DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this ___ day of
December, 1998, by and between La Crosse Funds, Inc., a
Wisconsin corporation (the "Corporation"), and Sunstone
Distribution Services, LLC, a Wisconsin limited
liability company (the "Distributor").
WHEREAS, the Corporation is an open-end investment
company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and is authorized
to issue shares of common stock (the "Shares") in
separate series with each such series representing
interests in a separate portfolio of securities and
other assets;
WHEREAS, the Distributor is registered as a broker-
dealer under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member of the
National Association of Securities Dealers, Inc. (the
"NASD"); and
WHEREAS, the Corporation and Distributor desire to
enter into an agreement pursuant to which Distributor
shall be the distributor of the Shares of the
Corporation representing the investment portfolios
listed on Schedule A hereto and any additional
investment portfolios the Corporation and Distributor
may agree upon and include on Schedule A as such
Schedule may be amended from time to time (such
investment portfolios and any additional investment
portfolios are individually referred to as a "Fund" and
collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good
and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. Appointment of the Distributor.
The Corporation hereby appoints the Distributor
as agent for the distribution of the Shares, on the
terms and for the period set forth in this Agreement.
Distributor hereby accepts such appointment as agent
for the distribution of the Shares on the terms and for
the period set forth in this Agreement.
2. Services, Duties and Representations of the
Distributor.
2.1 Distributor will act as agent for the
distribution of Shares in accordance with the
instructions of the Corporation's Board of Directors
and the registration statement and prospectuses then in
effect with respect to the Funds under the Securities
Act of 1933, as amended (the "1933 Act").
2.2 Distributor may finance appropriate
activities which it deems reasonable which are
primarily intended to result in the sale of Shares,
including, but not limited to, advertising, the
printing and mailing of prospectuses to other than
current shareholders, and the printing and mailing of
sales literature. Distributor may enter into servicing
and/or selling agreements with qualified broker/dealers
and other persons with respect to the offering of
Shares to the public, and if it so chooses Distributor
will act only on its own behalf as principal. The
Distributor shall not be obligated to sell any certain
number of Shares of any Fund.
2.3 All Shares of the Funds offered for sale by
Distributor shall be offered for sale to the public at
a price per unit (the "offering price") equal to their
net asset value (determined in the manner set forth in
the Funds' then current prospectus).
2.4 Distributor shall act as distributor of the
Shares in compliance in all material respects with all
applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or
adopted pursuant to the 1940 Act, by the Securities and
Exchange Commission (the "Commission") and the NASD.
2.5 Distributor shall furnish the Corporation
from time to time such information with respect to the
Distributor and its operations as the Corporation may
reasonably request including, but not limited to, such
information regarding the Distributor and its
operations as may be required to be included in filings
with the Commission.
2.6 Distributor acknowledges that the Corporation
has inquired of the Distributor as to the Year 2000
compliance status of its computer systems and software
and those of its software vendors. Distributor shall
report to the Board of the Corporation at least
quarterly as to the Year 2000 compliance status of its
mission critical computer systems and software .
3. Duties and Representations of the Corporation.
3.1 The Corporation represents that it is
registered as an open-end management investment company
under the 1940 Act and that it has and will continue to
act in conformity with its Articles of Incorporation,
By-Laws, its registration statement as may be amended
from time to time and resolutions and other
instructions of its Board of Directors and has and will
continue to comply with all applicable laws, rules and
regulations including without limitation the 1933 Act,
the 1934 Act, the 1940 Act, the laws of the states in
which Shares are offered and sold, and the rules and
regulations thereunder.
3.2 The Corporation shall take or cause to be
taken all necessary action to register and maintain the
registration of the Shares under the 1933 Act for sale
as herein contemplated and shall pay all costs and
expenses in connection with the registration of Shares
under the 1933 Act, and be responsible for all expenses
in connection with maintaining facilities for the issue
and transfer of Shares and for supplying information,
prices and other data to be furnished by the
Corporation hereunder.
3.3 The Corporation shall execute any and all
documents and furnish any and all information and
otherwise take all actions which may be reasonably
necessary in the discretion of the Corporation's
officers in connection with the qualification of the
Shares for sale in such states as Distributor and the
Corporation may approve, shall maintain the
registration of a sufficient number or amount of shares
thereunder, and shall pay all expenses which may be
incurred in connection with such qualification.
3.4 The Corporation shall, at its expense, keep
the Distributor fully informed with regard to its
affairs. Distributor shall be deemed to have the same
knowledge of the Corporation's affairs as Distributor's
affiliates' actual knowledge of such affairs. In
addition, the Corporation shall furnish Distributor
from time to time such information with respect to the
Corporation and the Shares as Distributor may
reasonably request, and the Corporation warrants that
the statements contained in any such information shall
be true and correct. The Corporation represents that it
will not use or authorize the use of any advertising or
sales material unless and until such materials have
been approved and authorized for use by the
Distributor.
3.5 The Corporation represents to Distributor
that all registration statements and prospectuses of
the Corporation filed or to be filed with the
Commission under the 1933 Act with respect to the
Shares have been and will be prepared in conformity
with the requirements of the 1933 Act, the 1940 Act,
and the rules and regulations of the Commission
thereunder. As used in this Agreement the terms
"registration statement" and "prospectus" shall mean
any registration statement and prospectus (together
with the related statement of additional information)
at any time now or hereafter filed with the Commission
with respect to any of the Shares and any amendments
and supplements thereto which at any time shall have
been or will be filed with said Commission. The
Corporation represents and warrants to Distributor that
any registration statement and prospectus, when such
registration statement becomes effective, will contain
all statements required to be stated therein in
conformity with the 1933 Act, the 1940 Act and the
rules and regulations of the Commission; that all
information contained in the registration statement and
prospectus will be true and correct in all material
respects when such registration statement becomes
effective; and that neither the registration statement
nor any prospectus when such registration statement
becomes effective will include an untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary to make the
statements therein not misleading. The Corporation
agrees to file from time to time such amendments,
supplements, reports and other documents as may be
necessary or required in order to comply with the 1933
Act and the 1940 Act and in order that there may be no
untrue statement of a material fact in a registration
statement or prospectus, or necessary or required in
order that there may be no omission to state a material
fact in the registration statement or prospectus which
omission would make the statements therein misleading.
3.6 The Corporation shall not file any amendment
to the registration statement or supplement to any
prospectus without giving Distributor reasonable notice
thereof in advance and if the Distributor objects to
such amendment (after a reasonable time), the
Corporation may terminate this Agreement forthwith by
written notice to the Distributor without payment of
any penalty. If the Corporation shall not propose an
amendment or amendments and/or supplement or
supplements promptly after receipt by the Corporation
of a written request in good faith from Distributor to
do so, Distributor may, at its option, immediately
terminate this Agreement. In addition, if, at any time
during the term of this Agreement, the Distributor
requests the Corporation to make any change in its
governing instruments or in its methods of doing
business which are necessary in order to comply with
any requirement of applicable law or regulation, and
the Corporation fails (after a reasonable time) to make
any such change as requested, the Distributor may
terminate this Agreement forthwith by written notice to
the Corporation without payment of any penalty. Nothing
contained in this Agreement shall in any way limit the
Corporation's right to file at any time any amendments
to any registration statement and/or supplements to any
prospectus, of whatever character, as the Corporation
may deem advisable, such right being in all respects
absolute and unconditional.
3.7 Whenever in their judgment such action is
warranted by market, economic or political conditions,
or by circumstances of any kind, the Corporation's
officers may decline to accept any orders for, or make
any sales of, any Shares until such time as they deem
it advisable to accept such orders and to make such
sales and the Corporation shall advise Distributor
promptly of such determination.
3.8 The Corporation agrees to advise the
Distributor promptly in writing:
(i) of any correspondence or other
communication by the Commission or its staff relating
to the Funds including requests by the Commission for
amendments to the registration statement or
prospectuses;
(ii) in the event of the issuance by the
Commission of any stop order suspending the
effectiveness of the registration statement or
prospectuses then in effect or the initiation of any
proceeding for that purpose;
(iii) of the happening of any event which
makes untrue any statement of a material fact made in
the registration statement or prospectuses or which
requires the making of a change in such registration
statement or prospectuses in order to make the
statements therein not misleading; and
(iv) of all actions taken by the Commission
with respect to any amendments to any registration
statement or prospectus which may from time to time be
filed with the Commission.
3.9 Distributor agrees to advise the Corporation
promptly in writing of the happening of any event which
makes untrue any statement of a material fact regarding
the Distributor made in the registration statement or
prospectuses (which statement was included in the
registration statement or prospectuses in reliance on,
and in conformity with, information relating to the
Distributor and furnished to the Corporation or its
counsel by the Distributor for the purpose of, and used
in, the registration statement), or which requires the
making of a change in such registration statement or
prospectuses in order to make such statements regarding
the Distributor not misleading.
4. Indemnification.
4.1(a) The Corporation authorizes Distributor
to use any prospectus, in the form furnished to
Distributor from time to time, in connection with the
sale of Shares. The Corporation shall indemnify,
defend and hold the Distributor, and each of its
present or former directors, members, officers,
employees, representatives and any person who controls
or previously controlled the Distributor within the
meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all losses, claims,
demands, liabilities, damages and expenses (including
the costs of investigating or defending any alleged
losses, claims, demands, liabilities, damages or
expenses and any counsel fees incurred in connection
therewith) which Distributor, each of its present and
former directors, officers, employees or
representatives or any such controlling person, may
incur under the 1933 Act, the 1934 Act, the 1940 Act,
any other statute (including Blue Sky laws) or any rule
or regulation thereunder, or under common law or
otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material
fact contained in the registration statement or any
prospectus, as from time to time amended or
supplemented, or an annual or interim report to
shareholders, or arising out of or 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; provided, however, that the Corporation's
obligation to indemnify Distributor and any of the
foregoing indemnitees shall not be deemed to cover any
losses, claims, demands, liabilities, damages or
expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission made
in the registration statement, prospectus, or annual or
interim report in reliance upon and in conformity with
information relating to the Distributor and furnished
to the Corporation or its counsel by Distributor for
the purpose of, and used in, the preparation thereof;
and provided further that the Corporation's agreement
to indemnify Distributor and any of the foregoing
indemnitees shall not be deemed to cover any liability
to the Corporation or its shareholders to which
Distributor would otherwise be subject by reason of its
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 Corporation's agreement to
indemnify the Distributor, and any of the foregoing
indemnitees, as the case may be, with respect to any
action, is expressly conditioned upon the Corporation
being notified of such action brought against
Distributor, or any of the foregoing indemnitees,
within a reasonable time after the summons or other
first legal process giving information of the nature of
the claim shall have been served upon the Distributor,
or such person, such notification to be given by letter
or by telegram addressed to the Corporation's
President, but the failure so to notify the Corporation
of any such action shall not relieve the Corporation
from any liability which the Corporation may have to
the person against whom such action is brought by
reason of any such untrue, or alleged untrue, statement
or omission, or alleged omission, otherwise than on
account of the Corporation's indemnity agreement
contained in this Section 4.1.
4.1(b) The Corporation shall be entitled to
participate at its own expense in the defense or, if it
so elects, to assume the defense of any suit brought to
enforce any such loss, claim, demand, liability, damage
or expense, but if the Corporation elects to assume the
defense, such defense shall be conducted by counsel
chosen by the Corporation and approved by the
Distributor, which approval shall not be unreasonably
withheld. In the event the Corporation elects to
assume the defense of any such suit and retain such
counsel, the indemnified defendant or defendants in
such suit shall bear the fees and expenses of any
additional counsel retained by them. If the
Corporation does not elect to assume the defense of any
such suit, or in case the Distributor does not, in the
exercise of reasonable judgment, approve of counsel
chosen by the Corporation, the Corporation will
reimburse the indemnified person or persons named as
defendant or defendants in such suit, for the fees and
expenses of any counsel retained by Distributor and
them. The Corporation's indemnification agreement
contained in this Section 4.1 and the Corporation'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, and each of its present or former
directors, officers, employees, representatives or any
controlling person, and shall survive the delivery of
any Shares and the termination of this Agreement. This
agreement of indemnity will inure exclusively to the
Distributor's benefit, to the benefit of each of its
present or former directors, members, officers,
employees or representatives or to the benefit of any
controlling persons and their successors. The
Corporation agrees promptly to notify Distributor of
the commencement of any litigation or proceedings
against the Corporation or any of its officers or
directors in connection with the issue and sale of any
of the Shares.
4.2(a) Distributor shall indemnify, defend and
hold the Corporation, and each of its present or former
directors, officers, employees, representatives, and
any person who controls or previously controlled the
Corporation within the meaning of Section 15 of the
1933 Act, free and harmless from and against any and
all losses, claims, demands, liabilities, damages and
expenses (including the costs of investigating or
defending any alleged losses, claims, demands,
liabilities, damages or expenses, and any counsel fees
incurred in connection therewith) which the
Corporation, and each of its present or former
directors, officers, employees, representatives, or any
such controlling person, may incur under the 1933 Act,
the 1934 Act, the 1940 Act, any other statute
(including Blue Sky laws) or any rule or regulation
thereunder, or under common law or otherwise, arising
out of or based upon any untrue, or alleged untrue,
statement of a material fact contained in the
Corporation's registration statement or any prospectus,
as from time to time amended or supplemented, or annual
or interim report to shareholders or the omission, or
alleged omission, to state therein a material fact
required to be stated therein or necessary to make the
statement not misleading, but only if such statement or
omission was made in reliance upon, and in conformity
with, information relating to the Distributor and
furnished to the Corporation or its counsel by the
Distributor for the purpose of, and used in, the
preparation thereof. Distributor's agreement to
indemnify the Corporation and any of the foregoing
indemnitees shall not be deemed to cover any liability
to Distributor to which the Corporation would otherwise
be subject by reason of its 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
Distributor's Agreement to indemnify the Corporation,
and any of the foregoing indemnitees, is expressly
conditioned upon the Distributor's being notified of
any action brought against the Corporation, and any of
the foregoing indemnitees, such notification to be
given by letter or telegram addressed to Distributor's
President, within a reasonable time after the summons
or other first legal process giving information of the
nature of the claim shall have been served upon the
Corporation or such person, but the failure so to
notify Distributor of any such action shall not relieve
Distributor from any liability which Distributor may
have to the person against whom such action is brought
by reason of any such untrue, or alleged untrue,
statement or omission, otherwise than on account of
Distributor's indemnity agreement contained in this
Section 4.2(a).
4.2(b) The Distributor shall be entitled to
participate at its own expense in the defense or, if it
so elects, to assume the defense of any suit brought to
enforce any such loss, claim, demand, liability, damage
or expense, but if the Distributor elects to assume the
defense, such defense shall be conducted by counsel
chosen by the Distributor and approved by the
Corporation, which approval shall not be unreasonably
withheld. In the event the Distributor elects to
assume the defense of any such suit and retain such
counsel, the indemnified defendant or defendants in
such suit shall bear the fees and expenses of any
additional counsel retained by them. If the
Distributor does not elect to assume the defense of any
such suit, or in case the Corporation does not, in the
exercise of reasonable judgment, approve of counsel
chosen by the Distributor, the Distributor will
reimburse the indemnified person or persons named as
defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Corporation and
them. The Distributor's indemnification agreement
contained in this Section 4.2 and the Distributor'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 Corporation, and each of its present or former
directors, officers, employees, representatives or any
controlling person, and shall survive the delivery of
any Shares and the termination of this Agreement. This
Agreement of indemnity will inure exclusively to the
Corporation's benefit, to the benefit of each of its
present or former directors, officers, employees or
representatives or to the benefit of any controlling
persons and their successors. The Distributor agrees
promptly to notify the Corporation of the commencement
of any litigation or proceedings against the
Distributor or any of its officers or directors in
connection with the issue and sale of any of the
Shares.
5. Offering of Shares.
No Shares shall be offered by either the
Distributor or the Corporation under any of the
provisions of this Agreement and no orders for the
purchase or sale of such Shares hereunder shall be
accepted by the Corporation if and so long as the
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 the current prospectus as required
by Section 10 of the 1933 Act, as amended, is not on
file with the Commission; provided, however, that
nothing contained in this paragraph 5 shall in any way
restrict or have an application to or bearing upon the
Corporation's obligation to repurchase Shares from any
shareholder in accordance with the provisions of the
registration statement.
6. Term.
6.1 This Agreement shall become effective with
respect to each Fund listed on Schedule A hereof as of
the date hereof and, with respect to each Fund not in
existence on that date, on the date an amendment to
Schedule A to this Agreement relating to that Fund is
executed. Unless sooner terminated as provided herein,
this Agreement shall continue in effect with respect to
each Fund until December __, 1999. Thereafter, if not
terminated, this Agreement shall continue automatically
in effect as to each Fund for successive annual
periods, provided such continuance is specifically
approved at least annually by (i) the Corporation's
Board of Directors or (ii) the vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting
securities of a Fund, and provided that in either event
the continuance is also approved by the Distributor and
by a majority of the Corporation's Board of Directors
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.
6.2 This Agreement may be terminated without
penalty with respect to a particular Fund (1) through a
failure to renew this Agreement at the end of a term,
(2) upon mutual consent of the parties, or (3) on no
less than thirty (30) days' written notice, by the
Corporation's Board of Directors, by vote of a majority
(as defined with respect to voting securities in the
1940 Act) of the outstanding voting securities of a
Fund, or by the Distributor (which notice may be waived
by the party entitled to such notice). In addition,
this Agreement may be terminated at any time, without
penalty, with respect to a particular Fund by vote of a
majority of the members of the Board of Directors who
are not interested persons of the Corporation (as
defined in the 0000 Xxx) and have no direct or indirect
financial interest in this Agreement. The terms of this
Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except
by a written instrument signed by the Distributor and
the Corporation. This Agreement will also terminate
automatically in the event of its assignment (as
defined in the 1940 Act).
7. Miscellaneous.
7.1 The services of the Distributor rendered to
the Funds are not deemed to be exclusive. The
Distributor may render such services and any other
services to others, including other investment
companies. The Corporation recognizes that from time
to time directors, officers, and employees of the
Distributor may serve as directors, trustees, officers
and employees of other entities (including other
investment companies), that such other entities may
include the name of the Distributor as part of their
name and that the Distributor or its affiliates may
enter into distribution, administration, fund
accounting, transfer agent or other agreements with
such other entities.
7.2 Distributor agrees on behalf of itself and
its employees to treat confidentially and as
proprietary information of the Corporation all records
relative to the Funds and prior, present or potential
shareholders of the Corporation (and clients of said
shareholders), and not to use such records and
information for any purpose other than performance of
its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the
Corporation, which approval may not be withheld where
the Distributor may be exposed to civil or criminal
proceedings for failure to comply, when requested to
divulge such information by duly constituted
authorities, when subject to governmental or regulatory
audit or investigation, or when so requested by the
Corporation. Records and information which have become
known to the public through no wrongful act of the
Distributor or any of its employees, agents or
representatives shall not be subject to this paragraph.
7.3 This Agreement shall be governed by Wisconsin
law. To the extent that the applicable laws of the
State of Wisconsin, or any of the provisions herein,
conflict with the applicable provisions of the 1940
Act, the latter shall control, and nothing herein shall
be construed in a manner inconsistent with the 1940 Act
or any rule or order of the Commission thereunder. Any
provision of this Agreement which may be determined by
competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction.
7.4 Any notice required or to be permitted to be
given by either party to the other shall be in writing
and shall be deemed to have been given when sent by
registered or certified mail, postage prepaid, return
receipt requested, as follows: Notice to the
Distributor shall be sent to Sunstone Distribution
Services, LLC, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX, 00000, Attention: Xxxxxx X. Xxxxxxx, and
notice to the Corporation shall be sent to La Crosse
Funds, Inc. 000 Xxxx Xxxxxx, Xx Xxxxxx, Xxxxxxxxx
00000 Attention: Xxxxxx X. Xxxxx.
7.5 This Agreement may be executed in any
number of counterparts, each of which shall be deemed
to be an original agreement but such counterparts shall
together constitute but one and the same instrument.
7.6 The Corporation shall not bear any
distribution fees or costs for the performance of the
Distributor's services hereunder, nor shall the
Corporation incur any such costs. Any such fees or
costs shall be borne by the Corporation's investment
adviser.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by a duly authorized
officer as of the day and year first above written.
LA CROSSE FUNDS, INC.
(the "Corporation")
By:______________________________
Xxxxxx X. Xxxxx
President
SUNSTONE DISTRIBUTION SERVICES, LLC
(the "Distributor")
By:______________________________________
Xxxxxx X. Xxxxxxx
President
Schedule A
to the
Distribution Agreement
by and between
La Crosse Funds, Inc.
and
Sunstone Distribution Services, LLC
Name of Funds
Fund Effective Date
La Crosse Large Cap Stock Fund December __, 1998
