EXHIBIT 15.1
AGREEMENT
March 2, 1996
The Xxxxxxxx Management Co., L.P.
The Courtyard Square
000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Gentlemen:
This is to confirm that in consideration of the agreements
hereinafter contained, the undersigned, The Xxxxxxxx Funds, Inc., a
Maryland corporation (the "Fund"), has agreed that you shall be, for the
period of this Agreement, a recipient of payments under the Fund's Service
and Distribution Plan (the "Plan") under Rule 12b-1 under the Investment
Company Act of 1940. This Agreement is subject to the terms and
conditions of the Plan, which is incorporated herein by reference.
1. Services to the Fund
1.1 You are hereby authorized to retain one or more
distributors (the "Distributors") for the shares of common stock of the
Fund (the "Shares") in accordance with the instructions of the Fund's
Board of Directors and the Fund's registration statement and then current
prospectus and statement of additional information under the Securities
Act of 1933, as amended. You shall monitor the activities of the
Distributors and report quarterly to the Board of Directors as to the
performance of the Distributors. Additionally you shall provide the
reports required by Paragraph 5 of the Plan.
1.1(a) You, at your own expense, shall finance appropriate
activities which you deem reasonable which are primarily intended to
result in the sale of Shares, including, but not limited to, advertising,
compensation of the Distributors, the printing and mailing of prospectuses
to other than current shareholders and the printing and mailing of sales
literature.
1.1(b) All Shares offered for sale by the Distributors shall
be offered for sale to the public at a price per Share equal to their net
asset value (determined in the manner set forth in the Fund's Registration
Statement and then current prospectus and statement of additional
information).
1.1(c) You are authorized to pay Xxxxxx X. Xxxxxxxx,
Incorporated ("Xxxxxxxx") 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 obligation to pay Xxxxxxxx shall be your obligation and
not an obligation of the Fund. Your agreement with Xxxxxxxx shall provide
that if any Shares are redeemed within one month after the date of
original purchase, Xxxxxxxx shall repay to you 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. Your agreement with Xxxxxxxx shall provide that in
determining whether Xxxxxxxx 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. You are also authorized to pay
other Distributors such fees that you negotiate with them in accordance
with paragraph 1.1(a), all of such payments to be your obligations and not
the obligation of the Fund.
1.1(d) In exchange for such services, the Fund agrees to pay
you quarterly fees in an amount equal to the amount of fees paid to the
Distributors pursuant to Section 1.1(c) less any amount repaid by
Xxxxxxxx; provided, however, that the fees paid hereunder in any fiscal
year of the Fund shall not exceed 0.75% of the average daily net assets of
the Fund.
1.2 Your agreement with Distributors shall provide that it
shall act as distributor of the Shares in compliance with all state and
federal laws, rules and regulations and the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
1.3 Whenever in their judgment such action is warranted by
market, economic or political conditions, or by circumstances of any kind,
the Fund's officers may decline to accept any orders for, or make any
sales of, any Shares until such time as they deem it advisable to accept
such orders and to make such sales and the Fund shall advise you promptly
of such determination.
1.4 The Fund agrees to pay all costs and expenses in connection
with the registration of the Shares under the Securities Act of 1933, as
amended, and to be responsible for all expenses in connection with
maintaining facilities for the issue and transfer of Shares and for
supplying information, prices and other data to be furnished by the Fund
hereunder.
1.5 The Fund agrees to execute any and all documents and to
furnish any and all information and otherwise to take all actions which
may be reasonably necessary in the discretion of the Fund's officers in
connection with the qualification of Shares for sale in such states as you
may designate to the Fund and the Fund may approve, and the Fund agrees to
pay all expenses which may be incurred in connection with such
qualification.
1.6 The Fund shall furnish you from time to time for use in
connection with the sale of Shares, such information with respect to the
Fund and the Shares as you may reasonably request. The Fund also shall
furnish you upon request with: (a) annual audited reports of the Fund's
books and accounts made by independent public accountants regularly
retained by the Fund, (b) semi-annual reports with respect to the Fund
prepared by the Fund, and (c) from time to time such additional
information regarding the Fund's financial condition as you may reasonably
request. The Fund authorizes you to use any prospectus, in the form
furnished to you by the Fund from time to time, in connection with the
sale of Shares.
1.7 No Shares shall be offered and no orders for the purchase
or sale of Shares shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the
provisions of the Securities Act of 1933, as amended, or if and so long as
current prospectuses as required by Section 10 of said Act, as amended,
are not on file with the Securities and Exchange Commission; provided,
however, that nothing contained in this paragraph 1.7 shall in any way
restrict or have an application to or bearing upon the Fund's obligation
to redeem Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or Articles of Incorporation.
2. Term
2. This Agreement shall become effective as of the date hereof
and, unless sooner terminated, shall continue until March 2, 1997, and
thereafter 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 also is 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.
This Agreement is terminable without penalty, on not less than 60 days'
notice, by the Fund's Board of Directors, by vote of the holders of a
majority (as defined in said Act) of the Fund's outstanding Shares, or by
you. This Agreement will also terminate automatically in the event of its
assignment (as defined in said Act).
Very truly yours,
THE XXXXXXXX FUNDS, INC.
By: _________________________
President
Accepted:
THE XXXXXXXX MANAGEMENT CO., L.P.
By: Xxxxxx X. Xxxxxxxx, Incorporated,
General Partner
By: ____________________________
President
