ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT is made ____ day of ___________, 1998 by and
between CAPSTONE INVESTMENT SERIES TRUST, a Massachusetts business trust (the
"Trust"), and CAPSTONE ASSET MANAGEMENT COMPANY, a Delaware corporation (the
"Administrator").
W I T N E S S E T H
WHEREAS, the Trust intends to engage in business as a diversified open-end
management investment company and register as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, the Administrator is engaged in the business of rendering
administrative and supervisory services to investment companies; and
WHEREAS, the Trust desires to retain the Administrator to render
supervisory and administrative services to the Trust in connection with the
separate series of the Trust (each a "Fund"), in the manner and on the terms
hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the terms and
provisions hereinafter set forth, the parties hereto agree as follows:
1. Employment of the Administrator. The Trust hereby employs the
Administrator to perform the duties set forth in Paragraph 2 hereof for the
period and on the terms hereinafter set forth. The Administrator hereby accepts
such employment and agrees during such period to render the services herein set
forth for the compensation herein provided. The Administrator shall for all
purposes herein be deemed to be an independent contractor and, except as
expressly provided or authorized (whether herein or otherwise), shall have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
2. Duties of the Administrator. The Administrator, subject to the
direction of the Board of Trustees and officers of the Trust, undertakes to
provide the following services and to assume the following obligations:
(a) Administrative Services. The Administrator shall conduct
and manage the day-to-day operations of the Funds, including (i) the
coordination of all matters relating to the functions of the
investment Adviser, custodian, transfer agent, other shareholder
service agents, accountants, attorneys and other parties performing
services or operational functions for the Funds, (ii) providing the
Funds, at the Administrator's expense, with services of persons
competent to perform such administrative and clerical functions as
are necessary in order to provide effective administration of the
Fund, including duties in connection with shareholder relations,
reports, redemption requests and account adjustments and the
maintenance of certain books and records of the Fund, (iii) the
preparation of registration statements, prospectuses, reports, proxy
solicitation materials and amendments thereto and the furnishing of
legal services to the Funds except for services provided by outside
counsel to be selected by the Board of Trustees, and (iv) providing
the Funds, at the Administrator's expense, with adequate office
space and related services necessary for its operations as
contemplated in this Agreement.
(b) Other Obligations and Services. The Administrator shall
make its officers and employees available to the Board of Trustees
and officers of the Trust for consultation and discussions regarding
the administrative management of the Fund.
3. Expenses of the Fund.
(a) The Administrator. The Administrator assumes and shall pay
for maintaining the staff and personnel and shall at its own expense
provide the equipment (other than equipment used in connection with
the Funds' custodial system), office space and facilities necessary
to perform its obligations under this Agreement, and shall pay all
compensation of officers of the Trust and the fees of all trustees
of the Trust who are affiliated persons of the Administrator.
(b) The Trust. The Trust and the Funds assume and shall pay or
shall arrange to pay all other expenses of the Trust and the Funds,
including (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of portfolio
investments; (iii) compensation of its trustees other than those who
are affiliated persons of the Adviser or the Administrator; (iv)
fees of outside counsel to and of independent accountants of the
Trust and/or the Funds selected by the Board of Trustees; (v)
custodian, registrar and transfer agent fees and expenses; (vi)
expenses related to the repurchase or redemption of the Funds'
shares including expenses related to a program of periodic
repurchases or redemptions; (vii) expenses related to the issuance
of the Funds' shares against payment therefor by or on behalf of the
subscribers thereto; (viii) fees and related expenses of registering
and qualifying the Trust, the Funds and their shares for
distribution under state and federal securities laws; (ix) expenses
of printing and mailing of registration statements, prospectuses,
reports, notices and proxy solicitation materials of the Trust and
the Funds; (x) all other expenses incidental to holding meetings of
the shareholders of the Trust and the Funds including proxy
solicitations therefor; (xi) expenses for servicing shareholder
accounts; (xii) insurance premiums for fidelity coverage and errors
and omissions insurance; (xiii) dues for membership of the Trust and
the Funds in trade associations approved by the Board of Trustees;
and (xiv) such non-recurring expenses as may arise, including those
associated with actions, suits or proceedings arising out of the
activities of the Trust or the Funds to which the Trust or the Funds
are a party and the legal obligation which the Trust or the Funds
may have to indemnify the officers and trustees with respect
thereto. To the extent that any of the foregoing expenses are
allocated among the Trust, the Funds and any other party, such
allocations shall be made pursuant to methods approved by the Board
of Trustees.
4. Compensation. As compensation for the services rendered, the
facilities furnished and the expenses assumed by the Administrator, each Fund
shall pay to the Administrator at the end of each month a fee at the annual rate
of 0.05% of the average daily net assets of each Fund as determined and computed
in accordance with the description of the method of determination of net asset
value contained in the combined prospectus and statement of additional
information of the Trust as in effect from time to time under the Securities Act
of 1933. If the Administrator shall serve for less than any whole quarter, the
compensation described in the preceding sentence shall be prorated.
5. Activities of the Administrator. The services of the
Administrator to the Trust hereunder are not to be deemed exclusive and the
Administrator shall be free to render similar services to others.
6. Liabilities of the Administrator. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Administrator, the Administrator shall not
be liable to the Trust, the Funds, or to any shareholder of the Trust or the
Funds for any act or omission in the course of, or in connection with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
7. Renewal. The term of this Agreement shall commence on the date
hereof and shall continue in effect until _____________, 2000 or until
terminated in accordance with Paragraph 9 hereof.
9. Termination.
(a) Prior to _____________, 2000, this Agreement may be terminated
by either party only for cause and upon 60 days' written notice to the other
party. Such termination shall be without penalty to the terminating party. For
purposes of this Paragraph 9(a), "cause" is defined as a finding made in good
faith by the Trustees of the Trust or the directors of the Administrator, as
applicable, that (i) the other party has failed on a continuing basis to perform
its duties pursuant to this Agreement in a satisfactory manner consistent with
then current industry standards and practices or (ii) the terms and provisions
of this Agreement are no longer reasonable in light of then current industry
standards and practices and the parties hereto cannot agree on a mutually
satisfactory amendment.
(b) After ____________, 1998, this Agreement may be terminated
without the payment of any penalty (i) by the Trust on 60 days' notice to the
Administrator and (ii) by the Administrator on 90 days' written notice to the
Trust.
10. Amendments. This Agreement may be amended by written agreement
between the parties at any time provided such amendment is authorized or
approved by the Board of Trustees of the Trust, and in accordance with any
applicable regulatory requirements.
11. Notices. Any and all notices or other communications required or
permitted under this Agreement shall be in writing and shall be deemed
sufficient when mailed by United States certified mail, return receipt
requested, or delivered in person against receipt to the party to whom it is to
be given, at the address of such party set forth below:
If to the Administrator:
Capstone Asset Management Company
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to the Trust:
Capstone Investment Series Trust
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 11.
12. Severability. If any provision of this Agreement is invalid,
illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect and this Agreement shall be construed in all respects as if
such invalid, illegal or unenforceable provision were omitted.
13. Headings. Any paragraph headings in this Agreement are for
convenience of reference only, and shall be given no effect in the construction
or interpretation of this Agreement or any provisions thereof.
14. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and which
together shall constitute but one and the same instrument.
15. Governing Law. This Agreement shall be subject to the laws of
the State of Texas, and shall be interpreted and construed to further and
promote the operation of the Trust, including the Funds, as a diversified
open-end management company.
16. Limitation of Liability for Claim. The Declaration of Trust of the
Trust, a copy of which, together with all amendments thereto, is on file in the
Office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "Capstone Indexed Series Trust" refers to the Trustees under the
Declaration of Trust collectively as trustees and not as individuals or
personally, and that no shareholder of the Funds, Trustee, officer, employee or
agent of the Trust, shall be subject to claims against or obligations of the
Trust or of the Funds to any extent whatsoever, but that the Trust estate only
shall be liable.
The Administrator is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust and hereby
agrees that the obligations assumed by the Trust on behalf of the Funds pursuant
to this Agreement shall be limited in all cases to the Funds and their assets,
and the Administrator shall not seek satisfaction of any such obligation from
shareholders or any shareholder of the Funds or any other series of the Trust or
their shareholders, or from any Trustee, officer, employee or agent of the
Trust. The Administrator understands that the rights and obligations of each
Fund, or series, under the Declaration are separate and distinct from those of
any and all other series.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first written above.
CAPSTONE INVESTMENT SERIES TRUST
By ________________________________
Name:
Title:
CAPSTONE ASSET MANAGEMENT COMPANY
By ________________________________
Name:
Title:
