DISTRIBUTION AGREEMENT
October 1, 1998
X.X. Xxxxxxx and Company
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
This is to confirm that in consideration of the agreements hereinafter
contained, the undersigned, Star Funds, a Massachusetts Business Trust ("Star
Funds"), has agreed that you shall be, for the period of this Agreement, the
distributor of shares of Common Stock (the "Shares") of the current Star Funds'
(Addendum A) and other such funds as may be contemplated (the "Funds").
1. Services as Distributor
-----------------------
1.1 You will act as agent for the distribution of Shares in accordance
with the instructions of Star Funds' Board of Trustees and the registration
statement and prospectuses then in effect with respect to the Funds under the
Securities Act of 1933, as amended, and will transmit promptly any orders
received by you for the purchase or redemption of Shares either directly to Star
Funds' transfer agent for the Fund involved or to any qualified broker/dealer
for transmittal to said agent.
1.1(a) You agree to use your best efforts to solicit orders for the sale
of Shares. You shall direct expenses to be paid for appropriate activities
which you deem reasonable which are primarily intended to result in the sale of
Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. In addition, you will provide one or more persons, during
normal business hours, to refer telephone questions to appropriate persons. It
is contemplated that you may enter into selling agreements with qualified
broker/dealers and other persons with respect to the offering of Shares to the
public, and in so doing you will act only on your own behalf as principal.
1.1(b) All Shares of the Funds offered for sale by you shall be offered
for sale to the public at a price per share (the "offering price") equal to (a)
their net asset value (determined in the manner set forth in Star Funds'
Articles of Incorporation and then current prospectuses) plus, except to those
classes of persons set forth in Star Funds' then current prospectuses, (b) a
sales charge which shall be the percentage of the offering price of such shares
as set forth in Star Funds' then current prospectuses. The offering price, if
not an exact multiple of one cent, shall be adjusted to the nearest cent.
Concessions by you to broker/dealers and other persons shall be set forth in
either the selling agreements between you and such broker/dealer and persons or,
if such concessions are described in Star Funds' then current prospectuses for
the Fund, shall be as so set forth. No broker/dealer or other persons who
enters into a selling agreement with you shall be authorized to act as agent for
Star Funds in connection with the offering or sale of its Shares to the public
or otherwise.
1.1(c) If any Shares sold by Star Funds are redeemed or repurchased by
Star Funds or by you as agent or are tendered for redemption within seven
business days after the date of confirmation of the original purchase of said
Shares, you shall forfeit the amount above the net asset value received by you
in respect of such Shares, provided that the portion, if any, of such amount re-
allowed by you to broker/dealers or other persons shall be repayable to Star
Funds only to the extent recovered by you from the broker/dealer or other person
concerned. You shall include in the forms of agreement with such broker/dealers
and other persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by Star Funds or by you as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
1.2 You shall act as distributor of the Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations, adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.3 Whenever in their judgment such action is warranted by market,
economic or political conditions, or by circumstances of any kind, Star Funds'
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 Star Funds shall advise you promptly of such determination.
1.4 Star Funds agrees to pay all costs and expenses in connection with the
registration of Shares under the Securities Act of 1933, as amended, and to 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 Star Funds hereunder.
1.5 Star Funds agrees to execute any and all documents and to furnish any
and all information and otherwise to take all action which may be reasonably
necessary in the discretion of Star Funds' officers in connection with the
qualification of Shares for sale in such states as you may designate to Star
Funds and Star Funds may approve, and Star Funds agrees to pay all expenses
which may be incurred in connection with such qualification. You shall pay all
expenses connected with your own qualification as a broker under State or
Federal laws and, except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.6 Star Funds shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to Star Funds and the
Shares as you may reasonably request, and Star Funds warranties that the
statements contained in any such information, when so signed by Star Funds'
officers, shall be true and correct. Star Funds also shall furnish you upon
request with: (a) annual audited reports of Star Funds' books and accounts with
respect to each of the Funds, made by independent public accountants regularly
retained by Star Funds, (b) semi-annual reports with respect to each of the
Funds prepared by Star Funds, and (c) from time to time such additional
information regarding Star Funds' financial condition as you may reasonably
request.
1.7 Star Funds represents to you that all registration statements and
prospectuses filed by Star Funds with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to the Shares have
been prepared in conformity with the requirements of said Act and rules and
regulations of the Securities and Exchange commission thereunder. As used in
the agreement the terms "registration statement" and "prospectus" shall mean any
registration statement and prospectus (together with the related statement of
additional information) filed with the Securities and Exchange Commission with
respect to any of the Shares and any amendments and supplements thereto which at
any time shall have been filed with said Commission. Star Funds represents and
warrants to you that any registration statement and prospectus, when such
registration statement becomes effective, will contain all statements required
to be stated therein in conformity with said Act and the rules and regulations
of said Commission; that all statements of fact contained in the registration
statement and prospectus will be materially true and correct 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 statement therein
not misleading. Star Funds may but shall not be obligated to propose from time
to time such amendment or amendments to any prospectus as, in light of future
developments, may, in the opinion of Star Funds' counsel, be necessary or
advisable. If Star Funds shall not propose such an amendment or amendments
and/or supplement or supplements within fifteen days after receipt by Star Funds
of a written request from you to do so, you may, at your option, terminate this
agreement. Star Funds shall not file any amendment to the registration
statement or supplement to any prospectus without giving you reasonable notice
thereof in advance; provided, however, that nothing contained in this agreement
shall in any way limit Star Funds' right to file at any time such amendments to
any registration statement and/or supplements to any prospectus, of whatever
character, as Star Funds may deem advisable, such right being in all respects
absolute and unconditional.
1.8 Star Funds authorizes you to use any prospectus, in the form furnished
to you from time to time, in connection with the sale of Shares. Star Funds
agrees to indemnify, defend and hold you, your several officers and directors,
and any person who controls you within the meaning of Section 15 of the
Securities Act of 1933, as amended, 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 you, your officers and directors,
or any such controlling person, may incur under the Securities Act of 1933, as
amended, 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 or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
either any registration statement or any prospectus or necessary to make the
statements in either thereof not misleading; provided, however, that Star Funds'
agreement to indemnify you, your officers or directors, and any such
controlling persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or alleged untrue
statement or omission or alleged omission made in the registration statement or
prospectus in reliance upon and in conformity with written information furnished
to Star Funds or its counsel by you and used in the preparation thereof; and
provided further that Star Funds' agreement to indemnify you and Star Funds'
representations and warranties herein set forth shall not be deemed to cover any
liability to Star Funds or its Shareholder to which you would otherwise be
subject by reason of willful misfeasance, bad faith or negligence in the
performance of your duties, or by reason of your reckless or negligent disregard
of your obligations and duties under this agreement. Star Funds' agreement to
indemnify you, your officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon Star Funds' being notified of any
action brought against you, your officers or directors, or any such controlling
person, such notification to be given by letter or by telegram addressed to Star
Funds at its principal office within ten days after the summons or other first
legal process shall have been served. The failure so to notify Star Funds of
any such action shall not relieve Star Funds from any liability which Star Funds
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 Star Funds' indemnity agreement contained in the paragraph
1.8. Star Funds 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 Star Funds and approved
by you. In the event Star Funds elects to assume the defense of any such suit
and retain counsel of good standing approved by you which approval shall not be
unreasonably withheld, 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
Star Funds does not elect to assume the defense of any such suit, or in case you
do not approve of counsel chosen by Star Funds, or if under prevailing law,
legal codes of ethics, the same counsel cannot effectively represent the
interest of both Star Funds and you or your directors, officers or controlling
persons, Star Funds will reimburse you, your officers and directors, or the
controlling person or persons named as defendant or defendants in such suit, for
the fees and expenses of any counsel retained by you or them. Star Funds'
indemnification agreement contained in this paragraph 1.8 and Star Funds'
representation and warranties in this agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity will insure exclusively
to your benefit, to the benefit of your several officers and directors, and
their respective estates, and to the benefit of any controlling persons and
their successors. Star Funds agrees promptly to notify you of the commencement
of any litigation or proceedings against Star Funds or any of its officers or
directors in connection with the issue and sale of any of the Shares.
1.9 You agree to indemnify, defend and hold Star Funds, its several
officers and directors, any person who controls Star Funds within the meaning of
Section 15 of the Securities Act of 1933, as amended, 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 Star Funds, its officer or
directors, or any such controlling person, may incur under the Securities Act of
1933, as amended, or under common law or otherwise, but only to the extent that
such liability or expense incurred by Star Funds, its officer or directors, or
such controlling person resulting from such claims or demands, shall arise out
of or be based upon any untrue, or alleged untrue, statement of a material fact
contained in information furnished by you to Star Funds or its counsel and used
in Star Funds' registration statement or any prospectus, or shall arise out of
or be based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished by you to Star Funds or its counsel
and required to be stated in any registration statement or prospectus or
necessary to make such information not misleading. Your agreement to indemnify
Star Funds, its officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of any action
brought against Star Funds, its officers or directors, or any such controlling
person, such notification to be given by letter or telegram addressed to you at
your principal office within ten days after the summons or other first legal
process shall have been served. You shall have the right to control the defense
of such action, with counsel of your own choosing, satisfactory to Star Funds,
if such action is based solely upon such alleged misstatement or omission on
your part, and in any other event Star Funds, its officers or directors or such
controlling persons shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which you may have to
Star Funds, its officers or directors, or to such controlling person by reasons
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement contained in
this paragraph 1.9.
1.10 No shares shall be offered by either you or Star Funds under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by Star Funds 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
Securities Act of 1933, as amended, or if and so long as current prospectuses as
required by Section 10 of said Act, as amended, are not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.10 shall in any way restrict or have an application to or
bearing upon Star Funds' obligation to repurchase Shares from any shareholder in
accordance with the provision of the prospectus or Articles of Incorporation.
1.11 Star Funds agrees to advise you promptly in writing::
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect;
(b) in the event of the issuance by the Securities and Exchange
commission of any stop order suspending the effectiveness of the
registration statement or prospectuses then in effect or the initiation of
any proceedings for that purpose;
(c) of the happening of any event which make untrue any statement of
a material fact made in the registration statement or prospectuses then in
effect or which requires the making of a change in such registration
statement or prospectuses in order to make the statements therein not
misleading; and
(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus which
may from time to time be filed with the Securities and Exchange Commission.
2. Term
----
2.1 This agreement shall become effective as the date hereof and, unless
sooner terminated, shall continue until February 28, 1999, and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) Star Funds' Board of Trustees
or (ii) the vote of a majority (as defined in the Investment Company Act of
1940) of the Fund's outstanding Shares, provided that in either event its
continuance also is approved by a majority of Star Funds' trustees which are not
"interested persons" (as defined in said Act) 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 not less than 60
days' notice, by Star Funds' Board of Trustees, by vote of the holders of a
majority (as defined in said Act) of the fund's outstanding Shares, or by you.
This agreement will also terminate automatically in the event of its assignment
(as defined in said Act).
3. Miscellaneous
-------------
3.1 Star Funds recognizes that from time to time your directors, officers
and employees may serve as directors, officers and employees of other
corporations (including other investment companies) and that such other
corporations may include the name X.X. Xxxxxxx and Company as part of their
name, and that you or your affiliates may enter into investment advisory or
other agreements with such other corporations.
3.2 You agree on behalf of yourself and your employees to treat
confidentially and as proprietary information of Star Funds all records and
other information relative to the Funds and prior, present or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than performance of your
responsibilities and duties hereunder, except after prior notification to and
approval in writing by Star Funds, which approval shall not be unreasonably
withheld and may not be withheld where you may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, and when so requested by Star
Funds.
3.3 No provisions of this agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
3.4 This agreement shall be governed by Wisconsin law.
3.5 You are hereby expressly put on notice of the limitation of liability
as set forth in Article XI of the Star Funds' Declaration of Trust and agree
that the obligation assumed by the Star Funds pursuant to this agreement shall
be limited in any case to the Star Funds and its assets and you shall not seek
satisfaction of any such obligation from the shareholders of the Star Funds, the
trustees, officers employees or agents of the Star Funds, or any of them.
3.6 You shall bear all legal fees incident to distribution of the Shares,
3.7 Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as follows:
Notice to you shall be sent to:
X.X. Xxxxxxx and Company
Attn: Xxxxxx X. Xxxxxxxxx
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxx 00000
And notice to the Star Funds shall be sent to:
Star Funds
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
With copy to:
Xxxxx Xxxx Xxxxxxx, Esq.
Cors & Xxxxxxx
000 Xxxx Xxxx Xxxx Xxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Please confirm that the foregoing is in accordance with your understanding
by indicating your acceptance hereof at the place below indicated, whereupon it
shall become a binding agreement between us.
Very truly yours,
STAR FUNDS
By:/s/ Xxxxxx X. Xxxx
(Authorized Officer)
Accepted:
X.X. XXXXXXX AND COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
(Authorized Officer)
Addendum A
Tax-Free Money Market Fund
Ohio Tax-Free Money Market Fund
Treasury Fund
Strategic Income Fund
U.S. Government Income Fund
Stellar Insured Tax-Free Bond Fund
Relative Value Fund
Market Capitalization Fund
Growth Equity Fund
Capital Appreciation Fund
Stellar Fund
International Equity Fund
