1
Exhibit (6)
DISTRIBUTION AGREEMENT
BETWEEN
INVESTMENT SERVICES FOR EDUCATION
ASSOCIATIONS TRUST
AND
CADRE SECURITIES, INC.
DATED AS OF JULY 1, 1997
2
TABLE OF CONTENTS
Recitals................................................................1
ARTICLE I
DELIVERY OF DOCUMENTS
Section 1.01 Documents Delivered.......................................2
ARTICLE II
APPOINTMENT, DUTIES AND
COMPENSATION AS DISTRIBUTION AGENT
Section 2.01 Appointment as Distribution Agent.........................3
Section 2.02 Services and Duties as Distribution Agent.................3
Section 2.03 Compensation as Distribution Agent........................4
ARTICLE III
EXPENSES
Section 3.01 Expenses Paid by the Distribution Agent...................4
ARTICLE IV
LIMITATIONS OF LIABILITY
Section 4.01 Distribution Agent's Liability Limitation.................4
Section 4.02 Fund's Liability Limitation...............................4
ARTICLE V
DURATION AND TERMINATION
Section 5.01 Term of Agreement.........................................5
ARTICLE VI
CONSULTATION AND RELIANCE
Section 6.01 Consultation with Counsel.................................6
Section 6.02 Reliance on Certificates..................................6
i
3
ARTICLE VII
MISCELLANEOUS
Section 7.01 Certain Relationships.....................................6
Section 7.02 Certain Restrictions......................................7
Section 7.03 Third Parties.............................................7
Section 7.04 Amendments................................................7
Section 7.05 Captions..................................................8
Section 7.06 Severability..............................................8
Section 7.07 Binding Effect............................................8
Section 7.08 Notices...................................................8
Section 7.09 Entire Agreement..........................................9
Section 7.10 Applicable Law............................................9
Section 7.11 Enforcement and Waiver....................................9
Section 7.12 Authorization.............................................9
Section 7.13 Counterparts.............................................10
Section 7.14 Books and Records........................................10
Section 7.15 Effectiveness............................................10
Execution..............................................................11
ii
4
INVESTMENT SERVICES FOR EDUCATION ASSOCIATIONS TRUST
DISTRIBUTION AGREEMENT
This Agreement, made as of the 1st day of July 1997, by and between the
Investment Services for Education Associations Trust, a Delaware business trust
(the "Fund"), and Cadre Securities Inc., a New York corporation ("Cadre" or the
"Distribution Agent").
WHEREAS, the Fund desires to avail itself of the experience, resources,
advice and assistance of Cadre Securities, Inc. and to have Cadre Securities,
Inc. undertake the duties and responsibilities hereinafter set forth, on behalf
and subject to the supervision of the Board of Trustees of the Fund, as provided
herein; and
WHEREAS, Cadre is willing to undertake to render such services, subject
to the supervision of the Board of Trustees, on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants hereinafter set forth and other good and valuable
consideration, the receipt of which is hereby acknowledged, and intending to be
legally bound hereby the parties hereto agree as follows:
1
5
ARTICLE I. DELIVERY OF DOCUMENTS
Section 1.01. Documents Delivered. Except as herein otherwise provided,
the Fund has delivered, or will cause to be delivered, to Cadre properly
certified or authenticated copies of each of the following documents and will
deliver to it all future amendments and supplements thereto, if any:
(a) Amended and Restated Agreement of Trust of the Fund, dated
as of December 11, 1996, (such document, as presently in effect and as the same
may be amended from time to time, is herein called the "Declaration of Trust");
(b) By-laws of the Fund (such By-laws, as presently in effect
and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Trustees of the Fund
authorizing the appointment of Cadre as the Distribution Agent of the Fund and
approving the form of this Agreement;
(d) Prospectus of the Fund (such Prospectus, in its present form
and as the same may be amended or supplemented from time to time, is herein
called the "Prospectus");
(e) Certified copy of the Investment Advisory Agreement;
(f) Certified copy of the Administration Agreement; and
(g) A certificate of the Secretary of the Fund 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 Fund in connection with
matters arising hereunder.
2
6
ARTICLE II. APPOINTMENT, DUTIES AND
COMPENSATION AS DISTRIBUTION AGENT
Section 2.01. Appointment as Distribution Agent. The Fund, hereby
appoints Cadre as the Distribution Agent of the Fund on the terms and for the
period set forth in this Agreement, and Cadre hereby accepts such appointment
and agrees to perform the services and duties of the Distribution Agent set
forth in Section 2.02 hereof for the compensation provided in Section 2.03
hereof.
Section 2.02 Services and Duties as Distribution Agent. Subject to the
supervision of the Board of Trustees of the Fund, the Distribution Agent:
(a) shall furnish the Fund, at the sole expense of the
Distribution Agent, with the services of such persons as may be necessary from
time to time, as requested by the Board of Trustees, competent to engage in
marketing and sales efforts to encourage investors and Shareholders to invest in
the Fund, and shall perform such marketing and sales functions as may be
requested from time to time by the Board of Trustees;
(b) shall advise the Board of Trustees from time to time, as
requested by the Board of Trustees, regarding methods of seeking and obtaining
additional Shareholders in the Fund;
(c) shall assist Shareholders and potential shareholders in
completing and submitting registration forms for the Fund; and
(d) shall assist in the preparation and dissemination of
information with respect to the existence and operation of the Fund.
In connection with the performance of its duties hereunder, the
Distribution Agent hereby represents and warrants to the Board of Trustees of
the Fund that it is authorized by, and has received all approvals and licenses
under, all applicable state and federal laws necessary to
3
7
lawfully perform its duties hereunder.
Section 2.03. Compensation as Distribution Agent. For the services to
be rendered and the duties to be assumed by the Distribution Agent pursuant to
Section 2.02 of this Agreement, the Distribution Agent shall not be paid any
fee.
ARTICLE III. EXPENSES
Section 3.01. Expenses Paid by the Distribution Agent. The Distribution
Agent shall pay the expenses of activities that are primarily intended to result
in the sale of Shares in the Fund, including but not limited to, advertising,
compensation of underwriters, dealers and sales personnel, the printing and
mailing of prospectuses to other than current shareholders, and the printing and
mailing of sales literature provided that the Distribution Agent shall not be
obligated to pay such expenses to the extent the Fund pays them under any plan
adopted by the Fund under Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "1940 Act").
ARTICLE IV. LIMITATIONS OF LIABILITY
Section 4.01. Distribution Agent's Liability Limitation. The
Distribution Agent shall not be liable for any error in judgement 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 or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement,
provided, however, that this Section 4.01 shall not limit the Distribution
Agent's liability to the Fund with respect to any breaches by it of this
Agreement.
4
8
Section 4.02. Fund's Liability Limitation. Reference is hereby made to
the Declaration of Trust which contains certain provisions limiting the
liability of the Board of Trustees, Shareholder, officers, employees and agents
of the Fund. The obligations of the Fund created hereunder are not personally
binding upon, nor shall resort be had to the property of, any of the Board of
Trustees, Shareholder, officers, employees or agents of the Fund, and only that
portion of the Fund property necessary to satisfy the obligations of the Fund
arising hereunder shall be bound or affected by the operation of this Agreement.
ARTICLE V. DURATION AND TERMINATION
Section 5.01. Term of Agreement. Unless sooner terminated as provided
herein, this Agreement will continue in effect until June 30, 1999. Thereafter,
if not terminated, this Agreement shall continue in effect for successive annual
periods, provided such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of the Fund's Board of Trustees
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval, and (b) by the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the Fund (by vote
of the Fund's Board of Trustees or by vote of a majority of the outstanding
voting securities of the Fund), or by the Distribution Agent, on 60 days'
written notice. This Agreement will immediately terminate in the event of its
assignment. (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" will have the same
meaning as the meaning of such terms in the
5
9
1940 Act).
ARTICLE VI. CONSULTATION AND RELIANCE
Section 6.01. Consultation with Counsel. The Distribution Agent may
consult with reputable and experienced legal counsel (who may be counsel to the
Fund) concerning any question that may arise with reference to its duties under
this Agreement, and the opinion of such counsel shall be full and complete
protection in respect of any action taken or omitted by the Distribution Agent
in good faith and in accordance with such opinion provided such action meets the
standards in Section 4.01.
Section 6.02. Reliance on Certificates. The Distribution Agent shall
not be liable, subject to Section 4.01, and shall be fully protected in relying
upon any notice, instrument, direction or other communication that the
Distribution Agent reasonably believes (based on the most recent certificate of
the Secretary of the Fund that has been received by the Distribution Agent
pursuant to paragraph (g) of Section 1.01. hereof) to have been given by an
individual who is authorized to act on behalf of the Fund. The Fund agrees that
it will supply the Distribution Agent with certificates of the type described in
paragraph (g) of Section 1.01 hereof from time to time as necessary to keep the
information contained therein current, unless an employee or an affiliate of the
Administrator is a trustee or an officer of the Fund in which case such
certificates shall not be required by this Agreement.
ARTICLE VII. MISCELLANEOUS
Section 7.01. Certain Relationships. Nothing in this Agreement shall
prevent the
6
10
Distribution Agent or any officer, director or employee thereof from acting as
investment adviser or manager or Distribution Agent for any other person, firm,
corporation or entity and shall not in any way limit or restrict the
Distribution Agent or any of its director, officers, partners or employees or
any of its affiliates' directors, officers, partners or employees from buying,
selling or trading any investment instrument for its or their own accounts or
the accounts of others (including without limitation other Funds) for whom it or
they may be acting; provided, however, that the Distribution Agent expressly
represents that it will undertake no activities which, in its judgment, will
materially adversely affect the performance of its obligations to the Fund under
this Agreement. Directors, officers, partners, employees and agents of the
Distribution Agent or of affiliated persons of the Distribution Agent may serve
as officers, employees or agents of the Fund.
Section 7.02. Certain Restrictions. Anything in this Agreement to the
contrary notwithstanding, the Distribution Agent shall refrain from any action
which would violate any law, rule or regulation of any governmental body or
agency having jurisdiction over the Fund or its Shareholder or which would not
be permitted by the Fund's Prospectus, Declaration of Trust or By-Laws or by
guidelines, procedures or other directions of the Fund's Board of Trustees.
Section 7.03. Third Parties. When dealing with third parties on behalf
of the Fund in connection with the matters to which this Agreement relates, the
Distribution Agent shall include such recitals in written documents as may be
reasonably requested by the Fund pursuant to the provisions of the Prospectus
and Declaration of Trust regarding the limitation of liability of the Board of
Trustees, Shareholders, officers, employees and agents of the Fund to third
parties.
7
11
Section 7.04. Amendments. This Agreement shall not be modified or
amended without the consent of each party hereto, which consent must be
evidenced by an instrument in writing executed by each party hereto, or by their
respective successors or permitted assigns.
Section 7.05. Captions. The captions in this Agreement are included for
convenience of reference only and shall in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
Section 7.06. 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.
Section 7.07. Binding Effect. This Agreement shall be binding upon and
shall insure the benefit of the parties hereto and, subject to Section 5.01,
their respective successors and permitted assigns.
Section 7.08. 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 by certified mail, return receipt
requested, or telegraph, postage prepaid to the appropriate party as follows:
A. If to the Fund:
Xxxxxxx X. Xxxxxxxx, Esq.
Cadre Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
with a copy to:
8
12
Xxxxxxx X. Xxxxxx, Esquire
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
B. If to the Distribution Agent:
Xxxxxxx X. Xxxxxxxx, Esq.
Cadre Securities, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
or at such other address or to the attention of such other individual as shall
be specified by the respective parties hereto by written notice hereunder.
Section 7.09. Entire Agreement. This Agreement, and the documents
delivered pursuant hereto, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof.
Section 7.10. Applicable Law. this Agreement shall be deemed to have
been executed in the State of Delaware and the substantive laws of the State of
Delaware shall govern the construction of this Agreement and the rights and
remedies of the respective parties hereto.
Section 7.11. Enforcement and Waiver. Each party hereto shall have the
right at all times to enforce the provisions of this Agreement in strict
accordance with the terms hereof, notwithstanding any conduct or custom on the
part of such party in refraining from so doing at any time or times. The failure
of a party hereto at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or waived the same.
All rights and remedies of the respective
9
13
parties hereto are cumulative and concurrent and the exercise of one right or
remedy shall not be deemed a waiver or release of any other right or remedy.
Section 7.12. Authorization. This Agreement has been duly authorized,
executed and delivered by the parties hereto and constitutes a legal, valid and
binding obligation of such parties, enforceable in accordance with its terms.
Each individual signatory hereto represents and warrants that he is duly
authorized to execute this Agreement on behalf of his organization.
Section 7.13. Counterparts. This Agreement is intended to take effect
as an instrument under seal.
Section 7.14. Books and Records. In compliance with the requirements of
Rule 31a-3 of the Rules under the Investment Company Act of 1940, the
Distribution Agent hereby agrees that all records which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
the Fund any records upon the Fund's request. The Distribution Agent further
agrees to preserve for the periods prescribed by Rule 31a-2 the records required
to be maintained by Rule 31a-1 of the Rules.
Section 7.15. Effectiveness. This Agreement shall take effect as of the
date first above written.
10
14
IN WITNESS WHEREOF, the parties hereto have caused this Distribution
Agreement to be executed by their officers designated below as of the day and
year first above written and confirmed the day and year written below.
Investment Services for Education Associations Trust
by: /s/Xxx X. Xxxxxx
---------------------------
Cadre Securities, Inc.
by: /s/Xxxxxxx X. Xxxxxxxx, Xx.
---------------------------
11
