FORM OF CONSULTING GROUP CAPITAL MARKET FUNDS INTERIM INVESTMENT ADVISORY AGREEMENT
Exhibit (d)(43)
FORM OF CONSULTING GROUP CAPITAL MARKET FUNDS
INVESTMENT ADVISORY AGREEMENT, effective as of the 1st day of June, 2009, between the
Citigroup Investment Advisory Services, LLC (“Manager”), a limited liability company organized and
existing under the laws of the State of Delaware, and Xxxxxxx Capital Management, LLC (“Adviser”),
a limited liability company organized and existing under the laws of the State of Delaware.
WHEREAS, the Manager has entered into an interim Management Agreement dated as of the first
day of June, 2009 (the “Interim Management Agreement”) with Consulting Group Capital Market Funds,
a Massachusetts business trust (the “Trust”), which is engaged in business as an open-end
management investment company registered under the Investment Company Act of 1940, as amended,
(“1940 Act”);
WHEREAS, the Trust is and will continue to be a series fund having two or more investment
portfolios, each with its own assets, investment objectives, policies and restrictions (each a
“Portfolio”);
WHEREAS, the Adviser is engaged principally in the business of rendering investment
advisory services and is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended, (“Advisers Act”); and
WHEREAS, the Manager desires to retain the Adviser to assist it in the provision of a
continuous investment program for that portion of the assets of the Portfolio listed on Appendix A
which the Manager may from time to time assign to the Adviser (the “Allocated Assets”) and the
Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein set forth, the
parties hereto agree as follows:
1. APPOINTMENT. Manager hereby retains the Adviser to act as investment sub-adviser for and
to manage the Allocated Assets for the period and on the terms set forth in this Agreement. The
Adviser accepts such employment and agrees to render the services herein set forth, for the
compensation herein provided.
2. DUTIES OF THE ADVISER.
A. INVESTMENT ADVISORY SERVICES. Subject to the supervision of the Trust’s Board of Trustees
(the “Board”) and the Manager, the Adviser shall manage the investments of the Allocated Assets in
accordance with the Portfolio’s investment objective, policies, and restrictions as provided in the
Trust’s Prospectus and Statement of Additional Information, as currently in effect and as amended
or supplemented from time to time (hereinafter referred to as the “Prospectus”) and provided to the
Adviser, and in compliance with the requirements applicable to U.S.-registered investment companies
under applicable laws and asset diversification requirements applicable to regulated investment
companies under Subchapter M of
the Internal Revenue Code of 1986, as amended (“Code”), measured as if the Allocated Assets were a
separate series of the Trust or a separate regulated investment company under the Code, and such
other limitations as the Manager and the Adviser may reasonably agree upon. The Adviser shall, in
its sole discretion, (a) make investment decisions for the Allocated Assets (excluding uninvested
cash); (b) place purchase and sale orders for portfolio transactions for the Allocated Assets; and
(c) employ professional portfolio managers and securities analysts to provide research services to
the Allocated Assets. In providing these services, the Adviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the Allocated Assets. The
Adviser will at no time have custody or physical control of the cash and assets of the Portfolio
and the custodian designated by the Manager to hold the Portfolio’s assets will automatically
invest any uninvested cash assets of the Allocated Assets on a daily basis.
B. ADVISER UNDERTAKINGS. In all matters relating to the performance of this Agreement, the
Adviser shall act in conformity with the Trust’s Master Agreement dated April 12, 1991, as amended
from time to time (the “Trust Agreement”) and as provided to the Adviser, and Prospectus and with
the written instructions and directions of the Board and the Manager, upon agreement by the
Adviser. The Adviser hereby agrees to:
| (i) | regularly report to the Board and the Manager (in such form and frequency as the Manager and Adviser mutually agree) with respect to the implementation of the investment program, compliance of the Allocated Assets with the Prospectus, the 1940 Act and the asset diversification requirements of the Code, (measured as if the Allocated Assets were a separate series of the Trust or a separate regulated investment company under the Code), and on other topics as may reasonably be requested by the Board or the Manager, including attendance at Board meetings, as reasonably requested, to present such reports to the Board; | ||
| (ii) | periodically consult with the Manager on a limited, “as needed” basis regarding the valuation of securities that are not registered for public sale, not traded on any securities markets, or otherwise may require fair valuation; | ||
| (iii) | provide, subject to any obligations or undertakings reasonably necessary to maintain the confidentiality of the Adviser’s (or its clients’) non-public information, certain information and records (including relevant Lipper and/or GIPS reports) about the relevant composite of accounts and the portfolios the Adviser manages that have investment objectives, policies, and strategies substantially similar to those employed by the Adviser in managing the Allocated Assets which may be reasonably necessary, under applicable laws, to allow the Trust or its agent to present historical performance information concerning the Adviser’s similarly managed accounts and portfolios, for inclusion in internal reports and materials prepared by the Trust or its agent, in accordance with regulatory requirements or as requested by applicable federal or state regulatory authorities; and |
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| (iv) | review schedules of the Allocated Assets (including holdings/securities positions and market value of portfolio securities) periodically provided to the Adviser by the Manager and confirm within a reasonable time to the Manager the concurrence of the Adviser’s records with such schedules. |
C. EXPENSES. The Adviser will bear all of its expenses in connection with the performance of
its services under this Agreement. All other expenses to be incurred in the operation of the
Portfolio will be borne by the Trust, except to the extent specifically assumed by the Adviser.
The expenses to be borne by the Trust include, without limitation, the following: organizational
costs, taxes, interest, brokerage fees and commissions, Trustees’ fees, Securities and Exchange
Commission (“SEC”) fees and state (Blue Sky) qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents’ fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent pricing services, costs
of maintaining existence, costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing shareholders, costs
of shareholders’ reports and meetings, and any extraordinary expenses.
D. BROKERAGE. The Adviser will select brokers, dealers, or other execution venues to
effect all orders for the purchase and sale of Allocated Assets. In selecting brokers, dealers, or
other execution venues to execute transactions on behalf of the Allocated Assets of the Portfolio,
the Adviser will use its best efforts to seek the best overall terms available. In assessing the
best overall terms available for any transaction, the Adviser will consider factors it deems
relevant, including, without limitation, the breadth of the market in the security or commodity
interest, the price of the security or commodity interest, the financial condition and execution
capability of the broker or dealer, the ability of the broker or dealer to position a block of
securities and/or commit broker capital, the ability to locate liquidity and the reasonableness of
the commission/spread, if any, for the specific transaction and on a continuing basis for all of
the Adviser’s clients. In selecting brokers or dealers to execute a particular transaction, and
in evaluating the best overall terms available, the Adviser is authorized to consider the brokerage
and research services (within the meaning of Section 28(e) of the Securities Exchange Act of 1934,
as amended (“Exchange Act”)) provided to the Portfolio and/or other accounts over which the
Adviser exercises investment discretion. Accordingly, in compliance with Section 28(e) of the
Exchange Act, the Adviser, in its discretion, may cause the Portfolio to pay a commission for
effecting a transaction for the Portfolio in excess of the amount another broker or dealer would
have charged for effecting that transaction. This may be done where the Adviser has determined in
good faith that the commission is reasonable in relation to the value of all brokerage and/or
research services provided by the broker to the Adviser, notwithstanding that the Portfolio may not
be the exclusive beneficiary of such brokerage and/or research services. Except as permitted by
Rule 17a-10 under the 1940 Act, Adviser will not engage in principal transactions with respect to
the Allocated Assets with any broker-dealer affiliated with the Manager or with any other adviser
to the Portfolio, and will engage in agency transactions with respect to the Allocated Assets with
such affiliated broker-dealers only in accordance with all applicable rules and regulations.
Adviser will provide a list of its affiliated broker-dealers to Manager, as such may be amended
from time to time. Manager will provide to Adviser a list of its affiliated broker-dealers, as
updated from time to time.
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X. XXXXXXXXXXX XX XXXXXX. Xx occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Allocated Assets as well as other clients of the
Adviser, the Adviser may to the extent permitted by applicable laws and regulations, but shall be
under no obligation to, aggregate the orders for securities to be purchased or sold. In such event,
allocation of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner the Adviser considers to be the most
equitable and consistent with its fiduciary obligations to the Portfolio and to its other clients.
The Manager recognizes that, in some cases, the Adviser’s allocation procedure may limit the size
of the position that may be acquired or sold for the Allocated Assets.
F. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Adviser hereby agrees that all records which it maintains for the Allocated Assets of the
Portfolio are the property of the Trust and further agrees to surrender to the Trust within a
reasonable time copies of any of such records upon the Portfolio’s or the Manager’s request,
provided, however, that Adviser may retain copies of any such records. The Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records relating to
its sub-advisory activities hereunder required to be maintained by
the Trust under Rule 31a-1 under
the 1940 Act and to preserve the records relating to its sub-advisory activities hereunder required
by Rule 204-2 under the Advisers Act for the period specified in said Rule. Notwithstanding the
foregoing, Adviser has no responsibility for the maintenance of the records of the Portfolio,
except for those related to the Allocated Assets.
G. ADVISER COMPLIANCE RESPONSIBILITIES. The Adviser and the Manager acknowledge that the
Adviser is not the compliance agent for the Portfolio, and does not have access to all of the
Trust’s books and records necessary to perform certain compliance testing. However, to the extent
that the Adviser has agreed to perform the services specified in this Agreement, the Adviser shall
perform limited compliance testing with respect to the Adviser’s management of the Allocated Assets
in accordance with relevant guidelines and/or restrictions in the Prospectus based upon information
in its possession and upon information and reasonable written instructions received from the
Manager or the Trust’s Administrator and agreed to by the Adviser. The Adviser shall not be
responsible for the Portfolio being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for the Portfolio’s failure to
qualify as a regulated investment company under the Code if the securities and other holdings of
the Allocated Assets, measured as if the Allocated Assets were a separate series of the Trust or a
separate regulated investment company under the Code, would not be in such violation or fail to so
qualify, as determined by the asset diversification test conducted by the Adviser. The Manager
or Trust’s Administrator shall promptly provide the Adviser with copies of the Trust Agreement, the
Trust’s By-Laws, the Prospectus and any written policies or procedures adopted by the Board
applicable to the Allocated Assets and any amendments or revisions thereto. Adviser shall supply
such reports or other documentation as reasonably requested from time to time by the Manager and
agreed to by the Adviser to evidence Adviser’s compliance with such Prospectus, policies or
procedures.
H. PROXY VOTING AND LEGAL ACTION NOTICE. The Adviser shall use its good faith judgment in a
manner which it reasonably believes best serves the interests of the Portfolio’s shareholders to
vote, abstain from voting, or otherwise process proxies solicited by or with respect to the
issuers of securities in the Allocated Assets and received in good order, all in accordance with
the Adviser’s proxy voting policy and procedures. The Manager shall cause to be forwarded to
Adviser all proxy solicitation materials that Manager receives. Adviser agrees
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that it has adopted written proxy voting procedures that are reasonably intended to comply with
the requirements of the Advisers Act. The Adviser further agrees that it will provide the Board as
the Board may reasonably request, with a written report of the proxies voted during the most
recent 12-month period or such other period as the Board may designate, in a format that shall
assist the Trust in its compliance with the 1940 Act. Upon reasonable request, Adviser shall
provide the Manager with all proxy voting records relating to the Allocated Assets, including but
not limited to those required in order for the Manager to complete Form N-PX.
The Adviser shall not have any responsibility for giving notice of, filing, collecting, or
otherwise taking any action on any claims that the Manager, the Portfolio or the Trust may be
entitled to assert in securities class action lawsuits or other legal actions relating to any
securities held in the Portfolio. Until this Agreement is terminated, upon the Manager’s request,
the Adviser will use its best efforts to forward to the Manager or the custodian of the Portfolio
material information that the Adviser receives regarding legal actions concerning securities held
in the Allocated Assets.
I. USE OF NAMES. The Adviser shall not use the name, logo, insignia, or other identifying xxxx
of the Trust or the Manager or any of their affiliates or any derivative or logo or trade or
service xxxx thereof in material relating to the Adviser in any manner not approved prior thereto
by the Manager; provided, however, that the Manager approves all uses of its or the Trust’s name
and that of their affiliates which merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities commission or other regulatory
authority. In no event shall such approval by the Manager be unreasonably withheld. The Manager
shall not use the name, logo, insignia, or other identifying xxxx of the Adviser or any of its
affiliates in any prospectus, sales literature or other material relating to the Trust in any
manner not approved prior thereto by the Adviser; provided, however, that the Adviser shall approve
all uses of its name which merely refer in accurate terms to the appointment of the Adviser
hereunder or which are required by the SEC or a state securities commission or other regulatory
authority; and provided, further that in no event shall such approval be unreasonably withheld.
J. OTHER ADVISERS. With respect to the Portfolio, (i) the Adviser will not knowingly consult
with any other adviser to that Portfolio (including, in the case of an offering of securities
subject to Section 10(f) of the 1940 Act, any adviser that is a principal underwriter or an
affiliated person of a principal underwriter of such offering) concerning transactions for the
Allocated Assets in securities or other assets, except, in the case of transactions involving
securities of persons engaged in securities-related businesses, for purposes of complying with the
conditions of paragraphs (a) and (b) of Rule 12d3-1 under the 1940 Act; and (ii) the Adviser will
provide advice and otherwise perform services hereunder exclusively with respect to the Allocated
Assets of that Portfolio.
K. PORTFOLIO HOLDINGS. The Adviser will not disclose, in any manner whatsoever, any list of
securities held by the Portfolio, except in accordance with the Portfolio’s portfolio holdings
disclosure policy, as provided to the Adviser, to the extent the Portfolio’s policy does not
conflict with the Adviser’s related xxxxxxx xxxxxxx policy and procedures, which shall govern in
the case of a conflict.
3. COMPENSATION OF ADVISER. All compensation due to the Manager for the services it
provides to the Trust under the Interim Management Agreement will be credited to an
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interest-bearing escrow account held at Xxxxx Brothers Xxxxxxxx and Co. (the “Escrow Agent”)
subject to the terms and conditions of an escrow agreement among the Manager, the Trust, and the
Escrow Agent. Pursuant to the terms of the escrow agreement, notwithstanding the Escrow Agent’s
temporary withholding of certain fees payable to the Manager, the Escrow Agent will pay the
Adviser, with respect to each Portfolio on Appendix A attached hereto, the compensation specified
in Appendix A. Such fees will be computed daily and paid monthly, calculated at an annual rate
based on the Allocated Assets’ average daily net assets as determined by the Trust’s accounting
agent. Compensation for any partial period shall be pro-rated based on the length of the period.
4. STANDARD OF CARE. The Adviser shall exercise its best judgment in rendering its
services described in this Agreement. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Portfolio or the Manager in connection with the
matters to which this Agreement relates, except a loss resulting from Adviser’s willful
misfeasance, bad faith or gross negligence on its part in the performance of its duties hereunder
or from reckless disregard by it of its obligations and duties under this Agreement. Neither the
Adviser nor any of its officers, directors or employees make any representations or warranties,
express or implied, that any level of performance or investment results will be achieved by the
Allocated Assets or that the Allocated Assets will perform comparably with any standard or index,
including other clients of the Adviser, whether public or private.
5. INDEMNIFICATION.
A. The Manager agrees to indemnify and hold harmless the Adviser from and against any and all
claims, losses, liabilities or damages (including reasonable attorneys’ fees and other related
expenses) (“Losses”), howsoever arising, from or in connection with this Agreement or the
performance by the Adviser of its duties hereunder; provided however that the Manager will not
indemnify the Adviser for Losses resulting from the Adviser’s willful misfeasance, bad faith or
gross negligence in the performance of its duties or from the Adviser’s reckless disregard of its
obligations and duties under this Agreement.
B. The Adviser agrees to indemnify and hold harmless the Manager from and against any and all
Losses resulting from the Adviser’s willful misfeasance, bad faith, or gross negligence in the
performance of, or from reckless disregard of, the Adviser’s obligations and duties under this
Agreement; provided however that the Adviser will not indemnify the Manager for Losses resulting
from the Manager’s willful misfeasance, bad faith or gross negligence in the performance of its
duties or from the Manager’s reckless disregard of its obligations and duties under this Agreement.
6. NON-EXCLUSIVITY. The services of the Adviser to the Manager with respect to the Allocated
Assets are not to be deemed to be exclusive, and the Adviser and its affiliates shall be free to
render investment advisory or other services to others (including other investment companies) and
to engage in other activities. It is understood and agreed that the directors, officers, and
employees of the Adviser are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers, directors, trustees,
or employees of any other firm or corporation, including other investment companies. Manager
acknowledges that Adviser or its affiliates may give advice and xxxx
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actions in the performance of its duties to clients which differ from the advice, or the timing
and nature of actions taken, with respect to other clients’ accounts (including the Allocated
Assets) or employee accounts which may invest in some of the same securities recommended to
advisory clients. In addition, advice provided by the Adviser may differ from advice given by its
affiliates.
7. MAINTENANCE OF INSURANCE. During the term of this Agreement, Adviser will maintain
comprehensive general liability coverage and will carry a fidelity bond covering it and each of its
employees and authorized agents with limits of not less than those considered commercially
reasonable and appropriate under current industry practices. Upon request, the Adviser will
provide evidence of any general liability coverage, as well as any fidelity bond that it then
carries, for a period of up to one year following the termination of this Agreement. Adviser
shall promptly notify Manager of any involuntary termination or material reduction of said
coverage.
8. CONFIDENTIALITY. Each party to this Agreement shall keep confidential any nonpublic
information concerning the other party and will not use or disclose such information for any
purpose other than the performance of or as appropriate to discharge its responsibilities and
duties hereunder (including for operational, compliance or risk management purposes), unless the
non-disclosing party has authorized such disclosure or if such disclosure is expressly required by
applicable federal or state regulatory authorities. Nonpublic information shall not include
information a party to this Agreement can clearly establish was (a) known to the party prior to
this Agreement; (b) rightfully acquired by the party from third parties whom the party reasonably
believes are not under an obligation of confidentiality to the other party to this Agreement; (c)
placed in public domain without fault of the party or its affiliates; or (d) independently
developed by the party without reference or reliance upon the nonpublic information.
9. TERM OF AGREEMENT. This Agreement shall become effective as of the date first written above
and shall continue in effect until termination of the Interim Management Agreement. This Agreement
is terminable, without penalty, at any time, by the Manager, by the Board, or by vote of holders of
a majority (as defined in the 0000 Xxx) of the Portfolio’s shares; or on 60 days’ written notice by
the Adviser, and will terminate five business days after the Adviser receives written notice of the
termination of the Interim Management Agreement between the Trust and the Manager. This Agreement
also will terminate automatically in the event of its assignment (as defined in the 1940 Act).
10. REPRESENTATIONS OF ADVISER. The Adviser represents, warrants, and agrees as follows:
A. The Adviser: (i) is registered as an investment adviser under the Advisers Act and will
continue to be so registered for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this
Agreement; (iii) has materially met, to the best of its knowledge, and will continue to meet for
so long as this Agreement remains in effect, any other applicable federal or state requirements,
or the applicable requirements of any regulatory organization, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the authority to enter into and
perform the services contemplated by this Agreement; and (v) will promptly notify the Manager of
the occurrence of any event that would disqualify the Adviser from serving as an investment
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adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise. The Adviser
will provide the information about itself to be set forth in the Prospectus and will review the
description of its operations, duties and responsibilities as set forth therein (as provided by the
Manager) and acknowledge that they are true and correct and contain no material misstatement or
omission, and it further agrees to inform the Manager as soon as it becomes aware of any material
fact known to the Adviser respecting or relating to the Adviser that is not contained in the
Prospectus and is necessary to make the statements therein not materially misleading, or of any
material statement respecting or relating to the Adviser contained therein which becomes untrue in
any material respect.
B. The Adviser has adopted a written code of ethics reasonably intended to comply with the
requirements of Rule 17j-1 under the 1940 Act and, if it has not already done so, will provide the
Manager and the Trust with a copy of such code of ethics. On at least an annual basis, the Adviser
will comply with the reporting requirements of Rule 17j-1, which may include (i) certifying to the
Manager that the Adviser and its Access Persons have materially complied with the Adviser’s Code of
Ethics with respect to the Allocated Assets and (ii) identifying any material violations which have
occurred with respect to the Allocated Assets. Upon the reasonable request of the Manager if and
as required by an applicable regulatory authority, as evidenced by specific requests for such
documents from such regulatory authority, the Adviser shall permit the Manager, its employees or
its agents to examine summaries of the reports required to be made by the Adviser pursuant to Rule
17j-1 and all other records relevant to the Adviser’s code of ethics.
C. Adviser has adopted and implemented written policies and procedures, as required by Rule
206(4)-7 under the Advisers Act, which are reasonably designed to prevent violations of the
Advisers Act and rules adopted thereunder by the Adviser or its supervised persons. Upon
reasonable request and as required by a relevant regulatory authority, Adviser shall provide the
Manager with access to the records relating to such policies and procedures as they relate to the
Allocated Assets. Adviser will also provide, at the reasonable request of the Manager, periodic
certifications, in a form reasonably acceptable to the Manager and the Adviser, attesting to such
written policies and procedures.
D. The Adviser has provided the Manager and the Trust with a copy of its registration under
the Advisers Act on Form ADV as most recently filed with the SEC and hereafter will furnish a copy
of its annual amendment to the Manager. To the best of the Adviser’s knowledge, the statements
contained in the Adviser’s registration on Form ADV are true and correct in all material respects
and do not omit to state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The Adviser acknowledges that it is an “investment
adviser” to the Portfolio with respect to the Allocated Assets within the meaning of the 1940 Act
and the Advisers Act.
E. The Adviser confirms that to the best of its knowledge, neither it nor any of its
“affiliated persons”, as defined in the 1940 Act, are affiliated persons of: (i) the Manager, (ii)
any other adviser to the Portfolio or any affiliated person of such adviser; (iii) Citigroup Global
Markets Inc, the distributor for the Trust; or (iv) any trustee or officer of the Trust.
11. PROVISION OF CERTAIN INFORMATION BY ADVISER. The Adviser will promptly notify the Manager
(1) in the event the SEC or other governmental authority has censured the Adviser; placed
limitations upon its activities, functions or operations; suspended or
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revoked its registration, if any, as an investment adviser; or has commenced proceedings, the
result of which could reasonably be expected to have a material impact on the services provided by
the Adviser to the Allocated Assets, or an investigation focused specifically on the services
provided under this Agreement, the result of which could reasonably be expected to have a material
impact on the services provided by the Adviser to the Allocated Assets or (2) upon having a
reasonable basis for believing that the Allocated Assets, measured as if the Allocated Assets were
a separate series of the Trust or a separate regulated investment company under the Code, have
ceased to qualify as a regulated investment company under Subchapter M of the Code as determined by
the diversification test conducted by the Adviser. As reasonably requested by the Trust on behalf
of the Trust’s officers and in accordance with the scope of Adviser’s obligations and
responsibilities contained in this Agreement, Adviser will provide reasonable assistance to the
Trust in connection with the Trust’s compliance with the Xxxxxxxx-Xxxxx Act and the rules and
regulations promulgated by the SEC thereunder, and Rule 38(a) - 1 of the 1940 Act. Such assistance
shall include, but not be limited to, (i) certifying periodically, upon the reasonable request of
the Trust, that the Adviser has adopted and implemented written policies and procedures which are
reasonably designed to prevent violations of the Advisers Act and rules adopted thereunder
(including Rule 206(4)-7); (ii) providing reasonable assistance to the Trust in facilitating
standard due diligence reviews arranged by the Trust to evaluate the effectiveness of the Trust’s
compliance controls; (iii) providing the Trust’s chief compliance officer with reasonable direct
access to its compliance personnel; (iv) providing the Trust’s chief compliance officer with
periodic reports, as agreed to by the Manager and the Adviser, and (v) promptly providing special
reports in the event of material compliance problems relating to the Allocated Assets, as the
Adviser determines in its sole discretion. Further, Adviser is aware that: (i) the Chief Executive
Officer (Principal Executive Officer) and Treasurer/Chief Financial Officer (Principal Financial
Officer) of the Trust (collectively, “Certifying Officers”) are required to certify the Trust’s
periodic reports on Form N-CSR pursuant to Rule 30a-2 under the 1940 Act; and (ii) the Certifying
Officers must rely upon certain matters of fact generated by Adviser of which they do not have
firsthand knowledge. Consequently, Adviser has in place and has observed procedures and controls
that are reasonably designed to ensure the adequacy of the limited services provided to the Trust
under this Agreement related to the preparation of Form N-CSR and the accuracy of the information
prepared by it and which is included in the Form N-CSR, and shall provide certifications to the
Trust regarding the accuracy of the information prepared by the Adviser to be relied upon by the
Certifying Officers in certifying the Trust’s periodic reports on Form N-CSR, in a form
satisfactory to the Trust and the Adviser.
12. PROVISION OF CERTAIN INFORMATION BY THE MANAGER. The Manager will promptly notify the
Adviser (1) in the event that the SEC has censured the Manager or the Trust; placed limitations
upon either of their activities, functions, or operations; suspended or revoked the Manager’s
registration as an investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions and (2) upon having a reasonable basis for believing that the
Portfolio has ceased to qualify or might not qualify as a regulated investment company under
Subchapter M of the Code.
13. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed, waived,
discharged, or terminated orally, but only by an instrument in writing signed by both parties.
14. LIMITATION OF LIABILITY. The Manager and Adviser agree that the obligations of the
Trust under this Agreement shall not be binding upon any of the Board
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members, shareholders, nominees, officers, employees or agents; whether past, present or future,
of the Trust individually, but are binding only upon the assets and property of the Portfolio, as
provided in the Trust Agreement. The execution and delivery of this Agreement have been duly
authorized by the Manager and the Adviser, and signed by an authorized officer of each acting as
such.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with the laws of the State
of New York, without giving effect to the conflicts of laws principles thereof, and with the 1940
Act. To the extent that the applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. CHANGE IN CONTROL. The Adviser will notify the Manager of any change of control of the
Adviser, as defined in the Advisers Act, prior to or promptly after such change. In addition the
Adviser will notify the Manager of any change in the portfolio manager(s) of the Allocated Assets
or President or Chief Executive Officer of the Adviser as soon as practicable after such change.
C. CAPTIONS. The captions contained in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
D. ENTIRE AGREEMENT. This Agreement represents the entire agreement and understanding of the
parties hereto and shall supersede any prior agreements between the parties relating to the subject
matter hereof.
E. DEFINITIONS. Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States courts or, in the absence of any controlling decision of any such court,
by rules, releases or orders of the SEC validly issued pursuant to the Act. As used in this
Agreement, the terms “majority of the outstanding voting securities,” “affiliated person,”
“interested person,” “assignment,” “broker,” “investment adviser,” “net assets,” “sale,” “sell,”
and “security” shall have the same meaning as such terms have in the 1940 Act, subject to such
exemptions as may be granted by the SEC by any rule, release or order. Where the effect of a
requirement of the federal securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, release, or order of the SEC, whether of special or general
application, such provision shall be deemed to incorporate the effect of such rule, release, or
order.
F. NOTICES. Any notice herein required is to be in writing and is deemed to have been given
to Adviser or Manager upon receipt of the same at their respective addresses set forth below. All
written notices required or permitted to be given under this Agreement will be delivered by
personal service, by postage mail return receipt requested or by facsimile machine or similar means
of delivery that provide evidence of receipt.
All notices to Manager shall be sent to:
10
The Consulting Group
c/o Citigroup Investment Advisory Services LLC
000 Xxxxxxxxx Xxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
Title: Assistant Secretary
c/o Citigroup Investment Advisory Services LLC
000 Xxxxxxxxx Xxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
Title: Assistant Secretary
All notices to Adviser shall be sent to:
Xxxxxxx Capital Management, LLC
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X.X. Xxxxxx
Title: General Counsel
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X.X. Xxxxxx
Title: General Counsel
G. DELIVERY OF FORM ADV. The Manager acknowledges receipt of the Adviser’s Form ADV
more than 48 hours prior to the execution of this Agreement.
If the terms and conditions described above are in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us the enclosed copy of this
Agreement.
| CITIGROUP INVESTMENT ADVISORY SERVICES, LLC |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxx | |||
| Title: | COO-CGCM Funds | |||
| Accepted: | ||||
| XXXXXXX CAPITAL MANAGEMENT, LLC | ||||
By:
|
/s/ Xxxx X. Xxxxxx
|
|||
| Title: Executive Vice President | ||||
11
APPENDIX A
FEE SCHEDULE
For the services provided by Adviser to the Allocated Assets, pursuant to the attached Interim
Investment Advisory Agreement, the Adviser will be paid a fee by the Escrow Agent, computed daily
and payable monthly, based on the average daily net assets of the Allocated Assets at the following
annual rates of the average daily net assets of the Allocated Assets as determined by the Trust’s
accounting agent:
| PORTFOLIO | RATE | |
International Equity Investments
|
0.45% on the first $750 million of the assets of the Allocated Assets, and 0.40% on all assets of the Allocated Assets above $750 million |
