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Exhibit (6)
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DISTRIBUTION AGREEMENT
BETWEEN
CADRE NETWORK HEALTH FINANCIAL SERVICES TRUST
AND
AMBAC CADRE SECURITIES, INC.
APRIL 23, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1 DELIVERY OF DOCUMENTS.............................................. 1
1.1 Documents Delivered................................................ 1
ARTICLE 2 APPOINTMENT, DUTIES, ETC........................................... 2
2.1 Appointment as Distributor......................................... 2
2.2 Services as Distributor............................................ 2
2.3 Matters Related to Services........................................ 3
ARTICLE 3 EXPENSES........................................................... 4
ARTICLE 4 LIMITATION OF LIABILITY............................................ 5
4.1 Ambac Cadre Securities............................................. 5
4.2 Trust.............................................................. 5
ARTICLE 5 DURATION, TERMINATION AND AMENDMENT................................ 5
5.1 Duration of Agreement.............................................. 5
5.2 Amendments, Etc.................................................... 6
ARTICLE 6 MISCELLANEOUS...................................................... 6
6.1 Certain Relationships.............................................. 6
6.2 Third Parties...................................................... 6
6.3 Captions........................................................... 6
6.4 Severability....................................................... 7
6.5 Binding Effect..................................................... 7
6.6 Notices............................................................ 7
6.7 Entire Agreement................................................... 7
6.8 Applicable Law..................................................... 7
6.9 Counterparts....................................................... 7
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DISTRIBUTION AGREEMENT
This Agreement, executed on April 23, 1997, is made by and between the
Cadre Network Health Financial Services Trust, a California trust (the "Trust"),
on behalf of its Portfolio known as the Cadre Network Health Financial Services
Liquid Asset Fund (the "Fund"), and Ambac Cadre Securities, Inc., a Delaware
corporation ("Ambac Cadre Securities"):
RECITALS
The Fund is a Portfolio of the Trust existing pursuant to a
Declaration of Trust (Amended and Restated) dated as of March 14, 1997
made by the Hospital Council of Northern and Central California;
The Trust is registered with the Securities and Exchange
Commission as an open-end, diversified investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the
Fund's shares (the "Shares") are registered under the Securities Act of
1933, as amended (the "1933 Act"); and
The Trust has entered in a Management and Investment Advisory
Agreement with AMBAC Investment Management, Inc., now known as Ambac
Cadre Financial Services, Inc., an affiliate of Ambac Cadre Securities,
and Ambac Cadre Securities is willing to undertake the duties and
responsibilities hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DELIVERY OF DOCUMENTS
1.1 DOCUMENTS DELIVERED. The Trust has delivered, or will cause to be
delivered, to Ambac Cadre Securities true and complete copies of the following
documents and all future amendments thereto:
(a) Declaration of Trust (Amended and Restated) dated as of March
14, 1997;
(b) Certified resolutions of the Board of Trustees of the Trust
authorizing the appointment of Ambac Cadre Securities as
distributor for the Fund pursuant to this Agreement and
approving this Agreement;
(c) Registration Statement of the Fund on Form N-1A including the
Prospectus contained in Part A thereof and the Statement of
Additional Information contained in Part B thereof, all
amendments to the Registration
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Statement and the current Prospectus and Statement of
Additional Information;
(d) Management and Investment Advisory Agreement between the Trust
and AMBAC Investment Management, Inc. dated December 30, 1996;
(e) Custody Agreement between the Trust and First Trust National
Association (the "Custodian") effective as of April 30, 1997;
and
(f) Certificate of the Secretary of the Trust setting forth the
names and specimen signatures of the individuals authorized at
the time of delivery of such certificate to act on behalf of
the Trust and the Fund in connection with matters arising
hereunder.
ARTICLE 2
APPOINTMENT, DUTIES, ETC.
2.1 APPOINTMENT AS DISTRIBUTOR. The Trust hereby appoints Ambac Cadre
Securities as distributor of the Shares covered by the Registration Statement on
the terms and for the period set forth in this Agreement, and Ambac Cadre
Securities hereby accepts such appointment.
As used in this Agreement, the terms "Registration Statement,"
"Prospectus," and "Statement of Additional Information" shall mean any
registration statement and prospectus, including the statement of additional
information incorporated by reference therein, filed with the Securities and
Exchange Commission ("SEC"), and any amendments supplemental thereto which at
any time shall have been filed with the SEC. The Trust represents and warrants
to Ambac Cadre Securities that any Registration Statement, when it becomes
effective, will contain all statements required to be stated therein in
conformity with the 1933 Act, and the rules and regulations thereunder, that all
statements of fact contained in any such Registration Statement will be true and
correct when the Registration Statement becomes effective, no Registration
Statement will include an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Trust may make such amendments or supplements to the
Registration Statement as the Trust may determine to be necessary or advisable.
2.2 SERVICES AS DISTRIBUTOR. Subject to the direction and control of
the Board of Trustees of the Trust, Ambac Cadre Securities shall:
(a) Use its best efforts to solicit orders for the purchase of
Shares of the Fund in accordance with the
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Registration Statement, Prospectus and Statement of Additional Information.
(b) Transmit promptly advice regarding all orders received for
the purchase or redemption of Shares to Ambac Cadre Financial Services, Inc., or
as otherwise directed by the Trust.
(c) Comply with all applicable laws, rules and regulations,
including without limitation, all rules and regulations made or adopted pursuant
to the 1940 Act, the Securities Exchange Act of 1934, as amended, and the 1933
Act, and the rules and regulations of the Securities and Exchange Commission
under each of said Acts.
(d) Act only on behalf of Ambac Cadre Securities as principal
if Ambac Cadre Securities chooses to enter into selling agreements with selected
dealers or others. In this regard, Ambac Cadre Securities is hereby authorized
to enter into selling agreements with selected dealers and other financial
institutions with respect to the offering of Shares of the Fund.
(e) The Trust agrees to execute on behalf of the Fund all
documents and to furnish all information and otherwise take all actions which
may be reasonably necessary in the discretion of the Trust officers or Board of
Trustees of the Trust in connection with the qualification of the Shares in such
states as Ambac Cadre Securities may designate to the Trust and the Trust may
approve.
2.3 MATTERS RELATED TO SERVICES.
(a) Whenever in their judgment such action is warranted by
market, economic or political conditions, or by abnormal circumstances of any
kind, the Board of Trustees of the Trust or its officers may decline to accept
any orders for, or make any sales of, any of the Shares until such time as they
deem it advisable to accept such orders and to make such sales and the Trust
shall advise Ambac Cadre Securities promptly of such determinations.
(b) The Trust shall furnish to Ambac Cadre Securities from
time to time, for use in connection with the distribution of the Shares, such
information with respect to the Fund and its Shares as Ambac Cadre Securities
may reasonably request. The Trust also shall furnish Ambac Cadre Securities upon
request with:
(i) Semiannual unaudited and annual audited reports
of the Fund's books and accounts made by independent
accountants regularly retained by the Trust on behalf of the
Fund; and
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(ii) From time to time such additional information
regarding the Fund's financial condition and investments as
Ambac Cadre Securities may reasonably request.
(c) The Trust authorizes Ambac Cadre Securities to use any
Prospectus and Statement of Additional Information which is then effective with
the SEC in the form furnished to Ambac Cadre Securities from time to time in
connection with the distribution of the Shares.
(d) No Shares shall be offered by Ambac Cadre Securities or
the Trust under any of the provisions of this Agreement, and no orders for the
purchase or sale of such Shares shall be accepted by the Trust, if and so long
as the effectiveness of the Registration Statement then in effect shall be
suspended under any of the provisions of the 1933 Act, or if and so long as a
current prospectus is required by Section 10 of said Act is not on file with the
SEC; provided, that nothing contained in this subsection (d) shall restrict or
have any application or bearing upon the Fund's obligation to repurchase any of
the Shares from any Shareholder in accordance with the provisions of the
Prospectus.
(e) The Trust agrees to advise Ambac Cadre Securities
immediately in writing (i) of any requests by the SEC for amendments to the
Registration Statement then in effect; (ii) in the event of the issuance by the
SEC of any stop orders suspending the effectiveness of the Registration
Statement then in effect or the initiation of any proceedings for that purpose;
(iii) of the happening of any event which makes untrue any statement of material
fact made in the Registration Statement then in effect or which requires the
making of a change in such Registration Statement in order to make the
statements therein not misleading; and (iv) all actions of the SEC with respect
to any amendments to the Registration Statement which may from time to time be
filed with the SEC.
(f) Ambac Cadre Securities represents and warrants that it is
authorized by, and has received all approvals and licenses under all applicable
federal and state laws, and the regulations thereunder, including without
limitation, registration as a broker/dealer under applicable federal and state
law, necessary to lawfully perform its duties hereunder.
ARTICLE 3
EXPENSES
Ambac Cadre Securities shall pay all costs and expenses connected with
its qualification as a dealer under applicable state and federal laws and,
except as otherwise specifically provided in this Agreement, all other costs and
expenses incurred by it in connection with the performance of its duties under
this
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Agreement, including without limitation, expenses of maintaining shareholder
transfer records.
The Fund shall pay, or cause to be paid, all costs and expenses in
connection with registration of the Shares under the Securities Act of 1933, as
amended, and qualification of the Shares for sale in those states determined as
provided in Section 2.2(e), and all expenses in connection with maintaining
facilities for the issuance of the Shares and for supplying information, prices
and other data to be furnished by the Fund hereunder, and all expenses in
connection with the preparation and printing of the Fund's Prospectus and
statements of additional information for regulatory purposes and for
distributing to shareholders; provided, that nothing contained herein shall be
deemed to require the Fund to pay any of the costs of advertising the sale of
the Shares.
ARTICLE 4
LIMITATION OF LIABILITY
4.1 AMBAC CADRE SECURITIES. Ambac Cadre Securities shall not be liable
for any error in judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith, gross negligence or negligence on
its part in the performance of its duties or from reckless disregard by Ambac
Cadre Securities of its obligations and duties under this Agreement; provided,
the foregoing shall not limit Ambac Cadre Securities' liability to the Fund with
respect to any breaches by Ambac Cadre Securities of this Agreement.
4.2 TRUST. Article 5 of the Declaration of Trust contains provisions
limiting the liability of the Trustees, officers, employees and agents of the
Trust. The obligations of the Trust created hereunder are not personally binding
upon, nor shall resort be had to the property of, any of the Trustees, officers,
employees or agents of the Trust, or of the Shareholders of the Fund, and only
that portion of the Fund property necessary to satisfy the obligations of the
Trust arising hereunder shall be bound or affected by the operation of this
Agreement.
ARTICLE 5
DURATION, TERMINATION AND AMENDMENT
5.1 DURATION OF AGREEMENT. This Agreement shall become effective on the
date first set forth above provided that it has been approved by the Board of
Trustees, including the vote of a majority of the outstanding shares of the Fund
and by a majority of the members of the Board of Trustees who are not parties to
this Agreement or "interested persons" of any such party (as that term is
defined by the 1940 Act and the rules thereunder), cast in person at a meeting
of the Board of Trustees called for the purpose of voting on the approval of
this Agreement. This
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Agreement shall remain in effect for two years after the date it becomes
effective and shall continue from year to year thereafter, but only so long as
such continuance is approved at least annually by the vote of a majority of the
members of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund (as defined by the 1940 Act), by the vote of a
majority of the members of the Board of Trustees who are not parties to this
Agreement or "interested persons" of any such party (as that term is defined by
the 1940 Act and the rules thereunder), cast in person at a meeting called for
such purpose.
This Agreement may be terminated at any time, without the payment of
any penalty, by Ambac Cadre Securities or the Trust or by vote of a majority of
the Fund's outstanding voting securities, in each case, on sixty (60) days'
written notice. This Agreement shall automatically terminate in the event of its
"assignment" as defined by the 1940 Act and the rules thereunder.
5.2 AMENDMENTS, ETC. No provision of this Agreement may be waived,
amended or terminated as to the Fund except by an instrument in writing signed
by the Trust and Ambac Cadre Securities and no amendment of this Agreement shall
be effective until approved by the Board of Trustees of the Trust in the manner
required by Section 5.1.
ARTICLE 6
MISCELLANEOUS
6.1 CERTAIN RELATIONSHIPS. Nothing in this Agreement shall prevent
Ambac Cadre Securities or any officer, director or employee thereof from acting
as distributor for any other person, firm, corporation or entity and shall not
in any way limit or restrict Ambac Cadre Securities or any of its directors,
officers, partners or employees or any of its affiliates or their respective
directors, officers, partners or employees from buying, selling or trading any
investment instruments for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, that Ambac Cadre Securities
represents that it will undertake no activities which, in its judgment, will
materially adversely affect the performance of its obligations under this
Agreement.
6.2 THIRD PARTIES. When dealing with third parties on behalf of the
Fund, Ambac Cadre Securities shall include such recitals in written documents as
may be reasonably requested by the Trust regarding the limitation of liability
of the Board of Trustees, the Fund's shareholders, and the Trust's officers,
employees and agents to third parties.
6.3 CAPTIONS. The captions in this Agreement are included for
convenience of reference only and shall in no way define or
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limit any of the provisions hereof or otherwise affect their construction or
effect.
6.4 SEVERABILITY. If any provision of this Agreement shall be held
invalid under any applicable statute or regulation or by a decision of a court
of competent jurisdiction, such invalidity shall not affect any other provision
of this Agreement that can be given effect without the invalid provision, and,
to this end, the provisions hereof are severable.
6.5 BINDING EFFECT. Except as otherwise provided in Article 5, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
6.6 NOTICES. Notices or consents of any kind required or permitted
under this Agreement shall be in writing and shall be deemed duly delivered if
delivered in person or if mailed, two (2) days following mailing by certified
mail, return receipt requested, postage prepaid to the appropriate party as
follows:
a. If to the Fund or Trust:
Cadre Network Health Financial Services Trust
c/o SharePlus
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
b. If to the Distributor:
Ambac Cadre Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
or at such other address as may be specified by either party to the other in the
manner required under this Section 6.6.
6.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
6.8 APPLICABLE LAW. This Agreement shall be deemed to have been
executed in the State of California and the substantive laws of the State of
California shall govern the construction of this Agreement and the rights and
remedies of the respective parties hereto; provided, however, in the event of
any conflict between such laws and the 1940 Act, the provisions of the 1940 Act
shall govern.
6.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the authorized representatives of the parties
hereto have executed this Agreement as of the date first above written.
AMBAC CADRE SECURITIES, INC.
By /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Its Chairman
CADRE NETWORK HEALTH FINANCIAL
SERVICES TRUST
By /s/ Xxx Xxxxxx
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Its Chairman
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