EXHIBIT (6)
FORM OF DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated , 1995, between Winthrop
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Focus Funds, a Massachusetts business trust (the "Company"), and Xxxxxxxxx
Xxxxxx & Xxxxxxxx Securities Corporation (the "Distributor"). The Company
is registered as a series investment company under the Investment Company
Act of 1940 (the "1940 Act"), and an indefinite number of shares of
beneficial interest in one or more series, without par value (the
"Shares"), have been registered under the Securities Act of 1933 (the "1933
Act") to be offered for sale to the public in a continuous public offering
in accordance with terms and conditions set forth in the Prospectus and
Statement of Additional Information (the "Prospectus") of the Company
included in the Company's Registration Statement on Form N-1A as such
documents may be amended from time to time.
In this connection, the Company desires that the Distributor act as
its exclusive sales agent and distributor for the sale and distribution of
Shares. The Distributor has advised the Company that it is willing to act
in such capacities, and it is accordingly agreed between them as follows:
1. The Company hereby appoints the Distributor as exclusive sales
agent and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Company further
agrees from and after the commencement of such continuous public offering
that it will not, without the Distributor's consent, sell or agree to sell
any Shares otherwise than through the Distributor, except the Company may
issue Shares in connection with a merger, consolidation or acquisition of
assets on such basis as may be authorized or permitted under the 0000 Xxx.
2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares, provided, however, that when
requested by the Company at any time for any reason the Distributor will
suspend such efforts. The Company may also withdraw the offering of Shares
at any time when determined to be in the best interests of the shareholders
of the Company by the Board, or when required by the provisions of any
statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that the Distributor does not undertake to
sell all or any specific portion of the Shares.
3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will use all
reasonable efforts to maintain such status and to abide by the Rules of
Fair Practice, the Constitution and the Bylaws of the National Association
of Securities Dealers, Inc., and all other rules and regulations that are
now or may become applicable to its performance
hereunder. The Distributor will undertake and discharge its obligations
hereunder as an independent contractor and it shall have no authority or
power to obligate or bind the Company by its actions, conduct or contracts
except that it is authorized to accept orders for the purchase or
repurchase of Shares as the Company's agent and subject to its approval.
The Company reserves the right to reject any order in whole or in part. The
Distributor may appoint sub-agents or distribute through dealers or
otherwise as it may determine from time to time pursuant to agreements
approved by the Company, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale or
repurchase of Shares on behalf of the Company or otherwise act as the
Company's agent for any purpose. The Distributor shall not utilize any
materials in connection with the sale or offering of Shares except the then
current Prospectus and such other materials as the Company shall provide or
approve in writing.
4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and may be
sold either through persons with whom it has selling agreements or directly
to prospective purchasers. To facilitate sales, the Company will furnish
the Distributor with the net asset value of its Shares promptly after each
calculation thereof.
5. The Company has delivered to the Distributor a copy of its current
Prospectus. It agrees that it will use its best efforts to continue the
effectiveness of its Registration Statement filed under the 1933 Act and
the 1940 Act. The Company further agrees to prepare and file any amendments
to its Registration Statement as may be necessary and any supplemental data
in order to comply with such Acts.
6. The Company will take such steps at its own expense as may be
necessary and feasible to qualify Shares for sale in states, territories or
dependencies of the United States of America and in the District of
Columbia in accordance with the laws thereof, and to renew or extend any
such qualification; provided, however, that the Company shall not be
required to qualify Shares or to maintain the qualification of Shares in
any state, territory, dependency or district where it shall deem such
qualification disadvantageous to the Company. The Distributor will pay all
expenses relating to its broker-dealer qualifications.
7. The Distributor agrees that:
(a) It will furnish to the Company any pertinent information
required to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and state
securities laws in any reports or registrations required to be filed
with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or Prospectus
filed under the Securities Act of 1933, as in effect from time to
time;
(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in the
Company's then current Prospectus or in such supplemental literature
or advertising as may be authorized in writing by the Company; and
(d) Subject to paragraph 9 below, the Distributor will bear those
costs of printing and distributing copies of any prospectuses and
annual or interim reports of the Company which are used in connection
with the offering of Shares which are incremental to the costs of
setting in type such prospectuses and reports and the costs of
printing the copies of such documents that the Company prepares for
distribution to its shareholders, and the costs of preparing, printing
and distributing any other literature used by the Distributor or
furnished by the Distributor for use in connection with the offering
of the Shares and the costs and expenses incurred by the Distributor
in advertising, promoting and selling Shares to the public. Subject to
the approval of the Board of Trustees, such costs may be reimbursed
pursuant to Section 9.
8. The Company will pay its legal and auditing expenses and the cost
of composition, setting in type, printing and distribution of the
prospectuses or annual or interim reports prepared for distribution to its
shareholders.
9. The Company will compensate the Distributor for its services in
connection with distribution of Shares by the Distributor in accordance
with the terms of the Plans of Distribution (the "Plans") adopted by the
Fund pursuant to Rule 12b-1 under the 1940 Act as such Plans may be in
effect from time to time; provided, however, that no payments shall be due
or paid to the Distributor hereunder unless and until this Agreement shall
have been approved by Trustee Approval and Disinterested Trustee Approval
(as such terms are defined in such Plans). The Company reserves the right
to modify or terminate such Plans at any time as specified in the Plans and
Rule 12b-1, and this Section 9 shall thereupon be modified or terminated to
the same extent without further action of the parties. In addition, this
Section 9 may be modified or terminated by the Trustees as set forth in
Section 13 hereof. The persons authorized to direct the payment of funds
pursuant to this Agreement and the Plans shall provide to the Company's
Board of Trustees, and the Trustees shall review, at least quarterly a
written report of the amounts so paid and the purposes for which such
expenditures were made. The amounts paid under this Agreement are in
addition to the amount of any initial sales charge or contingent deferred
sales charge, if any, paid to the Distributor pursuant to the terms of the
Company's Registration Statement as in effect from time to time.
10. The Company agrees to indemnity, defend and hold the Distributor,
its officers, directors, employees and agents and any person who controls
the Distributor within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all claims,
demands, liabilities and expenses, including costs of investigation or
defense (including reasonable counsel fees) incurred by such indemnitee in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which such indemnitee may be or
may have been involved as a party or otherwise or with which he may be or
may have been threatened, while the Distributor was active in such capacity
or by reason of the Distributor having acted in any such capacity or
arising out of or based upon any untrue statement of a material fact
contained in the then-current Prospectus relating to the Shares or arising
out of or based upon any alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such claims, demands, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by the Distributor to the
Company expressly for use in any such Prospectus; provided, however, that
(1) no indemnitee shall be indemnified hereunder against any liability to
the Company or the shareholders of the Company or any expense of such
indemnitee with respect to any matter as to which such indemnitee shall
have been adjudicated not to have acted in good faith in the reasonable
belief that its action was in the best interest of the Company or arising
by reason of such indemnitee's willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations under this Agreement ("disabling conduct"), or
(2) as to any matter disposed of by settlement or a compromise payment by
such indemnitee, no indemnification shall be provided unless there has been
a determination that such settlement or compromise is in the best interests
of the Company and that such indemnitee appears to have acted in good faith
in the reasonable belief that its action was in the best interest of the
Company and did not involve disabling conduct by such indemnitee.
Notwithstanding the foregoing the Company shall not be obligated to provide
any such indemnification to the extent such provision would waive any right
which the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Company, its
Trustees, officers, employees and agents and any person who controls the
Company within the meaning of Section 15 of the 1933 Act (each, an
"indemnitee"), free and harmless from and against any and all liabilities
and expenses, including costs of investigation or defense (including
reasonable counsel fees) incurred by such indemnitee, but only to the
extent that such liability or expense shall arise out of or be based upon
any untrue or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor of the Company
expressly for use in a Prospectus or any alleged omission to state a
material fact in connection with such information required to be stated
therein or necessary to make such information
not misleading or arising by reason of disabling conduct by such indemnitee
or any person selling Shares pursuant to an agreement with the Distributor.
The Company shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification
might be sought hereunder if the Company receives a written affirmation of
the indemnitee's good faith belief that the standard of conduct necessary
for indemnification has been met and a written undertaking to reimburse the
Company unless it is subsequently determined that the indemnity is entitled
to such indemnification and if the Trustees of the Company determine that
the facts then known to them would not preclude indemnification. In
addition, at least one of the following conditions must be met: (A) the
indemnitee shall provide a security for his undertaking, (B) the Company
shall be insured against losses arising by reason of any lawful advances,
or (C) a majority of a quorum of Trustees of the Company who are neither
"interested persons" of the Company (as defined in Section 2(a)(19) of the
Act) nor parties to the proceeding ("Disinterested Non-Party Trustees") or
an independent legal counsel in a written opinion, shall determine, based
on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee ultimately
will be found entitled to indemnification.
All determinations with respect to indemnification hereunder shall be
made (1) by a final decision on the merits by a court or other body before
whom the proceeding was brought that such indemnitee is not liable by
reason of disabling conduct or, (2) in the absence of such a decision, by
(i) a majority vote of a quorum of the Disinterested Non-party Trustees of
the Company, or (ii) if such a quorum is not obtainable or even, if
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion.
11. This Agreement shall become effective with respect to any class
and any series of the Company when approved by the Board of Trustees and
shall remain in effect for up to two years from its effective date (one
year in the case of Section 9) and thereafter from year to year provided
such continuance is specifically approved at least annually prior to each
anniversary of such date by (a) Trustee Approval or by vote at a meeting of
shareholders of such class or series of the lesser of (i) 67 percent of the
Shares of such class or series present or represented by proxy and (ii) 50
percent of the outstanding Shares of such class or series and (b) by
Disinterested Trustee Approval.
12. This Agreement may be terminated (a) by the Distributor at any
time without penalty by giving sixty (60) days' written notice to the
Company which notice may be waived by the Company; or (b) by the Company at
any time without penalty upon sixty (60) days' written notice to the
Distributor (which notice may be waived by the Distributor); provided,
however, that any such termination by the Company
shall be directed or approved in the same manner as required for
continuance of this Agreement by Section 11(a) (or, in the case of
termination of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same manner as
provided for continuance of this Agreement in Section 11(a) (or, in the
case of amendment of Section 9, by Section 11(b)). Any such amendment or
change shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, but this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment
(as such term is defined in the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed entirely
therein and in accordance with applicable provisions of the 1940 Act.
15. If any provision of this Agreement shall be held or made invalid
or unenforceable by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected or impaired thereby.
16. Notice is hereby given that this Agreement is entered into on the
Company's behalf by an officer of the Company in such officer's capacity as
an officer and not individually. It is understood and expressly stipulated
that none of the Trustees, officers or shareholders of the Company are
personally liable hereunder. Neither the Trustees, officers or shareholders
assume any personal liability for obligations entered into on behalf of the
Company. All persons dealing with the Company shall look solely to the
property of the Company for the enforcement of any claims against the
Company.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by the Company's authorized officers as of September , 1995.
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Winthrop Focus Funds
By:
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Name:
Title:
Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation
By:
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Name:
Title:
