LMP Adjustable Rate Income fund
Sub-Item 77Q
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of August, 2006,
by and between Xxxx Xxxxx Partners Adjustable Rate Income Fund (the "Fund")
and Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware limited liability
company (the "Manager").
WHEREAS, the Fund is registered as a management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment
advisory, management and administrative services and is registered
as an investment adviser under the Investment Advisers Act of 1940,
as amended;
WHEREAS, the Fund wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Fund; and
WHEREAS, the Manager is willing to furnish such services on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1.The Fund hereby appoints the Manager to act as investment adviser
and administrator of the Fund for the period and on the terms set
forth in this Agreement. The Manager accepts such appointment and
agrees to render the services herein set forth, for the compensation
herein provided.
2.The Fund shall at all times keep the Manager fully informed with regard
to the securities owned by it, its funds available, or to become available,
for investment, and generally as to the condition of its affairs.
It shall furnish the Manager with such other documents and information
with regard to its affairs as the Manager may from time to time
reasonably request.
3.(a) Subject to the supervision of the Fund's Board of Trustees
(the "Board"), the Manager shall regularly provide the Fund with
investment research, advice, management and supervision and shall
furnish a continuous investment program for the Fund's portfolio
of securities and other investments consistent with the Fund's
investment objectives, policies and restrictions, as stated in
the Fund's current Prospectus and Statement of Additional Information.
The Manager shall determine from time to time what securities and
other investments will be purchased, retained, sold or exchanged
by the Fund and what portion of the assets of the Fund's portfolio
will be held in the various securities and other investments in
which the Fund invests, and shall implement those decisions,
all subject to the provisions of the Fund's Declaration of Trust
and By-Laws (collectively, the "Governing Documents"), the 1940
Act, and the applicable rules and regulations promulgated thereunder
by the Securities and Exchange Commission (the "SEC") and
interpretive guidance issued thereunder by the SEC staff and any
other applicable federal and state law, as well as the investment
objectives, policies and restrictions of the Fund referred to above,
and any other specific policies adopted by the Board and disclosed
to the Manager. The Manager is authorized as the agent of the Fund
to give instructions to the custodian of the Fund as to deliveries
of securities and other investments and payments of cash for the
account of the Fund. Subject to applicable provisions of the 1940
Act and direction from the Board, the investment program to be
provided hereunder may entail the investment of all or substantially
all of the assets of the Fund in one or more investment companies.
The Manager will place orders pursuant to its investment
determinations for the Fund either directly with the issuer
or with any broker or dealer, foreign currency dealer, futures
commission merchant or others selected by it. In connection
with the selection of such brokers or dealers and the placing
of such orders, subject to applicable law, brokers or dealers
may be selected who also provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) to the
Fund and/or the other accounts over which the Manager or its
affiliates exercise investment discretion. The Manager is
authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing
a portfolio transaction for the Fund which is in excess of
the amount of commission another broker or dealer would have
charged for effecting that transaction if the Manager determines
in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the
overall responsibilities which the Manager and its affiliates
have with respect to accounts over which they exercise investment
discretion. The Board may adopt policies and procedures that modify
and restrict the Manager's authority regarding the execution of the
Fund's portfolio transactions provided herein. The Manager shall
also provide advice and recommendations with respect to other
aspects of the business and affairs of the Fund, shall exercise
voting rights, rights to consent to corporate action and any other
rights pertaining to the Fund's portfolio securities subject to
such direction as the Board may provide, and shall perform such
other functions of investment management and supervision as may be
directed by the Board.
(b)Subject to the direction and control of the Board, the Manager
shall perform such administrative and management services as may
from time to time be reasonably requested by the Fund as
necessary for the operation of the Fund, such as
(i) supervising the overall administration of the Fund,
including negotiation of
contracts and fees with and the monitoring of performance and
xxxxxxxx of the Fund's transfer agent, shareholder servicing agents,
custodian and other independent contractors or agents,
(ii) providing certain compliance, fund accounting, regulatory
reporting, and tax reporting services,
(iii) preparing or participating in the preparation of
Board materials, registration statements, proxy statements
and reports and other communications to shareholders,
(iv) maintaining the Fund's existence, and
(v) during such times as shares are publicly offered,
maintaining the registration and qualification of the Fund's
shares under federal and state laws. Notwithstanding the
foregoing, the Manager shall not be deemed to have assumed
any duties with respect to, and shall not be responsible for,
the distribution of the shares of any Fund, nor shall the
Manager be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer
agent, fund accounting agent, custodian, shareholder servicing
agent or other agent, in each case employed by the Fund to
perform such functions.
(c)The Fund hereby authorizes any entity or person associated with
the Manager which is a member of a national securities exchange
to effect any transaction on the exchange for the account of the
Fund which is permitted by Section 11(a) of the Exchange Act and
Rule 11a2-2(T) thereunder, and the Fund hereby consents to the
retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing,
the Manager agrees that it will not deal with itself, or with
members of the Board or any principal underwriter of the Fund,
as principals or agents in making purchases or sales of
securities or other property for the account of the Fund,
nor will it purchase any securities from an underwriting or
selling group in which the Manager or its affiliates is
participating, or arrange for purchases and sales of
securities between the Fund and another account advised by
the Manager or its affiliates, except in each case as
permitted by the 1940 Act and in accordance with such
policies and procedures as may be adopted by the Fund
from time to time, and will comply with all other
provisions of the Governing Documents and the Fund's
then-current Prospectus and Statement of Additional
Information relative to the Manager and its directors and officers.
4.Subject to the Board's approval, the Manager or the Fund may
enter into contracts with one or more investment subadvisers
or subadministrators, including without limitation, affiliates
of the Manager, in which the Manager delegates to such
investment subadvisers or subadministrators any or all its
duties specified hereunder, on such terms as the Manager will
determine to be necessary, desirable or appropriate, provided
that in each case the Manager shall supervise the activities of
each such subadviser or subadministrator and further provided
that such contracts impose on any investment subadviser or
subadministrator bound thereby all the conditions to which the
Manager is subject hereunder and that such contracts are entered
into in accordance with and meet all applicable requirements of
the 1940 Act.
5.(a)The Manager, at its expense, shall supply the Board and
officers of the Fund with all information and reports
reasonably required by them and reasonably available to
the Manager and shall furnish the Fund with office facilities,
including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Fund.
The Manager shall oversee the maintenance of all books
and records with respect to the Fund's securities
transactions and the keeping of the Fund's books of
account in accordance with all applicable federal and state
laws and regulations. In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Manager hereby agrees
that any records that it maintains for the Fund are the
property of the Fund, and further agrees to surrender promptly
to the Fund any of such records upon the Fund's request.
The Manager further agrees to arrange for the preservation
of the records required to be maintained by Rule 31a-1 under
the 1940 Act for the periods prescribed by Rule 31a-2 under
the 1940 Act. The Manager shall authorize and permit any of
its directors, officers and employees, who may be elected as
Board members or officers of the Fund, to serve in the capacities
in which they are elected.
(b)The Manager shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection
with its responsibilities under this Agreement. Other than
as herein specifically indicated, the Manager shall not be
responsible for the Fund's expenses, including, without limitation,
advisory fees; distribution fees; interest; taxes; governmental fees;
voluntary assessments and other expenses incurred in connection
with membership in investment company organizations; organization
costs of the Fund; the cost (including brokerage commissions,
transaction fees or charges, if any) in connection with the purchase
or sale of the Fund's securities and other investments and any
losses in connection therewith; fees and expenses of custodians,
transfer agents, registrars, independent pricing vendors or other
agents; legal expenses; loan commitment fees; expenses relating to
share certificates; expenses relating to the issuing and redemption
or repurchase of the Fund's shares and servicing shareholder
accounts; expenses of registering and qualifying the Fund's
shares for sale under applicable federal and state law; expenses
of preparing, setting in print, printing and distributing prospectuses
and statements of additional information and any supplements thereto,
reports, proxy statements, notices and dividends to the Fund's shareholders;
costs of stationery; website costs; costs of meetings of the Board
or any committee thereof, meetings of shareholders and other meetings
of the Fund; Board fees; audit fees; travel expenses of officers,
members of the Board and employees of the Fund, if any; and the Fund's
pro rata portion of premiums on any fidelity bond and other insurance
covering the Fund and its officers, Board members and employees;
litigation expenses and any non-recurring or extraordinary expenses
as may arise, including, without limitation, those relating to actions,
suits or proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify the Fund's Board members
and officers with respect thereto.
0.Xx member of the Board, officer or employee of the Fund shall receive
from the Fund any salary or other compensation as such member of the
Board, officer or employee while he is at the same time a director,
officer, or employee of the Manager or any affiliated company of the
Manager, except as the Board may decide. This paragraph shall not
apply to Board members, executive committee members, consultants and
other persons who are not regular members of the Manager's or any
affiliated company's staff.
0.Xx compensation for the services performed and the facilities
furnished and expenses assumed by the Manager, including the services
of any consultants retained by the Manager, the Fund shall pay the
Manager, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate set forth opposite the Fund's
name on Schedule A annexed hereto, provided however, that if the Fund
invests all or substantially all of its assets in another registered
investment company for which the Manager or an affiliate of the Manager
serves as investment adviser or investment manager, the annual fee
computed as set forth on such Schedule A shall be reduced by the
aggregate management fees allocated to that Fund for the Fund's
then-current fiscal year from such other registered investment company.
The first payment of the fee shall be made as promptly as possible at
the end of the month succeeding the effective date of this Agreement,
and shall constitute a full payment of the fee due the Manager for all
services prior to that date. If this Agreement is terminated as of any
date not the last day of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average
daily net assets of the Fund in that period from the beginning of such
month to such date of termination, and shall be that proportion of such
average daily net assets as the number of business days in such period
bears to the number of business days in such month. The average daily
net assets of the Fund shall in all cases be based only on business days
and be computed as of the time of the regular close of business of the
New York Stock Exchange, or such other time as may be determined by the
Board.
8.The Manager assumes no responsibility under this Agreement other than
to render the services called for hereunder, in good faith, and shall
not be liable for any error of judgment or mistake of law, or for any
loss arising out of any investment or for any act or omission in the
execution of securities transactions for the Fund, provided that
nothing in this Agreement shall protect the Manager against any
liability to the Fund to which the Manager would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties hereunder. As
used in this Section 8, the term "Manager" shall include any affiliates
of the Manager performing services for the Fund contemplated hereby
and the partners, shareholders, directors, officers and employees of
the Manager and such affiliates.
9.Nothing in this Agreement shall limit or restrict the right of any director,
officer, or employee of the Manager who may also be a Board member, officer,
or employee of the Fund, to engage in any other business or to devote his
time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature, nor to limit
or restrict the right of the Manager to engage in any other business or to
render services of any kind, including investment advisory and management
services, to any other fund, firm, individual or association. If the
purchase or sale of securities consistent with the investment policies
of the Fund or one or more other accounts of the Manager is considered at
or about the same time, transactions in such securities will be allocated
among the accounts in a manner deemed equitable by the Manager. Such
transactions may be combined, in accordance with applicable laws and
regulations, and consistent with the Manager's policies and procedures
as presented to the Board from time to time.
10.For the purposes of this Agreement, the Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus and
Statement of Additional Information and the terms "assignment,"
"interested person," and "majority of the outstanding voting securities"
shall have the meanings given to them by Section 2(a) of the 1940 Act,
subject to such exemptions as may be granted by the SEC by any rule,
regulation or order.
11.This Agreement will become effective with respect to the Fund on
the date set forth opposite the Fund's name on Schedule A annexed
hereto, provided that it shall have been approved by the Fund's
Board and by the shareholders of the Fund in accordance with the
requirements of the 1940 Act and, unless sooner terminated as
provided herein, will continue in effect until November 30, 2007.
Thereafter, if not terminated, this Agreement shall continue in
effect with respect to the Fund, so long as such continuance is
specifically approved at least annually (i) by the Board or
(ii) by a vote of a majority of the outstanding voting securities of
the Fund, provided that in either event the continuance is also
approved by a majority of the Board members who are not interested
persons of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
12.This Agreement is terminable with respect to the Fund without
penalty by the Board or by vote of a majority of the outstanding
voting securities of the Fund, in each case on not more than 60
days' nor less than 30 days' written notice to the Manager, or
by the Manager upon not less than 90 days' written notice to the
Fund, and will be terminated upon the mutual written consent of
the Manager and the Fund. This Agreement shall terminate
automatically in the event of its assignment by the Manager
and shall not be assignable by the Fund without the consent
of the Manager.
13.The Manager agrees that for services rendered to the Fund,
or for any claim by it in connection with services rendered to
the Fund, it shall look only to assets of the Fund for
satisfaction and that it shall have no claim against the
assets of any other portfolios of the Fund. The undersigned
officer of the Fund has executed this Agreement not individually,
but as an officer under the Fund's Declaration of Trust and the
obligations of this Agreement are not binding upon any of the
Trustees, officers or shareholders of the Fund individually.
00.Xx provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought, and no material amendment of the Agreement
shall be effective until approved, if so required by the 1940 Act,
by vote of the holders of a majority of the Fund's outstanding voting
securities.
15.This Agreement embodies the entire agreement and understanding between
the parties hereto, and supersedes all prior agreements and understandings
relating to the subject matter hereof. Should any part of this Agreement
be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on and shall inure to the benefit of the
parties hereto and their respective successors.
16.This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of New York.
[signature page to follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
XXXX XXXXX PARTNERS ADJUSTABLE RATE INCOME FUND
By:
Name:
Title:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
Schedule A
Xxxx Xxxxx Partners Adjustable Rate Income Fund
Date:
August 1, 2006
Fee:
The following percentage of the Fund's average daily net assets:
First $1 billion--0.55%
Next $1 billion--0.525%
Next $3 billion--0.50%
Next $5 billion--0.475%
Over $10 billion--0.45%
