Exhibit #6a
UNDERWRITING AGREEMENT
BETWEEN
STATE BOND INCOME FUNDS, INC.
AND
SBM FINANCIAL SERVICES, INC.
This Underwriting Agreement made this 14th day of June, 1995, by and
between State Bond Income Funds, Inc., a Maryland corporation (hereinafter
called the "Fund") and SBM Financial Services, Inc., a Minnesota corporation
(hereinafter called "Distributor").
WITNESSETH THAT:
1. The Fund hereby appoints Distributor as principal underwriter in
connection with the offering and sale of shares of the capital stock
of the Fund. The Fund authorizes Distributor, as agent for the Fund,
subject to applicable law and the Articles and By-laws of the Fund to
solicit orders for the purchase of its shares, satisfactory to the
Fund, and otherwise promote the Fund and, as agent for the Fund, to
accept orders from dealers with whom it has written agreements.
Distributor shall offer the Fund's shares only in states in which such
shares are qualified as a broker/dealer. Distributor shall distribute
the Fund's shares on an agency or "best efforts" basis under which the
Fund shall only issue such shares as are actually sold.
2. The public offering price of such shares shall be the net asset value
per share (as determined by the Fund) of the outstanding shares of the
Fund, plus the applicable sales charge as specified in the Fund's
Prospectus from time to time. Such net asset value shall be regularly
determined as set forth from time to time in the Fund's current
Prospectus and Statement of Additional Information. The Fund shall
promptly furnish Distributor a statement of each computation of net
asset value and of the details entering into such computation.
3. Distributor shall receive, as compensation for the services it
performs under this Agreement, a sales charge for each investment in
the Fund's shares, which sales charge shall be as set forth in
paragraph 2 of this Agreement. The sales charge may be deducted by
Distributor from the offering price when Distributor makes payment to
the Fund hereunder for sales of the Fund's shares. Distributor may in
its discretion allow concessions to dealers with whom Distributor has
made arrangements and agreements to sell shares of the Fund on its
behalf.
4. Distributor, at no expense to the Fund, shall print and distribute to
prospective investors Prospectuses and Statements of Additional
Information, and may print and distribute such other sales literature,
forms, and advertisements in connection with sale of the shares of the
Fund as comply with the applicable provisions of federal and state
law. Except as specifically provided herein, the Fund shall bear none
of the expenses of Distributor in connection with its offer and sale
of shares of the Fund. Distributor shall, as agent for the Fund, have
the right to sell Fund shares to dealers or to the public or both;
provided, however, that in connection with the sale or arranging for
the sale of Fund shares, Distributor shall give only such information
and make only such statements or representations as are contained in
the Prospectus or in the Statement of Additional Information, or in
such information as is furnished in writing to Distributor pursuant to
Paragraph 5 below, and the Fund shall not be responsible in any way
for any other information, statements or representations given or made
by Distributor or its representatives or agents.
5. The Fund shall keep Distributor fully informed with regard to its
affairs, and shall cooperate fully in the efforts of Distributor under
this Agreement.
6. The Fund agrees at its own expense to register its shares with the
Securities and Exchange Commission, State and other regulatory bodies
and to pay the related registration and filing fees therefor and to
file from time to time such amendments, reports and other documents as
may be necessary in order that there may
be no untrue statements of a material fact in the Registration
Statement, Prospectus, or Statement of Additional Information, or
necessary in order that there may be no omission to state a material
fact therein , in the light of the circumstances under which they were
made, not misleading. As used in this Agreement, the term
"Registration Statement" shall mean from time to time the Registration
Statement most recently filed by the Fund with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
amended (hereinafter called the "Act"), as such Registration Statement
is amended by any amendments thereto at the time in effect, and the
term "Prospectus" and "Statement of Additional Information" shall mean
from time to time the form of prospectus and statement of additional
information filed by the Fund as part of the Registration Statement.
7. The Fund agrees to prepare, set in print, print and distribute
Prospectuses to shareholders of the Fund, and furnish Distributor from
time to time a copy of the Prospectus and Statement of Additional
Information in connection with the sale of the Fund's shares. The Fund
agrees to indemnify, defend and hold Distributor, and any person who
controls Distributor within the meaning of Section 15 of the 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 counsel fees incurred in
connection therewith) which Distributor or any such controlling person
may incur, under the Act, or under common law or otherwise, arising
out of or based upon any alleged untrue statement of a material fact
contained in the Registration Statement or Prospectus 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; provided, however, that this indemnity
agreement of any person who is such a controlling person and who is
also a director of the Fund, shall not inure to the benefit of such
person unless a court of competent jurisdiction shall determine, or it
shall have been determined by controlling precedent, that such result
would not be against public policy as expressed in the Act; and
further provided that in no event shall anything herein contained be
so construed as to protect Distributor against any liability to the
Fund or its security holders to which Distributor would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under this Agreement.
The Fund's agreement to indemnify Distributor and any such controlling
person as aforesaid is expressly conditioned upon the Fund being
notified of any action brought against Distributor or any such
controlling person, such notification to be given by letter or by
telegram addressed to the Fund at its principal office in Minneapolis,
Minnesota, and sent to the Fund by the person against whom such action
is brought, within ten days after the summons or other first legal
process shall have been served. The failure so to notify the Fund of
any such action shall not relieve the Fund from any liability which
the Fund may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this Paragraph 7.
The Fund 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
Fund and approved by Distributor. In the event the Fund does elect to
assume the defense of any such suit and retain counsel of good
standing approved by 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 Fund does not elect to assume
the defense of any such suit, or in case Distributor does not approve
of counsel chosen by the Fund, the Fund will reimburse Distributor or
the controlling person or persons named as defendant or defendants in
such suit, for the fees and expenses of any counsel retained by
Distributor or them.
The indemnification agreement contained in this Paragraph 7 and the
Fund'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 Distributor or any controlling person. This
agreement of indemnity will inure exclusively to the benefit of
Distributor and its successors and their respective estates, and to
the benefit of any controlling persons and their successors. The Fund
agrees promptly to notify Distributor of the commencement of any
litigation or proceedings against the Fund in connection with the
issue and sale of any of its capital stock.
8. Distributor agrees to indemnify, defend and hold the Fund, its several
officers and directors, and any
person who controls within the meaning of Section 15 of the 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 counsel fees incurred in
connection therewith) which the Fund, its officers or directors, or
any such controlling person may incur under the Act or under common
law or otherwise; but only to the extent that such liability or
expense incurred by the Fund, its officers or directors or such
controlling person resulting from such claims or demands shall arise
out of or be based upon any alleged untrue statement of a material
fact contained in information furnished in writing by Distributor to
the Fund for use in the Registration Statement, Prospectus or
Statement of Additional Information, or shall arise out of or be based
upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement
or Prospectus or necessary to make such information not misleading.
Distributor's agreement to indemnify the Fund, its officers and
directors, and any such controlling person as aforesaid is expressly
conditioned upon Distributor being notified of any action brought
against the Fund, its officers or directors or any such controlling
person, such notification to be given by letter or telegram addressed
to Distributor at its principal office in Minneapolis, Minnesota, and
sent to Distributor by the person against whom such action is brought,
within ten days after the summons or other first legal process shall
have been served. Distributor shall have a right to control the
defense of such action, with counsel of its own choosing, satisfactory
to the Fund, if such action is based solely upon such alleged
misstatement or omission on Distributor's part, and in any other event
Distributor 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 so to notify Distributor of any such action shall
not relieve Distributor from any liability which Distributor may have
to the Fund, its officers or directors or to such controlling person
by reason of any such untrue statement or omission on Distributor's
part otherwise that on account of the indemnity agreement contained in
this Paragraph 8.
9. This Agreement may be terminated by either party upon sixty days'
written notice to the other party and shall terminate automatically in
the event of its assignment. The term "assignment" for this purpose
shall have the meaning defined in Section 2(a)(4) of the Investment
Company Act of 1940.
10. This Agreement shall continue for successive annual periods, provided
that such continuance is specifically approved annually by the vote of
a majority of the Fund's Directors who are not "interested persons" of
the parties hereto as defined in the Investment Company Act of 1940,
cast in person at a meeting called for that purpose, and by either the
vote of a majority of the Board of Directors of the Fund or by the
vote of a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act of 1940.
11. As additional compensation to Distributor for its services hereunder,
Distributor will receive after the end of each month from ARM Capital
Advisors, Inc., pursuant to the terms of the Investment Advisory and
Management Agreement between ARM Capital Advisors, Inc. and the Fund,
a payment equal to 1/12th of .25 of 1% of the average daily net assets
of the Fund for the month (the "12b-1 Fee"). Distributor shall use the
12b-1 Fee in the following manner:
a.) Broker/dealers other than Distributor shall be paid a portion of
the 12b-1 Fee based upon the percentage of Fund shares
attributable to shares sold by registered representatives of such
broker/dealers and still owned by such broker/dealers' clients
during the month.
b.) registered representatives of Distributor and their field
supervisors shall be paid a portion of such 12b-1 Fee based upon
the percentage of fund shares attributable to shares sold by such
registered representatives and still owned by such registered
representatives' clients during the month. Such amount shall be
paid to the registered representatives and their field
supervisors in such proportions as may be determined from time to
time, as set forth in written agreements.
c.) Other Service Entities (as defined in the Administration,
Shareholder Service and Plan of Distribution of the Fund) shall
be paid a portion of the 12b-1 Fee based upon the percentage for
Fund shares the holders of which were provided administrative or
shareholder assistance by such Service Entities during the month.
d.) The balance of the 12b-1 Fee shall be retained by Distributor and
shall be expanded by it on any activities primarily intended to
result in the sale of Fund shares, including, by way of example
but not by way of limitation, the printing of prospectuses and
reports for other than existing shareholders, preparation and
distribution of sales literature, advertising of any type,
expenses incurred by officers, employees or registered
representatives of Distributor, including travel, entertainment
and telephone expenses.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
STATE BOND MONEY FUNDS, INC.
By: /s/ Xxxxxxx Xxxxx
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Its: /s/ Vice President
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SBM FINANCIAL SERVICES, INC.
By: /s/ Xxxx X. XxXxxxxx
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Its: /s/ Secretary, General Counsel
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& Compliance Officer
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