MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of December,
2005, by and between Managed High Income Portfolio 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 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 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 Fund's Board members and officers with respect thereto.
0.Xx 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.
0.Xx 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
substantially all 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 of termination, 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 for 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 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 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.
00.Xx 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.
MANAGED HIGH INCOME PORTFOLIO INC.
By:_______________________________
Name: R. Xxx Xxxxxx
Title: Chairman
XXXXX XXXXXX FUND MANAGEMENT LLC
By:_______________________________
Name: Xxxxxx Xxxxxxx
Title: Director
Schedule A
Fee:
The following percentage of the Fund's average daily net assets:
0.80
