INVESTMENT ADVISORY AND ADMINISTRATION CONTRACT
Contract made as of June 22, 1998 between MANAGED HIGH YIELD PLUS FUND
INC., a Maryland corporation ("Fund"), and XXXXXXXX XXXXXXXX ASSET MANAGEMENT
INC. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended ("1934 Act"), and as an
investment adviser under the Investment Advisers Act of 1940, as amended.
WHEREAS the Fund is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as a closed-end, diversified management investment
company, and intends to register shares of its common stock ("Shares") for sale
to the public under the Securities Act of 1933, as amended ("1933 Act"); and
WHEREAS the Fund desires to retain Xxxxxxxx Xxxxxxxx as investment adviser
and administrator to furnish certain administrative, investment advisory and
portfolio management services to the Fund, and Xxxxxxxx Xxxxxxxx is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Xxxxxxxx Xxxxxxxx as investment
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adviser and administrator of the Fund for the period and on the terms set forth
in this Contract. Xxxxxxxx Xxxxxxxx accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. Duties as Investment Adviser.
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(a) Subject to the supervision of the Fund's board of directors ("Board"),
Xxxxxxxx Xxxxxxxx will provide a continuous investment program for the Fund,
including investment research and management with respect to all securities and
investments and cash equivalents in the Fund. Xxxxxxxx Xxxxxxxx will determine
from time to time what securities and other investments will be purchased,
retained or sold by the Fund.
(b) Xxxxxxxx Xxxxxxxx agrees that in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution; provided
that Xxxxxxxx Xxxxxxxx may, in its discretion, use brokers who provide the Fund
with research, analysis, advice and similar services to execute portfolio
transactions on behalf of the Fund, and Xxxxxxxx Xxxxxxxx may pay to those
brokers in return for brokerage and research services a higher commission than
may be charged by other brokers, subject to Xxxxxxxx Xxxxxxxx' determining in
good faith that such commission is reasonable in terms either of the particular
transaction or of the overall responsibility of Xxxxxxxx Xxxxxxxx to the Fund
and its other clients and that the total commissions paid by such Series will be
reasonable in relation to the benefits to the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to Xxxxxxxx
Xxxxxxxx, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder. Whenever
Xxxxxxxx Xxxxxxxx simultaneously places orders to purchase or sell the same
security on behalf of the Fund and one or more other accounts advised by
Xxxxxxxx Xxxxxxxx, such orders will be
allocated as to price and amount among all such accounts in a manner believed to
be equitable to each account. The Fund recognizes that in some cases this
procedure may adversely affect the results obtained for the Fund.
(c) Xxxxxxxx Xxxxxxxx will oversee the maintenance of all books and
records with respect to the securities transactions of the Fund, and will
furnish the Board with such periodic and special reports as the Board reasonably
may request. In compliance with the requirements of Rule 31a-3 under the 1940
Act, Xxxxxxxx Xxxxxxxx hereby agrees that all records which it maintains for the
Fund are the property of the Fund, agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any records which it maintains for the Fund and
which are required to be maintained by Rule 31a-1 under the 1940 Act and further
agrees to surrender promptly to the Fund any records which it maintains for the
Fund upon request by the Fund.
(d) Xxxxxxxx Xxxxxxxx will oversee the computation of the net asset value
and the net income of the Fund as described in the currently effective
registration statement of the Fund under the 1933 Act and the 1940 Act and any
amendments or supplements thereto ("Registration Statement") or as more
frequently requested by the Board.
(e) The Fund hereby authorizes Xxxxxxxx Xxxxxxxx and any entity or person
associated with Xxxxxxxx Xxxxxxxx which is a member of a national securities
exchange to effect any transaction on such exchange for the account of the Fund,
which transaction is permitted by Section 11(a) of the 1934 Act, and the Fund
hereby consents to the retention of compensation by Xxxxxxxx Xxxxxxxx or any
person or entity associated with Xxxxxxxx Xxxxxxxx.
3. Duties as Administrator. Xxxxxxxx Xxxxxxxx will administer the
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affairs of the Fund subject to the supervision of the Board and the following
understandings:
(a) Xxxxxxxx Xxxxxxxx will supervise all aspects of the operations of the
Fund, including oversight of transfer agency, custodial and accounting services,
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for and control of the conduct of the affairs of the Fund.
(b) Xxxxxxxx Xxxxxxxx will provide the Fund with such corporate,
administrative and clerical personnel (including officers of the Fund) and
services as are reasonably deemed necessary or advisable by the Board, including
the maintenance of certain books and records of the Fund.
(c) Xxxxxxxx Xxxxxxxx will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the Fund's
Registration Statement, proxy material, tax returns and required reports to the
Fund's shareholders and the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(d) Xxxxxxxx Xxxxxxxx will provide the Fund with, or obtain for it,
adequate office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
(e) Xxxxxxxx Xxxxxxxx will provide the Board on a regular basis with
economic and investment analyses and reports and make available to the Board
upon request any economic,
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statistical and investment services normally available to institutional or other
customers of Xxxxxxxx Xxxxxxxx.
4. Further Duties. In all matters relating to the performance of this
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Contract, Xxxxxxxx Xxxxxxxx will act in conformity with the Articles of
Incorporation, By-Laws and Registration Statement of the Fund and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. Delegation of Xxxxxxxx Xxxxxxxx' Duties as Investment Adviser and
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Administrator. Xxxxxxxx Xxxxxxxx may enter into one or more contracts ("Sub-
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Advisory or Sub-Administration Contracts") with a sub-adviser or sub-
administrator in which Xxxxxxxx Xxxxxxxx delegates to such sub-adviser or sub-
administrator any or all its duties specified in Paragraphs 2 and 3 of this
Contract, provided that each Sub-Advisory or Sub-Administration Contract imposes
on the sub-adviser or sub-administrator bound thereby all applicable duties and
conditions to which Xxxxxxxx Xxxxxxxx is subject by Paragraphs 2, 3 and 4 of
this Contract, and further provided that each Sub-Advisory or Sub-Administration
Contract meets all requirements of the 1940 Act and rules thereunder.
6. Services Not Exclusive. The services furnished by Xxxxxxxx Xxxxxxxx
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hereunder are not to be deemed exclusive and Xxxxxxxx Xxxxxxxx shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Xxxxxxxx Xxxxxxxx, who may also be
a director, officer or employee of the Fund, to engage in any other business or
to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature.
7. Expenses.
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(a) During the term of this Contract, the Fund will bear all expenses, not
specifically assumed by Xxxxxxxx Xxxxxxxx, incurred in its operations and the
offering of its Shares or any preferred stock.
(b) Expenses borne by the Fund will include but not be limited to the
following (which shall be in addition to the fees payable to and expenses
incurred on behalf of the Fund by Xxxxxxxx Xxxxxxxx under the Contract): (i)
the cost (including brokerage commissions) of securities purchased or sold by
the Fund and any losses incurred in connection therewith; (ii) fees payable to
and expenses incurred on behalf of the Fund by Xxxxxxxx Xxxxxxxx under this
Contract; (iii) organizational and offering expenses of the Fund, whether or not
advanced by Xxxxxxxx Xxxxxxxx; (iv) filing fees and expenses relating to the
registrations and qualification of the Fund's shares and the Fund under federal
and/or state securities laws and maintaining such registration and
qualifications; (v) fees and salaries payable to the Fund's directors and
officers who are not interested persons of the Fund or Xxxxxxxx Xxxxxxxx; (vi)
all expenses incurred in connection with the Fund's directors' services,
including travel expenses; (vii) taxes (including any income or franchise taxes)
and governmental fees; (viii) costs of any liability, uncollectible items of
deposit and other insurance and fidelity bonds; (ix) any costs, expenses or
losses arising out of a liability of or claim for damages or other relief
asserted against the Fund for violation of any law; (x) legal,
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accounting and auditing expenses, including legal fees of special counsel for
those directors of the Fund who are not interested persons of the Fund; (xi)
charges of custodians, transfer agents and other agents (including any lending
agent); (xii) costs of preparing share certificates; (xiii) expenses of setting
in type and printing prospectuses and supplements thereto, statements of
additional information and supplements thereto, reports and proxy materials for
existing shareholders; (xiv) costs of mailing prospectuses and supplements
thereto, statements of additional information and supplements thereto, reports
and proxy materials to existing shareholders; (xv) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Fund is a party and the expenses the Fund may incur as
a result of its legal obligation to provide indemnification to its officers,
directors, agents and shareholders) incurred by the Fund; (xvi) fees, voluntary
assessments and other expenses incurred in connection with membership in
investment company organizations; (xvii) the cost of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xviii) the cost of investment company literature and other
publications provided by the Fund to its directors and officers; (xix) costs of
mailing, stationery and communications equipment; (xx) expenses incident to any
dividend reinvestment plan; (xxi) charges and expenses of any outside pricing
service used to value portfolio securities; (xxii) interest on borrowings of the
Fund; (xxiii) fees and expenses of listing and maintaining any listing of the
Fund's Shares on any national securities exchange; and (xxiv) costs and expenses
(including rating agency fees) associated with the issuance of any preferred
stock.
(c) Xxxxxxxx Xxxxxxxx will assume the cost of any compensation for
services provided to the Fund received by the officers of the Fund and by those
directors who are interested persons of the Fund.
(d) The payment or assumption by Xxxxxxxx Xxxxxxxx of any expenses of the
Fund that Xxxxxxxx Xxxxxxxx is not required by this Contract to pay or assume
shall not obligate Xxxxxxxx Xxxxxxxx to pay or assume the same or any similar
expense of the Fund on any subsequent occasion.
8. Compensation.
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(a) For the services provided and the expenses assumed pursuant to this
Contract, the Fund will pay to Xxxxxxxx Xxxxxxxx a fee, computed weekly and paid
monthly, at an annual rate of 0.70% of the Fund's average weekly total assets
minus liabilities other than the Fund's aggregate indebtedness constituting
leverage.
(b) The fee shall be computed weekly and paid monthly to Xxxxxxxx Xxxxxxxx
on or before the first business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective day to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. Limitation of Liability of Xxxxxxxx Xxxxxxxx. Xxxxxxxx Xxxxxxxx and
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its delegates, including any Sub-Adviser or Sub-Administrator to the Fund, shall
not be liable for any error of
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judgment or mistake of law or for any loss suffered by the Fund or any of its
shareholders, in connection with the matters to which this Contract relates,
except to the extent that such a loss results 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 Contract. Any
person, even though also an officer, director, employee, or agent of Xxxxxxxx
Xxxxxxxx, who may be or become an officer, director, employee or agent of the
Fund shall be deemed, when rendering services to the Fund or acting with respect
to any business of the Fund, to be rendering such service to or acting solely
for the Fund and not as an officer, director, employee, or agent or one under
the control or direction of Xxxxxxxx Xxxxxxxx even though paid by it.
10. Duration and Termination.
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(a) This Contract shall become effective upon the date hereinabove written
provided that, this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of those directors of the Fund who are not
parties to this Contract or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Fund's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the its effective date. Thereafter, if
not terminated, this Contract shall continue automatically for successive
periods of twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of those directors of the
Fund who are not parties to this Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Fund.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund on sixty days' written
notice to Xxxxxxxx Xxxxxxxx or by Xxxxxxxx Xxxxxxxx at any time, without the
payment of any penalty, on sixty days' written notice to the Fund. This
Contract will automatically terminate in the event of its assignment.
11. Amendment of this Contract. No provision of this Contract may be
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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 amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities.
12. Governing Law. This Contract shall be construed in accordance with
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the laws of the State of Delaware, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent
that the applicable laws of the State of Delaware conflict with the applicable
provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. The captions in this Contract are included for
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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 Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby.
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This Contract shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this Contract, the
terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "national
securities exchange," "net assets," "prospectus," "sale," "sell" and "security"
shall have the same meaning as such terms have in the 1940 Act, subject to such
exemption as may be granted by the Securities and Exchange Commission by any
rule, regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is relaxed by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: MANAGED HIGH YIELD PLUS FUND INC.
_____________________________ By _________________________________________
Attest: XXXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
_____________________________ By _________________________________________
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