Exhibit 99.B.6
UNDERWRITING AGREEMENT
This Agreement, dated as of the ___ day of ____, 1994, made by and
between McM Funds, a Delaware business trust (the "Trust") operating as a
registered investment company under the Investment Company Act of 1940, as
amended (the "Act"), duly organized and existing under the laws of the State of
Delaware; McMorgan & Company, ("the Advisor"), a registered investment adviser
existing as a corporation duly organized and existing under the laws of the
State of California; and Fund/Plan Broker Services, Inc. ("Fund/Plan"), a
corporation duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue
separate series of shares representing interests in separate investment
portfolios (the "Series"), which Series are identified on Schedule "C" attached
hereto, and which Schedule "C" may be amended from time to time by mutual
agreement among the Parties; and
WHEREAS, the Advisor has been appointed investment adviser to the
Trust; and
WHEREAS, Fund/Plan is a broker-dealer registered with the U.S.
Securities and Exchange Commission and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Parties are desirous of entering into an agreement
providing for the distribution by Fund/Plan of shares of the Series of the Trust
(the "Shares"), and that Fund/Plan be compensated by the Advisor for providing
such services.
NOW, THEREFORE, in consideration of the promises and agreements of the
Parties contained herein, the Parties agree as follows:
1. Appointment.
The Trust hereby appoints Fund/Plan as its exclusive agent for the
distribution of the Shares, and Fund/Plan hereby accepts such
appointment under the terms of this Agreement. The Trust agrees that it
will not sell any shares to any person except to fill orders for the
shares received through Fund/Plan; provided, however, that the
foregoing exclusive right shall not apply: (a) to shares issued or sold
in connection with the merger or consolidation of any other investment
company with the Trust or the acquisition by purchase or otherwise of
all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the
Trust; (b) to shares which may be offered by the Trust to its
stockholders for reinvestment of cash distributed from capital gains or
net investment income of the Trust; or (c) to shares which may be
issued to shareholders of other funds who exercise any exchange
privilege set forth in the Trust's Prospectus. Notwithstanding any
other provision hereof, the Trust may terminate, suspend, or withdraw
the offering of the Shares whenever, in its sole discretion, it deems
such action to be desirable.
2. Sale and Repurchase of Shares.
(a) Fund/Plan is hereby granted the right as agent for the Trust,
to sell Shares to the public against orders therefor at the
public offering price (as defined in sub-paragraph 2.(c)
hereof).
(b) Fund/Plan will also have the right to take, as agent for the
Trust, all actions which, in Fund/Plan's judgment, are
necessary to carry into effect the distribution of the Shares.
(c) The public offering price shall be the net asset value of the
Shares then in effect.
(d) The net asset value of the Shares shall be determined in the
manner provided in the then current prospectus, and statement
of additional information relating to the Shares and when
determined shall be applicable to all transactions as provided
in the prospectus. The net asset value of the Shares shall be
calculated by the Trust or by another entity on behalf of the
Trust. Fund/Plan shall have no duty to inquire into or
liability for the accuracy of the net asset value per Share as
calculated.
(e) On every sale, the Trust shall receive the applicable net
asset value of the Shares promptly.
(f) Upon receipt of purchase instructions, Fund/Plan will transmit
such instructions to the Trust or its transfer agent for
registration of the Shares purchased.
(g) Nothing in this Agreement shall prevent Fund/Plan or any
affiliated person (as defined in the Act) of Fund/Plan from
acting as underwriter or distributor for any other person,
firm or corporation (including other investment companies) or
in any way limit or restrict Fund/Plan or such affiliated
person from buying, selling or trading any securities for its
or their own account or for the accounts of others for whom it
or they may be acting; provided, however, that Fund/Plan
expressly agrees that it will not for its own account purchase
any shares of the Trust except for investment purposes and
that it will not for its own account sell any such shares
except by redemption of such shares by the Trust, and that it
will not undertake in any activities which, in its judgment,
will adversely affect the performance of its obligations to
the Trust under this Agreement.
(h) Fund/Plan may repurchase Shares at such prices and upon such
terms and conditions as shall be specified in the Prospectus.
3. Rules of Sale of Shares.
Fund/Plan does not agree to sell any specific number of Shares.
Fund/Plan, as Underwriter for the Trust, undertakes to sell Shares on a
best efforts basis and only against orders received therefor. The Trust
reserves the right to refuse at any time or times to sell any of its
Shares for any reason deemed adequate by it.
4. Rules of NASD.
(a) Fund/Plan will conform to the Rules of Fair Practice of the
NASD and the securities laws of any jurisdiction in which it
directly or indirectly sells any Shares.
(b) Fund/Plan will require each dealer with whom Fund/Plan has a
selling agreement to conform to the applicable provisions of
the Prospectus, with respect to the public offering price of
the Shares, and Fund/Plan shall not cause the Trust to
withhold the placing of purchase orders so as to make a profit
thereby.
(c) The Trust agrees to furnish to Fund/Plan sufficient copies of
any agreements, plans, communications with the public or other
materials it intends to use in connection with any sales of
Shares in adequate time for Fund/Plan to file and clear
(unless Fund/Plan and the Trust agree that any such material
may be filed subsequent to distribution) such materials with
the proper authorities before they are put in use unless
Fund/Plan and the Trust agree that any such material may be
filed subsequent to distribution. In addition,
the Trust agrees not to use any such materials until so filed
and cleared for use by appropriate authorities and Fund/Plan.
(d) Fund/Plan, at its own expense, will qualify as a dealer or
broker, or otherwise, under all applicable state or federal
laws required in order that the Shares may be sold in such
states as may be mutually agreed upon by the parties.
(e) Fund/Plan shall not, in connection with any sale or
solicitation of a sale of the Shares, make or authorize any
representative, Service Organization, broker or dealer to
make, any representations concerning the Shares except those
contained in the Prospectus covering the Shares and in
communications with the public or sales materials approved by
Fund/Plan and the Trust as information supplemental to such
Prospectus. Copies of the Prospectus will be supplied by the
Trust to Fund/Plan in reasonable quantities upon request.
5. Records to be Supplied by the Trust.
The Trust shall furnish to Fund/Plan copies of all information,
financial statements and other papers which Fund/Plan may reasonably
request for use in connection with the distribution of the Shares
including, but not be limited to, one certified copy of all financial
statements prepared for the Trust by its independent public
accountants.
6. Expenses.
(a) The Trust will bear the following expenses:
(i) preparation, setting in type, and printing of
sufficient copies of the prospectuses and statements
of additional information for distribution to
shareholders, and the distribution of same to the
shareholders;
(ii) preparation, printing and distribution of reports and
other communications to shareholders;
(iii) registration of the Shares under the federal
securities laws;
(iv) qualification of the Shares for sale in the
jurisdictions mutually agreed upon by the Trust and
Fund/Plan;
(v) maintaining facilities for the issue and transfer of
the Shares;
(vi) supplying information, prices and other data to be
furnished by the Trust under this Agreement; and
(vii) any original issue taxes or transfer taxes applicable
to the sale or delivery of the Shares or certificates
therefor.
(b) the Advisor will pay all other expenses incident to the sale
and distribution of the Shares sold hereunder.
7. Term and Compensation.
(a) The term of this Agreement shall commence on the date which
the Trust's registration statement becomes effective (the
"Effective Date"), with the U.S. Securities and Exchange
Commission.
(b) This Agreement shall remain in effect for two (2) years from
the Effective Date. The Agreement shall continue thereafter
for periods not exceeding one (1) year if approved at least
annually (i) by a vote of a majority of the outstanding voting
securities of each Series or by a vote of the Trustees
of the Trust, and (ii) by a vote of a majority of the trustees
of the Trust who are not interested persons or parties to this
Agreement (other than as Trustees of the Trust), cast in
xxxxxx at a meeting called for the purpose of voting on such
approval.
(c) Fees payable to Fund/Plan shall by paid by the Advisor as set
forth in Schedule "B" attached and shall be fixed for the two
(2) years period commencing on the Effective Date of this
Agreement. Thereafter, the fee schedule will be subject to
annual review and adjustment.
(d) This Agreement (i) may at any time be terminated without the
payment of any penalty, either by a vote of the Trustees of
the Trust or by a vote of a majority of the outstanding voting
securities of each Series with respect to such Series, on
sixty (60) days' written notice to Fund/Plan; and (ii) may be
terminated by Fund/Plan on sixty (60) days' written notice to
the Trust with respect to any Series.
(e) This Agreement shall automatically terminate in the event of
its assignment.
8. Indemnification of Fund/Plan by Advisor.
The Advisor will indemnify and hold Fund/Plan harmless for the actions
of its employees registered with the NASD as Fund/Plan representatives
and will undertake to maintain compliance with all rules and
regulations concerning any and all sales presentations made by such
employees.
9. Liability of Fund/Plan.
(a) Fund/Plan, its directors, officers, employees, shareholders
and agents shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the
part of Fund/Plan in the performance of its obligations and
duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(b) The Trust agrees to indemnify and hold harmless Fund/Plan
against any and all liability, loss, damages, costs or
expenses (including reasonable counsel fees) which Fund/Plan
may incur or be required to pay hereafter, in connection with
any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative
body, in which Fund/Plan may be involved as a party or
otherwise or with which Fund/Plan may be threatened, by reason
of the offer or sale of the Trust shares prior to the
execution of this Agreement.
(c) Any person, even though also a director, officer, employee,
shareholder or agent of Fund/Plan, who may be or become an
officer, director, trustee, employee or agent of the Trust,
shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or
business in connection with Fund/Plan's duties hereunder), to
be rendering such services to or acting solely for the Trust
and not as a director, officer, employee, shareholder or
agent, or one under the control or direction of Fund/Plan even
though receiving a salary from Fund/Plan.
(d) The Trust agrees to indemnify and hold harmless Fund/Plan, and
each person, who controls Fund/Plan within the meaning of
Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), or Section 20 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against any and
all losses, claims, damages and liabilities, joint or several
(including any reasonable investigative, legal and other
expenses incurred in connection therewith) to which they, or
any of them, may become subject under the Act, the Securities
Act, the Exchange Act or other federal or state law or
regulation, at common law or otherwise insofar as such losses,
claims, damages or liabilities (or actions, suits or
proceedings in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material
fact contained in a prospectus, statement of additional
information, supplement thereto, sales literature or other
written information prepared by the Trust and furnished by the
Trust to Fund/Plan for Fund/Plan's use hereunder, disseminated
by the Trust or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading. Such indemnity shall not, however, inure to
the benefit of Fund/Plan (or any person controlling Fund/Plan)
on account of any losses, claims, damages or liabilities (or
actions, suits or proceedings in respect thereof) arising from
the sale of the shares of the Trust to any person by Fund/Plan
(i) if such untrue statement or omission or alleged untrue
statement or omission was made in the prospectus, statement of
additional information, or supplement, sales or other
literature, in reliance upon and in conformity with
information furnished in writing to the Trust by Fund/Plan
specifically for use therein or (ii) if such losses, claims,
damages or liabilities arise out of or are based upon an
untrue statement or omission or alleged untrue statement or
omission found in any prospectus, statement of additional
information, supplement, sales or other literature,
subsequently corrected, but, negligently distributed by
Fund/Plan and a copy of the corrected prospectus was not
delivered to such person at or before the confirmation of the
sale to such person.
Fund/Plan agrees to indemnify and hold harmless the Trust for such losses,
claims, damages or liabilities as a result of , and consistent with of (i) of
(ii) above.
10. Amendments.
No provision of this Agreement may be amended or modified, in any
manner whatsoever except by a written agreement properly authorized and
executed by the Parties.
11. Section Headings.
Section and Paragraph headings are for convenience only and shall not
be construed as part of this Agreement.
12. Reports.
Fund/Plan shall prepare reports for the Board of Trustees of the Trust
on a quarterly basis showing such information as from time to time
shall be reasonably requested by such Board.
13. Severability.
If any part, term or provision of this Agreement is held by any court
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid
provided that the basic agreement is not thereby substantially
impaired.
14. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania and the venue of any action arising under this Agreement
shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania if the suit is
instituted by the Trust or the Advisor. If a suit is instituted by
Fund/Plan, the venue of such action arising under this Agreement shall
be San Francisco, California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement consisting of
nine type written pages, together with Schedules "A", "B" and "C", to be signed
by their duly authorized officers, as of the day and year first above written.
McM Funds
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By: Xxxxx X. Xxxxxx, Vice President
McMorgan & Company
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By: Xxxxxx Xxxxxx, President
Fund/Plan Broker Services, Inc.
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By: Xxxxx X. Xxxx,
President
SCHEDULE "A"
UNDERWRITER/DISTRIBUTION SERVICES
FOR
McM FUNDS
FUND/PLAN BROKER SERVICES, INC.
Fund/Plan Broker Services, Inc. (FPBS), a fully registered Broker/Dealer and
member of the National Association of Securities Dealers (NASD) offers
Underwriter/Sponsor and Distribution/Marketing Services to our Mutual Fund
Clients.
UNDERWRITER/SPONSOR SERVICES
As Underwriter/Sponsor, FPBS assumes the responsibility for distribution of
Trust shares within the guidelines outlined by the Investment Company Act of
1940 of the Securities Exchange Commission as well as the NASD. This includes,
but is not limited to, submission of Trust literature to the NASD as well as
registration and licensing of Trust personnel.
Underwriter/Sponsor services include:
A) Compliance and maintenance of Trust share registration limits
B) Preparation and execution of Underwriter and 12B-1 Plan Agreements
Monitoring accruals
Monitoring expenses
Disbursements for expenses and trail commissions
C) Quarterly Reports to Board of Directors and/or Trustees
D) Literature review, recommendations and submission to the NASD
E) All NASD required files and bookkeeping
F) Initial NASD Licensing and Transfers of Registered Representatives
This includes: U-4 Form and Fingerprint Submission to NASD
Supplying Series 6 or 7 and 63 written study
material
Renewals and Terminations of Representatives
G) Written supervisory procedures and manuals for Registered
Representatives
H) Ongoing training and updates for Representatives regarding disbursement
of Trust literature, written correspondence and communications with the
public.
DISTRIBUTION/MARKETING SERVICES
As Distributor (a term often used interchangeable with Underwriter), FPBS offers
optional marketing services including, but not limited to, Inbound
Telemarketing.
I. Inbound Telemarketing Services
A) Receive and answer directly with name of the Trust
B) Input marketing inquiries on confidential database for Fund
C) Fax to Trust daily the names and addresses of prospects
requesting literature.
C) Fax to Trust daily the names and phone numbers of prospects
requesting verbal information.
SCHEDULE "B"
UNDERWRITER AND DISTRIBUTION FEE SCHEDULE
FOR
McM FUNDS
I. UNDERWRITER/SPONSOR SERVICES
A) The annual fee to Fund/Plan Broker Services (FPBS) will be
$15,000 per year as primary Underwriter/Distributor of the
Funds and primary licensing/regulatory agent for Trust
personnel. Fund/Plan Broker Services will be required to
maintain the Funds' registration with FPBS as Broker/Dealer of
record.
B) FPBS will maintain annual NASD and state license renewals and
the monitoring required of representative activities as
follows:
Up to 2 States - $1,000 per Representative per Year
3 to 30 States - $2,000 per Representative per Year
31 to 50 States - $3,000 per Representative per Year
II. DISTRIBUTION/MARKETING SERVICES
Inbound Telemarketing Services $1.50 per call
Three Month Introductory Minimum Monthly Fee - $500
III. OUT-OF-POCKET EXPENSES
McM Funds will reimburse Fund/Plan Services monthly for all
out-of-pocket expenses, including postage, telecommunications
(telephone and fax), special reports, record retention, special
transportation costs as incurred.
SCHEDULE "C"
Identification of Series
Below are listed the "Series" to which services under this Agreement are to be
performed as of the execution date of this Agreement:
"McM Funds"
1. Equity Investment Fund
2. Special Equity Fund
3. Balanced Fund
4. Intermediate Fixed Income Fund
5. Fixed Income Fund
6. Principal Preservation Fund
This Schedule "C" may be amended from time to time by agreement of the Parties.
McM Funds
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By: Xxxxx X. Xxxxxx, Vice President
McMorgan & Company
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By: Xxxxxx Xxxxxx, President
Fund/Plan Broker Services, Inc.
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By: Xxxxx X. Xxxx,
President
