INVESTMENT ADVISORY AND SERVICE AGREEMENT
INVESTMENT ADVISORY AND SERVICE
AGREEMENT
THIS INVESTMENT
ADVISORY AND SERVICE AGREEMENT, dated and effective as of the 1st day of April,
2010, is made and entered into by and between CAPITAL PRIVATE CLIENT SERVICES
FUNDS, a Delaware statutory trust (the “Trust”), on behalf of the portfolios
listed on Exhibit
A hereto (each a “Fund,” and collectively, the “Funds”) and CAPITAL
GUARDIAN TRUST COMPANY, a California corporation (the “Investment
Adviser”).
W I T N E S S E T
H
The Trust is an
open-end diversified investment company of the management type and is registered
under the Investment Company Act of 1940, as amended (the “1940 Act”). Each of
the Funds has been designated as a series of the Trust. The Investment Adviser
is registered under the Investment Advisers Act of 1940, as amended, and is
engaged in the business of providing investment advisory and related
services.
NOW, THEREFORE, in
consideration of the premises and the mutual undertaking of the parties, it is
covenanted and agreed as follows:
1. The Trust hereby
employs the Investment Adviser to provide investment advisory and administrative
services to the Trust with respect to the Funds. The Investment Adviser hereby
accepts such employment and agrees to render the services to the extent herein
set forth, for the compensation herein provided. The Investment Adviser shall,
for all purposes herein, be deemed an independent contractor and not an agent of
the Trust.
2. (a) The
Investment Adviser shall provide general management services to the Trust,
including overall supervisory responsibility for the general management and
investment of each Fund’s assets, giving due consideration to the policies of
each Fund as expressed in the Trust’s agreement and declaration of trust,
by-laws, registration statement under the 1940 Act and registration statement
under the Securities Act of 1933, as amended (the “1933 Act”), as well as to the
factors affecting the Funds’ status as a regulated investment company under the
Internal Revenue Code of 1986, as amended.
(b) The Investment
Adviser may delegate its investment management responsibilities under paragraph
2(a), or a portion thereof, to one or more entities that are direct or indirect
subsidiaries of the Investment Adviser or at least majority owned subsidiaries
of The Capital Group Companies, Inc. and registered as investment advisers under
the Investment Adviser’s Act of 1940 (each a “Subsidiary”), pursuant to an
agreement between the Investment Adviser and the Subsidiary (the “Subsidiary
Agreement”). Any Subsidiary to which the Investment Adviser proposes to delegate
its investment management responsibilities must be approved by the Fund’s Board
of Trustees, including a majority of the Trustees who are not parties to this
Agreement nor interested persons of any such party (“Independent Trustees”). Any
delegation of duties pursuant to this Section 2 shall comply with all
applicable provisions of Section 15 of the 1940 Act, except to the extent
permitted by any exemptive order of the Securities and Exchange Commission
(“SEC”), or similar relief.
(c) The Investment
Adviser shall, subject to review and approval of the Board of Trustees of the
Fund: (i) set each Fund’s overall investment strategies;
(ii) evaluate, select and recommend Subsidiaries to manage all or a part of
each Fund’s assets; (iii) when appropriate, allocate and reallocate each
Fund’s assets among multiple Subsidiaries; (iv) monitor and evaluate the
performance of Subsidiaries; and (v) implement procedures reasonably
designed to ensure that the Subsidiaries comply with the federal securities laws
and each Fund’s investment objective, policies and restrictions. The Investment
Adviser shall be solely responsible for paying the fees of any
Subsidiary.
(d) Any Subsidiary
Agreement may provide that the Subsidiary, subject to the control and
supervision of the Trust’s Board of Trustees and the Investment Adviser, shall
have full investment discretion for each Fund and shall make all determinations
with respect to (i) the investment of each Fund’s assets assigned to the
Subsidiary; (ii) the purchase and sale of portfolio securities with those
assets, and (iii) any steps that may be necessary to implement an
investment decision. The Investment Adviser shall periodically evaluate the
continued advisability of retaining any Subsidiary and will make recommendations
to the Trust’s Board of Trustees as needed.
(e) The Investment
Adviser shall furnish the services of persons to perform the executive,
administrative, clerical, and bookkeeping functions of the Fund, including the
daily determination of net asset value per share. The Investment Adviser shall
pay the compensation and travel expenses of all such persons, and they shall
serve without any additional compensation from the Trust or any Fund. The
Investment Adviser shall also, at its expense, provide the Trust with necessary
office space (which may be in the offices of the Investment Adviser); all
necessary office equipment and utilities; and general purpose forms, supplies,
and postage used at the offices of the Trust. The Investment Adviser may
delegate the provision of any such services to a third party approved by the
Trust’s Board of Trustees.
(f) The Investment
Adviser shall maintain all books and records with respect to each Fund’s
investment management activities that are required to be maintained pursuant to
the Investment Company Act of 1940 and the rules thereunder, as well as any
other applicable legal requirements. The Investment Adviser may delegate its
responsibilities under this paragraph to a third party approved by the Trust’s
Board of Trustees. The Investment Adviser acknowledges and agrees
that all such records are the property of the Trust, and it shall maintain and
preserve such records in accordance with applicable law and provide such records
promptly to the Trust upon request.
(g) The Investment
Adviser shall prepare and submit to the Trust all data on the performance of its
duties as investment adviser for required filings with governmental agencies or
for the preparation of reports to the Board of Trustees or the shareholders of
each Fund.
(h) The Investment
Adviser shall furnish from time to time such other appropriate information as
may be reasonably requested by any Fund.
3. The Trust shall
pay all expenses not assumed by the Investment Adviser as provided herein. Such
expenses shall include, but shall not be limited to, expenses incurred in
connection with the organization of the Trust, its qualification to do business
in the State of California, and its registration as an investment company under
the 1940 Act; custodian, stock transfer and dividend disbursing fees and
expenses; expenses incurred for shareholder servicing, recordkeeping,
transactional services, tax and informational returns and fund and shareholder
communications; costs of designing and of printing and mailing to its
shareholders reports, prospectuses, proxy statements, and notices to its
shareholders; taxes; expenses of the issuance, sale, redemption, or repurchase
of shares of the Fund (including registration and qualification expenses); legal
and auditing fees and expenses; compensation, fees, and expenses paid to
Independent Trustees; association dues; and costs of any share certificates,
stationery and forms prepared exclusively for the Trust or a Fund.
4. (a) The Trust
shall pay to the Investment Adviser on or before the tenth (10th) day of
each month, as compensation for the services rendered by the Investment Adviser
during the preceding month, a fee calculated at the annual rate of 0.35% of the
net assets of each Fund.
(b) Such fee shall
be accrued daily and the daily rate shall be computed based on the actual number
of days per year. For the purposes hereof, the net assets of the Fund shall be
determined in the manner set forth in the agreement and declaration of trust and
registration statement of the Trust. The advisory fee shall be payable for the
period commencing on the date on which operations of the Fund begin and ending
on the date of termination of this Agreement and shall be prorated for any
fraction of a month at the beginning or the termination of such
period.
5. This Agreement
may be terminated with respect to the Trust or any Fund at any time, without
payment of any penalty, by the Board of Trustees of the Trust or by vote of a
majority (within the meaning of the 0000 Xxx) of the outstanding voting
securities of the Fund on sixty (60) days’ written notice to the Investment
Adviser, or by the Investment Adviser on like notice to the Fund. Unless sooner
terminated in accordance with this provision, this Agreement shall continue
until [December 31, 2011]. It may thereafter be renewed from year to year by
mutual consent, provided that such renewal shall be specifically approved with
respect to each Fund at least annually by the Board of Trustees of the Trust, or
by vote of a majority (within the meaning of the 0000 Xxx) of the outstanding
voting securities of the Fund. In either event, any such renewal must be
approved by a majority of the Independent Trustees at a meeting called for the
purpose of voting on such approval.
6. This Agreement
shall not be assignable by either party hereto, and in the event of assignment
(within the meaning of the 0000 Xxx) by the Investment Adviser shall
automatically be terminated forthwith.
7. Nothing
contained in this Agreement shall be construed to prohibit the Investment
Adviser from performing investment advisory, management, or distribution
services for other investment companies and other persons or companies, nor to
prohibit affiliates of the Investment Adviser from engaging in such businesses
or in other related or unrelated businesses.
8. The Investment
Adviser shall not be liable to the Trust or any Fund or its shareholders for any
error of judgment, for any mistake of law, for any loss arising out of any
investment, or for any act or omission not involving willful misfeasance, bad
faith, gross negligence, or reckless disregard of its obligations and duties
hereunder.
9. 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’s estate. The Investment Adviser agrees to look solely to the
assets of the Trust for the satisfaction of any liability in respect of the
Trust under 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.
10. The Trust
acknowledges and agrees that the names “Personal Investment Management” and
“Capital,” or any derivatives thereof or logo associated with those names, are
the valuable property of the Investment Adviser and its affiliates, and that the
Trust shall have the right to use such names (or derivatives or logos) only so
long as this Agreement shall continue in effect. Upon termination of this
Agreement, the Trust shall forthwith cease to use such names (or derivatives or
logos).
IN WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in duplicate
original by their duly authorized officers.
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CAPITAL
PRIVATE CLIENT
SERVICES
FUNDS
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CAPITAL GUARDIAN TRUST
COMPANY
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By:
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By:
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EXHIBIT
A
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Capital Core
Municipal Fund
Capital Short-Term
Municipal Fund
Capital California
Core Municipal Fund
Capital California
Short-Term Municipal Fund
Capital Core Bond
Fund
