MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this
1st day of December, 2005, by and between Zenix Income Fund Inc.,
a Maryland Corporation (the "Corporation") and Xxxxx Xxxxxx Fund
Management LLC, a Delaware limited liability company (the "Manager").
WHEREAS, the Corporation 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 Corporation wishes to retain the Manager to provide
investment advisory, management, and administrative services to the
Corporation (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 Corporation 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 Corporation'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 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 Corporation'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
Corporation 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 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) 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
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
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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 Securities Exchange Act of 1934, as
amended, 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 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 Corporation 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 employeesof 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 Corporation
or Fund shall receive from the Corporation 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
substantiallyall 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 oftermination, 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 or 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 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
Corporation 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 Corporation 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
Corporation'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 for two years from the above
written date. 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 memberswho are not interested persons of any
party to this Agreement, by vote castin 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 Corporation. This
Agreement shall terminate automatically in the event of its assignment
by the Manager and shall not be assignable by the Corporation 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 Corporation.
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.
ZENIX INCOME FUND INC.
By:_______________________________
Name: R. Xxx Xxxxxx
Title: Chairman
