COMPLIANCE SERVICES AGREEMENT
Exhibit
(h)(4)
THIS
COMPLIANCE SERVICES AGREEMENT, is made this 1st date of May, 2010 by and
between:
CAPSTONE ASSET MANAGEMENT COMPANY
("CAMCO"), a Delaware corporation having its principal place of business in
Houston, Texas; and
CAPSTONE CHURCH CAPITAL FUND (“CCCF”),
a Delaware statutory trust, and XXXXXXX FUNDS, INC. (“SFI”) and CAPSTONE SERIES
FUND, INC. (“CSFI”), each a Maryland corporation having its principal place of
business in Houston, Texas (CCCF, SFI and CSFI are “Companies”
herein). The Companies adopt this Compliance Services Agreement on
behalf of their series listed on Schedule A hereto (each a "Fund”).
W I T N E S S E T H
WHEREAS,
the Companies and the Funds are each engaged in business as management
investment companies and are registered as such under the Investment Company Act
of 1940 ("Act"); and
WHEREAS,
CAMCO is engaged in providing services to investment companies, including
compliance services as described herein; and
WHEREAS,
the Companies desire to retain CAMCO to render compliance services to the Funds,
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
CAMCO. The Companies hereby employ CAMCO to perform the duties set
forth in Paragraph 2 hereof for the period and on the terms hereinafter
set forth. CAMCO hereby accepts such employment and agrees during such
period to render the services herein set forth for the compensation herein
provided. CAMCO 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 Companies or the Funds in any way or otherwise be deemed an
agent of the Companies or the
Funds.
|
|
2.
|
Duties of
CAMCO. CAMCO undertakes to provide the following services and to
assume the following obligations, subject to the supervision of the Funds’
Chief Compliance Officer and the overall direction of the board of
directors or trustees and officers of each
Company:
|
|
(a)
|
To
provide continuing implementation of a compliance program for the Funds
pursuant to Rule 38a-1 under the Act (“Rule 38a-1”), such program to
contain policies and procedures reasonably designed to prevent the Funds
from violating Federal Securities Laws (as defined in Rule 38a-1),
including policies and procedures that provide for the oversight of
compliance by each of the Funds’ investment adviser(s) (including any
sub-adviser), principal underwriter, administrator, and transfer agent
(“Policies and Procedures”);
|
|
(b)
|
To
assure that all Policies and Procedures have been approved by each Fund’s
board of directors or trustees, including a majority of the directors or
trustees who are not interested persons of the Fund, based on a finding
that the Policies and Procedures are reasonably designed to prevent
violation of the Federal Securities Laws by the Fund, and by the Fund’s
investment adviser(s) (including any subadviser), principal underwriter,
administrator, and transfer agent;
|
|
(c)
|
To
assist the Funds’ Chief Compliance Officer in preparing for periodic
meetings with the Funds’ independent directors or
trustees.
|
|
(d)
|
To
assist the Funds’ Chief Compliance Officer in reviewing, no less
frequently than annually, the adequacy of such Policies and Procedures and
the effectiveness of their implementation and to recommend to the Funds’
Chief Compliance Officer any changes deemed advisable as a result of such
review;
|
|
(e)
|
To
assist the Funds’ Chief Compliance Officer in preparing his annual report
to the Funds’ boards of directors or trustees required by Rule 38a-1, such
report to address the operation of the Policies and Procedures, any
material changes made to the Policies and Procedures since the date of the
last report, any material changes to the Policies and Procedures
recommended as a result of the annual review conducted pursuant to
paragraph 2(c), above, and each Material Compliance Matter (as defined in
Rule 38a-1) that occurred since the date of the last
report;
|
|
(f)
|
To
assure that the Funds maintain copies, of: (1) Policies and Procedures, as
currently in effect or as in effect at any time within the past five
years, in an easily accessible place; (2) xxxxx of materials provided to
the Funds’ boards of directors or trustees in connection with their
approval of the Policies and Procedures and of written reports provided to
the Funds’ boards of directors or trustees pursuant to paragraph
(a)(4)(iii) of Rule 38a-1, all such copies to be maintained for
at least five years after the end of the fiscal year in which the
documents were provided, the first two years in an easily accessible
place; and (3) any records documenting the Funds’ annual review pursuant
to paragraph (a)(3) of Rule 38a-1, such records to be maintained for at
least five years after the end of the fiscal year in which the annual
review was conducted, the first two years in an easily accessible
place;
|
|
(g)
|
To
track regulatory changes, industry rules and best practices, and guidance
from legal and accounting communities in order to make recommendations to
the Chief Compliance Officer for changes or additions to Policies and
Procedures to assure that they are kept up-to-date and that the Funds’
boards of directors or trustees are kept informed of
developments;
|
|
(h)
|
To
assist the Funds’ Chief Compliance Officer in such other
compliance-related matters as he may request from time to time, such as:
the conduct of internal monitoring and auditing of Fund operations;
monitoring of compliance by the Funds’ directors or trustees with ethics
policies; monitoring of compliance by committees of the Funds’ boards of
directors or trustees with their charters; responding to regulatory
investigations and queries; and other compliance matters;
and
|
|
(i)
|
To
make its officers and employees available to the Funds’ boards of
directors or trustees and officers for consultation and discussions
regarding compliance management of the
Funds.
|
|
3.
|
Expenses of CAMCO and
the Funds.
|
|
(a)
|
CAMCO
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.
|
|
(b)
|
The
Companies and the Funds. The Companies and the Funds assume and shall pay
or shall arrange for others to pay all other expenses of the Companies 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 the directors or trustees of the
Companies other than those who are affiliated persons of the Funds’
investment adviser(s) (including any sub-adviser) or administrator; (iv)
fees of outside counsel to and of independent accountants of the Companies
and/or the Funds selected by the Funds’ board of directors or trustees;
(v) payments pursuant to the Funds’ investment advisory, subadvisory,
administration, and compliance service contracts, and fees and expenses of
the Funds’ custodians, registrars and transfer agents; (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 Companies, 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 Companies and the Funds;
(x) all other expenses incidental to holding meetings of the
shareholders of the Companies 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 Companies and the Funds in
trade associations approved by the Funds’ boards of directors or 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 Companies or the Funds to which a Company or a Fund is a
party and the legal obligation which a Company or a Fund may have to
indemnify the officers and directors with respect thereto. To the extent
that any of the foregoing expenses are allocated among the Companies, the
Funds and any other party, such allocations shall be made pursuant to
methods approved by the Funds’ boards of directors or
trustees.
|
|
4.
|
Compensation.
As compensation for the services rendered, the facilities furnished and
the expenses assumed by CAMCO hereunder, each Fund shall pay to CAMCO at
the end of each month a fee at the annual rate of 0.025% of the average
daily net assets of the 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 with respect to the Fund as in effect from time to time under
the Securities Act of 1933. If CAMCO shall serve for less than
any whole quarter, the compensation described in the preceding sentence
shall be prorated.
|
|
5.
|
Activities of
CAMCO. The services of CAMCO to the Funds hereunder are
not to be deemed exclusive and CAMCO shall be free to render similar
services to others.
|
|
6.
|
Liabilities of
CAMCO. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the
part of CAMCO, CAMCO shall not be liable to a Company, a Fund, or to any
shareholder of a Fund 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 terminated in accordance with Paragraph 8
hereof.
|
|
8.
|
Termination. This
Agreement may be terminated with respect to one or more Funds without the
payment of any penalty (i) by a Company on 60 days' notice to CAMCO and
(ii) by CAMCO on 90 days' written notice to the applicable Company or
Companies.
|
|
9.
|
Amendments; Addition
of Funds. 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 directors or trustees of the applicable Company
or Companies, and in accordance with any applicable regulatory
requirements. A Fund may be added to Schedule A hereto at any
time provided such addition is approved by the applicable Fund’s board of
directors or trustees.
|
|
10.
|
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
CAMCO:
Capstone
Asset Management Company
0000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
If to a
Company, as applicable:
Xxxxxxx
Funds, Inc.
0000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Capstone
Series Fund, Inc.
0000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxx 00000
Capstone
Church Capital Fund
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 10.
|
11.
|
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.
|
|
12.
|
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.
|
|
13.
|
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.
|
|
14.
|
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 Companies, including each Fund, as a diversified open-end management
company or closed-end interval fund, as
applicable.
|
|
15.
|
Limitation of
Liability for Claim. The Declaration of Trust of CCCF, a copy of
which, together with all amendments thereto, is maintained at the offices
of CCCF, provides that “A Trustee, when acting in such capacity, shall not
be personally liable to any person other than the Trust or a beneficial
owner for any act, omission or obligation of the Trust or any
Trustee. A Trustee shall not be liable for any act or omission
or any conduct whatsoever in his capacity as Trustee, provided that
nothing contained herein or in the Delaware Act shall protect any Trustee
against any liability to the Trust or to Shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee hereunder. No Trustee shall be responsible or liable
for any neglect or wrong-doing of any officer, agent, employee, Investment
Adviser, Administrator, Principal Underwriter, or service provider or
consultant of the Trust, nor shall any Trustee be responsible for the act
or omission of another Trustee. No Trustee who has been determined to be
an “audit committee financial expert” (for purposes of Section 407 of the
Xxxxxxxx-Xxxxx Act of 2002 or any successor provision thereto) by the
Board of Trustees shall be subject to any greater liability or duty of
care in discharging such Trustee’s duties and responsibilities by virtue
of such determination than is any Trustee who has not been so
designated.”
|
CAMCO is
hereby expressly put on notice of the foregoing limitations of liability of
CCCF’s trustees and hereby agrees that the obligations assumed by CCCF pursuant
to this Agreement shall be limited in all cases to CCCF and its assets, and
CAMCO shall not seek satisfaction of any such obligation from shareholders or
any shareholder of CCCF or any other series of CCCF or its shareholders, or from
any trustee, officer, employee or agent of CCCF.
With
respect to SFI and CSFI, CAMCO understands that the rights and obligations of
each Fund, or series, under the respective Articles of Incorporation 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.
XXXXXXX
FUNDS, INC.
By /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
President
CAPSTONE
SERIES FUND, INC.
By /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
President
CAPSTONE
CHURCH CAPITAL FUND
By /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
President
CAPSTONE
ASSET MANAGEMENT COMPANY
By /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
President
SCHEDULE
A
1. The
following series of SFI are Funds under the Compliance Services
Agreement:
Xxxxxxx
Large Cap Enhanced Index Fund
Xxxxxxx
Global Equity Income Fund
Xxxxxxx
International Enhanced Index Fund
Xxxxxxx
Select Bond Fund
2. The following series of Capstone Series Fund, Inc. is a Fund under
the Compliance Services Agreement:
|
|
Xxxxxxx
Small-Mid Cap Enhanced Index Fund
|
3. Capstone
Church Capital Fund is a Company and a Fund under the Compliance
Services Agreement
