MASTER PORTFOLIO TRUST
SMASh Series M Hub Fund
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (Agreement) is made this 13th
day of April, 2007, by and between Master Portfolio Trust (the
Trust) and Xxxx Xxxxx Partners Fund Advisor, LLC, a Delaware
limited liability company (the Manager).
WHEREAS, the Trust is a Maryland business trust
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 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 Trusts
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 Funds current
Prospectus and Statement of Additional Information. The
Manager shall determine from time to time what securities and
other investments will be purchased (including, as permitted in
accordance with this paragraph, swap agreements, options and
futures), retained, sold or exchanged by the Fund and what
portion of the assets of the Funds portfolio will be held in
the various securities and other investments in which the Fund
invests, and shall implement those decisions (including the
execution of investment documentation), all subject to the
provisions of the Trusts 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 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 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 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 Managers
authority regarding the execution of the Funds 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. The Manager may execute on behalf of
the Fund certain agreements, instruments and documents in
connection with the services performed by it under this
Agreement. These may include, without limitation, brokerage
agreements, clearing agreements, account documentation, futures
and option agreements, swap agreements, other investment
related agreements, and any other agreements, documents or
instruments the Manager believes are appropriate or desirable
in performing its duties under this Agreement.
(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, investor 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 investors,
(iv) maintaining the Funds existence, and (v) during such
times as beneficial interests are publicly offered, maintaining
the registration and qualification of the Funds beneficial
interests 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 interests in 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, investor 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 Funds 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 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 Funds
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
certificates representing beneficial interests; expenses
relating to the issuing and redemption or repurchase of the
Fund's beneficial interests and servicing investor accounts;
expenses of registering and qualifying the Fund's beneficial
interests 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 distributions to investors in the Fund;
costs of stationery; website costs; costs of meetings of the
Board or any committee thereof, meetings of investors 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 Funds
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. The Fund shall not pay the Manager any fee hereunder.
The Manager acknowledges and agrees that the Fund is an
integral part of separately managed account programs, and that
the Manager will be compensated directly or indirectly by
separately managed account sponsors for services rendered
hereunder. The Manager acknowledges and agrees that such
compensation is sufficient consideration hereunder.
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 Trust or the Fund
contemplated hereby and the partners, investors, 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 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 Managers
policies and procedures as presented to the Board from time to
time.
10. For the purposes of this Agreement, 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 Funds name on
Schedule A annexed hereto, provided that it shall have been
approved by the Trust's Board and by the investors in the Fund
in accordance with the requirements of the 1940 Act and, unless
sooner terminated as provided herein, will continue in effect
for an initial two year term. 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 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 Agreement not
individually, but as an officer under the Trusts Declaration
of Trust and the obligations of this Agreement are not binding
upon any of the Trustees, officers or investors of or in 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
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.
MASTER PORTFOLIO TRUST
By:
Name:
Title:
XXXX XXXXX PARTNERS FUND
ADVISOR, LLC
By:
Name:
Title:
Schedule A
SMASh SERIES M PORTFOLIO
Date: April 13, 2007
8
BUSDOCS/1636579.2
BUSDOCS/1636579.2
