EXHIBIT 6a
UNDERWRITING AGREEMENT
BETWEEN
STATE BOND MONEY FUNDS, INC.
AND
SBM FINANCIAL SERVICES, INC.
This Underwriting Agreement made this 14th day of June, 1995, by and
between State Bond Money 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 and in which Distributor is qualified as a
broker/dealer. Distributor shall distribute the Fund's shares on an
agency of "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. Such net asset value shall be regularly determined as set forth
from time to time in the Fund's current prospectus. The Fund shall
promptly furnish Distributor a statement of each computation of net
asset value and of the details entering into such computation.
Distributor shall not charge any sales load with respect to any sale
of the Fund's shares.
3. Distributor, at no expense to the Fund, shall print and distribute to
prospective investors Prospectuses, 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
such information as is furnished in writing to Distributor pursuant to
Paragraph 4 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.
4. The Fund shall keep Distributor fully informed with regard to its
affairs, and shall cooperate fully in the efforts of Distributor under
this Agreement.
5. 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 or Prospectus 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" shall mean from time to time the form of prospectus
file by the Fund as part of the Registration Statement.
6. 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 in form as then most recently
filed with the Securities and Exchange Commission. The Fund authorizes
Distributor to print copies of and use such Prospectus 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 in
either thereof or necessary to make the statements in either thereof
not misleading; provided, however, that this indemnity agreement, to
the extent that it might require indemnity 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 (10) 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 6.
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 6 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.
7. 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 or Prospectus
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 (10) 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 7.
8. This Agreement may be terminated by either party upon sixty (60) 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.
9. 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.
10. In order to compensate 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 it and the Fund, a payment equal to .20 of 1% - 12 of the average
daily net assets of the Fund for the month. Distributor shall use such
payment in the following manner:
a.) To the extent that the Fund's average daily net assets were
attributable to shares sold by registered representatives of
broker/dealers other than the Distributor, the portion of such payment
attributable to shares sold by such broker/dealers and which were
still owned by such broker/dealers' clients during the month, shall be
paid to such broker/dealers.
b.) To the extent that the average daily net assets were attributable to
shares sold by registered representatives of Distributor, the portion
of such payment attributable to shares sold by such registered
representatives and which were still owned representatives' clients
during the month shall be paid to such representatives and field
supervisors, in such proportions as may be determined from time to
time, as set forth in written agreements.
c.) To the extent that the average daily net assets were attributable to
shares sold to individuals wherein there is no registered
representatives and/or field supervisors of Distributor or other
broker/dealer associated with the sales who is entitled to receive
that attributable portion of such payment, such portion of the payment
shall be retained by the Distributor and shall be expended by it on
any activities primarily intended to result in the sale of Fund
shares, including, by 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 of branch offices maintained by the
Distributor, compensation paid to and 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
----------------------------------
Its: /s/ Vice President
----------------------------
SBM FINANCIAL SERVICES, INC.
By: /s/ Xxxx X. XxXxxxxx
----------------------------------
Its: /s/ Secretary, General Counsel
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& Compliance Officer
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