ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT (the "Agreement") is made as of May 1,
1994 by and between XXXXXXXX INC. ("Xxxxxxxx") and THE CAPITOL MUTUAL FUNDS,
a Massachusetts business trust ("Capitol Funds").
WHEREAS, Capitol Funds is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Capitol Funds desires to retain Xxxxxxxx to render certain
administrative services for the investment portfolios of Capitol Funds listed on
Schedule I (individually, a "Fund" and collectively, the "Funds"), and Xxxxxxxx
is willing to render such services; and
WHEREAS, Capitol Funds is retaining, pursuant to a separate
Co-Administration Agreement, The Boston Company Advisors, Inc. ("Boston
Advisors") to perform certain other administrative services.
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Capitol Funds hereby appoints Xxxxxxxx to act as
Administrator of the Funds and Xxxxxxxx hereby accepts such appointment and
agrees to render such services and duties set forth in Paragraph 3, for the
compensation and on the terms herein provided. Absent written notification to
the contrary by either Capitol Funds or Xxxxxxxx, each new investment portfolio
established in the future by Capitol Funds shall automatically become a "Fund"
for all purposes hereunder as if listed on Schedule I.
2. Delivery of Documents. Capitol Funds has furnished Xxxxxxxx with copies
properly certified or authenticated of each of the following:
(a) The Capitol Funds' most recent Post-Effective Amendment to its
Registration Statement on Form N-1A (the "Registration Statement") under the
Securities Act of 1933, as amended, and under the 1940 Act, as filed with the
Securities and Exchange Commission (the "SEC") relating to the Funds' units or
shares (the "Shares");
(b) The Funds' most recent Prospectus(es); and
(c) The Funds' most recent Statement(s) of Additional Information.
Capitol Funds will furnish Xxxxxxxx from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, Capitol Funds will provide Xxxxxxxx with any other
documents that Xxxxxxxx may reasonably request and
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will notify Xxxxxxxx as soon as possible of any matter materially affecting
Xxxxxxxx' performance of its services under this Agreement.
3. Duties as Administrator. Subject to the supervision and direction of
the Board of Trustees of Capitol Funds, Xxxxxxxx, as Administrator, will assist
in supervising various aspects of Capitol Funds' administrative operations and
undertakes to perform the following specific services from and after the
effective date of this Agreement:
(a) Maintaining office facilities (which may be in the offices of
Xxxxxxxx or a corporate affiliate);
(b) Furnishing statistical and research data, data processing services,
clerical services, and internal executive and administrative services and
stationery and office supplies in connection with the foregoing;
(c) Furnishing corporate secretarial services, including coordinating
the preparation and distribution of materials for Board of Trustees meetings;
(d) Providing the services of certain persons who may be appointed as
officers of Capitol Funds by Capitol Funds' Board of Trustees;
(e) Coordinating the provision of legal advice and counsel to Capitol
Funds with respect to regulatory matters, including monitoring regulatory and
legislative developments which may affect Capitol Funds and assisting in the
strategic response to such developments, counseling and assisting Capitol Funds
in routine regulatory examinations or investigations of Capitol Funds, and
working closely with outside counsel to Capitol Funds in connection with any
litigation in which Capitol Funds is involved;
(f) Coordinating the preparation of reports to Capitol Funds'
shareholders of record and the SEC including, but not necessarily limited to,
Annual Reports and Semi-Annual Reports to Shareholders and on Form N-SAR and
Notices pursuant to Rule 24f-2 under the 1940 Act;
(g) Coordinating with Capitol Funds and its Distributor regarding the
jurisdictions in which the Shares of Capitol Funds shall be registered or
qualified for sale and, in connection therewith, being responsible for the
registration or qualification and the maintenance of such registration or
qualification of Shares for sale under the securities laws of any state. Payment
of share registration fees and any fees for qualifying or continuing the
qualification of Capitol Funds or any Fund as a dealer or broker shall be made
or reimbursed by Capitol Funds or that Fund, respectively;
(h) Preparing and filing on a timely basis various reports,
registration statements and post-effective amendments thereto and other
documents required by federal, state and other applicable laws and regulations
other than those filed or required to be filed by the Adviser, Boston Advisors,
Transfer Agent or Custodian;
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(i) Preparing and filing on a timely basis Capitol Funds' Rule 24f-2
Notice;
(j) Monitoring the development and implementation of compliance
procedures for Capitol Funds which will include, among other matters, monitoring
each Fund's status as a regulated investment company under Sub-Chapter M of the
Internal Revenue Code of 1986, as amended, and compliance by each Fund with its
investment objective, policies, restrictions, tax matters and applicable laws
and regulations; and
(k) Generally assisting in all aspects of Capitol Funds' operations.
In performing all services under this Agreement, Xxxxxxxx shall (a) act in
conformity with Capitol Funds' Agreement and Declaration of Trust and the
By-Laws; the 1940 Act, the Investment Advisers Act of 1940 and other applicable
laws, as the same may be amended from time to time; and Capitol Funds'
Registration Statement, as such Registration Statement may be amended from time
to time, (b) consult and coordinate with legal counsel for Capitol Funds, as
necessary and appropriate, and (c) advise and report to Capitol Funds and its
legal counsel, as necessary or appropriate, with respect to any compliance or
other matters that come to its attention.
In connection with its duties under this Paragraph 3, Xxxxxxxx may, at its
own expense, enter into sub-administration agreements with other service
providers, provided that each such service provider agrees with Xxxxxxxx to
comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder. Xxxxxxxx will provide Capitol Funds with a copy of each
sub-administration agreement it executes relating to Capitol Funds. Xxxxxxxx
will be liable for acts or omissions of any such sub-administrators under the
standards of care provided herein under Paragraph 5.
In addition to the services specifically identified above, Xxxxxxxx shall
coordinate the provision of services to Capitol Funds by Boston Advisors, the
Transfer Agent and the Custodian.
4. Compensation. Xxxxxxxx shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
Paragraph 4(b) below.
(a) Xxxxxxxx will from time to time employ or associate with itself
such person or persons as Xxxxxxxx may believe to be particularly suited to
assist it in performing services under this Agreement. Such person or persons
may be officers and employees who are employed by both Xxxxxxxx and Capitol
Funds. The compensation of such person or persons shall be paid by Xxxxxxxx and
no obligation shall be incurred on behalf of Capitol Funds in such respect.
(b) Xxxxxxxx shall not be required to pay any of the following expenses
incurred by Capitol Funds: investment advisory expenses, costs of printing and
mailing stock certificates, prospectuses, reports and notices; interest on
borrowed money; brokerage fees and commissions; taxes and fees payable to
Federal, state and other governmental agencies; fees of Trustees of Capitol
Funds who are not affiliated with Xxxxxxxx; outside auditing expenses; outside
legal
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expenses; fees of any other service provider to Capitol Funds (other than a
subadministrator engaged pursuant to Paragraph 3, and except for transmitting
the fees payable to Boston Advisors pursuant to Paragraph 3(d)); or other
expenses not specified in this Section 4 which may be properly payable by
Capitol Funds and which are approved by Capitol Funds' President or Treasurer.
(c) For the services to be rendered, the facilities to be furnished and
the payments to be made by Xxxxxxxx, as provided for in this Agreement, Xxxxxxxx
shall be compensated by Capitol Funds in accordance with the terms set forth in
the Fee Letter Agreement dated as of May 1, 1994 between Capitol Funds, Xxxxxxxx
and Boston Advisors, as the same may be amended from time to time (the "Fee
Letter Agreement") provided, however, that any amendments to the Fee Letter
Agreement shall be presented for approval or ratification by Capitol Funds at
the next regularly scheduled Board meeting.
(d) Xxxxxxxx shall be authorized to receive, as agent for Boston
Advisors, the fees payable by Capitol Funds to Boston Advisors pursuant to the
Fee Letter Agreement for services provided by Boston Advisors under its
Co-Administration Agreement, and shall promptly forward such fees to Boston
Advisors, provided that it shall only be required to forward amounts actually
received from Capitol Funds and shall have no other duty to pay the same.
5. Limitation of Liabilities; Indemnification.
(a) Xxxxxxxx shall not be liable for any error of judgment or mistake
of law or for any loss suffered by Capitol Funds in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from Xxxxxxxx' willful misfeasance, bad faith or gross negligence in
the performance of such obligations and duties, or by reason of its reckless
disregard thereof. Any person, even though also an officer, Trustee, partner,
employee or agent of Xxxxxxxx, shall be deemed, when rendering services to
Capitol Funds or acting on any business of Capitol Funds (other than services or
business in connection with Xxxxxxxx' duties as Administrator hereunder), to be
acting solely for Capitol Funds and not as an officer, Trustee, partner,
employee or agent or one under the control or discretion of Xxxxxxxx even though
paid by it.
(b) Capitol Funds, on behalf of each Fund, will indemnify Xxxxxxxx
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit relating to the particular Fund
and not resulting from the willful misfeasance, bad faith or gross negligence of
Xxxxxxxx in the performance of such obligations and duties or by reason of its
reckless disregard thereof. Xxxxxxxx will not confess any claim or settle or
make any compromise in any instance in which Capitol Funds will be asked to
provide indemnification, except with Capitol Funds' prior written consent. Any
amounts payable by Capitol Funds under this Section 5(b) shall be satisfied only
against the assets of the Fund involved in the claim, demand, action or suit and
not against the assets of any other investment portfolio of Capitol Funds.
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6. Termination of Agreement.
(a) This Agreement shall become effective on May 1, 1994 and shall
remain in full force and effect unless terminated pursuant to the provisions of
subsection (b) of this Section 6.
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days written notice, by vote of the holders of a majority of
the Board of Trustees of Capitol Funds or by Xxxxxxxx. Xxxxxxxx will cooperate
with and assist Capitol Funds, its agents and any successor administrator or
administrators in the substitution/conversion process.
(c) Section 8 shall survive this Agreement's termination.
7. Amendments. No provision of this Agreement may be changed, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, discharge or termination is sought.
8. Confidentiality. All books, records, information and data pertaining to
the business of Capitol Funds, its prior, present or potential shareholders and
the Adviser's customers that are exchanged or received pursuant to the
performance of Xxxxxxxx' duties under this Agreement shall remain confidential
and shall not be disclosed to any other person, except as specifically
authorized by Capitol Funds or as may be required by law, and shall not be used
for any purpose other than performance of its responsibilities and duties
hereunder.
9. Service to Other Companies or Accounts.
Capitol Funds acknowledges that Xxxxxxxx now acts, will continue to act
and may act in the future as investment adviser to fiduciary and other managed
accounts, and as investment adviser, sub-investment adviser and/or administrator
to other investment companies or series of investment companies, and Capitol
Funds has no objection to Xxxxxxxx' so acting. Capitol Funds further
acknowledges that the persons employed by Xxxxxxxx to assist in the performance
of Xxxxxxxx' duties under this Agreement may not devote their full time to such
service and nothing contained in this Agreement shall be deemed to limit or
restrict the right of Xxxxxxxx or any affiliate of Xxxxxxxx to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
10. Miscellaneous
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to Capitol Funds or Xxxxxxxx shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
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To Capitol Funds:
The Capitol Mutual Funds
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
To Stephens:
Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other party.
(c) This Agreement shall be construed in accordance with the laws of
the State of Arkansas.
(d) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(f) This Agreement and the Fee Letter Agreement constitute the entire
agreement between the parties hereto with respect to the matters described
herein.
(g) The names "The Capitol Mutual Funds" and "Trustees of The Capitol
Mutual Funds" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated January 22, 1990 which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of The Commonwealth of Massachusetts and at the principal office of Capitol
Funds. The obligations of "The Capitol Mutual Funds" entered into in the name or
on behalf thereof by any of Capitol Funds' Officers, representatives or agents
are made not individually but in such capacities, and are not binding upon any
of Capitol Funds' Shareholders, officers, representatives or agents of Capitol
Funds personally, but bind only Capitol Funds Property (and a Fund's Shares of
Capitol Funds must look solely to Capitol Funds Property belonging to such
Fund's Shares for the enforcement of any claims against Capitol Funds.)
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
XXXXXXXX INC.
By: /s/R. Xxxx Xxxxxx
-----------------------------
Name: R. Xxxx Xxxxxx
Title: Senior Vice President
THE CAPITOL MUTUAL FUNDS
By: /s/ A. Xxx Xxxxxx
-----------------------------------------
Name: A. Xxx Xxxxxx
Title: President and Chairman of the Board
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SCHEDULE I
1. Nations Cash Reserves
2. Nations Treasury Reserves
3. Nations Government Reserves
4. Nations Municipal Reserves
5. Nations Money Market Reserves
Amended: February 4, 1998
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