GENERAL DISTRIBUTION AGREEMENT
AGREEMENT, effective commencing on ______________, 2000, between CAPSTONE ASSET
PLANNING COMPANY (the "Distributor"), a Delaware corporation having its
principal place of business in Houston, Texas and CAPSTONE CHRISTIAN VALUES
FUND, INC. (the "Fund") with respect to its Series, the Christian Stewardship
Bond Index Fund, the Christian Stewardship Large Cap Equity Index Fund, the
Christian Stewardship Small Cap Equity Index Fund and the Christian Stewardship
International Index Fund (the "Series").
WHEREAS, the Fund is a Maryland corporation organized under Articles of
Incorporation dated May 11, 1992, (the "Articles") and is 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;
WHEREAS, the Series are separate series of the Fund's shares of beneficial
interest;
WHEREAS, in consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. Sale of Shares - The Fund grants to the Distributor the right to sell
shares on behalf of the Christian Stewardship Fund Bond Index Fund, the
Christian Stewardship Fund Large Cap Equity Index Fund, the Christian
Stewardship Fund Small Cap Equity Index Fund and the Christian Stewardship
Fund International Index Fund ("Series"), each a series of the Fund,
during the term of this Agreement and subject to the registration
requirements of the Securities Act of 1933, as amended ("1933 Act"), and
applicable laws governing the sale of securities in the various states
("Blue Sky Laws") under the following terms and conditions: the
Distributor shall have the right to sell, as agent on behalf of the Fund,
shares authorized for issue and registered under the 1933 Act.
2. Sale of Shares by the Fund - The rights granted to the Distributor shall
be nonexclusive in that the Fund reserves the right to sell its shares to
investors on applications received and accepted by the Fund. Further, the
Fund reserves the right to issue shares in connection with the merger or
consolidation, or acquisition by the Fund through purchase or otherwise,
with any other investment company, trust, or personal holding company.
3. Shares Covered by this Agreement - This agreement shall apply to unissued
shares of the Fund, shares of the Fund held in its treasury in the event
that in the discretion of the Fund treasury shares shall be sold, and
shares of the Fund repurchased for resale. It shall apply to each series
of shares that may be offered by the Fund.
4. Public Offering Price - Except as otherwise noted in the Fund's current
Prospectus, all shares sold to investors by the Distributor or the Fund
will be sold at the public offering price of each series. The public
offering price for each series, for all accepted subscriptions, will be
the net asset value per share of the particular series, as determined in
the manner described in the Fund's current Prospectus, plus a sales charge
(if any) described in the Fund's current Prospectus for that series. The
Fund, on behalf of the respective series, shall in all cases receive the
net asset value per share on all sales of each series. If a sales charge
is in effect, the Distributor shall have the right, subject to such rules
or regulations of the Securities and Exchange Commission as may then be in
effect pursuant to Section 22 of the Investment Company Act of 1940, to
retain the sales charges or to reallow all or a portion of the sales
charge to dealers or to reallow all or a portion of the sales charge to
dealers who have sold shares of the Fund. The Distributor may also receive
payments from the Fund for distribution-related services pursuant to any
plan pursuant to Rule 12b-1 under the Investment Company Act of 1940
("1940 Act") that may be adopted by the Fund's Board of Directors.
5. Suspension of Sales - If and whenever the determination of net asset value
for any series is suspended and until such suspension is terminated, no
further orders for sales for that series shall be processed by the
Distributor except such unconditional orders placed with the Distributor
before it had knowledge of the suspension. In addition, the Fund reserves
the right to suspend sales of any series and the Distributor's authority
to process orders for shares of any series on behalf of the Fund if, in
the judgment of the Fund, it is in the best interests of the Fund to do
so. Suspension will continue for such period as may be determined by the
Fund.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Fund. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other entities, including other investment companies.
This does not obligate the Distributor to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction in which it is not now
registered or to maintain its registration in any jurisdiction in which it
is now registered.
7. Authorized Representations - The Distributor is not authorized by the Fund
to give any information or to make any representations other than those
contained in the appropriate registration statements or Prospectuses filed
with the Securities and Exchange Commission under the 1933 Act (as these
registration statements and Prospectuses may be amended from time to
time), or contained in shareholder reports or other material that may be
prepared by or on behalf of the Fund for the Distributor's use. This shall
not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may be deem
appropriate.
8. Portfolio Securities - Portfolio securities of the Fund may be bought or
sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Fund.
9. Registration of Shares - The Fund agrees that it will take all action
necessary to register shares of each of its series under the 1933 Act
(subject to the necessary approval of its shareholders) so that there will
be available for sale the number of shares of each series the Distributor
may reasonably be expected to sell. The Fund shall make available to the
Distributor such number of copies of its currently effective Prospectus as
the Distributor may reasonably request. The Fund shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Fund.
10.Expenses - The Fund shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement and Prospectus under the 1933 Act and amendments for the issue
of its shares, (b) in connection with making notice filings and satisfying
other requirements related to the offering and sale of shares of each
series in the various states in which the Board of the Fund shall
determine it is advisable to offer and sell such shares, (c) of preparing,
setting in type, printing and mailing any report or other communication to
shareholders of the Fund in their capacity as such, and (d) of preparing,
setting in type, printing and mailing Prospectuses sent annually to
existing shareholders. Except as may be otherwise provided by any plan
pursuant to Rule 12b-1 under the 1940 Act that may be adopted by the
Fund's Board of Directors, the Distributor shall pay expenses of (a)
printing and distributing any Prospectuses or reports prepared for its use
in connection with the offering of the shares for sale to the public, (b)
other literature used by the Distributor in connection with such offering,
and (c) advertising in connection with such offering. It is recognized by
the Fund that Capstone Asset Management Company may reimburse the
Distributor for its direct and indirect expenses incurred in the
distribution of the Fund's shares.
11.Indemnification - The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if
any, who controls the Distributor within the meaning of Section 15 of the
1933 Act against any loss, liability, claim, damages or expenses
(including the reasonable cost of investigating or defending any alleged
loss, liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith), arising by reason of any person
acquiring any shares, based upon the grounds that the registration
statement, Prospectus, shareholder reports or other information filed or
made public by the Fund (as from time to time amended), included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However, the
Fund does not agree to indemnify the Distributor or hold it harmless to
the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to Fund by or on behalf of the
Distributor. In no case (i) is the indemnity of the Fund in favor of the
Distributor or any person indemnified to be deemed to protect the
Distributor or any person against any liability to the Fund or its
security holders to which the Distributor or such person would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence
in the performance of its duties or by reason of its reckless disregard of
its obligations and duties under this Agreement, or (ii) is the Fund to be
liable under its indemnity agreement contained in this paragraph with
respect to any claim made against the Distributor or any person
indemnified unless the Distributor or any person shall have notified the
Fund in writing of the claim within a reasonable time after the summons or
other first written notification giving information of the nature of the
claim shall have been served upon the Distributor or any person (or after
the Distributor or the person shall have received notice of service on any
designated agent). However, failure to notify the Fund of any claim shall
not relieve the Fund from any liability which it may have to the
Distributor or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph.
The Fund shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any claims, but if the Fund elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or person or persons, defendant or defendants in the suit. In
the event the Fund elects to assume the defense of any suit and retain
counsel, the Distributor, officers or directors or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Fund does not
elect to assume the defense of any suit, it will reimburse the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses
of any counsel retained by them. The Fund agrees to notify the Distributor
promptly of the commencement of any litigation or proceedings against it
or any of its officers or Directors in connection with the issuance of
sale of any of the shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its Board members and officers and each
person, if any, who controls the Fund within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable counsel fees incurred in connection therewith)
arising by reason of any person acquiring any shares, based upon the 1933
Act or any other statute or common law, alleging that the registration
statement, any Prospectus, shareholder reports or other information filed
or made public by the Fund (as from time to time amended), included an
untrue statement of a material fact or omitted to state a material fact
required to be stated or necessary in order to make the statements not
misleading, insofar as the statement or omission was made in reliance
upon, and in conformity with information furnished to the Fund by or on
behalf of the Distributor. In no case (i) is the indemnity of the
Distributor in favor of the Fund or any person indemnified to be deemed to
protect the Fund or any person against any liability to which the Fund or
such person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by
reason or its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Distributor to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Fund or any person indemnified unless the Fund or person, as
the case may be, shall have notified the Distributor in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Fund or upon such person (or after the Fund or such person
shall have received notice of service on any designated agent. However,
failure to notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Fund or any person
against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. In the case of any notice
to the Distributor, it shall be entitled to participate, at its own
expense, in the defense or, if it so elects, to assume the defense or any
suit brought to enforce the claim, but if the Distributor elects to assume
the defense, the defense shall be conducted by counsel chosen by it and
satisfactory to the Fund, to its officers and Board and to any controlling
person or persons, defendant or defendants in the suit. In the event that
the Distributor elects to assume the defense of any suit and retain
counsel, the Fund or controlling persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained
by them. If the Distributor does not elect to assume the defense of any
suit, it will reimburse the Fund, officers and Board or controlling person
or persons, defendant or defendants in the suit, for the reasonable fees
and expenses of any counsel retained by them. The Distributor agrees to
notify the Fund promptly of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
shares.
12.Acceptance or Rejection of Orders - The Distributor shall have the right
to accept or reject orders for the purchase of shares of the Fund. Any
consideration received in connection with a rejected purchase order will
be returned promptly. The Distributor agrees to promptly issue
confirmations of all accepted purchase orders and to transmit a copy of
such confirmations to the Fund, or, if so directed, to any duly appointed
transfer or shareholder servicing agent of the Fund. The net asset value
of all shares which are the subject of such confirmations, computed in
accordance with the applicable rules under the Investment Company Act of
1940, shall be a liability of the Distributor to the Fund to be paid
promptly after receipt of payment from the originating dealer and not
later than eleven business days after such confirmation even if the
Distributor has not actually received payment from the originating dealer.
If the originating dealer should fail to make timely settlement of its
purchase order in accordance with the rules of the National Association of
Securities Dealers, Inc., the Distributor shall have the right to cancel
such purchase order and, at the Distributor's account and risk, to hold
responsible the originating dealer. The Distributor agrees to promptly
reimburse the Fund for any amount by which the Fund's losses attributable
to any such cancellation, or to errors on the part of the Distributor in
relation to the effective date of accepted purchase orders, exceed
contemporaneous gains realized by the Fund for either of such reasons in
respect to other purchase orders. The Fund shall register or cause to be
registered all shares sold by the Distributor pursuant to the provisions
hereof in such name or names and amounts as the Distributor may request
from time to time. All shares of the Fund, when so issued and paid for,
shall be fully paid and non-assessable.
13.Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force for two (2)
years from the effective date and thereafter from year to year, provided
continuance as to each particular Fund after the two (2) year period is
approved annually by either (i) the vote of a majority of the Board
members of the Fund, or by the vote of a majority of the outstanding
voting securities of that Fund, and (ii) the vote of a majority of those
Board members of the Fund who are not parties to this Agreement or
interested persons of any party, cast in person at a meeting called for
the purpose of voting on the approval. As used in this paragraph the terms
"vote of a majority of the outstanding voting securities" and "interested
person," shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended.
14.Termination - This Agreement shall automatically terminate in the event
of its assignment. As used in this paragraph the term "assignment" shall
have the respective meaning specified in the Investment Company Act of
1940 as now in effect or as hereafter amended. In addition to termination
by failure to approve continuance or by assignment, this Agreement may at
any time be terminated by either party upon not less than sixty days'
prior written notice to the other party.
15.Notice - Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Fund, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇,
and if to the Distributor, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇.
IN WITNESS, the Fund has executed this instrument in its name and behalf, and
its seal affixed, by one of its officers duly authorized, and the Distributor
has executed this instrument in its name and behalf, and its corporate seal
affixed, by one of its officers duly authorized, as of the day and year above
written.
CAPSTONE CHRISTIAN VALUES FUND, INC.
By: ____________________________________
Name: _________________________________
Title: __________________________________
CAPSTONE ASSET PLANNING COMPANY
By: ___________________________________
President