FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of October,
1998, by and between Star Funds, Massachusetts business trust (hereinafter
referred to as the "Trust") and Firstar Trust Company, a corporation organized
under the laws of the State of Wisconsin (hereinafter referred to as "FTC").
WHEREAS, the Trust is an open-end management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio;
WHEREAS, FTC is a trust company and, among other things, is in the
business of providing fund administration services for the benefit of its
customers; and
WHEREAS, the Trust desires to retain FTC to act as Administrator for each
series of the Trust (hereinafter each series is referred to individually as
"Fund") listed on Exhibit A attached hereto, as may be amended from time to
time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and FTC agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Trust hereby appoints FTC as Administrator of the Trust on the terms
and conditions set forth in this Agreement, and FTC hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FTC
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Coordinate board communication by:
a. Assisting Trust counsel in establishing meeting agendas
b. Preparing board reports based on financial and administrative
data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings
relating thereto
e. Preparing minutes of meetings of the board and shareholders
3. Audits
a. Prepare appropriate schedules and assist independent auditors
b. Provide information to SEC and facilitate audit process
c. Provide office facilities
4. Assist in overall operations of the Fund
5. Pay Fund expenses upon written authorization from the Trust
B.Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements, including:
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-3
4) Code of Ethics for the disinterested trustees of the Fund
b.Monitor Fund's compliance with the policies and investment
limitations of the Trust as set forth in its Prospectus and
Statement of Additional Information
2. Blue Sky Compliance
a.Prepare and file with the appropriate state securities
authorities any and all required compliance filings relating to
the registration of the securities of the Trust so as to enable
the Trust to make a continuous offering of its shares in all
states
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a.Assist Trust counsel in updating Prospectus and Statement of
Additional Information and in preparing proxy statements and
Rule 24f-2 notices
b.Prepare annual and semiannual reports
c.Coordinate the printing of publicly disseminated Prospectuses
and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
4. IRS Compliance
a.Monitor Trust's status as a regulated investment company under
Subchapter M through review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b.Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by Fund's Prospectus and Statement
of Additional Information
2. Prepare financial reports for shareholders, the board, the SEC,
and independent auditors
3. Supervise the Trust's Custodian and Trust Accountants in the
maintenance of the Trust's general ledger and in the preparation
of the Fund's financial statements, including oversight of
expense accruals and payments, of the determination of net asset
value of the Trust's net assets and of the Trust's shares, and of
the declaration and payment of dividends and other distributions
to shareholders
X.Xxx Reporting
1. Prepare and file on a timely basis appropriate federal and state
tax returns including Forms 1120/8610 with any necessary
schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to trustees and other
service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
3. COMPENSATION
The Trust, on behalf of the Fund, agrees to pay FTC for the performance of
the duties listed in this Agreement, the fees and out-of-pocket expenses as
set forth in the attached Exhibit A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and FTC.
The Trust agrees to pay all fees and reimbursable expenses within ten (10)
business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FTC shall exercise reasonable care in the performance of its duties
under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's control, except a loss
resulting from FTC's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful misconduct
on its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless FTC from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which FTC may sustain or incur or which
may be asserted against FTC by any person arising out of any action
taken or omitted to be taken by it in performing the services
hereunder (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to FTC by any
duly authorized officer of the Trust, such duly authorized officer
to be included in a list of authorized officers furnished to FTC and
as amended from time to time in writing by resolution of the Board
of Trustees of the Trust.
FTC shall indemnify and hold the Trust harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which the Trust may sustain
or incur or which may be asserted against the Trust by any person
arising out of any action taken or omitted to be taken by FTC as a
result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, FTC shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and correct
any errors resulting from such a breakdown at the expense of FTC.
FTC agrees that it shall, at all times, have reasonable contingency
plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent
appropriate equipment is available. Representatives of the Trust
shall be entitled to inspect FTC's premises and operating
capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the indemnitee will use all reasonable care
to notify the indemnitor promptly concerning any situation which
presents or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim which may be the subject of this
indemnification. In the event that the indemnitor so elects, it
will so notify the indemnitee and thereupon the indemnitor shall
take over complete defense of the claim, and the indemnitee shall in
such situation initiate no further legal or other expenses for which
it shall seek indemnification under this section. The indemnitee
shall in no case confess any claim or make any compromise in any
case in which the indemnitor will be asked to indemnify the
indemnitee except with the indemnitor's prior written consent.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FTC agrees on behalf of itself and its directors, officers, and employees
to treat confidentially and as proprietary information of the Trust all
records and other information relative to the Trust and prior, present, or
potential shareholders of the Trust (and clients of said shareholders), and
not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where FTC may be
exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities,
or when so requested by the Trust.
6. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FTC, shall furnish to FTC the data
necessary to perform the services described herein at times and in such
form as mutually agreed upon.
7. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in
effect for successive annual periods. The Agreement may be terminated by
either party upon giving ninety (90) days prior written notice to the other
party or such shorter period as is mutually agreed upon by the parties.
However, this Agreement may be amended by mutual written consent of the
parties.
8. NOTICES
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 FTC shall be sent to:
Firstar Trust Company
Attn.: Mutual Fund Services
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
Star Funds
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any of
FTC's duties or responsibilities hereunder is designated by the Trust by
written notice to FTC, FTC will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by FTC
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which FTC has maintained, the Trust shall pay
any expenses associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FTC's personnel in the establishment of
books, records, and other data by such successor.
10. GOVERNING LAW
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Wisconsin. However,
nothing herein shall be construed in a manner inconsistent with the 1940
Act or any rule or regulation promulgated by the Securities and Exchange
Commission thereunder.
11. RECORDS
FTC shall keep records relating to the services to be performed hereunder,
in the form and manner, and for such period as it may deem advisable and is
agreeable to the Trust but not inconsistent with the rules and regulations
of appropriate government authorities, in particular, Section 31 of the
1940 Act and the rules thereunder. FTC agrees that all such records
prepared or maintained by FTC relating to the services to be performed by
FTC hereunder are the property of the Trust and will be preserved,
maintained, and made available in accordance with such section and rules of
the 1940 Act and will be promptly surrendered to the Trust on and in
accordance with its request.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
STAR FUNDS FIRSTAR TRUST COMPANY
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx Xxxxxxxxx
---------------------------- ---------------------------------
Attest: /s/ Xxxxxxxxx Xxxxxx Attest:/s/ Xxxx Xxxx
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FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE
EXHIBIT A
Separate Series of the Star Funds
NAME OF SERIES DATE ADDED
-------------- -----------------
Star Tax-Free Money Market Fund October 1, 1998
Star Ohio Tax-Free Money Market Fund "
Star Treasury Fund "
Star Strategic Income Fund "
Star U.S. Government Income Fund "
Star Relative Value Fund "
Star Market Capitalization Fund "
Star Growth Equity Fund "
Star Capital Appreciation Fund "
Star International Equity Fund "
The Stellar Fund "
Stellar Insured Tax-Free Bond Fund "
Annual fund administration fee
12 basis points on average daily net assets
Plus out-of-pocket expenses, including, but not limited to, the following:
o Postage (including overnight courier service)
o Statement Stock
o Envelopes
o Telephones
o Telecommunication Charges (including FAX)
o Travel
o Duplicating
o Forms
o Supplies
o Microfiche
o Computer Access Charges
o Client Specific System Enhancements
o Access to the Shareholder Recordkeeping System
o Security Pricing Services
o Variable Rate Change Notification Services
o Paydown Factor Notification Services
Fees and out-of-pocket expenses are billed to the fund monthly.
