T N E S S E T H;
WHEREAS, the Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940 and serves as investment adviser
to The Xxxxxxxx Funds, Inc. (the "Fund"), an open-end management
investment company under the Investment Company Act of 1940;
WHEREAS, the Adviser has been authorized by the Fund to retain a
distributor for the shares of the Fund's Common Stock (the "Shares")
pursuant to the Fund's Service and Distribution Plan (the "Plan") under
the Investment Company Act of 1940;
WHEREAS, the Distributor is a registered broker-dealer under
state and federal laws and regulations and is a member of the National
Association of Securities Dealers, Inc.; and
WHEREAS, the Adviser desires to retain the Distributor as the
distributor of the Shares.
NOW, THEREFORE, the Adviser and Distributor mutually agree and
promise as follows:
1. Appointment of Distributor.
The Adviser hereby appoints the Distributor as the distributor
of the Shares in jurisdictions wherein the Shares may legally be offered
for sale.
2. Acceptance; Services of Distributor.
The Distributor hereby accepts appointment as distributor for
the Shares and agrees that it will use its best efforts with reasonable
promptness to sell such part of the authorized Shares remaining unissued
as from time to time shall be effectively registered under the Securities
Act of 1933 at prices determined as hereinafter provided and on terms
hereinafter set forth.
3. Manner of Sale; Compliance with Securities Laws and
Regulations.
a. The Distributor shall sell Shares to prospective
purchasers in such manner, not inconsistent with the provisions hereof and
the then effective Registration Statement of the Fund under the Securities
Act of 1933 (and then current prospectus and statement of additional
information). The Distributor shall cause subscriptions for Shares to be
transmitted to the Fund's custodian in accordance with the Share Purchase
Application then in force for the purchase of Shares. All such Share
Purchase Applications are subject to acceptance or rejection by the Fund.
Shares are to be sold for cash, payable at the time the Share Purchase
Application and payment for such Shares are received by the Fund's
custodian.
b. The Adviser will furnish to the Distributor from time
to time such information with respect to the Fund and its Shares as the
Distributor may reasonably request for use in connection with the sale of
the Shares. The Distributor agrees that it will not use or distribute any
statements, other than those contained in the Fund's current prospectus
and statement of additional information, except such supplemental
literature or advertising as shall be lawful under federal and state
securities laws and regulations, and that shall have been approved by the
Fund.
c. In selling the Shares, the Distributor will in all
respects conform to the requirements of all state and federal laws, rules
and regulations and the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., and will indemnify and hold harmless the Fund
and each person who has been, is or may hereafter be a director or officer
of the Fund from any damage or expense on account of any wrongful act by
the Distributor or any employee, representative or agent of the
Distributor. The term "expense" includes amounts paid in satisfaction of
judgments or in settlement.
4. Price of Shares.
All Shares offered for sale or sold by the Distributor shall be
sold at the net asset value per share as determined in the manner provided
in the Fund's Registration Statement and then current prospectus and
statement of additional information.
5. Registration of Shares and Distributor.
a. The Adviser agrees that the Fund will use its best
efforts to keep effectively registered under the Securities Act for sale
as herein contemplated the Shares.
b. The Adviser agrees that the Fund will execute any and
all documents and furnish any and all information which may be reasonably
necessary in connection with the qualification of the Shares for sale in
such states as the Distributor may reasonably request (it being understood
that the Fund shall not be required without its consent to comply with any
requirement which in the Fund's opinion is unduly burdensome).
c. Notwithstanding any other provision hereof, the
Distributor agrees that the Fund may terminate, suspend or withdraw the
offering of Shares whenever, in its sole discretion, it deems such action
to be desirable.
6. Expenses; Compensation of Distributor.
a. The Adviser agrees that the Fund will pay or cause to
be paid expenses (including the fees and disbursements of its own counsel)
of any registration of the Shares under the Securities Act of 1933,
expenses of qualifying or continuing the qualification of the Shares for
sale under the laws of such states as may be designated by the
Distributor under the conditions herein specified, and expenses incident
to the issuance of Shares, such as the cost of share certificates, issue
taxes and fees of the transfer agent. The Adviser will pay all other
expenses incident to the sale and distribution of the Shares issued or
sold hereunder, including, without limiting the generality of the
foregoing, all (a) expenses of printing and distributing or disseminating
any other literature, advertising and selling aids in connection with such
offering of the Shares for sale (except that such expenses shall not
include expenses incurred by the Fund in connection with the preparation,
printing and distribution of any report or other communication to holders
of Shares in their capacity as such) and (b) expenses of advertising in
connection with such offering.
b. The Adviser shall pay a fee equal to 1% of the net
asset value of all Shares sold other than Shares sold pursuant to the
reinvestment of dividends. The Distributor acknowledges that such
obligation is solely the obligation of the Adviser and not the obligation
of the Fund. If any Shares are redeemed within one month after the date
of original purchase, the Distributor shall repay to the Adviser the fee
earned with respect to the original sale of such Shares; provided,
however, that such fees shall not be required to be repaid in the event of
death or disability of the shareholder. In determining whether the
Distributor is required to repay fees with respect to a redemption of less
than all of a shareholder's Shares, Shares which have been held for one
month will be considered to have been redeemed first and then other Shares
in the order purchased.
7. Duration and Termination.
a. This Agreement shall become effective on
_________________, 1996 and shall continue in effect until _____________,
1997, and shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by
(i) the Fund's Board of Directors or (ii) the vote of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
Shares, provided that in either event its continuance is also approved by
a majority of the Fund's directors who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval.
b. Notwithstanding whatever may be provided herein to the
contrary, this Agreement may be terminated at any time, without payment of
any penalty, by the Fund's Board of Directors, or by vote of the holders
of a majority (as defined in the Investment Company Act of 1940) of the
Fund's outstanding Shares, or by the Distributor, in each case, upon sixty
(60) days' written notice to the other party and shall terminate
automatically in the event of its assignment (as defined in said Act).
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day first above written.
THE XXXXXXXX MANAGEMENT CO., L.P.
By: Xxxxxx X. Xxxxxxxx, Incorporated
General Partner
By: _________________________________
President
THE XXXXXXXX FUNDS, INC.
By: __________________________________
President
