Exhibit 15.1
AGREEMENT
May 1, 1998
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 "Company"), has agreed that you shall be, for the period of this Agreement,
a recipient of payments under the Company's Service and Distribution Plan (the
"Plan") under Rule 12b-1 under the Investment Company Act of 1940 with respect
to the Xxxxxxxx Balanced Fund (the "Fund"). 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 Company'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 reimburse Xxxxxx X. Xxxxxxxx,
Incorporated ("Xxxxxxxx") for expenses actually incurred by Xxxxxxxx in
distributing or promoting the sale of Shares. You are also authorized to pay
Xxxxxxxx an amount equal to $225 per hour, or such other rate as you and
Xxxxxxxx may agree from time to time, for services provided by Xxxx X. Xxxxxxxx
in his capacity as President of Xxxxxxxx related to the distribution of Shares.
The obligation to pay Xxxxxxxx shall be your obligation and not an obligation of
the Fund. 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 fees on an annualized basis of 0.75% (0.25%, effective July 1, 1998) of the
Fund's average daily net assets.
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 the Company's Articles of Incorporation.
2. Term
2. This Agreement shall become effective as of the date hereof and,
unless sooner terminated, shall continue until May 1, 1999, and thereafter 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 also is 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. This Agreement is terminable without penalty, on not less than
60 days' notice, by the Company'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
