LMP Real Estate Income Fund Inc.
MANAGEMENT AGREEMENT
Xxxx Xxxxx Partners Fund Advisor, LLC
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
August, 2006, by and between Real Estate Income Fund Inc. (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 Directors
(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 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 Articles of Incorporation 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 the 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 of 1934 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 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 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 "managed assets"
shall be determined as provided in the Fund's 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 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.
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.
14.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.
15.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.
REAL ESTATE INCOME FUND INC.
By:
Name:
Title:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
Schedule A
Real Estate Income Fund Inc.
Date:
August 1, 2006
Fee:
0.90% of the sum of the Fund's average daily net assets attributable to
the Fund's outstanding common shares, plus average daily assets
attributable to any of the Fund's preferred shares that may be outstanding,
plus the principal amount of any commercial paper or notes issued by the Fund
and any borrowings by the Fund ("Managed Assets"). For the purpose of
determining fees payable to the Manager, the value of the Fund's Managed
Assets shall be computed in the manner specified in the Fund's
Registration Statement on Form N-2, as amended from time to time.
