CAPITAL PRIVATE CLIENT SERVICES FUNDS PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL
UNDERWRITING AGREEMENT, is between CAPITAL PRIVATE CLIENT SERVICES FUNDS, a
Delaware statutory trust (the “Trust”), and AMERICAN FUNDS DISTRIBUTORS, INC., a
California corporation (the “Distributor”).
W I T N E S S E T
H:
WHEREAS, the Trust
is registered under the Investment Company Act of 1940, as amended (the “1940
Act”), as an open-end diversified investment company which offers five
portfolios that are set forth on Exhibit A;
WHEREAS, the Trust
offers one class of shares of beneficial interest and it is a part of the
business of the Trust, and affirmatively in the interest of the Trust, to offer
shares of the Trust either from time to time or continuously as determined by
the Trust’s officers subject to authorization by its Board of
Trustees;
WHEREAS, shares of
beneficial interest of the Trust are available only to clients of Capital
Guardian Trust Company’s Capital Group Private Client Services
division;
WHEREAS, the
Distributor is engaged in the business of promoting the distribution and
servicing of shares of investment companies; and
WHEREAS, the Trust
and the Distributor wish to enter into an agreement with each other to promote
the distribution and servicing of the shares of the Trust and of all series or
classes of the Trust which may be established in the future;
NOW, THEREFORE, the
parties agree as follows:
1. (a) The
Distributor shall be the exclusive principal underwriter for the sale of the
shares of the Trust and of each series or class of the Trust which may be
established in the future, except as otherwise provided pursuant to the
following subsection (b). The terms “shares of Trust” or “shares” as
used herein shall mean shares of beneficial interest of the Trust and each
series or class which may be established in the future and become covered by
this Agreement in accordance with Section 30 of this Agreement.
(b) The
Trust may, upon 60 days’ written notice to the Distributor, from time to time
designate other principal underwriters of its shares with respect to areas other
than the North American continent, Hawaii, Puerto Rico, and such countries or
other jurisdictions as to which the Trust may have expressly waived in writing
its right to make such designation. In the event of such designation,
the right of the Distributor under this Agreement to sell shares in the areas so
designated shall terminate, but this Agreement shall remain otherwise in full
force and effect until terminated in accordance with the other provisions
hereof.
2. In
the sale of shares of the Trust, the Distributor shall act as agent of the Trust
except in any transaction in which the Distributor sells such shares as a dealer
to the public, in which event the Distributor shall act as principal for its own
account.
3. The
Trust shall sell shares only through the Distributor, except that the Trust may,
to the extent permitted by the 1940 Act and the rules and regulations
promulgated thereunder or pursuant thereto, at any time:
(a) issue shares to any corporation,
association, trust, partnership or other organization, or its, or their,
security holders, beneficiaries or members, in connection with a merger,
consolidation or reorganization to which the Trust is a party, or in connection
with the acquisition of all or substantially all the property and assets of such
corporation, association, trust, partnership or other organization;
(b) issue shares at net asset value
to the holders of shares of capital stock or beneficial interest of other
investment companies served as investment adviser by any affiliated company or
companies of The Capital Group Companies, Inc., to the extent of all or any
portion of amounts received by such shareholders upon redemption or repurchase
of their shares by the other investment companies;
(c) issue shares at net asset value
to its shareholders in connection with the reinvestment of dividends paid and
other distributions made by the Trust;
(d) issue shares at net asset value
to persons entitled to purchase shares as described in the Trust's
current Registration Statement in effect under the Securities Act of 1933, as
amended, for each series issued by the Trust at the time of such offer or
sale.
4. The
Distributor shall devote its best efforts to the sale of shares of the Trust and
shares of any other mutual funds served as investment adviser by affiliated
companies of The Capital Group Companies, Inc., and insurance contracts funded
by shares of such mutual funds, for which the Distributor has been authorized to
act as a principal underwriter for the sale of shares. The
Distributor shall maintain a sales organization suited to the sale of shares of
the Trust and shall use its best efforts to effect such sales in jurisdictions
as to which the Trust shall have expressly waived in writing its right to
designate another principal underwriter pursuant to subsection 1(b) hereof, and
shall effect and maintain appropriate qualification to do so in all those
jurisdictions in which it sells or offers shares for sale and in which
qualification is required.
5. Within
the United States of America, any and all dealers to whom the Distributor shall
offer and sell shares must be duly licensed and qualified to sell shares of the
Trust. Shares sold to dealers shall be for resale by such dealers
only at the public offering price set forth in the current summary prospectus
and/or prospectus of the Trust’s Registration Statement in effect under the
Securities Act of 1933, as amended (“Prospectus”). The Distributor
shall not, without the consent of the Trust, sell or offer for sale any shares
of a series or class issued by the Trust other than as principal underwriter
pursuant to this Agreement.
6. If
the Distributor sells shares of the Trust to dealers, it shall be the
responsibility of the Distributor to ensure that such dealers are appropriately
qualified to transact business in the shares under applicable laws, rules and
regulations promulgated by such national, state, local or other governmental or
quasi-governmental authorities as may in a particular instance have
jurisdiction.
7. The
applicable public offering price of shares shall be the price which is equal to
the net asset value per share, as shall be determined by the Trust in the manner
and at the time or times set forth in and subject to the provisions of the
Prospectus of the Trust.
8. All
orders for shares received by the Distributor shall, unless rejected by the
Distributor or the Trust, be accepted by the Distributor immediately upon
receipt and confirmed at an offering price determined in accordance with the
provisions of the Prospectus and the 1940 Act, and applicable rules in effect
thereunder. The Distributor shall not hold orders subject to
acceptance nor otherwise delay their execution. The provisions of
this Section shall not be construed to restrict the right of the Trust to
withhold shares from sale under Section 15 hereof.
9. The
Trust or its transfer agent shall be promptly advised of all orders received,
and shall cause shares to be issued upon payment therefor in New York or Los
Angeles Clearing House Trusts.
10. The
Distributor shall adopt and follow procedures as approved by the officers of the
Trust for the confirmation of sales to dealers or other investors of the Trust,
the collection of amounts payable by dealers or other investors of the Trust on
such sales, and the cancellation of unsettled transactions, as may be necessary
to comply with the requirements of the Securities and Exchange Commission or the
Financial Industry Regulatory Authority (“FINRA”), as such requirements may from
time to time exist.
11. The
Trust agrees to use its best efforts to maintain its registration as a
diversified open-end management investment company under the 0000
Xxx.
12. The
Trust agrees to use its best efforts to maintain an effective Prospectus under
the Securities Act of 1933, as amended, and warrants that such Prospectus will
contain all statements required by and will conform with the requirements of
such Securities Act of 1933 and the rules and regulations thereunder, and that
no part of any such Prospectus, at the time the Registration Statement of which
it is a part becomes effective, will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading (excluding any
information provided by the Distributor in writing for inclusion in the
Prospectus). The Distributor agrees and warrants that it will not in
the sale of shares use any Prospectus, advertising or sales literature not
approved by the Trust or its officers nor make any untrue statement of a
material fact nor omit the stating of a material fact necessary in order to make
the statements made, in the light of the circumstances under which they are
made, not misleading. The Distributor agrees to indemnify and hold
the Trust harmless from any and all loss, expense, damage and liability
resulting from a breach of the agreements and warranties contained in this
Section, or from the use of any sales literature, information, statistics or
other aid or device employed in connection with the sale of shares.
13. The
expense of each printing of each Prospectus and each revision thereof or
addition thereto deemed necessary by the Trust's officers to meet the
requirements of applicable laws shall be paid by the Trust,
including:
(a) the typesetting and make-ready
charges;
(b) the printing charges;
and
(c) any expenses incurred in
connection with the foregoing.
14. The
Trust agrees to use its best efforts to qualify and maintain the qualification
of an appropriate number of the shares of each series or class it offers for
sale under the securities laws of such states as the Distributor and the Trust
may approve. Any such qualification for any series or class may be
withheld, terminated or withdrawn by the Trust at any time in its
discretion. The expense of qualification and maintenance of
qualification shall be borne by the Trust, but the Distributor shall furnish
such information and other material relating to its affairs and activities as
may be required by the Trust or its counsel in connection with such
qualifications.
15. The
Trust may withhold shares of any series or class from sale to any person or
persons or in any jurisdiction temporarily or permanently if, in the opinion of
its counsel, such offer or sale would be contrary to law or if the Trustees or
the President or any Vice President of the Trust determines that such offer or
sale is not in the best interest of the Trust. The Trust will give
prompt notice to the Distributor of any withholding and will indemnify it
against any loss suffered by the Distributor as a result of such withholding by
reason of nondelivery of shares of any series or class after a good faith
confirmation by the Distributor of sales thereof prior to receipt of notice of
such withholding.
16. (a) This
Agreement may be terminated at any time, without payment of any penalty, as to
the Trust or any series on sixty (60) days’ written notice by the Distributor to
the Trust.
(b) This
Agreement may be terminated as to the Trust or any series or class by either
party upon five (5) days’ written notice to the other party in the event that
the Securities and Exchange Commission has issued an order or obtained an
injunction or other court order suspending effectiveness of the Registration
Statement covering the shares of the Trust or such series or class.
(c) This
Agreement may be terminated as to the Trust or any series or class by the Trust
upon five (5) days’ written notice to the Distributor provided either of the
following events has occurred:
(i) the
NASD has expelled the Distributor or suspended its membership in that
organization; or
(ii) the
qualification, registration, license or right of the Distributor to sell shares
of any series in a particular state has been suspended or canceled by the State
of California or any other state in which sales of the shares of the Trust or
such series during the most recent 12-month period exceeded 10% of all shares of
such series sold by the Distributor during such period.
(d) This
Agreement may be terminated as to the Trust or any series or class at any time
on sixty (60) days’ written notice to the Distributor without the payment of any
penalty, by vote of a majority of the Independent Trustees or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Trust or such series or class.
17. This
Agreement shall not be assignable by either party hereto and in the event of
assignment shall automatically terminate forthwith. The term
“assignment” shall have the meaning set forth in the 1940 Act.
18. No
provision of this Agreement shall protect or purport to protect the Distributor
against any liability to the Trust or holders of its shares for which the
Distributor would otherwise be liable by reason of willful misfeasance, bad
faith, or gross negligence, or reckless disregard of the Distributor’s
obligations under this Agreement.
19. This
Agreement shall become effective on April 1, 2010. Unless sooner terminated in
accordance with the other provisions hereof, this Agreement shall continue in
effect until [DATE] and shall continue in effect from year to year thereafter
but only so long as such continuance is specifically approved at least annually
by (i) the vote of a majority of the Independent Trustees of the Trust cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
the vote of either a majority of the entire Board of Trustees of the Trust or a
majority (within the meaning of the 0000 Xxx) of the outstanding voting
securities of the Trust.
20. If
the Trust shall at any time issue shares in more than one series or class, this
Agreement shall take effect with respect to such series or class of the Trust
which may be established in the future at such time as it has been approved as
to such series or class by vote of the Board of Trustees and the Independent
Trustees in accordance with Section 19. The Agreement as approved
with respect to any series or class shall specify any provisions which may
differ from those herein with respect to such series, subject to approval in
writing by the Distributor.
21. This
Agreement may be approved, amended, continued or renewed with respect to a
series or class as provided herein notwithstanding such approval, amendment,
continuance or renewal has not been effected with respect to any one or more
other series or class of the Trust.
22. This
Agreement shall be construed under and shall be governed by the laws of the
State of California, and the parties hereto agree that proper venue of any
action with respect hereto shall be Los Angeles County, California.
IN WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in duplicate
original by their officers thereunto duly authorized, as of April 1,
2010.
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AMERICAN
FUNDS DISTRIBUTORS, INC.
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CAPITAL
PRIVATE CLIENT
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SERVICES
FUNDS
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By:
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By:
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Xxxxx X.
Xxxxxxxx
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Xxxxxxx X.
Xxxxxxx
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President
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President and
Principal
Executive
Officer
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By:
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By:
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Xxxxx X.
Xxxxxx
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Xxxxxxxx X.
Xxxxxx
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Secretary
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Secretary
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EXHIBIT
A
Capital Core
Municipal Fund
Capital Short-Term
Municipal Fund
Capital California
Core Municipal Fund
Capital California
Short-Term Municipal Fund
Capital Core Bond
Fund
