Western Asset Managed Municipals Portfolio Inc
Sub-Item 77Q
MANAGEMENT AGREEMENT
Xxxx Xxxxx Partners Fund Advisor, LLC
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of August,
2006, by and between Managed Municipals Portfolio 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.
6. No 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
"net 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.
MANAGED MUNICIPALS PORTFOLIO INC.
By:
Name:
Title:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
Schedule A
Managed Municipals Portfolio Inc.
Date:
August 1, 2006
Fee:
The following percentage of the Fund's average daily net assets: 0.55%
