EXHIBIT 15.2
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of May, 1998 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
Balanced Fund (the "Fund"), which is an investment portfolio of The Xxxxxxxx
Funds, Inc. (the "Company"), an open-end management investment company under the
Investment Company Act of 1940;
WHEREAS, the Adviser has been authorized by the Company to retain a
distributor for the shares of the Fund's Common Stock (the "Shares") pursuant to
the Company'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 Company 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. The Adviser will reimburse the Distributor for expenses actually
incurred by the Distributor in distributing or promoting the sale of Shares.
b. The Adviser shall pay to the Distributor an amount equal to
$225 per hour, or such other rate as the Adviser and the Distributor may agree
from time to time, for services provided by Xxxx X. Xxxxxxxx in his capacity as
President of the Distributor related to the distribution of Shares.
7. Duration and Termination.
a. This Agreement shall become effective on May 1, 1998 and shall
continue in effect until May 1, 1999, and shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Company'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 Company'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 Company'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
XXXXXX X. XXXXXXXX, INCORPORATED
By:
President
