INVESTMENT ADVISORY AGREEMENT
April 11, 2003
Credit Suisse Asset Management, LLC
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Credit Suisse Institutional High Yield Fund, Inc. (the
"Fund"), a corporation organized and existing under the laws of the State of
Maryland, herewith confirms its agreement with Credit Suisse Asset Management,
LLC (the "Adviser") as follows:
1. Investment Description; Appointment
-----------------------------------
The Fund desires to employ the capital of the Fund by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in its Articles of Incorporation, as may be amended from
time to time, and in the Fund's Prospectus(es) and Statement(s) of Additional
Information as from time to time in effect (the "Prospectus" and "SAI,"
respectively), and in such manner and to such extent as may from time to time be
approved by the Board of Directors of the Fund. Copies of the Fund's Prospectus
and SAI have been or will be submitted to the Adviser. The Fund desires to
employ and hereby appoints the Adviser to act as investment adviser to the Fund.
The Adviser accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser
------------------------------
Subject to the supervision and direction of the Board of
Directors of the Fund, the Adviser will (a) act in strict conformity with the
Fund's Articles of Incorporation, the Investment Company Act of 1940 (the "1940
Act") and the Investment Advisers Act of 1940, as the same may from time to time
be amended (the "Advisers Act"), (b) manage the Fund's assets in accordance with
the Fund's investment objective and policies as stated in the Fund's Prospectus
and SAI, (c) make investment decisions for the Fund, (d) place purchase and sale
orders for securities on behalf of the Fund, (e) exercise voting rights in
respect of portfolio securities and other investments for the Fund, and (f)
monitor and evaluate the services provided by the Fund's investment
sub-adviser(s), if any, under the terms of the applicable investment
sub-advisory agreement. In providing those services, the Adviser will provide
investment research and supervision of the Fund's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Adviser will furnish the
Fund with whatever statistical information the Fund may reasonably request with
respect to the securities that the Fund may hold or contemplate purchasing.
Subject to the approval of the Board of Directors of the Fund
and, where required by law, the Fund's shareholders, the Adviser may engage an
investment sub-adviser or sub-
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advisers to provide advisory services in respect of the Fund and may delegate to
such investment sub-adviser(s) the responsibilities described in subparagraphs
(b), (c), (d) and (e) above. In the event that an investment sub-adviser's
engagement has been terminated, the Adviser shall be responsible for furnishing
the Fund with the services required to be performed by such investment
sub-adviser(s) under the applicable investment sub-advisory agreement(s) or
arranging for a successor investment sub-adviser(s) to provide such services on
terms and conditions acceptable to the Fund and the Fund's Board of Directors
and subject to the requirements of the 1940 Act.
3. Brokerage
---------
In executing transactions for the Fund, selecting brokers or
dealers and negotiating any brokerage commission rates, the Adviser will use its
best efforts to seek the best overall terms available. In assessing the best
overall terms available for any portfolio transaction, the Adviser will consider
all factors it deems relevant including, but not limited to, breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, the Adviser may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as the same may from time to time be amended) provided to the Fund and/or other
accounts over which the Adviser or an affiliate exercises investment discretion.
4. Information Provided to the Fund
--------------------------------
The Adviser will keep the Fund informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the Fund
from time to time with whatever information the Adviser believes is appropriate
for this purpose.
5. Disclosure Regarding the Adviser
--------------------------------
(a) The Adviser has reviewed the disclosure about the Adviser
contained in the Fund's registration statement and represents and warrants that,
with respect to such disclosure about the Adviser or information related,
directly or indirectly, to the Adviser, such registration statement contains, as
of the date hereof, no untrue statement of any material fact and does not omit
any statement of a material fact which is required to be stated therein or
necessary to make the statements contained therein not misleading.
(b) The Adviser agrees to notify the Fund promptly of (i) any
statement about the Adviser contained in the Fund's registration statement that
becomes untrue in any material respect, (ii) any omission of a material fact
about the Adviser in the Fund's registration statement which is required to be
stated therein or necessary to make the statements contained therein not
misleading, (iii) any reorganization or change in the Adviser, including any
change in its ownership or key employees, or (iv) any change in the membership
of the Adviser, as long as the Adviser is a partnership.
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(c) Prior to the Fund or any affiliated person (as defined in
the 1940 Act, an "Affiliate") of the Fund using or distributing sales literature
or other promotional material referring to the Adviser ("Promotional Material"),
the Fund shall forward such material to the Adviser and shall allow the Adviser
reasonable time to review the material. The Adviser will not act unreasonably in
its review of Promotional Material and the Fund will use all reasonable efforts
to ensure that all Promotional Material used or distributed by or on behalf of
the Fund will comply with the requirements of the Advisers Act, the 1940 Act and
the rules and regulations promulgated thereunder.
(d) The Adviser has supplied the Fund copies of its Form ADV
with all exhibits and attachments thereto and will hereinafter supply the Fund,
promptly upon preparation thereof, copies of all amendments or restatements of
such document.
6. Compliance
----------
(a) The Adviser agrees that it shall promptly notify the Fund
(i) in the event that the SEC or any other regulatory authority has censured its
activities, functions or operations; suspended or revoked its registration as an
investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions, (ii) in the event that there is a change in the
Adviser, financial or otherwise, that adversely affects its ability to perform
services under this Agreement or (iii) upon having a reasonable basis for
believing that, as a result of the Adviser's investing the Fund's assets, the
Fund's investment portfolio has ceased to adhere to the Fund's investment
objectives, policies and restrictions as stated in the Prospectus or SAI or is
otherwise in violation of applicable law.
(b) The Fund agrees that it shall promptly notify the Adviser
in the event that the SEC has censured the Fund; placed limitations upon any of
its activities, functions or operations; or has commenced proceedings or an
investigation that may result in any of these actions.
(c) The Fund shall be given access to the records of the
Adviser at reasonable times solely for the purpose of monitoring compliance with
the terms of this Agreement and the rules and regulations applicable to the
Adviser relating to its providing investment advisory services to the Fund,
including without limitation records relating to trading by employees of the
Adviser for their own accounts and on behalf of other clients. The Adviser
agrees to cooperate with the Fund and its representatives in connection with any
such monitoring efforts.
7. Books and Records
-----------------
(a) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which 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 request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act and to preserve the
records required by Rule 204-2 under the Advisers Act for the period specified
therein.
(b) The Adviser agrees on behalf of itself and its employees
to treat confidentially and as proprietary information of the Fund all records
and other information
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relative to the Fund and prior, present or potential shareholders and not to use
such records and information for any purpose other than performance of its
responsibilities and duties hereunder except after prior notification to and
approval in writing of the Fund, which approval shall not be unreasonably
withheld and may not be withheld where the Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply or when requested to divulge
such information by duly constituted authorities.
(c) The Adviser hereby agrees to furnish to regulatory
authorities having the requisite authority any information or reports in
connection with services that the Adviser renders pursuant to this Agreement
which may be requested in order to ascertain whether the operations of the Fund
are being conducted in a manner consistent with applicable laws and regulations.
8. Standard of Care
----------------
The Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Adviser
against any liability to the Fund or to shareholders of the Fund to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or by reason of
the Adviser's reckless disregard of its obligations and duties under this
Agreement.
9. Compensation
------------
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Adviser an annual fee calculated at an annual
rate of 0.70% of the Fund's average daily net assets. The fee for the period
from the date of this Agreement to the end of the calendar year shall be
prorated according to the proportion that such period bears to the full yearly
period. Upon any termination of this Agreement before the end of a year, the fee
for such part of that year shall be prorated according to the proportion that
such period bears to the full yearly period and shall be payable upon the date
of termination of this Agreement. For the purpose of determining fees payable to
the Adviser, the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Fund's Prospectus or SAI.
10. Expenses
--------
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement, including the fees payable to
any investment sub-adviser engaged pursuant to paragraph 2 of this Agreement.
The Fund will bear its proportionate share of certain other expenses to be
incurred in its operation, including: investment advisory and administration
fees; taxes, interest, brokerage fees and commissions, if any; fees of Directors
of the Fund who are not officers, directors, or employees of the Adviser or any
of its affiliates; fees of any pricing service employed to value shares of the
Fund; Securities and Exchange Commission fees and state blue sky qualification
fees; charges of custodians and transfer and dividend disbursing agents; the
Fund's proportionate share of insurance premiums; outside auditing and legal
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expenses; costs of maintenance of the Fund's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Fund and of the officers or Board of Directors of the Fund; and any
extraordinary expenses.
The Fund will be responsible for nonrecurring expenses which
may arise, including costs of litigation to which the Fund is a party and of
indemnifying officers and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
11. Services to Other Companies or Accounts
---------------------------------------
The Fund understands that the Adviser now acts, will continue
to act and may act in the future as investment adviser to fiduciary and other
managed accounts and to one or more other investment companies or series of
investment companies, and the Fund has no objection to the Adviser so acting,
provided that whenever the Fund and one or more other accounts or investment
companies or portfolios advised by the Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each entity. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Fund understands that the
persons employed by the Adviser to assist in the performance of the Adviser's
duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of the Adviser
or any affiliate of the Adviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature, provided that
doing so does not adversely affect the ability of the Adviser to perform its
services under this Agreement.
12. Term of Agreement
-----------------
This Agreement shall continue for an initial two-year period
commencing on the date first written above, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or (b) a vote of a "majority" (as defined in the 0000 Xxx) of the Fund's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Directors who are not "interested
persons" (as defined in said Act) of any party to this Agreement, by vote cast
in person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on 60 days' written notice, by the
Board of Directors of the Fund or by vote of holders of a majority of the Fund's
shares, or upon 90 days' written notice, by the Adviser. This Agreement will
also terminate automatically in the event of its assignment (as defined in said
Act).
13. Representations by the Parties
------------------------------
(a) The Adviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act, a duly registered
investment adviser in any and all states of the
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United States in which the Adviser is required to be so registered and has
obtained all necessary licenses and approvals in order to perform the services
provided in this Agreement. The Adviser covenants to maintain all necessary
registrations, licenses and approvals in effect during the term of this
Agreement.
(b) The Adviser represents that it has read and understands
the Prospectus and SAI and warrants that in investing the Fund's assets it will
use all reasonable efforts to adhere to the Fund's investment objectives,
policies and restrictions contained therein.
(c) The Adviser represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1 under the 1940 Act and will provide the
Fund with any amendments to such Code and will provide any certifications
required by Rule 17j-1.
(d) The Fund represents that a copy of its Articles of
Incorporation, dated July 31, 1998, together with all amendments thereto, is on
file in the Department of Assessments and Taxation of the State of Maryland.
14. Miscellaneous
-------------
The Fund recognizes that directors, officers and employees of
the Adviser may from time to time serve as directors, trustees, officers and
employees of corporations and business trusts (including other investment
companies) and that such other corporations and business trusts may include the
name "CS", "CSFB", "CSAM" or "Credit Suisse" (or any combination thereof) as
part of their names, and that the Adviser or its affiliates may enter into
advisory or other agreements with such other corporations or business trusts. If
the Adviser ceases to act as the investment adviser of the Fund's shares, the
Fund agrees that, at the Adviser's request, the Fund's license to use the words
"CS", "CSFB", "CSAM" or "Credit Suisse" (or any combination thereof) will
terminate and that the Fund will take all necessary action to change the name of
the Fund to names not including the words "CS", "CSFB", "CSAM" or "Credit
Suisse" (or any combination thereof).
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
CREDIT SUISSE INSTITUTIONAL HIGH YIELD FUND, INC.
By: /s/Xxx Xxxxxx
--------------------------------
Name: Xxx Xxxxxx
------------------------------
Title: Vice President and Secretary
-----------------------------
Accepted:
CREDIT SUISSE ASSET MANAGEMENT, LLC
By: /s/Xxx Xxxxxx
-----------------------
Name: Xxx Xxxxxx
---------------------
Title: Managing Director
---------------------
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