Managed High Income Portfolio Inc.
New Management Agreement
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of
August, 2006, by and between Managed High Income Portfolio Inc.
(the "Fund") and Xxxx Xxxxx Partners Fund Advisor, LLC,
a Delaware limited liability company (the "Manager").
WHEREAS, the Fund 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 Fund wishes to retain the Manager to
provide investment advisory, management, and
administrative services to 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 Fund 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 Fund'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 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 Fund'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 Fund 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 directionfrom the Board, the investment program to be
provided hereunder may entailthe investment of all or
substantially all of the assets of the 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 ordealers and the placing of such orders,
subject to applicable law, brokers ordealers 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, as amended
(the "Exchange Act")) to the Fund 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 the 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 the 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, andshall not be
responsible for, the distribution of the shares of the 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 Exchange Act of 1934and 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 principalsor 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 the 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 the Fund from
time to time, and will comply with all other provisions
of the Governing Documents and the Fund's 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 Fund 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 therecords 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 securitiesand 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;
expensesrelating 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 saleunder 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 Fund
shall receive from the 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 servicesof 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 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 the 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 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 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 the 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 ina 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 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 on Schedule A annexed hereto,
provided that it shall have been approved by the Fund'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 until
November 30, 2007. 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 Fund.
This Agreement shall terminate automatically in the event of
its assignment by the Manager and shall not
be assignable by the Fund without the consent of the Manager.
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.
14.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.
15.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:
Title:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
Name:
Title:
Schedule A
Managed High Income Portfolio Inc.
Date:
August 1, 2006
Fee:
The following percentage of the Fund's average daily net
assets: 0.80%
