EXHIBIT E(ii)
CAPSTONE INTERNATIONAL SERIES TRUST
INVESTMENT COMPANY SERVICES AGREEMENT
This Agreement, dated as of the 7th day of October 2000, made by and
between Capstone International Series Trust, ("Company", on behalf of the
Capstone Japan Fund and the Capstone New Zealand Fund (hereafter, collectively
"Fund" or "Funds") and Declaration Service Company ("Declaration"). The Company
is a Massachusetts Business Trust organized under an Indenture of Trust dated
May 2, 1986, amended and restated December 29, 1986, (the "Trust Document") and
authorized to divide and classify its shares of beneficial interest into
separate series of shares and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company. Declaration is a corporation duly
organized under the laws of the Commonwealth of Pennsylvania (Company and
Declaration are, collectively, the "Parties").
WITNESSETH THAT:
Whereas, the Company is authorized by its Trust Document to issue separate
series of shares representing interests in separate investment portfolios,
including the Funds which are identified on Schedule "C" attached hereto and
which Schedule "C" may be amended from time to time by mutual agreement of the
Company and Declaration; and
Whereas, the Parties desire to enter into an agreement whereby Declaration
will provide the services to the Funds as specified herein and set forth in
particular in Schedule "A" which is attached hereto and made a part hereof.
Now Therefore, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
GENERAL PROVISIONS
SECTION 1. APPOINTMENT. The Company hereby appoints Declaration as
servicing agent for the Funds and Declaration hereby accepts such appointment.
In order that Declaration may perform its duties under the terms of this
Agreement, the Board of Trustees of the Company shall direct the officers,
investment adviser(s), legal counsel, independent accountants and custodian of
the Funds to cooperate fully with Declaration and, upon request of Declaration,
to provide such information, documents and advice relating to the Funds which
Declaration requires to execute its responsibilities hereunder. In connection
with its duties, Declaration shall be entitled to rely, and will be held
harmless by the Funds when acting in reasonable reliance, upon any instruction,
advice or document relating to the Funds as provided to Declaration by any of
the aforementioned persons on behalf of the Funds. All fees charged by any such
persons acting on behalf of the Funds will be deemed an expense of the Funds.
Any services performed by Declaration under this Agreement will conform to
the requirements of:
(a) the provisions of the 1940 Act and the Securities Act of 1933, as
amended, and any rules or regulations in force thereunder;
(b) any other applicable provision of state and federal law;
(c) the provisions of the Trust Document and the by-laws as amended from
time to time and delivered to Declaration;
(d) any policies and determinations of the Board of Trustees of the Funds
which are communicated to Declaration; and
(e) the policies of the Funds as reflected in the Funds registration
statement as filed with the U.S. Securities and Exchange Commission.
Nothing in this Agreement will prevent Declaration or any officer thereof
from providing the same or comparable services for or with any other person,
firm or corporation. While the services supplied to the Funds may be different
than those supplied to other persons, firms or corporations, Declaration will
provide the Funds equitable treatment in supplying services. The Funds recognize
that they will not receive preferential treatment from Declaration as compared
with the treatment provided to other Declaration clients.
SECTION 2. DUTIES AND OBLIGATIONS OF DECLARATION.
Subject to the provisions of this Agreement, Declaration will provide to
the Funds the specific services as set forth in Schedule "A" attached hereto.
SECTION 3. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
"Certificate" will mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement. To be effective, such
Certificate shall be
given to and received by the custodian and shall be signed on behalf of the
Funds by any two of the Company's designated officers, and the term Certificate
shall also include instructions communicated to the custodian by Declaration.
"CUSTODIAN" will refer to that agent which provides safekeeping of the
assets of the Funds.
"INSTRUCTIONS" will mean communications containing instructions transmitted
by electronic or telecommunications media including, but not limited to,
Industry Standardization for Institutional Trade Communications,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed by an officer or unsigned) and tested telex.
"ORAL INSTRUCTION" will mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to Declaration in person
or by telephone, telegram, telecopy or other mechanical or documentary means
lacking original signature, by a person or persons reasonably identified to
Declaration to be a person or persons so authorized by a resolution of the Board
of Trustees of the Company to give Oral Instructions to Declaration on behalf of
the Funds.
"SHAREHOLDERS" will mean the registered owners of the shares of the Funds
in accordance with the share registry records maintained by Declaration for the
Funds.
"SHARES" will mean the issued and outstanding shares of the Funds.
"SIGNATURE GUARANTEE" will mean the guarantee of signatures by an "eligible
guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be members of a clearing corporation
or maintain net capital of at least $100,000. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program.
"WRITTEN INSTRUCTION" will mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to Declaration in an
original writing containing an original signature or a copy of such document
transmitted by telecopy including transmission of such signature reasonably
identified to Declaration to be the signature of a person or persons so
authorized by a resolution of the Board of Trustees of the Company, or so
identified by the Company to give Written Instructions to Declaration on behalf
of the Funds.
CONCERNING ORAL AND WRITTEN INSTRUCTIONS For all purposes under this
Agreement, Declaration is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives from the Company or its agents, on
behalf of the Funds. In cases where the first instruction is an Oral Instruction
that is not in the form of a document or written record, a confirmatory Written
Instruction or Oral Instruction in the form of a document or written record
shall be delivered. In cases where Declaration receives an Instruction, whether
Written or Oral, to enter a portfolio transaction onto a Fund's records, the
Funds shall cause the broker/dealer executing such transaction to send a written
confirmation to the Custodian.
Declaration shall be entitled to rely on the first Instruction received.
For any act or omission undertaken by Declaration in compliance therewith, it
shall be free of liability and fully indemnified and held harmless by the Funds,
provided however, that in the event a Written or Oral Instruction received by
Declaration is countermanded by a subsequent Written or Oral Instruction
received prior to acting upon such countermanded Instruction, Declaration shall
act upon such subsequent Written or Oral Instruction. The sole obligation of
Declaration with respect to any follow-up or confirmatory Written Instruction or
Oral Instruction in documentary or written form shall be to make reasonable
efforts to detect any such discrepancy between the original Instruction and such
confirmation and to report such discrepancy to the Funds. The Funds shall be
responsible for and bear the expense of any action, including any reprocessing,
necessary to correct any discrepancy or error. To the extent such action
requires Declaration to act, the Funds shall give Declaration specific Written
Instruction as to the action required.
The Funds will file with Declaration a certified copy of each resolution of
the Company's Board of Trustees authorizing execution of Written Instructions or
the transmittal of Oral Instructions as provided above.
SECTION 4. INDEMNIFICATION.
(a) Declaration, its directors, officers, employees, shareholders, and
agents will be liable for any loss suffered by the Funds resulting from the
willful misfeasance, bad faith, negligence or disregard on the part of
Declaration in the performance of its obligations and duties under this
Agreement.
(b) Any director, officer, employee, shareholder or agent of Declaration,
who may be or become an officer, trustee, employee or agent of the Company or
the Funds, will be deemed, when rendering services to the Funds, or acting on
any business of Company or the Funds (other than services or business in
connection with Declaration' duties hereunder), to be rendering such services to
or acting solely for the Company or the Funds, as applicable, and not as a
director, officer, employee, shareholder or agent of, or under the control or
direction of Declaration even though such person may be receiving compensation
from Declaration.
(c) The Company agrees that the Funds shall indemnify and hold Declaration
harmless, together with its directors, officers, employees, shareholders and
agents from and against any and all claims, demands, expenses and liabilities
(whether with or without basis in fact or law) of any and every nature which
Declaration may sustain or incur or which may be asserted against Declaration by
any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by Declaration except
claims, demands, expenses and liabilities arising from willful misfeasance, bad
faith, negligence or disregard on the part of Declaration in the performance of
its obligations and duties under this Agreement; or
(ii) any action taken or omitted to be taken by Declaration in
reliance upon any Certificate, instrument, order or stock certificate or other
document reasonably believed by Declaration to be genuine and signed,
countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Funds, or
upon the written opinion of legal counsel for the Funds or Declaration; or
(iii) the offer or sale of shares of the Funds to any person, natural
or otherwise, which is in violation of any state or federal law.
If a claim is made against Declaration as to which Declaration may seek
indemnity under this Section, Declaration will notify the Funds promptly after
receipt of any written assertion of such claim threatening to institute an
action or proceeding with respect thereto and will notify the Funds promptly of
any action commenced against Declaration within ten (10) days after Declaration
has been served with a summons or other legal process. Failure to notify the
Funds will not, however, relieve the Funds from any liability which they may
have on account of the indemnity under this Section so long as the Funds have
not been prejudiced in any material respect by such failure.
The Company and the Funds and Declaration will cooperate in the control of
the defense of any action, suit or proceeding in which Declaration is involved
and for which indemnity is being provided by the Funds to Declaration. The
Company, on behalf of the Funds, may negotiate the settlement of any action,
suit or proceeding subject to Declaration's approval, which will not be
unreasonably withheld. Declaration reserves the right, but not the obligation,
to participate in the defense or settlement of a claim, action or proceeding
with its own counsel. Costs or expenses incurred by Declaration in connection
with, or as a result of such participation, will be borne solely by the Funds
if:
(i) Declaration has received an opinion of counsel from counsel to
the Funds stating that the use of counsel to the Funds by Declaration would
present an impermissible conflict of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both Declaration and the Funds, and legal counsel to Declaration has
reasonably concluded that there are legal defenses available to it which are
different from or additional to those available to the Funds or which may be
adverse to or inconsistent with defenses available to the Funds (in which case
the Funds will not have the right to direct the defense of such action on behalf
of Declaration); or
(iii) the Company authorizes Declaration to employ separate counsel at
the expense of the Funds.
(d) The terms of this Section will survive the termination of this
Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
(a) Declaration represents and warrants that:
(i) it is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Pennsylvania;
(ii) it is empowered under applicable laws and by its Certificate of
Incorporation and by-laws to enter into and perform this Agreement;
(iii) all requisite corporate proceedings have been taken to authorize
Declaration to enter into and perform this Agreement;
(iv) it has and will continue to have access to the facilities,
personnel and equipment required to fully perform its duties and obligations
hereunder;
(v) no legal or administrative proceedings have been instituted or
threatened which would impair Declaration's ability to perform its duties and
obligations under this Agreement;
(vi) its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or obligation of
Declaration or any law or regulation applicable to it;
(vii) it is registered as a transfer agent under Section 17A(c)(2) of
the Exchange Act;
(viii) this Agreement has been duly authorized by Declaration and, when
executed and delivered, will constitute valid, legal and binding obligation of
Declaration, enforceable in accordance with its terms.
(b) The Company represents and warrants that:
(i) it is a Massachusetts Business Trust duly organized and existing
and in good standing under the laws of the Commonwealth of Massachusetts;
(ii) it is empowered under applicable laws and by its Trust Document
and by-laws to enter into and perform this Agreement;
(iii) all requisite proceedings have been taken to authorize the
Company to enter into and perform this Agreement;
(iv) no legal or administrative proceedings have been instituted or
threatened which would impair the ability of the Company or the Funds to perform
their duties and obligations under this Agreement;
(v) the Company's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligations of the Company, or any law or regulation applicable to either;
(vi) the Shares are properly registered or otherwise authorized for
issuance and sale;
(vii) this Agreement has been duly authorized by the Company and, when
executed and delivered, will constitute valid, legal and binding obligation of
the Company, enforceable in accordance with its terms.
(c) Delivery of Documents
The Company will furnish or cause to be furnished to Declaration the
following documents relating to the Funds;
(i) current Prospectus and Statement of Additional Information;
(ii) most recent Annual Report;
(iii) most recent Semi-Annual Report for registered investment
companies on Form N-SAR;
(iv) certified copies of resolutions of the Company's Board of
Trustees authorizing the execution of Written Instructions or the transmittal of
Oral Instructions and those persons authorized to give those Instructions.
(d) Record Keeping and Other Information
Declaration will create and maintain all records required of it pursuant to
its duties hereunder and as set forth in Schedule "A" in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the Act. All such records will be the property of the Funds and will be
available during regular business hours for inspection, copying and use by the
Funds. Where applicable, such records will be maintained by Declaration for the
periods and in the places required by Rule 31a-2 under the Act. Upon termination
of this Agreement, Declaration will deliver all such records to the Funds or
such person as the Funds may designate.
SECTION 6. COMPENSATION. The Company agrees, on behalf of the Funds, to pay
Declaration compensation for its services, and to reimburse it for expenses at
the rates, times, manner and amounts as set forth in Schedule "B" attached
hereto and incorporated herein by reference and as will be set forth in any
amendments to such Schedule "B" agreed upon in writing by the Parties. Upon
receipt of an invoice therefor, Declaration is authorized to collect such fees
by debiting the Funds custody account following review and approval of such fees
by an authorized representative of the Funds, which will not be unreasonably
withheld. In addition, the Company agrees, on behalf of the Funds, to reimburse
Declaration for any out-of-pocket expenses paid by Declaration on behalf of the
Funds within five (5) calendar days of the Funds receipt and approval of an
invoice therefor, such approval will not be unreasonably withheld.
For the purpose of determining fees payable to Declaration, the value of
each Fund's net assets will be computed at the times and in the manner specified
in the Funds Prospectus and Statement of Additional Information then in effect,
and the fees due Declaration will be calculated daily and paid monthly on the
value of each Fund's assets thus determined.
During the term of this Agreement, should the Funds seek services or
functions in addition to those outlined below or in Schedule "A" attached
hereto, a written amendment to this Agreement specifying the additional services
and corresponding additional compensation will be executed by the Parties.
In the event that the Funds are more than sixty (60) days delinquent in
payments of monthly xxxxxxxx in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by the
Funds), this Agreement may be terminated upon thirty (30) days' written notice
to the Funds by Declaration. The Funds must notify Declaration in writing of any
contested amounts within five (5) days of receipt of a billing for such amounts.
Disputed amounts are not due and payable while they are being disputed
SECTION 7. DAYS OF OPERATION. Nothing contained in this Agreement is
intended to or will require Declaration, in any capacity hereunder, to perform
any functions or duties on any holiday, day of special observance or any other
day on which the New York Stock Exchange ("NYSE") is closed. Functions or duties
normally scheduled to be performed on such days will be performed on and as of
the next succeeding business day on which the NYSE is open. Notwithstanding the
foregoing, Declaration will compute the net asset value of each Funds on each
day required pursuant to Rule 22c-1 promulgated under the Act.
SECTION 8. ACTS OF GOD, ETC. Declaration will not be liable or responsible
for delays or errors caused by acts of God or by reason of circumstances beyond
its control including, acts of civil or military authority, national
emergencies, insurrection, war, riots, or failure or unavailability of
transportation, communication or power supply, fire, flood or other catastrophe.
In the event of equipment failures beyond Declaration's control,
Declaration will, at no additional expense to the Funds, take reasonable steps
to minimize service interruptions but will have no liability with respect
thereto. The foregoing obligation will not extend to computer terminals located
outside of premises maintained by Declaration. Declaration has entered into and
maintains in effect agreements making reasonable provision for emergency use of
electronic data processing equipment.
SECTION 9. INSPECTION AND OWNERSHIP OF RECORDS. In the event of a request
or demand for the inspection of the records of the Funds, Declaration will use
its best efforts to notify the Funds and to secure instructions as to permitting
or refusing such inspection. Declaration may, however, make such records
available for inspection to any person in any case where it is advised in
writing by its counsel that it may be held liable for failure to do so after
notice to the Funds.
Declaration recognizes that the records it maintains for the Funds are the
property of the Funds and will be surrendered to the Funds upon written notice
to Declaration as outlined under Section 10(c) below. The Funds are responsible
for the payment in advance of any fees owed to Declaration. Declaration agrees
to maintain the records and all other information of the Funds in a confidential
manner and will not use such information for any purpose other than the
performance of Declaration' duties under this Agreement. Declaration will
maintain off site secured storage of all electronic records of the Funds. The
Funds understand that Declaration maintains storage for physical records at
Declaration's location.
SECTION 10. DURATION AND TERMINATION.
(a) The initial term of this Agreement will be for the period of twenty
four (24) months, commencing on the date herein above first written (the
"Effective Date") and will continue thereafter subject to termination by either
Party as set forth in subsection (c) below.
(b) The fee schedules set forth in Schedule "B" attached hereto will be
fixed for the initial term commencing on the Effective Date of this Agreement
and will continue thereafter subject to review and any adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on which
this Agreement shall be terminated ("Termination Date"). The Termination Date
shall be set on a day not less than sixty (60) days after the Notice Date. The
period of time between the Notice Date and the Termination Date is hereby
identified as the "Notice Period". Any time up to, but not later than fifteen
(15) days prior to the Termination Date, the Funds will pay to Declaration such
compensation as may be due as of the Termination Date and will likewise
reimburse Declaration for any out-of-pocket expenses and disbursements
reasonably incurred or expected to by incurred by Declaration up to and
including the Termination Date.
(d) In connection with the termination of this Agreement, if a successor
to any of Declaration' duties or responsibilities under this Agreement is
designated by the Funds by written notice to Declaration, Declaration will
promptly, on the Termination Date and upon receipt by Declaration of any
payments owed to it as set forth in Section 10(c) above, transfer to the
successor, at the Funds expense, all records which belong to the Funds and will
provide appropriate, reasonable and professional cooperation in transferring
such records to the named successor.
(e) Should the Funds desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date,
Declaration shall make a good faith effort to facilitate the conversion on such
prior date, however, there can be no guarantee that Declaration will be able to
facilitate a conversion of services prior to the end of the Notice Period.
Should services be converted to a successor service provider prior to the end of
the Notice Period, or if a Funds is liquidated or its assets merged or purchased
or the like with another entity, payment of fees to Declaration shall be
accelerated to a date prior to the conversion or termination of services and
calculated as if the services had remained at Declaration until the expiration
of the Notice Period and shall be calculated through the Notice Date.
(f) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either Party in the event of a material breach by the other Party
involving negligence, willful misfeasance, bad faith or a disregard of its
obligations and duties under this Agreement provided that such breach shall have
remained unremedied for sixty (60) days or more after receipt of written
specification thereof.
SECTION 11. RIGHTS OF OWNERSHIP. All computer programs and procedures
developed to perform services required to be provided by Declaration under this
Agreement are the property of Declaration. All records and other data, except
such computer programs and procedures are the exclusive property of the Funds
and all such other records and data will be furnished to the Funds in
appropriate form as soon as practicable after termination of this Agreement for
any reason. Ownership and control of toll free telephone lines 000-000-0000 and
000-000-0000 will be retained by the Funds, even though these lines may be
connected from time to time to the telephone system of Declaration.
SECTION 12. AMENDMENTS TO DOCUMENTS. The Company will furnish Declaration
written copies of any amendments to, or changes in, the Trust Document, by-laws,
Prospectus or Statement of Additional Information in a reasonable time prior to
such
amendments or changes becoming effective. In addition, the Company agrees that
no amendments will be made to the Prospectus or Statement of Additional
Information of the Funds which might have the effect of changing the procedures
employed by Declaration in providing the services agreed to hereunder or which
amendment might affect the duties of Declaration hereunder unless the Company
first obtains Declaration' approval of such amendments or changes.
SECTION 13. CONFIDENTIALITY. Both Parties hereto agree that any non-public
information obtained hereunder concerning the other Party is confidential and
may not be disclosed to any other person without the consent of the other Party,
except as may be required by applicable law or at the request of the U.S.
Securities and Exchange Commission or other governmental agency. Declaration
agrees that it will not use any non-public information for any purpose other
than performance of its duties or obligations hereunder. The obligations of the
Parties under this Section will survive the termination of this Agreement. The
Parties further agree that a breach of this Section would irreparably damage the
other Party and accordingly agree that each of them is entitled, without bond or
other security, to an injunction or injunctions to prevent breaches of this
provision.
SECTION 14. NOTICES. Except as otherwise provided in this Agreement, any
notice or other communication required by or permitted to be given in connection
with this Agreement will be in writing and will be delivered in person or sent
by first class mail, postage prepaid or by prepaid overnight delivery service to
the respective parties as follows:
If to the Funds: If to Declaration:
---------------- ------------------
Capstone International Series Trust. Declaration Service Company.
0000 Xxx Xxxxxx, Xxxxx 0000 000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx Attention: Xxxxxxx X. Xxxxx
President Chief Executive Officer
SECTION 15. AMENDMENT. No provision of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by the Parties. This Agreement may be amended from time to time by
supplemental agreement executed by the Parties and the compensation stated in
Schedule "B" attached hereto may be adjusted accordingly as mutually agreed
upon.
SECTION 16. AUTHORIZATION. The Parties represent and warrant to each other
that the execution and delivery of this Agreement by the undersigned officer of
each Party has been duly and validly authorized; and when duly executed, this
Agreement will constitute a valid and legally binding enforceable obligation of
each Party.
SECTION 17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when so executed will be deemed to be an original,
but such counterparts will together constitute but one and the same instrument.
SECTION 18. ASSIGNMENT. This Agreement will extend to and be binding upon
the Parties hereto and their respective successors and assigns; provided,
however, that this Agreement will not be assignable by the Company without the
written consent of Declaration or by Declaration without the written consent of
the Company which consent shall be authorized or approved by a resolution by its
respective Boards of Trustees.
SECTION 19. GOVERNING LAW. This Agreement will be governed by the laws of
the Commonwealth of Pennsylvania and the exclusive venue of any action arising
under this Agreement will be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
SECTION 20. SEVERABILITY. If any part, term or provision of this Agreement
is held by any court to be illegal, in conflict with any law or otherwise
invalid, the remaining portion or portions will be considered severable and not
be affected and the rights and obligations of the parties will be construed and
enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid, provided that the basic agreement is
not thereby materially impaired.
In Witness Whereof, the Parties hereto have caused this Agreement
consisting of sixteen (16) typewritten pages, together with Schedules "A," "B"
and "C" (pages 17- 24, attached), to be signed by their duly authorized officers
as of the day and year first above written.
Capstone International Series Trust Declaration Service Company
By: By:
-------------------------------- --------------------------------
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
President Chief Executive Officer
SCHEDULE A
Accounting Services Provided by Declaration Service Company
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Journalize each Fund's investment, capital share and income and expense
activities.
Verify investment buy/sell trade tickets when received from the advisor and
transmit trades to the Funds custodian for proper settlement.
Maintain individual ledgers for investment securities.
Maintain historical tax lots for each security.
Reconcile cash and investment balances of each Funds with the custodian, and
provide the advisor with the beginning cash balance available for investment
purposes.
Update the cash availability throughout the day as required by the advisor.
Post to and prepare each Fund's Statement of Assets and Liabilities and
Statement of Operations.
Calculate expenses payable pursuant to the Funds various contractual
obligations.
Control all disbursements from the Funds and authorize such disbursements upon
instructions of the Funds.
Calculate capital gains and losses.
Determine each Fund's net income.
Obtain security market prices or if such market prices are not readily
available, then obtain such prices from services approved by the advisor, and in
either case calculate the market or fair value of each Fund's investments.
Where applicable, calculate the amortized cost value of debt instruments.
Transmit or mail a copy of the portfolio valuations to the advisor.
Compute the net asset value of each Funds.
Report applicable net asset value and performance data to performance tracking
organizations.
Compute each Fund's yields, total returns, expense ratios and portfolio turnover
rate.
Prepare and monitor the expense accruals and notify Funds management of any
proposed adjustments.
Prepare monthly financial statements, which will include, without limitation,
the Schedule of Investments, the Statement of Assets and Liabilities, the
Statement of Operations, the Statement of Changes in Net Assets, the Cash
Statement, and the Schedule of Capital Gains and Losses.
Prepare monthly security transactions listings.
Prepare monthly broker security transactions summaries.
Supply various Funds statistical data as requested on an ongoing basis.
Assist in the preparation of support schedules necessary for completion of
Federal and state tax returns.
Assist in the preparation and filing of the Funds annual and semiannual reports
with the SEC on Form N-SAR.
Assist in the preparation and filing of the Funds annual and semiannual reports
to shareholders and proxy statements.
Assist with the preparation of amendments to the Funds Registration Statements
on From N-1A and other filings relating to the registration of shares.
Monitor each Fund's status as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended from time to time ("Code").
Determine the amount of dividends and other distributions payable to
shareholders as necessary to, among other things, maintain the qualification as
a regulated investment company of each Funds under the Code.
Provide other accounting services as may be agreed upon from time to time in
writing by the Company and Declaration.
Transfer Agent, Shareholder Servicing Agent and Dividend Disbursing
Agent Services provided by Declaration Service Company
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Examine and process new accounts, subsequent payments, liquidations, exchanges,
transfers, telephone transactions, check redemptions, automatic withdrawals, and
wire order trades.
Reinvest or pay dividends and make other distributions.
Answer investor and dealer telephone and/or written inquiries, except as
otherwise agreed by the Transfer Agent and the Company.
Process and confirm address changes.
Process standard account record changes as required, i.e. Dividend Codes, etc.
Microfilm and/or store source documents for transactions, such as account
applications and correspondence.
Perform backup withholding for those accounts in accordance with Federal
regulations.
Solicit missing taxpayer identification numbers.
Provide remote access inquiry to Funds records via Funds supplied hardware
(Funds also responsible for connection line and monthly fee).
Maintain the following shareholder information in such a manner as the Transfer
Agent shall determine:
o Name and address, including zip code.
o Balance of Shares.
o Number of Shares, issuance date of each share outstanding and cancellation
date of each share no longer outstanding, if issued.
o Balance of dollars available for redemption.
o Dividend code (daily accrual, monthly reinvest, monthly cash or quarterly
cash). Type of account code.
o Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available.
o Original establishment date for accounts opened by exchange.
o W-9 withholding status and periodic reporting.
o State of residence code.
o Social security or taxpayer identification number, and indication of
certification.
o Historical transactions on the account for the most recent 18 months, or
other period as mutually agreed to from time to time.
o Indication as to whether phone transaction can be accepted for this
account.
o Beneficial owner code, i.e. male, female, joint tenant, etc.
o Provide the following reports and statements:
o Prepare daily journals for Funds reflecting all shares and dollar activity
for the previous day.
o Supply information monthly for Funds preparation of Blue Sky reporting.
o Supply monthly purchase, redemption and liquidation information for use in
Funds N-SAR report.
o Provide monthly average daily balance reports for the Funds.
o Prepare and mail copies of summary statements to dealers and investment
advisors.
o Mail transaction confirmation statements daily to investors.
o Mail periodic statement to investors.
o Compute, prepare and furnish all necessary reports to governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S.
o Enclose various marketing material as designated by the Funds in statement
mailings, i.e. monthly and quarterly statements (material must be
adaptable to mechanical equipment as reasonably specified by the Transfer
Agent).
o Prepare and mail confirmation statements to dealers daily.
o Prepare certified list of stockholders for proxy mailing.
Administrative Services Provided by Declaration Service Company
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o Provide overall day-to-day Funds administrative management, including
coordination of investment advisor, custodian, transfer agency, distribution
and pricing and accounting services.
o Preparation of filing of all Federal and State reports including:
o Fund's post-effective amendments under the Securities Act of 1933 and the
Investment Company Act of 1940.
o Form N-SAR - Semi-Annual report for Registered Investment Companies.
o The Fund's Annual and Semi-Annual Report.
o Rule 24f-2 Notice - filing regarding sale(s) of securities.
o Rule 17g-1 filing with the SEC regarding Fidelity Bond coverage.
o Ongoing monitoring and filing of State Blue Sky registrations.
o Prepare and file such reports, applications and documents as may be necessary
or desirable to register the Fund's shares with the Federal and state
securities authorities, and monitor the sale of Funds shares for compliance
with Federal and state securities laws.
o Prepare and file reports to shareholders, including the annual report to
shareholders, and coordinate mailing Prospectuses, notices, proxy statements,
proxies and other reports to shareholders.
o Assist with layout and printing of shareholder communications, including
Prospectuses and reports to shareholders.
o Administer contracts on behalf of the Funds with, among others, the Funds's
investment advisor, custodian, transfer agent/shareholder servicing agent,
distributor, and accounting services agent.
o Assist in preparation of and maintain materials for trustees/management
meetings including, agendas, minutes, attendance records and minute books.
o Coordinate shareholder meetings, including assisting Funds counsel in
preparation of proxy materials, preparation of minutes and tabulation of
results.
o Monitor and pay Funds bills, maintain Funds budget and report budget expenses
and variances to Funds management.
o Monitor the Fund's compliance with the investment restrictions and
limitations imposed by the 1940 Act and state Blue Sky laws and applicable
regulations thereunder, the fundamental and non-fundamental investment
policies and limitations set forth in the Fund's Prospectuses and Statement
of Additional Information, and the investment restrictions and limitations
necessary for each Portfolio of the Funds to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended, or any successor statute.
o Prepare and distribute to appropriate parties notices announcing the
declaration of dividends and other distributions to shareholders.
o Provide other administrative services as may be agreed from time to time in
writing by the Funds or Administrator.
SCHEDULE B
Compensation Schedule for Services Provided by Declaration Service Company
TRANSFER AGENT/SHAREHOLDER SERVICES, ACCOUNTING, ADMINISTRATION
(1) .20% First $ 25 Million Assets
.15% Next 25 Million Assets
.10% Next 50 Million Assets
.075% Next 300 Million Assets
.03% Thereafter
(2) Plus $12.00 Annual Fee, per shareholder account on Transfer Agent System.
MINIMUM FEE (FIRST TWO PORTFOLIOS)
$ 10,000/month minimum. Year one, for one class of shares per Portfolio.
11,834/month minimum. Thereafter, for one class of shares per Portfolio.
First additional class of shares, 50% of fee/minimum then in effect. All Classes
thereafter, 25% of fee/minimum then in effect. (Fees rolled into one fee for
18f-3 purposes.)
Funds is also responsible for standard out-of-pocket expenses such as check
processing fees, wire fees, bank service charges, printing, funds specific
Funds/SERV and Networking Costs, confirmations and account statements, courier
service, portfolio price quotation services, asset allocation transaction
charges, travel, postage, telephone, copying, registration fees and other
standard miscellaneous items.
SCHEDULE C
Capstone International Series Trust
Series and Portfolios covered by this Agreement:
Capstone Japan Fund
Capstone New Zealand Fund
