LIBERTY FLOATING RATE ADVANTAGE FUND
MANAGEMENT AGREEMENT
AGREEMENT dated as of November 1, 2001, between LIBERTY FLOATING RATE ADVANTAGE
FUND, a Massachusetts business trust ("Fund"), and XXXXX XXX & XXXXXXX
INCORPORATED, a Delaware corporation ("Advisor").
In consideration of the promises and covenants herein, the parties agree as
follows:
1. The Advisor will manage the investment of the assets of the Fund in
accordance with its investment policies and will perform the other services
herein set forth, subject to the supervision of the Board of Trustees of
the Trust.
2. In carrying out its investment management obligations, the Advisor shall:
(a) evaluate such economic, statistical and financial information and
undertake such investment research as it shall believe advisable; (b)
purchase and sell securities and other investments for the Fund in
accordance with the procedures approved by the Board of Trustees and (c)
report results to the Board of Trustees of the Trust.
3. The Advisor shall furnish at its expense the following:
(a) office space, supplies, facilities and equipment; (b) executive and
other personnel for managing the affairs of the Fund (including preparing
financial information of the Fund and reports and tax returns required to
be filed with public authorities, but exclusive of those related to
custodial, transfer, dividend and plan agency services, determination of
net asset value and maintenance of records required by Section 31(a) of the
Investment Company Act of 1940, as amended, and the rules thereunder (1940
Act)); and (c) compensation of Trustees who are directors, officers,
partners or employees of the Advisor or its affiliated persons (other than
a registered investment company).
4. The Advisor shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
5. The Fund shall pay the Advisor monthly a fee at the annual rate of 0.45% of
the Average Daily Managed Assets of the Fund.
"Average Daily Managed Assets" of the Fund shall mean the average daily
value of the total assets of the Fund less all accrued liabilities of the
Fund (other than the aggregate amount of any outstanding borrowings
constituting financial leverage).
6. If the operating expenses of the Fund for any fiscal year exceed the most
restrictive applicable expense limitation for any state in which shares are
sold, the Advisor's fee shall be reduced by the excess but not to less than
zero. Operating expenses shall not include brokerage, interest, taxes,
deferred organization expenses and extraordinary expenses, if any. The
Advisor may waive its compensation (and, bear expenses of the Fund) to the
extent that expenses of the Fund exceed any expense limitation the Advisor
declares to be effective.
7. This Agreement shall become effective as of the date of its execution, and
(a) unless otherwise terminated, shall continue until July 31, 2003 and
from year to year thereafter so long as approved annually in accordance
with the 1940 Act; (b) may be terminated without penalty on sixty days'
written notice to the Advisor either by vote of the Board of Trustees of
the Trust or by vote of a majority of the outstanding shares of the Fund;
(c) shall automatically terminate in the event of its assignment; and (d)
may be terminated without penalty by the Advisor on sixty days' written
notice to the Trust.
8. This Agreement may be amended in accordance with the 1940 Act.
9. For the purpose of the Agreement, the terms "vote of a majority of the
outstanding shares", "affiliated person" and "assignment" shall have their
respective meanings defined in the 1940 Act and exemptions and
interpretations issued by the Securities and Exchange Commission under the
1940 Act.
10. In the absence of willful misfeasance, bad faith or gross negligence on the
part of the Advisor, or reckless disregard of its obligations and duties
hereunder, the Advisor shall not be subject to any liability to the Trust
or the Fund, to any shareholder of the Trust or the Fund or to any other
person, firm or organization, for any act or omission in the course of, or
connected with, rendering services hereunder.
LIBERTY FLOATING RATE ADVANTAGE FUND
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Secretary
XXXXX XXX & FARNHAM INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Assistant Secretary
A copy of the document establishing the Trust is filed with the Secretary of The
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of the Fund.
