AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 1st day of June,
2004, is made and entered into by and between THE CASH MANAGEMENT TRUST OF
AMERICA, a Massachusetts business trust, (hereinafter called the "Trust"), and
CAPITAL RESEARCH AND MANAGEMENT COMPANY, a Delaware corporation, (hereinafter
called the "Adviser"). This Agreement shall supersede the previous agreement
between the Trust and the Adviser, which previous agreement shall terminate by
mutual consent of the parties when this Agreement becomes effective. The parties
agree as follows:
1. The Trust hereby employs the Adviser to furnish advice to
the Trust with respect to the investment and reinvestment of the assets of the
Trust. 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 Trust.
2. The Adviser agrees to provide supervision of the portfolio
of the Trust and, to the extent authorized by the Trustees, to determine what
securities or other property shall be purchased or sold by the Trust, giving due
consideration to the policies of the Trust as expressed in the Trust's
Declaration of Trust, By-Laws, Registration Statement under the Investment
Company Act of 1940, as amended (the "1940 Act"), Registration Statement under
the Securities Act of 1933, as amended (the "1933 Act"), and Prospectus as in
use from time to time, as well as to the factors affecting the Trust's status as
a regulated investment company under the Internal Revenue Code of 1954, 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 Trust. With respect to such
transactions, the Adviser, subject to such directions as may be furnished from
time to time by the Trustees, shall endeavor as the primary objective to obtain
the most favorable prices and execution of orders. Subject to the primary
objective, the Adviser may place orders with broker-dealer firms which have sold
shares of the Trust or which furnished statistical and other information to the
Adviser, taking into account the value and quality of the brokerage services of
such broker-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 shall (a) furnish to the Trust the services of
qualified personnel to (i) manage the investments of the Trust, (ii) perform the
executive and related administrative functions of the Trust, and (iii) if
desired by the Trust, serve as Trustees of the Trust, in all cases without
additional compensation of such persons by the Trust; (b) pay the expenses of
all persons whose services are to be furnished by the Adviser under this
Section; (c) provide office space, furniture, small office equipment, and
telephone facilities and utilities, all of which may be the same as occupied or
used by the Adviser; and (d) provide general purpose forms, supplies,
stationery, and postage used at the offices of the Trust relating to the
services to be furnished by the Adviser hereunder.
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4. Except to the extent expressly assumed by the Adviser
herein, the Trust 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 Trustees who are
not affiliated persons of the Adviser and reimbursement of travel expenses
incurred by such Trustees in connection with attendance at meetings of the
Trustees or committees thereof; fees and expenses of the transfer agent,
dividend disbursing agent, legal counsel, independent public accountants, and
custodian; costs of designing, printing, and mailing reports, prospectuses,
proxy statements and notices to shareholders; fees and expenses of sale
(including registration and qualification), issuance (including costs of any
share certificates) and redemption of shares; association dues; interest; and
taxes.
5. The Trust shall pay to the Adviser on or before the tenth (10th) day of each
month, as compensation for the services rendered by the Adviser hereunder during
the previous month, a fee computed at the annual rate of:
0.32% on the first $1 billion of the average daily net assets
of the Trust during the preceding month; plus 0.29% on the
portion of such net assets in excess of $1 billion but not
exceeding $2 billion; plus 0.27% of such net assets in excess
of $2 billion.
Such fee shall be computed and accrued daily based on the number of days per
year.
For the purposes hereof, the total net assets of the
Trust shall be determined in the
manner set forth in the Declaration of Trust, By-Laws, and Prospectus of the
Trust. The advisory fee shall be payable for the period commencing on the
effective date of this Agreement and ending on the date of termination of this
Agreement.
6. Within thirty days following the close of any fiscal year
of the Trust, the Adviser will pay to the Trust a sum equal to the amount by
which the aggregate expenses of the Trust 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 Trust for 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.
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 Trust may issue in the future. Any new class(es) of
shares issued by the Trust 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 Trust for other expenses to the
extent necessary to result in an expense reduction only for Class A shares of
the Trust.
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, nor to prohibit affiliates of the Adviser from engaging in such
business or in other related or unrelated businesses.
9. The Adviser shall have no liability to the Trust, 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 Trust 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, 2005. It may thereafter be renewed from year to year by
mutual consent, provided that such renewal shall be specifically approved at
least annually by (i) the Trustees or by the vote of a majority (as defined in
the 0000 Xxx) of the outstanding voting securities of the Trust, and (ii) a
majority of those Trustees who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) 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. The obligations of the Trust under this Agreement are not
binding upon any of the Trustees, officers, employees, agents or shareholders of
the Trust individually, but bind only the Trust Estate. The Adviser agrees to
look solely to the assets of the Trust for the satisfaction of any liability of
the Trust in respect of this Agreement and will not seek recourse against such
Trustees, officers, employees, agents or shareholders, or any of them, or any of
their personal assets for such satisfaction.
12. This Agreement may be terminated at any time, without
payment of any penalty, by the Trustees or by the vote of a majority (as defined
in the 0000 Xxx) of the outstanding voting securities of the Trust, on sixty
(60) days' written notice to the Adviser, or by the Adviser on like notice to
the Trust. This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 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.
THE CASH MANAGEMENT TRUST CAPITAL RESEARCH AND
OF AMERICA MANAGEMENT COMPANY
By /s/ Xxxx X. Xxxxx, Xx. By /s/ Xxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxx, Xx., Chairman Xxxxx X. Xxxxxxxxxx, President
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By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx, Secretary Xxxxxxx X. Xxxxxx, Vice President
and Secretary
