AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT,
dated and effective as of the 1st of June, 2009, is made and entered into by and
between THE TAX-EXEMPT BOND FUND OF AMERICA, INC., a Maryland corporation,
(hereinafter called the “Fund”), and CAPITAL RESEARCH AND MANAGEMENT COMPANY, a
Delaware corporation, (hereinafter called the “Adviser”). The parties
agree as follows:
1. The
Fund hereby employs the Adviser to furnish advice to the Fund with respect to
the investment and reinvestment of the assets of the Fund. The Adviser hereby
accepts such employment and agrees to render the services and to assume the
obligation to the extent herein set forth, for the compensation herein
provided. The Adviser shall, for all purposes herein, be deemed an
independent contractor and not an agent of the Fund.
2. The
Adviser agrees to provide from its own resources and those of its subsidiary
companies supervision of the portfolio of the Fund and, to the extent authorized
by the Board of Directors of the Fund, to determine what securities or other
property shall be purchased or sold by the Fund, giving due consideration to the
policies of the Fund as expressed in the Fund's Articles of Incorporation,
By-Laws, Registration Statement under the Investment Company Act of l940, as
amended (the "l940 Act"), and Prospectus as in use from time to time, as well as
to the factors affecting the Fund's status as a regulated investment company
under the Internal Revenue Code of l954, as amended.
The Adviser shall
provide adequate facilities and qualified personnel for the placement of orders
for the purchase, or other acquisition, and sale, or other disposition, of
portfolio securities for the Fund. With respect to such transactions,
the Adviser, subject to such directions as may be furnished from time to time by
the Board of Directors of the Fund, shall endeavor as the primary objective to
obtain the most favorable prices and execution of orders. Subject to
such primary objective, the Adviser may place orders with brokerage firms which
have sold shares of the Fund or which furnish statistical and other information
to the Adviser, taking into account the value and quality of the brokerage
services of such dealers, including the availability and quality of such
statistical and other information. Receipt by the Adviser of any such
statistical and other information and services shall not be deemed to give rise
to any requirement for abatement of the advisory fee payable pursuant to Section
5 hereof.
3. The
Adviser, at its own expense, shall furnish to the Fund: office space, furniture,
equipment, supplies, telephone and utilities, which may be the same as occupied
or used by the Adviser; the services of qualified personnel for administering
the affairs, managing the investments, and preparing and maintaining the books
of account and records of the Fund; members of the Adviser's organization to
serve without compensation for the Fund as officers and/or directors of the
Fund, if desired by the Fund; daily determination of net asset value and
offering price per share; general purpose forms, supplies, stationery and
postage relating to the obligations of the Adviser hereunder; and compensation
and expenses of all persons whose services are to be furnished to the Fund
pursuant to this Section 3.
4. Except
to the extent expressly assumed by the Adviser herein, the subject to an expense
reimbursement fee agreement described in Section 6 below, the Fund shall pay all
costs and expenses in connection with its operations. Without
limiting the generality of the foregoing, such costs and expenses shall include
the following: compensation paid to the directors of the Fund who are
not affiliated persons of the Adviser and reimbursement of travel expenses
incurred by such Directors of the Fund in connection with attendance at meetings
of the Directors or committees thereof; fees and expenses of the Fund's
custodian, transfer agent, dividend disbursing agent, legal counsel and
independent public accountants; costs of designing, printing, and mailing
reports, prospectuses, proxy statements and notices to Fund shareholders;
special purpose forms and stationery, and postage relating directly to the
business of the Fund; fees and expenses of sale (including registration and
qualification), issuance (including costs of stock certificates) and redemption
of shares; association dues; interest; and taxes.
5. The
Fund shall pay to the Adviser on or before the tenth (10th) day of each month,
as compensation for the services rendered by the Adviser during the preceding
month, the sum of the following amounts:
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(a)
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0.30% per
annum on the first $60 million of the Fund’s average daily net assets;
plus
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0.21% per annum on
the portion of such net assets between $60 million and $1 billion;
plus
0.18% per annum on
the portion of such net assets between $1 billion and $3 billion;
plus
0.15% per annum on
the portion of such net assets between $3 billion and $6 billion;
plus
0.13% per annum on
the portion of such net assets between $6 billion and $10 billion;
plus
0.12% per annum on
the portion of such net assets in excess of $10 billion (“Net Asset Portion”),
plus
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(b)
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3% of the
Fund’s first $3,333,333 of monthly gross income;
plus
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2.5% of such income
between $3,333,333 and $8,333,333; plus
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2% of
such income in excess of $8,333,333 (“Income
Portion”).
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The Net Asset
Portion shall be accrued daily based on the number of days per year. The net
asset value of the Fund shall be determined in the manner set forth in the
Articles of Incorporation and prospectus of the Fund as of the close of the New
York Stock Exchange on each day of which said Exchange is open, and in the case
of Saturdays, Sundays, and other days on which said Exchange shall not be open,
as at the close of the last preceding day on which said Exchange shall have been
open.
The Income Portion
shall be accrued daily and “gross income” for this purpose shall be determined
in the same manner as gross income is determined for and reported in financial
statements and shall not include gains or losses on the sale of
securities.
Upon any
termination of this Agreement on a day other than the last day of the month the
fee for the period from the beginning of the month in which termination occurs
to the date of termination shall be prorated according to the proportion which
such period bears to the full month of the Fund.
6. The
Adviser agrees to pay the expenses of the Fund referred to in Section 4
above (with the exclusion of interest, taxes, brokerage costs and extraordinary
expenses such as litigation and acquisitions) for a period not to exceed the ten
year period ending September 30, l989, all subject to reimbursement by the
Fund. To accomplish such reimbursement, the Fund shall pay the
Adviser an expense reimbursement fee that on an annual basis is equivalent to
the difference between the compensation referred to in Section 6 above, and 1%
of the average daily net assets of the Fund. Such expense
reimbursement fee agreement shall terminate when either (1) all of such
reimbursable expenses of the Fund that have been paid by the Adviser pursuant
thereto have been reimbursed by the Fund or (2) the ten year period has
expired. Payment of the foregoing fee is subject to the provision
that within thirty days following the close of any fiscal year of the Fund, the
Adviser will pay to the Fund a sum equal to the amount by which the aggregate
expenses of the Fund incurred during such fiscal year, but excluding interest,
taxes, brokerage costs, and extraordinary expenses such as litigation and
acquisitions, exceed the lesser of either 25% of gross income of the Fund for
the preceding year or the sum of (a) 1-1/2% of the average daily net assets of
the preceding year up to and including $30,000,000 and (b) 1% of any excess of
average daily net assets of the preceding year over $30,000,000. The
obligation of the Adviser to reimburse the Fund for expenses incurred for any
year may be terminated or revised at any time by the Adviser to the Fund by
notice in writing from the Adviser to the Fund, provided, however, that
termination or revision of the Adviser's obligation to reimburse for expenses is
not to be effective with respect to the fiscal year within which such notice is
given.
7. The
expense limitation described in Section 6 shall apply only to Class A shares
issued by the Fund and shall not apply to any other class(es) of shares the Fund
may issue in the future. Any new class(es) of shares issued by the
Fund will not be subject to an expense limitation. However,
notwithstanding the foregoing, to the extent the Investment Adviser is required
to reduce its management fee pursuant to provisions contained in Section 6 due
to the expenses of the Class A shares exceeding the stated limit, the Investment
Adviser will either (i) reduce its management fee similarly for other classes of
shares, or (ii) reimburse the Fund for other expenses to the extent necessary to
result in an expense reduction only for Class A shares of the Fund.
8. Nothing
contained in this Agreement shall be construed to prohibit the Adviser from
performing investment advisory, management, or distribution services for other
investment companies and other persons or companies, or to prohibit affiliates
of the Adviser from engaging in such businesses or in other related or unrelated
businesses.
9. The
Adviser shall have no liability to the Fund, or its shareholders or creditors,
for any error of judgment, mistake of law, or for any loss arising out of any
investment, or for any other act or omission in the performance of its
obligations to the Fund not involving willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties
hereunder.
10. This
Agreement shall continue in effect until the close of business on May 31,
2010. It may be renewed from year to year thereafter by mutual
consent, provided that such renewal shall be specifically approved at least
annually by (i) the Board of Directors of the Fund, or by the vote of a majority
(as defined in the l940 Act) of the outstanding voting securities of the Fund,
and (ii) a majority of those directors who are not parties to this Agreement or
interested persons (as defined in the l940 Act) of any such party cast in person
at a meeting called for the purpose of voting on such approval. Such
mutual consent to renewal shall not be deemed to have been given unless
evidenced by a writing signed by both parties hereto.
11. This
Agreement may be terminated at any time, without payment of any penalty, by the
Board of Directors of the Fund or by the vote of a majority (as defined in the
l940 Act) of the outstanding voting securities of the Fund, on sixty (60) days'
written notice to the Adviser, or by the Adviser on like notice to the
Fund. This Agreement shall automatically terminate in the event of
its assignment (as defined in the l940 Act).
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in duplicate
originals by their officers thereunto duly authorized as of the day and year
first above written.
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THE
TAX-EXEMPT BOND FUND
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CAPITAL
RESEARCH AND
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OF AMERICA,
INC.
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MANAGEMENT
COMPANY
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By /s/ Xxxx X.
Xxxxxxxx
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By /s/Xxxxxxx X.
Xxxxxx
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Xxxx X.
Xxxxxxxx, President
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Xxxxxxx X.
Xxxxxx, President
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By /s/Xxxxxxxx X.
Xxxxxxx
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By /s/Xxxxxxx X.
Xxxxxx
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Xxxxxxxx X.
Xxxxxxx, Secretary
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Xxxxxxx X.
Xxxxxx,
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Senior Vice
President and Secretary
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