Exhibit 6
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of February 27, 1996, between Winthrop
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 Sec-
tion 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 February 27, 1996.
Winthrop Focus Funds
By: /s/ X. Xxxxxxx Xxxxxxx
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Name: X. Xxxxxxx Xxxxxxx
Title: President
Xxxxxxxxx Lufkin & Xxxxxxxx
Securities Corporation
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Vice President
