650 HIGH INCOME FUND INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of August 1, 2010 between 650 High Income Fund
Inc. (the "Fund"), a Maryland corporation, and Six50 Capital Management LLC
(the "Adviser"), a Delaware limited liability corporation.
WHEREAS, the Fund is engaged in business as a non-diversified,
closed-end management investment company registered under the Investment Company
Act of 1940 (collectively, with the rules and regulations promulgated
thereunder,the "1940 Act");
WHEREAS, the Adviser is a registered investment adviser under the
Investment Adviser's Act of 1940, with the rules and regulations promulgated
thereunder;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act
as investment adviser to the Fund with respect to the investment and the
reinvestment of the Fund's assets.
2. Duties and Obligations of the Adviser with Respect to
investments of assets of the Fund:
(a) Subject to the succeeding provisions of this paragraph and
subject to the direction and general control of the Fund's Board of Directors,
the Adviser shall act as investment adviser for and supervise and manage the
investment and reinvestment of the portfolio's assets and in connection
therewith have complete discretion in purchasing and selling securities and
other assets for the Fund and in voting and exercising all other rights
appertaining to such securities and other assets on behalf of the Fund. To
carry out such decisions, the Adviser is hereby authorized, as agent for the
Fund and attorney-in-fact for the Fund's account and at the Fund's risk and
in the Fund's name, to place such orders for the investment and reinvestment
of the Fund's assets.
(b) In the performance of its duties under this Agreement, the
Adviser shall at all times conform to, and act in accordance with, any
requirements imposed by (i) the provisions of the 1940 Act, and of any rules or
regulations in force thereunder; (ii) any other applicable provision of law;
(iii) the provisions of the Articles of Incorporation and By-Laws of the Fund,
as such documents are amended from time to time; (iv) the Fund's Registration
Statement filed with the 1940 Act and the Securities Act of 1933, including the
Prospectus and Statement of Additional Information forming a part thereof
(the "Registration Statement"); and (v) any policies and determinations
established by the Board of Directors of the Fund.
(c) The Adviser shall report to the Fund's Board of Directors at
each meeting thereof all changes in the Fund's portfolio and will also keep the
Fund in touch with important developments affecting the portfolio and, on the
Adviser's initiative, will furnish the Fund from time to time with such
information as the Adviser may believe appropriate for this purpose, whether
concerning the individual entities whose securities are included in the
portfolio, the activities in which such entities engage, Federal income tax
policies applicable to the Fund's investments, or the conditions prevailing in
the financial markets or the economy generally. The Adviser shall also furnish
the Fund with such statistical and analytical information with respect to the
portfolio securities as it may believe appropriate or as the Fund may
reasonably request.
(d) The Adviser may from time to time employ, subcontract with or
otherwise associate itself with entirely at its expense, such persons as it
believes to be particularly fitted to assist it in the execution of its duties
hereunder.
(e) The Adviser will bear all costs and expenses of its partners and
employees and any overhead incurred in connection with its duties hereunder and
shall bear the costs of any salaries or directors' fees of any officers or
directors of the Fund who are affiliated persons (as defined in the Act) of the
Adviser.
(f) The Adviser shall give the Fund the benefit of its best judgment
and effort in rendering services hereunder, but the Adviser shall not be liable
for any act or omission or for any loss sustained by the Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
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
under this Agreement.
(g) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Adviser or any
of its partners, officers, employees or agents from buying, selling or trading
any securities for its or their own accounts or for the accounts of others for
whom it or they may be acting, provided, however, that the Adviser will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
3. Fund Transactions and Brokerage
The Adviser is authorized, for the purchase and sale of the
Fund's portfolio securities, to employ such securities dealers as may, in the
judgment of the Adviser, implement the investment objectives and policies of the
Fund to obtain the best net results taking into account such factors as price,
including dealer spread, the size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities and the firm's
risk in positioning the securities involved. Consistent with these investment
objectives and policies, the Adviser is authorized to direct the execution of
the Fund's portfolio transactions to dealers and brokers furnishing statistical
information or research deemed by the Adviser to be useful or valuable to the
performance of its investment advisory functions for the Fund.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Fund or be in
breach of any obligation owing to the Fund under this Agreement, or otherwise,
solely by reason of its having directed a securities transaction on behalf of
the Fund to a broker-dealer in compliance with the provisions of Section 28(e)
of the Securities Exchange Act of 1934.
4. Compensation of the Adviser
(a) The Fund agrees to pay to the Adviser for all services
rendered a fee computed and payable monthly in an amount equal to 0.50% of the
Fund's average weekly net assets on an annualized basis, for the then-current
fiscal year. For any period less than a month during which this Agreement is in
effect, the fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be. The Adviser
may use any portion of this fee for distribution of Fund shares or for making
servicing payments to organizations whose customers or clients are Fund
shareholders. The Adviser may waive its right to any fee to which it is
entitled hereunder, provided such waiver is delivered to the Fund in writing.
Any reimbursement of expenses to which the Fund may become entitled to pursuant
to paragraph 2(e) hereof, will be paid to the Fund at the same time as the Fund
pays the Adviser hereunder.
(b) For purposes of this Agreement, the average daily net assets of
the Fund shall mean the average daily value of the total assets of the Fund,
minus the accrued liabilities (including accrued expenses) of the Fund. The
average daily net assets of the Fund shall be calculated as set forth in the
current prospectus or pursuant to the procedures adopted by resolutions of the
Fund's Board of Directors for calculating the net asset value of the Fund's
shares or delegating such calculations to third parties.
5. Duration and Termination
(a) This Agreement will become effective on the date hereof and
shall continue in effect until May 31, 2012, and thereafter for successive
twelve-month periods, provided that such continuation is specifically approved
at least annually by (i) the Board of Directors and by a majority of those
directors who are neither party to this Agreement nor, other than by their
service as directors of the Fund, interested persons(as defined in the 1940 Act
and the rules thereunder) of any such person who is party to this Agreement,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by the vote of more than 75% of the outstanding shares of the Fund's
Common Stock. Upon the effectiveness of this Agreement, it shall supersede all
previous agreements between the Adviser and the Fund covering the subject matter
thereof. This Agreement may be terminated at any time, without the payment of
any penalty, (i) by vote of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, or (ii) by a
vote of a majority of the entire Board of Directors, on sixty days' written
notice to the Adviser, or (iii) by the Adviser on sixty days' written notice to
the Fund.
(b) This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by either party and this Agreement shall
terminate automatically in the event of any such transfer, assignment, sale,
hypothecation or pledge by either party. The terms "transfer", "assignment" and
"sale" as used in this paragraph shall have the meanings ascribed thereto by
governing law and in applicable rules or regulations of the Securities and
Exchange Commission.
6. Amendment
This Agreement may not be amended without the approval of the
holders of more than 75% of the Fund's outstanding Common Stock.
7. Notices
Any notice under this Agreement shall be in writing to the other
party at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of the
date actually received or on the fourth day after the postmark if such notice is
mailed first class postage prepaid.
8. Governing Law
This Agreement shall be construed in accordance with the laws of
the State of New York and in accordance with the applicable provisions of the
1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their respective
seals to be hereunto affixed, all as of the day and the year first above
written.
650 HIGH INCOME FUND, INC.
By: __________________________________
Name: Xxxxxx XxXxxxxx
Title: Treasurer
Six50 CAPITAL MANAGEMENT LLC
By: ___________________________________
Name: Xxxxxxxx X. Xxx
Title: President
