ECLIPSE FUNDS INC. AMENDED AND RESTATED MANAGEMENT AGREEMENT
AMENDED
AND RESTATED MANAGEMENT AGREEMENT
The
Management Agreement, made between Eclipse Funds Inc., a Maryland corporation
(the “Company”), on November 21, 1997, as amended, is hereby amended and
restated as of March 30, 2005, on behalf of its series as set forth on Schedule
A (each, a “Fund,” and collectively, the “Funds”) and New York Life Investment
Management LLC, a Delaware limited liability company (the
“Manager”).
W
I T N E
S S E T H:
WHEREAS,
the Company is an open-end management investment company registered under
the
Investment Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS,
the shares of common stock of the Company (the “Shares”) are divided into
separate series, each of which is established by resolution of the Board
of
Directors of the Company and the Directors may from time to time terminate
such
series or establish and terminate additional series; and
WHEREAS,
the Company desires to retain the Manager to render investment advisory and
related administrative services to the Funds, and the Manager is willing
to
render such services on the terms and conditions hereinafter set forth;
and
WHEREAS,
the Company entered into (1) a Management Agreement between Mainstay
Institutional Funds Inc., on behalf of the Intermediate Term Bond Fund, All
Cap
Growth Fund, Indexed Bond Fund, S&P 500 Index Fund, Cash Reserves Fund,
Asset Manager Fund, Short Term Bond Fund and All Cap Value Fund and MainStay
Management, Inc. dated November 21, 1997; (2) an Amendment to the Management
Agreement dated October 1, 1999, (3) a Management Agreement on March 31,
2004 by
and between the Company and the Manager on behalf of the Floating Rate Fund,
(4)
a Management Agreement on February 23, 2005 by and between the Company and
the
Manager on behalf of the Conservative Allocation Fund, Growth Allocation
Fund,
Moderate Allocation Fund and Moderate Growth Allocation Fund, and a Management
Agreement on June 29, 2005 between the Company and the Manager on behalf
of the
Large Cap Opportunity Fund (collectively, the “Current Management Agreements”);
and
WHEREAS,
the Management Agreement dated October 21, 1997 was amended effective October
1,
1999 to reflect the conversion of MMI from a corporation to a limited liability
company under Delaware law and to replace MMI with MainStay Management LLC
(“MM
LLC”); and
WHEREAS,
pursuant to a Substitution Agreement dated January 2, 2001 by and between
MM LLC
and the Manager, the Manager assumed all the interests, rights and
responsibilities of MM LLC under the Management Agreement dated October 21,
1997, as further amended effective October 1, 1999, and agreed to perform
all of
MM LLC’s duties and responsibilities under such Agreement; and
WHEREAS,
each Fund desires to retain the Manager to render investment advisory and
related administrative services to the Fund, and the Manager is willing to
render such services on the terms and conditions hereinafter set forth;
and
WHEREAS,
this Agreement amends and restates, in their entirety, the Current Management
Agreements, and any amendments thereto, in order to combine the Current
Management Agreements into a single Amended and Restated Management Agreement
and to make certain other ministerial changes designed to facilitate the
administration of this Agreement;
NOW,
THEREFORE, the parties agree as follows:
I. Appointment.
The Company hereby appoints New York Life Investment Management LLC to act
as
Manager to the Funds for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
II. Duties
as
Manager. Subject to the supervision of the Directors of the Company, the
Manager
shall administer each Fund’s business affairs and manage the investment
operations of the Fund and the composition of the portfolio of the Fund,
including the purchase, retention and disposition of securities therein,
in
accordance with the investment objectives, policies and restrictions of the
Fund, as stated in the currently effective Prospectus (as hereinafter defined)
and subject to the following understandings:
A. The
Manager shall (i) furnish the Funds with office facilities; (ii) be responsible
for the financial and accounting records required to be maintained by the
Funds
(excluding those being maintained by the Funds’ Custodian, Transfer Agent except
as to which the Manager has supervisory functions) and other than those being
maintained by the Funds’ subadvisor, if any; and (iii) furnish the Funds with
ordinary clerical, bookkeeping and recordkeeping services at such office
facilities.
B. The
Manager shall provide supervision of each Fund’s investments and determine from
time to time what investments or securities will be purchased, retained,
sold or
lent by the Fund, and what portion of the Fund’s assets will be invested or held
uninvested as cash.
C. The
Manager shall use its best judgment in the performance of its duties under
this
Agreement.
D. The
Manager, in the performance of its duties and obligations under this Agreement,
shall act in conformity with the Articles of Incorporation, By-Laws and
Prospectus (each as hereinafter defined) of the Company and with the
instructions and directions of the Directors of the Company and will conform
to
and comply with the requirements of the 1940 Act and all other applicable
federal and state laws and regulations.
E. The
Manager, and any subadvisor to whom such authority has been delegated, shall
determine the securities to be purchased or sold by the Funds and will place
orders pursuant to its determination with or through such persons, brokers
or
dealers (including NYLIFE Securities Inc.) in conformity with the policy
with
respect to brokerage as set forth in the Company’s Registration Statement and
Prospectus (each as hereinafter defined) or as the Directors may direct from
time to time. It is recognized that, in providing the Funds with investment
supervision or the placing of orders for portfolio transactions, the Manager
or
any subadvisor will give primary consideration to securing the most favorable
price and efficient execution. Consistent with this policy, the Manager or
any
subadvisor may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect
or
be a party to any such transaction or other transactions to which other clients
of the Manager or any subadvisor may be a party. It is understood that neither
the Funds, the Company nor the Manager or any subadvisor has adopted a formula
for allocation of the Funds’ investment transaction business. It is also
understood that it is desirable for the Funds that the Manager or any subadvisor
have access to supplemental investment and market research and security and
economic analyses provided by certain brokers who may execute brokerage
transactions at a higher cost to the Funds than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price
and
efficient execution. Therefore, the Manager or any subadvisor is authorized
to
place orders for the purchase and sale of securities for the Funds with such
certain brokers, subject to review by the Company’s Directors from time to time
with respect to the extent and continuation of this practice. It is understood
that the services provided by such brokers may be useful to the Manager or
any
subadvisor in connection with its services to other clients.
On
occasions when the Manager or any subadvisor deems the purchase or sale of
a
security to be in the best interest of the Funds as well as other clients,
the
Manager or any subadvisor, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so sold or purchased in order to obtain the most favorable price or
lower
brokerage commissions and efficient execution. In such event, allocation
of the
securities so purchased or sold, as well as expenses incurred in the
transaction, will be made by the Manager or any subadvisor in the manner
it
considers to be the most equitable and consistent with its fiduciary obligations
to the Funds and to such other clients.
F. The
Manager shall maintain all books and records with respect to the Funds’
securities transactions required by sub-paragraphs (b)(5), (6), (9) and (10)
and
paragraph (f) of Rule 31a-1 under the 1940 Act and any other books and records
required to be maintained by it under the 1940 Act and the Rules thereunder
and
shall render to the Company’s Directors such periodic and special reports as the
Directors may reasonably request.
G. The
Manager shall provide the Company’s Custodian on each business day with
information relating to the execution of all portfolio transactions pursuant
to
standing instructions.
H. With
respect to any or all series of the Company, including the Funds, the Manager
may enter into one or more contracts (“Subadvisory” or “Sub-Administration
Contract”) with a subadvisor or sub-administrator in which the Manager delegates
to such subadvisor or sub-administrator any or all its duties specified in
this
Agreement, provided that the Subadvisory or Sub-Administration Contract meets
all applicable requirements of the 1940 Act and rules thereunder.
III. Manager
Personnel. The Manager shall authorize and permit any of its directors, officers
and employees who may be elected or appointed as Directors or officers of
the
Company to serve in the capacities in which they are elected or appointed.
Services to be furnished by the Manager under this Agreement may be furnished
through the medium of any of such directors, officers, or
employees.
IV. Books
and
Records. The Manager shall keep the Funds’ books and records required to be
maintained by it, pursuant to paragraph 2 hereof. The Manager agrees that
all
records which it maintains for the Funds are the property of the Funds, and
it
will surrender promptly to the Funds any of such records upon the Funds’
request. The Manager further agrees to preserve for the periods prescribed
by
Rule 31a-2 as promulgated by the Securities and Exchange Commission (the
“Commission”) under the 1940 Act any such records as are required to be
maintained by the Manager pursuant to paragraph 2 hereof.
V. Services
Not Exclusive. The services furnished by the Manager hereunder are not to
be
deemed exclusive and the Manager shall be free to furnish similar services
to
others so long as its services under this Agreement are not impaired
thereby.
VI. Documents.
The Company has delivered to the Manager copies of each of the following
documents and will deliver to it all future amendments and supplements, if
any:
A. Articles
of Incorporation of the Company, as amended from time to time, as filed with
the
Department of Assessments and Taxation of the State of Maryland (such Articles
of Incorporation, as in effect on the date hereof and as amended from time
to
time, is herein called the “Articles of Incorporation”);
B. By-Laws
of the Company, as amended from time to time, (such By-Laws, as in effect
on the
date hereof and as amended from time to time, are herein called the
“By-Laws”);
C. Certified
Resolutions of the Directors of the Company authorizing the appointment of
the
Manager and approving the form of this Agreement;
D. Registration
Statement under the 1940 Act and the Securities Act of 1933, as amended,
on Form
N-1A (the “Registration Statement”), as filed with the Commission, relating to
the Funds and the Funds’ Shares and all amendments thereto;
E. Notification
of Registration of the Company under the 1940 Act on Form N-8A as filed with
the
Commission and all amendments thereto; and
F. The
form
of Prospectus and Statement of Additional Information of the Company pursuant
to
which the Funds’ shares are offered for sale to the public (such Prospectus and
Statement of Additional Information, as currently in effect and as amended
or
supplemented from time to time, being herein called collectively the
“Prospectus”).
VII. Expenses.
A. In
connection with the services rendered by the Manager under this Agreement,
the
Manager will bear all of the following expenses:
1. the
salaries and expenses of all personnel of the Company and the Manager, except
the fees and expenses of Directors who are not interested persons of the
Manager
or of the Company; and
2. all
expenses incurred by the Manager in connection with managing the investment
operations of the Funds and administering the ordinary course of the Funds’
business, other than those assumed by the Funds herein;
B. each
Fund
assumes and will pay its expenses, including but not limited to those described
below (where any such category applies to more than one series of the Company,
the Fund shall be liable only for its allocable portion of the
expenses):
1. the
fees
and expenses of Directors who are not interested persons of the Manager or
of
the Company;
2. the
fees
and expenses of the Funds’ custodian which relate to (A) the custodial function
and the recordkeeping connected therewith, (B) the maintenance of the XXX
required accounting records of the Funds not being maintained by the Manager,
(C) the pricing of the Funds’ Shares, including the cost of any pricing service
or services which may be retained pursuant to the authorization of the Directors
of the Company, and (D) for both mail and wire orders, the cashiering function
in connection with the issuance and redemption of the Funds’
Shares;
3. the
fees
and expenses of the Company’s transfer and dividend disbursing agent, which may
be the custodian, which relate to the maintenance of the shareholder
account;
4. the
charges and expenses of legal counsel (including an allocable portion of
the
cost of maintaining an internal legal and compliance department) and independent
accountants for the Company;
5. brokers’
commissions and any issue or transfer taxes chargeable to the Company in
connection with its securities transactions on behalf of the Funds;
6. all
taxes
and business fees payable by the Company or the Funds to federal, state or
other
governmental agencies;
7. the
fees
of any trade association of which the Company may be a member;
8. the
cost
of share certificates representing Fund Shares;
9. the
fees
and expenses involved in registering and maintaining registrations of the
Company and of its Shares with the Commission, registering the Company as
a
broker or dealer and qualifying its Shares under state securities laws,
including the preparation and printing of the Company’s registration statements
and prospectuses for filing under federal and state securities laws for such
purposes;
10. allocable
communications expenses with respect to investor services and all expenses
of
shareholders’ and Directors’ meetings and of preparing, printing and mailing
reports to shareholders in the amount necessary for distribution to the
shareholders;
11. litigation
and indemnification expenses and other extraordinary expenses not incurred
in
the ordinary course of the Company’s business; and
12. any
expenses assumed by the Funds pursuant to a Plan of Distribution adopted
in
conformity with Rule 12b-1, if any, under the 1940 Act.
VIII. Organization
Expenses. The Funds hereby agree to reimburse the Manager for the organization
expenses of, and the expenses incurred in connection with, the initial offering
of Shares of the Fund.
IX. Compensation.
For the services provided and the facilities furnished pursuant to this
Agreement, the Company will pay to the Manager as full compensation therefor
a
fee at the annual rate for each Fund as set forth on Schedule A. This fee
will
be computed daily and will be paid to the Manager monthly. This fee will
be
chargeable only to the applicable Fund, and no other series of the Company
shall
be liable for the fee due and payable hereunder. The Funds shall not be liable
for any expense of any other series of the Company.
X. Standard
of Care. Subject to the applicable law, the Manager shall not be liable for
any
error of judgment or for any loss suffered by the Funds in connection with
the
matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance
of its
duties or from reckless disregard by it of its obligations and duties under
this
Agreement.
XI. Duration
and Termination. This Agreement shall continue in effect with respect to
the
Funds for a period of more than two years from the date hereof only so long
as
such continuance is specifically approved at least annually with respect
to the
Funds in conformity with the requirements of the 1940 Act and the Rules
thereunder; provided, however, that this Agreement may be terminated with
respect to the Funds at any time, without the payment of any penalty, by
the
Directors of the Company or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Funds, or by the Manager at
any
time, without the payment of any penalty, on not more than 60 days’ nor less
than 30 days’ written notice to the other party. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940
Act).
XII. Other
Business. Nothing in this Agreement shall limit or restrict the right of
any of
the Manager’s directors, officers, or employees who may also be a Director,
officer, or employee of the Company to engage in any other business or to
devote
his time and attention in part to the management or other aspects of any
business, whether of a similar or dissimilar nature, nor limit or restrict
the
Manager’s right to engage in any other business or to render services of any
kind to any other corporation, trust, firm, individual or
association.
XIII. Independent
Contractor. Except as otherwise provided herein or authorized by the Directors
of the Company from time to time, the Manager shall for all purposes herein
be
deemed to be an independent contractor and shall have no authority to act
for or
represent the Funds or the Company in any way or otherwise be deemed an agent
of
the Funds or the Company.
XIV. Company
Materials. During the term of this Agreement, the Company agrees to furnish
the
Manager at its principal office all prospectuses, proxy statements, reports
to
shareholders, sales literature or other material prepared for distribution
to
shareholders of the Funds or to the public, which refer to the Manager in
any
way, prior to use thereof and, not to use such material if the Manager
reasonably objects in writing within five business days (or such other time
as
may be mutually agreed) after receipt thereof. In the event of termination
of
this Agreement, the Company will continue to furnish to the Manager copies
of
any of the above-mentioned materials which refer in any way to the Manager.
The
Company shall furnish or otherwise make available to the Manager such other
information relating to the business affairs of the Funds as the Manager
at any
time, or from time to time, reasonably requests in order to discharge its
obligations hereunder.
XV. Amendment.
This Agreement may be amended in writing by mutual consent, but the consent
of
the Funds, if required, must be obtained in conformity with the requirements
of
the 1940 Act and the Rules thereunder.
XVI. Notice.
Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered
mail,
postage prepaid, (1) to the Manager at NYLIM Center, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000; or (2) to the Company at NYLIM Center, 000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
XVII. Governing
Law. This Agreement shall be governed by and construed in accordance with
the
laws of the State of New York.
XVIII. Limitation
of Liability of the Company and the Shareholders. It is understood and expressly
stipulated that none of the Directors, officers, agents or shareholders of
the
Company shall be personally liable hereunder. The name “Eclipse Funds Inc.” is
the designation of the Company for the time being under the Articles of
Incorporation and all persons dealing with the Company must look solely to
the
property of the Company for the enforcement of any claims against the Company,
as neither the Directors, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Company. No series
of
the Company shall be liable for any claims against any other series of the
Company.
XIX. Use
of
Name. The Funds may use any name including the word “Eclipse” or “MainStay” only
for so long as this Agreement or any other agreement between the Manager
or any
other affiliate of New York Life Insurance Company and the Company or any
extension, renewal or amendment thereof remains in effect, including any
similar
agreement with any organization which shall have succeeded to the Manager’s
business as investment adviser. At such time as such an agreement shall no
longer be in effect, the Funds will (to the extent that it lawfully can)
cease
to use such name or any other name indicting that it is advised by or otherwise
connected with the Manager or any organization which shall have so succeeded
to
its business.
XX. Miscellaneous.
The captions in this Agreement are included for convenience of reference
only
and in no way define or delimit any of the provisions hereof or otherwise
affect
their construction or effect. If any provision of this Agreement shall be
held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. As used in this Agreement,
terms shall have the same meaning as such terms have in the 1940 Act. Where
the
effect of a requirement of the federal securities laws reflected in any
provision of this Agreement is made less restrictive by a rule, regulation
or
order of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation
or
order. This Agreement may be signed in counterpart.
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
by their officers designated below as of the 30th
day of
March, 2005.
ECLIPSE
FUNDS INC., on behalf of
each
series listed on Schedule A
By: /s/
Xxxx
X. Xxxxxxxxx
Name:
Xxxx X. Xxxxxxxxx
Title:
Chief Executive Officer
NEW
YORK
LIFE INVESTMENT MANAGEMENT LLC
By: /s/
Xxxxxxxxxxx X. Xxxxx
Name:
Xxxxxxxxxxx X. Xxxxx
Title:
Executive Vice President
-
-
SCHEDULE
A
(as
of
March 30, 2005)
|
Fund
|
Annual
Rate1
|
|
All
Cap Growth Fund
|
0.85%
|
|
All
Cap Value Fund
|
0.85%
|
|
Asset
Manager Fund
|
0.65%
|
|
Cash
Reserves Fund
|
0.50%
|
|
Conservative
Allocation Fund
|
0.00%*
|
|
Floating
Rate Fund
|
0.60%
|
|
Growth
Allocation Fund
|
0.00%*
|
|
Indexed
Bond Fund
|
0.50%2
|
|
S&P
500 Index Fund
|
0.50%3
|
|
Intermediate
Term Bond Fund
|
0.75%
|
|
Moderate
Growth Allocation Fund
|
0.00%*
|
|
Moderate
Allocation Fund
|
0.00%*
|
|
Short
Term Bond Fund
|
0.60%
|
1 Of
each
Fund’s average daily net assets.
|
2
|
The
Manager has agreed to a fee waiver such that the management fee
shall be
0.40% through December 31, 2005.
|
|
3
|
The
Manager has agreed to a fee waiver such that the management fee
shall be
0.30% through December 31, 2005.
|
*
The
Manager will receive no fee from the Fund, although the parties acknowledge
that
the Manager or its affiliates shall receive compensation from other registered
investment companies, including other series of the Company, in connection
with
assets of the Fund that are invested in such investment companies.
