DISTRIBUTION AGREEMENT
THE XXXXXXX FUNDS, INC.
DEM FIXED INCOME FUND
The World Trade Center-Baltimore
28th Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
February 11, 1998
The Xxxxxxx Co.
The World Trade Center -- Baltimore
28th Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, The Xxxxxxx Funds, Inc. an open-end,
diversified, management investment company organized as a corporation under the
laws of the State of Maryland (the "Corporation"), on behalf of DEM Fixed Income
Fund, a series of the Corporation (the "Fund"), has agreed that The Xxxxxxx Co.
shall be, for the period of this Agreement, the distributor of shares of DEM
Fixed Income Fund Investor Class and Institutional Class Common Stock, par value
$.001 per share ("Investor Shares" and "Institutional Shares," respectively).
1. SERVICES AS DISTRIBUTOR
1.1 The Xxxxxxx Co. will act as agent for the distribution of the
Investor Shares and Institutional Shares covered by the post-effective amendment
to the Fund's registration statement on Form N-1A, under the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as
amended (the "1940 Act") pertaining to the Investor Shares and the Institutional
Shares of the Fund (the post-effective amendment to the registration statement,
together with the prospectuses (the "prospectus") and statement of additional
information (the "statement of additional information") included as part
thereof, any amendments or supplements thereto, or material incorporated by
reference into the prospectus or statement of additional information, being
referred to collectively in this Agreement as the "registration statement").
The Xxxxxxx Co.
February 11, 1998
Page 2
1.2 The Xxxxxxx Co. agrees to use appropriate efforts to solicit
orders for the sale of the Investor Shares and Institutional Shares at such
prices and on the terms and conditions set forth in the registration statement
and will undertake such advertising and promotion as it believes is reasonable
in connection with such solicitation.
1.3 All activities by The Xxxxxxx Co. as distributor of the Investor
Shares and Institutional Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted by the Securities and Exchange Commission (the "SEC") or by any
securities association registered under the Securities Exchange Act of 1934, as
amended.
1.4 The Xxxxxxx Co. agrees to (a) provide one or more persons during
normal business hours to respond to telephone questions concerning the Fund and
its performance and (b) perform such other services as are described in the
registration statement and in the Investor Class Distribution Plan (the
"Investor Class Plan") and in the Institutional Class Distribution Plan (the
"Institutional Class Plan"), each adopted by the Fund pursuant to Rule 12b-1
under the 1940 Act ("Rule 12b-1") to be performed by The Xxxxxxx Co., without
limitation, distributing and receiving subscription order forms and receiving
written redemption requests.
1.5 (a) The Xxxxxxx Co. will be paid fees under the Investor Class
Plan to compensate The Xxxxxxx Co. or enable The Xxxxxxx Co. to compensate other
persons, ("Service Providers"), including any other distributor of Investor
Shares, for providing: (i) services primarily intended to result in the sale of
Investor Shares ("Investor Selling Services"), and (ii) stockholder servicing,
administrative and accounting services ("Investor Administrative Services" and
collectively with Investor Selling Services, "Investor Services"). Investor
Selling Services may include, but are not limited to: the printing and
distribution to prospective investors in Investor Shares of prospectuses and
statements of additional information describing the Fund; the preparation,
including printing, and distribution of sales literature, reports and media
advertisements relating to the Investor Shares; providing telephone services
relating to the Fund; distributing Investor Shares; costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising, and related travel and
entertainment expenses; and costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional activities that
the Fund may, from time to time, deem advisable. In
The Xxxxxxx Co.
February 11, 1998
Page 3
providing compensation for Investor Selling Services in accordance with the
Investor Class Plan, The Xxxxxxx Co. is expressly authorized (i) to make, or
cause to be made, payments reflecting an allocation of overhead and other office
expenses related to providing Investor Services; (ii) to make, or cause to be
made, payments, or to provide for the reimbursement of expenses of, persons who
provide support services in connection with the distribution of Investor Shares
including, but not limited to, office space and equipment, telephone facilities,
answering routine inquiries regarding the Fund, and providing any other Investor
Service; and (iii) to make, or cause to be made, payments to compensate selected
dealers or other authorized persons for providing any Investor Services.
Administrative Services may include, but are not limited to, (i) responding to
inquiries of prospective investors regarding the Fund; (ii) services to
stockholders not otherwise required to be provided by the Fund's custodian or
any co-administrator; (iii) establishing and maintaining accounts and records on
behalf of Fund stockholders; (iv) processing purchase, redemption and exchange
transactions in Investor Shares; and (v) other similar services not otherwise
required to be provided by the Fund's transfer agent or any co-administrator.
Payments under the Investor Class Plan are not tied exclusively to the selling
and administrative expenses actually incurred by The Xxxxxxx Co. or any Service
Provider, and the payments may exceed expenses actually incurred by The Xxxxxxx
Co. and/or a Service Provider. Furthermore, any portion of any fee paid to The
Xxxxxxx Co. or to any of its affiliates by the Fund or any of their past profits
or other revenue may be used in their sole discretion to provide services to
stockholders of the Fund or to xxxxxx distribution of Investor Shares.
(b) Pursuant to the Investor Class Plan, the Fund will pay The
Xxxxxxx Co. on the first business day of each quarter a fee for the previous
quarter calculated at an annual rate of up to .75% of the average daily net
assets of the Investor Shares of the Fund consisting of up to .50% as
compensation for Investor Selling Services and .25% as compensation for Investor
Administrative Services provided by The Xxxxxxx Co. to the Investor Shares
pursuant to this Agreement.
1.6 (a) The Xxxxxxx Co. will be paid fees under the
Institutional Class Plan to compensate The Xxxxxxx Co. or enable The Xxxxxxx Co.
to compensate other persons, including any other distributor of the
Institutional Shares or institutional stockholders of record of the
Institutional Shares, including but not limited to retirement plans,
broker-dealers, depository institutions, and other financial intermediaries
("Institutions"), who own Institutional Shares on behalf of their customers,
clients or (in the case of retirement plans) participants ("Customers") and
companies providing certain services to Customers (collectively with
Institutions, "Service
The Xxxxxxx Co.
February 11, 1998
Page 4
Organizations"), for providing (i) services primarily intended to result in the
sale of the Institutional Shares ("Institutional Selling Services"), and (ii)
stockholder servicing, administrative and accounting services to Customers
("Institutional Administrative Services").
(b) The annual fee paid to The Xxxxxxx Co. with respect to
Institutional Selling Services will compensate The Xxxxxxx Co., or allow The
Xxxxxxx Co. to compensate Service Organizations, to cover certain expenses
primarily intended to result in the sale of the Institutional Shares, including,
but not limited to: (i) costs of payments made to employees that engage in the
distribution of the Institutional Shares; (ii) payments made to, and expenses
of, persons who provide support services in connection with the distribution of
the Institutional Shares, including, but not limited to, office space and
equipment, telephone facilities, processing stockholder transactions and
providing any other stockholder services not otherwise provided by the Fund's
transfer agent; (iii) costs relating to the formulation and implementation of
marketing and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; (iv) costs of printing and distributing prospectuses, statements of
additional information and reports of the Fund to prospective holders of the
Institutional Shares; (v) costs involved in preparing, printing and distributing
sales literature pertaining to the Fund; and (vi) costs involved in obtaining
whatever information, analyses and reports with respect to marketing and
promotional activities that the Fund may, from time to time, deem advisable.
(c) The annual fee paid to The Xxxxxxx Co. with respect to
Institutional Administrative Services will compensate The Xxxxxxx Co., or allow
The Xxxxxxx Co. to compensate Service Organizations, for personal service and/or
the maintenance of Customer accounts, including but not limited to (i)
responding to Customer inquiries, (ii) providing information on Customer
investments, and (iii) providing other stockholder liaison services and for
administrative and accounting services to Customers, including, but not limited
to: (a) aggregating and processing purchase and redemption requests from
Customers and placing net purchase and redemption orders with the Fund's
distributor or transfer agent; (b) providing Customers with a service that
invests the assets of their accounts in the Institutional Shares; (c) processing
dividend payments from the Fund on behalf of Customers; (d) providing
information periodically to Customers showing their positions in the
Institutional Shares; (e) arranging for bank wires; (f) providing sub-accounting
with respect to the Institutional Shares beneficially owned by Customers or the
information to the Fund necessary for
The Xxxxxxx Co.
February 11, 1998
Page 5
sub-accounting; (g) forwarding stockholder communications from the Fund (for
example, proxies, stockholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Customers, if required
by law and; (h) providing other similar services to the extent permitted under
applicable statutes, rules and regulations. Payments under the Institutional
Class Plan are not tied exclusively to the selling and administrative expenses
actually incurred by The Xxxxxxx Co. or any Service Organization, and the
payments may exceed expenses actually incurred by The Xxxxxxx Co. or any Service
Organization. Furthermore, any portion of any fee paid to The Xxxxxxx Co. or to
any of its affiliates by the Fund or any of their past profits or other revenue
may be used in their sole discretion to provide services to stockholders of the
Fund or to xxxxxx distribution of the Institutional Shares.
(d) Pursuant to the Institutional Class Plan, the Fund will pay
The Xxxxxxx Co. on the first business day of each quarter a fee for the previous
quarter calculated at an annual rate of up to .25% of the average daily net
assets of the Institutional Shares of the Fund for Selling Services and
Administrative Services provided by The Xxxxxxx Co. or any Service Organizations
to the Institutional Shares pursuant to this Agreement.
1.7 The Xxxxxxx Co. acknowledges that, whenever in the judgment of
the Corporation's officers such action is warranted for any reason, including,
without limitation, market, economic or political conditions, those officers may
decline to accept any orders for, or make any sales of, the Investor Shares or
Institutional Shares until such time as those officers deem it advisable to
accept such orders and to make such sales.
1.8 The Xxxxxxx Co. will transmit any orders received by it for
purchase or redemption of the Investor Shares and Institutional Shares to
Fund/Plan Services, Inc. ("Fund/Plan"), the Fund's transfer and dividend
disbursing agent, or its successor of which The Xxxxxxx Co. is notified in
writing. The Fund will promptly advise The Xxxxxxx Co. of the determination to
cease accepting orders or selling Investor Shares or Institutional Shares or to
recommence accepting orders or selling Investor Shares or Institutional Shares.
The Fund (or its agent) will confirm orders for Investor Shares and
Institutional Shares placed through The Xxxxxxx Co. upon their receipt, or in
accordance with any exemptive order of the SEC, and will make appropriate book
entries pursuant to the instructions of The Xxxxxxx Co. The Xxxxxxx Co. agrees
to cause payment for Investor Shares and Institutional Shares and instructions
as to book entries to be delivered promptly to the Fund (or its agent).
The Xxxxxxx Co.
February 11, 1998
Page 6
1.9 The outstanding Investor Shares and Institutional Shares are
subject to redemption as set forth in the prospectus. The price to be paid to
redeem the Investor Shares and Institutional Shares will be determined as set
forth in the prospectus.
1.10 The Xxxxxxx Co. will prepare and deliver reports to the Treasurer
of the Corporation on a regular, at least quarterly, basis, showing the
distribution expenses incurred pursuant to this Agreement, the Investor Class
Plan and the Institutional Class Plan adopted by the Fund pursuant to Rule 12b-1
and the purposes therefor, as well as any supplemental reports as the Directors
from time to time may reasonably request.
1.11 The Xxxxxxx Co. will create and maintain all records required of
it pursuant to its duties hereunder in accordance with all applicable laws,
rules and regulations, including records required by Section 31(a) of the 1940
Act. All such records will be the property of the Corporation and will be
available upon request of the Corporation for inspection, copying and use by the
Corporation and will be surrendered to the Corporation promptly upon demand of
the Corporation. Where applicable, such records will be maintained by The
Xxxxxxx Co. for the periods and in the places required by Rule 31a-2 under the
1940 Act. Upon termination of this Agreement, The Xxxxxxx Co. will promptly
surrender all such records to the Corporation or such person as the Corporation
may designate.
2. DUTIES OF THE FUND
2.1 The Corporation, on behalf of the Fund, agrees at its own expense
to execute any and all documents, to furnish any and all information and to take
any other actions that may be reasonably necessary in connection with the
qualification of the Investor Shares and Institutional Shares for sale in those
states that The Xxxxxxx Co. may designate.
2.2 The Corporation shall furnish from time to time, for use in
connection with the sale of the Investor Shares and Institutional Shares, such
informational reports with respect to the Fund and the Investor Shares and
Institutional Shares as The Xxxxxxx Co. may reasonably request, all of which
shall be signed by one or more of the Corporation's duly authorized officers;
and the Corporation warrants that the statements contained in any such reports,
when so signed by one or more of the Corporation's officers, shall be true and
correct. The Corporation shall also furnish The Xxxxxxx Co. upon request with:
(a) annual audits of the Fund's books and accounts
The Xxxxxxx Co.
February 11, 1998
Page 7
made by independent public accountants regularly retained by the Corporation,
(b) semiannual unaudited financial statements pertaining to the Fund, (c)
quarterly earnings statements prepared by the Corporation, (d) a monthly
itemized list of the securities held by the Fund, (e) monthly balance sheets as
soon as practicable after the end of each month and (f) from time to time such
additional information regarding the Fund's financial condition as The Xxxxxxx
Co. may reasonably request.
3. REPRESENTATIONS AND WARRANTIES
The Corporation, on behalf of the Fund, represents to The Xxxxxxx Co.
that the registration statement has been or will be carefully prepared in
conformity with the requirements of the 1933 Act, the 1940 Act and the rules and
regulations of the SEC thereunder. The Fund represents and warrants to The
Xxxxxxx Co. that any registration statement pertaining to the Investor Shares
and/or Institutional Shares, or prospectus and statement of additional
information contained therein, when such registration statement becomes
effective, will include all statements required to be contained therein in
conformity with the 1933 Act, the 1940 Act and the rules and regulations of the
SEC; that all statements of fact contained in any registration statement with
respect to the Investor Shares and/or Institutional Shares, prospectus or
statement of additional information will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information with respect
to the Investor Shares and/or Institutional Shares when such registration
statement 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 Investor Shares
and/or Institutional Shares. The Xxxxxxx Co. may, but shall not be obligated
to, propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus or statement of
additional information as, in the light of future developments, may, in the
opinion of The Xxxxxxx Co.'s counsel, be necessary or advisable. If the
Corporation shall not propose such amendment or amendments and/or supplement or
supplements within fifteen (15) days after receipt by the Corporation of a
written request from The Xxxxxxx Co. to do so, The Xxxxxxx Co. may, at its
option, terminate this Agreement. The Corporation shall not file any amendment
to any registration statement or supplement to any prospectus or statement of
additional information without giving The Xxxxxxx Co. reasonable notice thereof
in advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Corporation's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information with respect
The Xxxxxxx Co.
February 11, 1998
Page 8
to the Investor Shares and/or Institutional Shares, of whatever character, as
the Corporation may deem advisable, such right being in all respects absolute
and unconditional.
4. INDEMNIFICATION
4.1 The Corporation, on behalf of the Fund, agrees to indemnify,
defend and hold The Xxxxxxx Co., its several officers and directors, and any
person who controls The Xxxxxxx Co. 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 counsel fees incurred in connection therewith)
which The Xxxxxxx Co., its officers and directors, or any such controlling
person, may incur under the 1933 Act, the 1940 Act or common law or otherwise,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement, any prospectus or any
statement of additional information with respect to the Investor Shares and/or
Institutional Shares, or arising out of or based upon any omission or alleged
omission to state a material fact required to be stated in any registration
statement, any prospectus or any statement of additional information with
respect to the Investor Shares and/or Institutional Shares, or necessary to make
the statements in any of them not misleading; provided, however, that the
Corporation's agreement, on behalf of the Fund, to indemnify The Xxxxxxx Co.,
its officers, or directors, and any such controlling person, and any claims,
demands, liabilities or expenses arising out of or based upon such indemnity
shall be limited to the "assets belonging to" (as such expression is defined in
the Corporation's charter) the Fund; and further provided that the Corporation's
agreement, on behalf of the Fund, to indemnify The Xxxxxxx Co., its officers or
directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of or based upon any
statements or representations made by The Xxxxxxx Co. or its representatives or
agents other than such statements and representations as are contained in any
registration statement, prospectus or statement of additional information with
respect to the Investor Shares and/or Institutional Shares and in such financial
and other statements as are furnished to The Xxxxxxx Co. pursuant to paragraph
2.2 hereof; and further provided that the Corporation's agreement, on behalf of
the Fund, to indemnify The Xxxxxxx Co. and the Corporation's representations and
warranties, on behalf of the Fund, hereinbefore set forth in paragraph 3 shall
not be deemed to cover any liability to the Fund or its stockholders to which
The Xxxxxxx Co. would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of The
Xxxxxxx Co.'s reckless disregard of its obligations and duties
The Xxxxxxx Co.
February 11, 1998
Page 9
under this Agreement. The Corporation's agreement, on behalf of the Fund, to
indemnify The Xxxxxxx Co., its officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon the Corporation's being
notified of any action brought against The Xxxxxxx Co., its officers or
directors, or any such controlling person, such notification to be given by
letter or by telegram addressed to the Corporation at its principal office in
Baltimore, Maryland and sent to the Corporation by the person against whom such
action is brought, within ten (10) days after the summons or other first legal
process shall have been served. The failure to so notify the Corporation of any
such action shall not relieve the Corporation from any liability that the
Corporation may have to the person against whom such action is brought by reason
of any such untrue or alleged untrue statement or omission or alleged omission
otherwise than on account of the Corporation's indemnity agreement, on behalf of
the Fund, contained in this paragraph 4.1. The Corporation's indemnification
agreement, on behalf of the Fund, contained in this paragraph 4.1 and the
Corporation's representations and warranties, on behalf of the Fund, in this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of The Xxxxxxx Co., its officers and
directors, or any controlling person, and shall survive the delivery of any of
the Corporation's shares. This agreement of indemnity will inure exclusively to
The Xxxxxxx Co.'s benefit, to the benefit of its several officers and directors,
and their respective estates, and to the benefit of the controlling persons and
their successors. The Corporation, on behalf of the Fund, agrees to notify The
Xxxxxxx Co. promptly of the commencement of any litigation or proceedings
against the Corporation or any of its officers or directors in connection with
the issuance and sale of any of the Investor Shares and/or Institutional Shares.
4.2 The Xxxxxxx Co. agrees to indemnify, defend and hold the
Corporation, its several officers and directors, and any person who controls the
Corporation or the Fund 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 costs of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) that the
Corporation, its officers or directors or any such controlling person may incur
under the 1933 Act, the 1940 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by the Corporation, its officers
or directors or such controlling person resulting from such claims or demands
shall arise out of or be based upon (a) any unauthorized sales literature,
advertisements, information, statements or representations or (b) any untrue or
alleged untrue statement of a material fact contained in information furnished
in writing by The Xxxxxxx Co. to the Corporation specifically for use in the
registration statement
The Xxxxxxx Co.
February 11, 1998
Page 10
and used in the answers to any of the items of the registration statement or in
the corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission or alleged
omission to state a material fact in connection with such information furnished
in writing by The Xxxxxxx Co. to the Corporation and required to be stated in
such answers or necessary to make such information not misleading. The Xxxxxxx
Co.'s agreement to indemnify the Corporation, its officers and directors, and
any such controlling person, as aforesaid, is expressly conditioned upon The
Xxxxxxx Co.'s being notified of any action brought against the Corporation, its
officers or directors, or any such controlling person, such notification to be
given by letter or telegram addressed to The Xxxxxxx Co. at its principal office
in Baltimore, Maryland and sent to The Xxxxxxx Co. by the person against whom
such action is brought, within ten (10) days after the summons or other first
legal process shall have been served. The failure to so notify The Xxxxxxx Co.
of any such action shall not relieve The Xxxxxxx Co. from any liability that The
Xxxxxxx Co. may have to the Corporation, its officers or directors, or to such
controlling person by reason of any such untrue or alleged untrue statement or
omission or alleged omission otherwise than on account of The Xxxxxxx Co.'s
indemnity agreement contained in this paragraph 4.2. The Xxxxxxx Co. agrees to
notify the Corporation promptly of the commencement of any litigation or
proceedings against The Xxxxxxx Co. or any of its officers or directors in
connection with the issuance and sale of any of the Investor Shares and/or
Institutional Shares.
4.3 In case any action shall be brought against any indemnified party
under paragraph 4.1 or 4.2, and it shall timely notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish to do so, to assume the
defense thereof with counsel satisfactory to such indemnified party. If the
indemnifying party opts to assume the defense of such action, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and expenses of
separate counsel to such indemnified party if (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between them in the
conduct of the defense of such action.
The Xxxxxxx Co.
February 11, 1998
Page 11
5. EFFECTIVENESS OF REGISTRATION
None of the Investor Shares or Institutional Shares shall be offered
by either The Xxxxxxx Co. or the Corporation under any of the provisions of this
Agreement and no orders for the purchase or sale of the Investor Shares or
Institutional Shares shall be accepted by the Corporation if and so long as the
effectiveness of the registration statement shall be suspended under any of the
provisions of the 1933 Act or if and so long as the prospectus is not on file
with the SEC; provided, however, that nothing contained in this paragraph 5
shall in any way restrict or have an application to or bearing upon the
Corporation's obligation to repurchase its shares from any stockholder in
accordance with the provisions of the prospectus or statement of additional
information.
6. NOTICE TO THE XXXXXXX CO.
The Corporation, on behalf of the Fund, agrees to advise The Xxxxxxx
Co. immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect
with respect to the Investor Shares and/or Institutional Shares or for
additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement, prospectus or
statement of additional information then in effect with respect to the
Investor Shares and/or Institutional Shares or the initiation of any
proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration statement, prospectus
or statement of additional information then in effect with respect to the
Investor Shares and/or Institutional Shares or that requires the making of
a change in such registration statement, prospectus or statement of
additional information in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendment to
any registration statement, prospectus or statement of additional
information with respect to the Investor Shares or Institutional Shares
which may from time to time be filed with the SEC.
The Xxxxxxx Co.
February 11, 1998
Page 12
7. TERM OF AGREEMENT
This Agreement shall continue until December 29, 1998 with respect to
each of the Investor Shares and Institutional Shares, and thereafter shall
continue automatically for successive annual periods ending on the anniversary
of such date, provided such continuance is specifically approved at least
annually by (a) a vote of a majority of the Corporation's Board of Directors or
(b) a vote of a majority (as defined in the 0000 Xxx) of each of the outstanding
Investor Shares and Institutional Shares, respectively, provided that the
continuance is also approved by a vote of a majority of the Corporation's
Directors who are not interested persons (as defined in the 0000 Xxx) of the
Corporation and who have no direct or indirect financial interest in the
operation of the Investor Class Plan or the Institutional Class Plan, in this
Agreement or in any agreement related to the Investor Class Plan or
Institutional Class Plan ("Qualified Directors"), by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable with respect to the Investor Shares or the Institutional Shares
without penalty (a) on sixty (60) days' written notice, by a vote of a majority
of the Fund's Qualified Directors or by vote of a majority (as defined in the
0000 Xxx) of the outstanding Investor Shares or Institutional Shares, as
applicable, or (b) on ninety (90) days' written notice by The Xxxxxxx Co. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
8. AMENDMENTS
This Agreement may not be amended to increase materially the amount of
the fee with respect to the Investor Shares and/or Institutional Shares
described in Section 1.5 above without approval of at least a majority (as
defined in the 0000 Xxx) of the outstanding Investor Shares and/or Institutional
Shares, respectively. In addition, all material amendments to this Agreement
must be approved by a vote of the Corporation's Board of Directors, and by a
vote of a majority of the Qualified Directors, cast in person at a meeting
called for the purpose of voting on the approval.
The Xxxxxxx Co.
February 11, 1998
Page 13
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
THE XXXXXXX FUNDS, INC., ON BEHALF OF DEM FIXED
INCOME FUND
By: /s/ XXXXXX X. XXXXXXX, XX.
--------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
Accepted:
THE XXXXXXX CO.
By: /s/ XXXXXX X. XXXXXXX, XX.
--------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
