MANAGEMENT AGREEMENT
Xxxx Xxxxx Partners Fund Advisor, LLC
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of August,
2006, by and between Xxxx Xxxxx Partners Municipal Funds (the "Trust")
and Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware limited liability
company (the "Manager").
WHEREAS, the Trust is registered as a management investment company
underthe 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
aninvestment adviser under the Investment Advisers Act of 1940, as
amended;
WHEREAS, the Trust wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Trust with
respect to the series of the Trust designated in Schedule A annexed
hereto (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 Trust 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 Trust'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 Trust'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 Trust 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 a Fund in one or more investment companies. The
Managerwill 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
dealersmay be selected who also provide brokerage and research services
(asthose terms are defined in Section 28(e) of the Securities Exchange
Actof 1934, as amended (the "Exchange Act")) to the Funds 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 a 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
ofthe 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
exerciseinvestment 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 a 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
retentionof 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
principalunderwriter ofthe 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 ofsecurities between a 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 a 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 Trust with all information and reports reasonably required by
them and reasonably available to the Manager and shall furnish the Fund
with officefacilities, 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
respectto 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
recordsthat 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
underthe 1940 Act for the periods prescribed by Rule 31a-2 under the
0000 Xxx.Xxx 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
otherinsurance 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 Trust or Fund
shall receive from the Trust or 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.
7. As 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 periodfrom 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 YorkStock 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 arisingout of any investment or for any act or omission in
the execution of securities transactions for a 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 ofits 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 Trust or 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 Trust or 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 a 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 Trust'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 suchcontinuance 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 Trust. This
Agreement shall terminate automatically in the event of its assignment
by the Manager and shall not be assignable by the Trust 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
Trust. The undersigned officer of the Trust has executed this
Agreementnot individually, but as an officer under the Trust's
Declaration of Trust and the obligations of this Agreement are not
binding upon any ofthe Trustees, officers or shareholders of the
Trust individually.
14. No 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 madeinvalid 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 hall 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 MUNICIPAL FUNDS
By:
Name:
Title:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
Schedule A
California Money Market Portfolio
Date:
August 1, 2006
Fee:
The following percentage of the Fund's average daily net assets:
First $1 billion--0.45%
Next $1 billion--0.425%
Next $3 billion--0.40%
Next $5 billion--0.375%
Over $10 billion--0.35%
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