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DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this first day of July, 1997, by and
between Cadre Institutional Investors Trust (the "Trust"), a business trust
organized under the laws of the State of Delaware, and Cadre Securities, Inc.
(the "Distributor"), a corporation organized under the laws of the State of
Delaware.
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and is currently offering units of beneficial interest (such units
of all series are hereinafter called the "Shares"), representing interests in
the investment portfolio of the Trust identified on Schedule A hereto (the
"Fund"), which is registered with the Securities and Exchange Commission ("SEC")
pursuant to the Trust's Registration Statement on Form N-1A, as amended (the
"Registration Statement"); and
WHEREAS, the Trust desires to retain the Distributor as distributor for
the Fund to provide for the sale and distribution of the Shares of the Fund
identified on Schedule A, and for such additional classes or series as the Trust
may issue, and the Distributor is prepared to provide such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. SERVICE AS DISTRIBUTOR
1.1 The Distributor will act on behalf of the Trust for the
distribution of the Shares covered by the Registration Statement under the
Securities Act of 1933, as amended (the "1933 Act"). The Distributor will have
no liability for payment for the purchase of Shares sold pursuant to this
Agreement or with respect to redemptions or repurchases of Shares.
1.2 The Distributor agrees to use such efforts as is deemed
appropriate by the Distributor to solicit orders for the sale of the Shares and
to undertake such advertising and promotion and other activities as it believes
reasonable in connection with such solicitation. The Trust understands that the
Distributor serves as the distributor of the shares of other investment
companies and series thereof (collectively, the "Companies"), including
Companies having investment objectives similar to those of the Trust. The Trust
further understands that investors and potential investors in the Trust may
invest in shares of such other Companies. The Trust agrees that the
Distributor's duties to such Companies shall not be deemed in conflict with its
duties to the Trust under this paragraph 1.2.
1.3 The Distributor shall, at its own expense, finance
appropriate activities which it deems reasonable which are primarily intended to
result in the sale of the Shares, including, but not limited to, the payment of
compensation to brokers, dealers and other financial institutions which make
shares available to their customers (collectively, "Dealers"), the payment
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of compensation to sales personnel of the Distributor, and the printing and
mailing of prospectuses to other than current shareholders.
1.4 All activities by the Distributor and its agents and
employees, as distributor of the Shares, shall comply with all applicable laws,
rules and regulations, including, without limitation, all rules and regulations
made or adopted by the SEC and the National Association of Securities Dealers.
1.5 The Distributor will transmit any orders received by it
for purchase or redemption of the Shares to the transfer agent for the Trust.
1.6 Whenever in its judgment such action is warranted by
unusual market, economic or political conditions, the Trust may decline to
accept any orders for, or make any sales of, the Shares until such time as the
Trust deems it advisable to accept such orders and to make such sales.
1.7 The Trust agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the qualification of
the Shares for sale in such states as the Distributor may designate.
1.8 The Trust shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect to the
Trust and the Shares as the Distributor may reasonably request; and the Trust
warrants that the statements contained in any such information shall fairly show
or represent what they purport to show or represent. The Trust shall also
furnish the Distributor upon request with: (a) audited annual statements and
unaudited semi-annual statements of each Fund's books and accounts prepared by
the Trust, (b) quarterly earnings statements prepared by the Trust, (c) a
monthly itemized list of the securities comprising the portfolio of each Fund,
(d) monthly balance sheets as soon as practicable after the end of each month,
and (e) from time to time such additional information regarding the financial
condition of the Trust and the Funds as the Distributor may reasonably request.
1.9 The Trust represents to the Distributor that all
Registration Statements and prospectuses filed by the Trust with the SEC under
the 1933 Act with respect to the Shares have been prepared in conformity with
the requirements of said Act and the rules and regulations of the SEC
thereunder. As used in this Agreement, the term "Registration Statement" shall
mean any Registration Statement and any prospectus and any statement of
additional information relating to the Trust filed with the SEC and any
amendments or supplements thereto at any time filed with the SEC. Except as to
information included in the Registration Statement in reliance upon information
provided to the Trust by the Distributor or any affiliate of the Distributor,
the Trust represents and warrants to the Distributor that: any Registration
Statement, when such Registration Statement becomes effective, will contain
statements required to be stated therein in conformity with the 1933 Act and the
rules and regulations of the SEC thereunder; all statements of fact contained in
any such Registration Statement will be true and correct when such Registration
Statement becomes effective; and no Registration Statement when such
Registration Statement becomes effective will include an untrue statement of a
material fact or omit to state a
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material fact required to be stated therein or necessary to make the statements
therein not misleading to a purchaser of the Shares. The Trust may but shall not
be obligated to propose from time to time such amendment or amendments to any
Registration Statement and such supplement or supplements to any prospectus as,
in the light of future developments, may, in the opinion of the Trust's counsel,
be necessary or advisable. The Trust shall promptly notify the Distributor of
any advice given to it by its counsel regarding the necessity or advisability of
amending or supplementing such Registration Statement. If the Trust shall not
propose such amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Trust of a written request from the
Distributor to do so, the Distributor may, at its option, terminate this
Agreement. The Trust shall not file any amendment to any Registration Statement
or supplement to any prospectus without giving the Distributor reasonable notice
thereof in advance; provided, however, that nothing contained in this Agreement
shall in any way limit the Trust's right to file at any time such amendments to
any Registration Statements and/or supplements to any prospectus, of whatever
character, as the Trust may deem advisable, such right being in all respects
absolute and unconditional.
1.10 The Trust authorizes the Distributor and Dealers to use
any prospectus or statement of additional information in the form furnished from
time to time in connection with the sale of the Shares. The Trust agrees to
indemnify and hold harmless the Distributor, its officers, directors, and
employees, and any person who controls the Distributor within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending such claims, demands or liabilities and any legal fees incurred in
connection therewith) which the Distributor, its officers, directors, employees
or any such controlling person may incur under the 1933 Act, under any other
statute, at common law or otherwise, arising out of or based upon:
(a) any untrue statement, or alleged untrue
statement, of a material fact contained in the Trust's Registration Statement,
prospectus, statement of additional information, or sales literature (including
amendments and supplements thereto), or
(b) any omission, or alleged omission, to state a
material fact required to be stated in the Trust's Registration Statement,
prospectus, statement of additional information or sales literature (including
amendments or supplements thereto), necessary to make the statements therein not
misleading, provided, however, that insofar as losses, claims, damages,
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 on and in
conformity with information furnished to the Trust by the Distributor or its
affiliated persons for use in the Trust's Registration Statement, prospectus, or
statement of additional information or sales literature (including amendments or
supplements thereto), such indemnification is not applicable.
The Distributor, its officers, directors, and employees, and
any such controlling person, as aforesaid, shall notify the Trust of any action
brought against the Distributor, its officers, directors or employees, or any
such controlling person, such notification to be given by letter or by telegram
addressed to the Trust and sent to the Trust by the person against whom such
action is brought, within 10 days after the summons or other first legal process
shall have
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been served. The failure to notify the Trust of any such action shall not
relieve the Trust from any liability which the Trust may have to the person
against whom such action is brought by reason of any such untrue, or allegedly
untrue, statement or omission, or alleged omission, otherwise than on account of
the Trust's indemnity agreement contained in this paragraph 1.10. The Trust will
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Trust and approved by the Distributor,
which approval shall not unreasonably be withheld. In the event the Trust elects
to assume the defense of any such suit and retain counsel of good standing
approved by the Distributor, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them; but in
case the Trust does not elect to assume the defense of any such suit, or in case
the Distributor reasonably does not approve of counsel chosen by the Trust, or
in case there is a conflict of interest between the Trust or the Distributor,
the Trust will reimburse the Distributor, its officers, directors and employees,
or the controlling person or persons named as defendant or defendants in such
suit, for the fees and expenses of any counsel retained by the Distributor or
them. The Trust's indemnification agreement contained in this paragraph 1.10 and
the Trust's representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Distributor, its officers, directors and employees, or any
controlling person, and shall survive the delivery of any Shares. This agreement
of indemnity will inure exclusively to the Distributor's benefit, to the benefit
of its several officers, directors and employees, and their respective estates,
and to the benefit of the controlling persons and their successors. The Trust
agrees promptly to notify the Distributor of the commencement of any litigation
or proceedings against the Trust or any of its officers or trustees in
connection with the issue and sale of any Shares.
1.11 The Distributor agrees to indemnify and hold harmless the
Trust, its several officers and trustees and each person, if any, who controls
the Trust or a Fund within the meaning of Section 15 of the 1933 Act against any
loss, claims, damages, liabilities and expenses (including the cost of any
reasonable legal fees incurred in connection therewith) which the Trust, its
officers, trustees or any such controlling person may incur under the 1933 Act,
under any other statute, at common law or otherwise, but only to the extent that
such liability or expense incurred by the Trust, its officers or trustees, or
any controlling person resulting from such claims or demands arose out of the
acquisition of any Shares by any person which may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Trust's Registration Statement, prospectus or statement of additional
information (including amendments and supplements thereto), or any omission, or
alleged omission, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon information furnished or confirmed in writing
to the Trust by the Distributor or its affiliated persons (as defined in the
1940 Act).
The agreement of the Distributor to indemnify the Trust, its
officers and trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon the Distributor being notified of any action brought
against the Trust, its officers or trustees, or any such controlling person,
such notification to be given by letter or telegram addressed to the Distributor
at its principal office, and sent to the Distributor by the person against whom
such action is brought,
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within 10 days after the summons or other first legal process shall have been
served. The Distributor shall have the right of first control of the defense of
such action, with counsel of its own choosing, satisfactory to the Trust, if
such action is based solely upon such alleged misstatement or omission on the
Distributor's part, and in any other event the Trust, its officers or trustees
or such controlling person shall each have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify the Distributor of any such action shall not relieve the Distributor from
any liability that the Distributor may have to the Trust, its officers or
trustees, or to such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
the Distributor's indemnity agreement contained in this paragraph 1.11.
1.12 No Shares shall be offered by either the Distributor or
the Trust under any of the provisions of this Agreement and no orders for the
purchase or sale of Shares hereunder shall be accepted by the Trust if and so
long as effectiveness of the Registration Statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the 1933 Act, or if and so long as a current prospectus as required by Section
5(b)(2) of said Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 1.12 shall in any way restrict or have any
application to or bearing upon the Trust's obligation to redeem Shares tendered
for redemption by any shareholder in accordance with the provisions of the
Trust's Registration Statement, Declaration of Trust, or bylaws.
1.13 The Trust agrees to advise the Distributor as soon as
reasonably practical by a notice in writing delivered to the Distributor:
(a) of any request by the SEC for amendments to the
Registration Statement, prospectus or statement of additional information then
in effect or for additional information;
(b) in the event of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement,
prospectus or statement of additional information then in effect or the
initiation by service of process on the Trust of any proceeding for that
purpose;
(c) of the happening of any event that makes untrue
any statement of a material fact made in the Registration Statement, prospectus
or statement of additional information then in effect or that requires the
making of a change in such Registration Statement, prospectus or statement of
additional information in order to make the statements therein not misleading;
and
(d) of all actions of the SEC with respect to any
amendments to any Registration Statement, prospectus or statement of additional
information which may from time to time be field with the SEC.
For purposes of this Section, informal requests by or acts of the Staff of the
SEC shall not be deemed actions of or requests by the SEC.
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1.14 The Distributor may enter into selling agreements with
Dealers with respect to the offering of the Shares to the public. Each such
selling agreement will provide (a) that all payments for purchases of Shares
will be sent directly from the Dealer to the Funds' transfer agent and (b) that,
if payment is not made with respect to purchases of Shares at the customary or
required time for settlement of the transaction, the Distributor will have the
right to cancel the sale of the Shares ordered by the Dealer, in which case the
Dealer will be responsible for any loss suffered by any Fund or the Distributor
resulting from such cancellation. The Distributor may also act as disclosed
agent for a Fund and sell Shares of that Fund to individual investors. The
Distributor shall enter into selling agreements only with Dealers that are
either members in good standing of the National Association of Securities
Dealers, Inc. or entities that are not required to be such members. All selling
agreements shall be in such form as is approved by the President of the Trust.
2. TERM
This Agreement shall become effective on July 1, 1997, and,
unless sooner terminated as provided herein, shall continue for an initial two
year term and shall continue in effect from year to year thereafter, provided
that such continuance is specifically approved at least annually by (i) the
Trust's Board of Trustees or (ii) by a vote of a majority (as defined in the
1940 Act and Rule 18f-2 thereunder) of the outstanding voting securities of the
Trust, and further provided that in either event the continuance is also
approved by a majority of the Trustees who are not parties to this Agreement and
who are not interested persons (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable without penalty, on at least
sixty days' written notice, by the Trust's Board of Trustees, by vote of a
majority (as defined in the 1940 Act and Rule 18f-2 thereunder) of the
outstanding voting securities of the Trust, or by the Distributor. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act and the rules thereunder).
3. LIMITATION OF LIABILITY
(a) The Distributor shall not be liable to the Trust for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of its obligations and duties under this
Agreement, except a loss resulting from the Distributor's willful misfeasance,
bad faith or gross negligence in the performance of such obligations and duties,
or by reason of its reckless disregard thereof. The Trust will indemnify the
Distributor against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit not resulting from
the willful misfeasance, bad faith or gross negligence of the Distributor in the
performance of such obligations and duties or by reason of its reckless
disregard thereof.
(b) In no event and under no circumstances shall either party
to this Agreement be liable to the other party for consequential or indirect
loss of profits, reputation or business or any other special damages under any
provision of this Agreement.
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4. NOTICES
All notices and other communications (collectively referred to
as a "Notice" or "Notices" in this paragraph) hereunder shall be given in
writing or by telegram, cable, telex or facsimile sending device. Notices shall
be addressed (a) if to the Distributor at its principal place of business, 000
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000; (b) if to the Trust, at its
principal place of business, 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, X.X. 00000; or (c)
if to neither of the foregoing, at such other address as to which the sender
shall have been notified by any such Notice or other communication. The Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given three days after it is sent, or if sent by telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately.
Either party hereto may change the address to which Notices to it shall be sent
by giving Notice of such change to the other party.
5. FURTHER ACTIONS
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
6. AMENDMENTS
This Agreement or any part hereof may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.
7. GOVERNING STATE
This Agreement shall be governed by and its provisions shall
be construed in accordance with the laws of the State of New York and the
applicable provisions of the 1940 Act. To the extent the provisions of New York
law conflict with the 1940 Act, the latter shall control.
8. MATTERS RELATING TO THE TRUST AS A DELAWARE BUSINESS TRUST
The names "Cadre Institutional Investors Trust" and "Trustees
of Cadre Institutional Investors Trust" refer respectively to the Trust created
and the trustees of the Trust, as trustees but not individually or personally,
acting from time to time under a Declaration of Trust dated as of June 27, 1995
to which reference is hereby made and the Trust's Certificate of Trust, a copy
of which is on file at the office of the Secretary of the State of Delaware, and
to any and all amendments to such documents. The obligations of "Cadre
Institutional Investors Trust" entered into in the name or on behalf thereof by
any of its trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the trustees, shareholders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with the Trust must look solely to the assets of the
Trust for the enforcement of any claims against the Trust.
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9. MISCELLANEOUS
This Agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter thereof. 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 construction or
effect. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding and shall inure
to the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
CADRE INSTITUTIONAL INVESTORS TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Title: President
CADRE SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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SCHEDULE A
to the Distribution Agreement
between Cadre Institutional Investors Trust and
Cadre Securities, Inc.
NAME OF SERIES
* Liquid Asset Fund
CADRE INSTITUTIONAL INVESTORS TRUST CADRE SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxx
---------------------------- --------------------
Title: President Title: President
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