DISTRIBUTION AGREEMENT
THE XXXXXXX FUNDS, INC.
The World Trade Center-Baltimore
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
WHEREAS, The Xxxxxxx Funds, Inc., a Maryland corporation (the
"Company"), desires to enter into an agreement regarding the distribution of the
shares (the "Shares") of the Company's two investment portfolios: The Xxxxxxx
US Treasury Money Fund and The Xxxxxxx Institutional Cash Management Fund
(collectively, the "Funds"); and
WHEREAS, the Company has agreed that The Xxxxxxx Co., Inc. (the
"Distributor"), a Maryland corporation, shall act as the exclusive distributor
of the Shares;
WHEREAS, the Distributor agrees to act as the exclusive distributor of
the Shares for the period of this Distribution Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the agreements hereinafter
contained, it is agreed as follows:
1. SERVICES AS DISTRIBUTOR.
1.1 The Distributor shall use reasonable efforts to promote the
Company and to solicit orders for the purchase of Shares and shall undertake
such advertising and promotion as it believes reasonable in connection with such
solicitation. Distributor shall be the exclusive distributor of the Shares.
The Distributor shall sell the Shares only at the offering price at the time of
such sale (computed in the manner described in the Funds' then effective
prospectus), and the Funds shall receive not less than the full net asset value
per share for all the Shares sold. No sales charge shall be imposed on sales of
any Shares. The Company agrees, provided that the Shares may be legally issued,
to fill all orders confirmed by the Distributor in accordance with the
provisions of this Agreement.
1.2 The Distributor shall conduct the offering of Shares and
other activities pursuant hereto in strict accordance with the Registration
Statement and the applicable requirements of the Articles of Incorporation and
the By-Laws of the Company, as each may be from time to time amended, and in
strict accordance with all applicable state and federal statutes, rules and
regulations, including in particular, the Investment Company Act of 1940 as
amended (the "1940 Act"), the Securities Act of 1933 as amended (the "Securities
Act"), the Securities Exchange Act of 1934 as amended
(the "Exchange Act"), the rules and regulations of the Securities Exchange
Commission promulgated under the 1940 Act, the Securities Act and the Exchange
Act, the applicable rules and regulations of any securities association
registered under the Exchange Act, and all applicable state Blue Sky laws, rules
and regulations.
1.3 The Distributor shall transmit any orders received by it for
purchase or redemption of Shares to the Company's transfer agent and custodian,
process inquiries from stockholders and communicate with the Company and
transfer agent on behalf of stockholders.
1.4 The Distributor shall bear all its expenses in connection
with the performance of this Agreement, including, but not limited to, the
printing and distribution of prospectuses included in the Registration Statement
as defined below to stockholders other than to existing stockholders and shall
receive no reimbursement or compensation in connection therewith from the
Company therefor.
2. DUTIES OF THE COMPANY.
2.1 The Company agrees to file all required reports with the
Securities and Exchange Commission in a timely manner and to maintain on file
with the Securities and Exchange Commission a current prospectus and statement
of additional information during the term of this Agreement.
2.2 The Company agrees at its own expense to execute any and all
documents and to furnish, at its own expense, any and all documents and all
information and otherwise to take all actions that may be reasonably necessary
in connection with the qualification of Shares for sale in such states as the
Company and the Distributor may designate.
2.3 The Company shall furnish from time to time, for use in
connection with the sale of Shares such information with respect to the Funds
and the Shares as the Distributor may reasonably request; and the Company
warrants that any such information shall be true and correct.
3. REPRESENTATIONS OF THE COMPANY.
3.1 The Company represents to the Distributor that any
registration statement, prospectus, and statement of additional information
filed with the Commission and any amendments and supplements thereto (the
"Registration Statement") with respect to the Shares have been prepared in
conformity with the requirements of the Securities Act, the 1940 Act and the
rules and regulations of the Commission thereunder. The Company represents and
warrants to the Distributor that any Registration Statement, when such becomes
effective, will contain all statements required to be stated therein in
conformity with the Securities Act, the 1940 Act and the rules and regulations
of Commission; that all statements of fact contained in such
Registration Statement will be true and correct when such becomes effective; and
that no Registration Statement, when such 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 Shares.
4. INDEMNIFICATION.
4.1 The Company shall indemnify and hold harmless the
Distributor, each person, if any, who controls the Distributor within the
meaning of Section 15 of the Securities Act, and any person with whom the
Distributor enters into agreements for the sale of Shares of the Company or to
prepare sales literature for the Company against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damage or expense and counsel fees incurred
in connection therewith), insofar as such loss, liability, claim, damage,
expense, actions or proceedings in respect thereof arise out of or are based
upon an untrue statement of a material fact contained in the Registration
Statement then in effect, annual or interim reports to shareholders or sales
literature used in connection with the sale of Shares or omission to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, written information furnished to the Company
specifically for use therein; provided, however, no person shall be entitled to
indemnity in the event of its willful malfeasance, bad faith or gross negligence
in the performance of its duties under this Agreement or such other agreement or
by reason of its reckless disregard of its obligations and duties under this
Agreement or such other agreement.
5. OFFERING OF SHARES.
5.1 None of the Shares shall be offered by the Distributor under
this Agreement, and no orders for the purchase or sale of Shares hereunder shall
be accepted by the Company, if and so long as the effectiveness of the
Registration Statement or any necessary amendments thereto shall be suspended
under any of the provisions of the Securities Act; provided, however, that
nothing contained in this paragraph 5.1 shall in any way restrict or have any
application to or bearing upon the Company's obligation to redeem Shares from
any shareholder in accordance with the provisions of the Company's prospectus or
Articles of Incorporation. The Company shall notify the Distributor of any
suspension of the effectiveness of the Registration Statement.
6. TERM.
6.1 Either party shall have the right to terminate this
Agreement upon sixty (60) days' written notice to the other. This agreement
shall become effective as of the date hereof and shall continue in effect,
unless sooner terminated as herein provided, until December 29, 1998, and from
year to year thereafter
if such continuance is approved at least annually in the manner required by the
1940 Act. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. MISCELLANEOUS
7.1 This Agreement shall be governed by the laws of the State of
Maryland.
7.2 The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their constructions or effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the 30th day of April 1997.
THE XXXXXXX FUNDS, INC.
By: /S/ XXXXXX X. XXXXXXX, XX.
--------------------------
Xxxxxx X. Xxxxxxx, Xx.
President
THE XXXXXXX CO.
By: /S/ XXXXXX X. XXXXXXX, XX.
--------------------------
Xxxxxx X. Xxxxxxx, Xx.
President
