INVESTMENT ADVISORY AGREEMENT

       AGREEMENT made as of the 1st day of January 2007, by and between Pacholder High Yield Fund,
Inc., a Maryland corporation (hereinafter called the “Fund”), and J.P. Morgan Investment Management Inc., a
Delaware Corporation (hereinafter called “JPMIM”).

       WHEREAS, the Fund is engaged in business as a diversified, closed-end management investment
company and is registered as such under the Investment Company Act of 1940, as amended (the “1940 Act”);

       WHEREAS, JPMIM is registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the “Advisers Act”), and engages in the business of acting as investment adviser;

       WHEREAS, the Fund has entered into an Investment Advisory Agreement with Pacholder & Company,
LLC (“P&C”) dated as of March 1, 2005 (the “2005 Contract”); and

       WHEREAS, effective as of the close of business on December 31, 2005, P&C is being merged into
JPMIM and, as a result, P&C’s rights and obligations under the 2005 Contract are being transferred to and
assumed by JPMIM (JPMIM, as successor to P&C’s rights and obligations under the 2005 Contract, is
hereinafter the “Adviser”); and

       WHEREAS, the parties wish to enter into a new investment advisory agreement having the same terms
as the 2005 Contract with such ministerial changes as are necessary to convert the contract with P&C into a
contract with JPMIM;

       NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter contained,
the Fund and the Adviser agree as follows:

       1.  Duties and Responsibilities of Adviser.

       A.  Investment Advisory Services.    The Fund hereby retains the Adviser to act as investment manager
of the Fund and, subject to the supervision of the Fund’s Board of Directors, to supervise the investment
activities of the Fund as hereinafter set forth giving due consideration to the policies of the Fund as expressed in
the Fund’s Registration Statement on Form N-2 under the 1940 Act and under the Securities Act of 1933, as
amended, as well as to the factors affecting the status of the Fund as a “regulated investment company” under
the Internal Revenue Code of 1986, as amended. Without limiting the generality of the foregoing, the Adviser:

(i)	shall obtain and evaluate such information and advice relating to the economy, securities
markets and securities as it deems necessary or useful to discharge its duties hereunder;

(ii)	shall continuously manage the assets of the Fund in a manner consistent with the
investment objectives and policies of the Fund;

(iii)	shall determine the securities to be purchased, sold or otherwise disposed of by the Fund
and the timing of such purchases, sales and dispositions; and

(iv)	shall take such further action, including the placing of purchase and sale orders on behalf
of the Fund, as the Adviser shall deem necessary or appropriate. The Adviser shall also furnish
to or place at the disposal of the Fund such of the information, evaluations, analyses and
opinions formulated or obtained by the Adviser in the discharge of its duties as the Fund may,
from time to time, reasonably request.


       B.  Reports to Fund.    The Adviser shall furnish to or place at the disposal of the Fund such
information, reports, evaluations, analyses and opinions related to the Fund’s investments and investment
activities, and the Adviser’s investment outlook and strategy as the Fund may, at any time or from time to time,
reasonably request or as the Adviser may deem helpful to the Fund.

       C.  Fund Personnel.    The Adviser agrees to permit individuals who are officers or employees of the
Adviser to serve (if duly elected or appointed) as officers, directors, members of any committee of directors,
members of any advisory board, or members of any other committee of the Fund, without remuneration from
or other cost to the Fund.

       2.  Allocation of Expenses.

       A.  Expenses Paid by Adviser.    The Adviser shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees of the Fund who are employees of the Adviser
or any corporate affiliate of the Adviser, if any, and provide such office space, facilities and equipment and
maintain such records as required by applicable law or as the Advisor shall reasonably require in the
management of the assets of the Fund. The Adviser shall also bear the cost of telephone service, heat, light,
power and other utilities provided to the Fund.

       B.  Expenses Paid by Fund.    The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund, including without limitation: the charges and expenses of any registrar, any fund administrator, any
fund accountant, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio
securities and other property, and any stock transfer or dividend agent or agents appointed by the Fund; brokers’
commissions and other transaction expenses chargeable to the Fund in connection with portfolio transactions to
which the Fund is a party; all taxes, including securities issuance and transfer taxes, and fees payable by the
Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of
certificates representing shares of the Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the Securities and Exchange Commission and
various states and other jurisdictions (including filing fees and legal fees and disbursements of counsel and the
costs and expenses of preparation, printing (including typesetting) and distributing a prospectus for such
purposes); all expenses of shareholders’ and directors’ meetings and of preparing, printing and mailing proxy
statements and reports to shareholders; fees of directors or members of any advisory board or committee who
are not employees of the Adviser or any corporate affiliate of the Adviser; travel expenses of directors; all
expenses incident to the payment of any dividend reinvestment program; charges and expenses of any outside
service used for pricing of the Fund’s portfolio securities; charges and expenses of legal counsel, including
counsel to the directors of the Fund who are not “interested persons” (as defined in the 1940 Act) of the Fund or
the Adviser, and of independent accountants, in connection with any matter relating to the Fund; membership
dues of industry associations; interest payable on Fund borrowings; fees and expenses incident to the listing of
the Fund’s shares on any stock exchange; postage; insurance premiums on property or personnel (including
officers and directors) of the Fund which inure to its benefit; extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification related thereto); fees and expenses of
counsel, accountants and investment bankers; and all other charges and costs of the Fund’s operation unless
otherwise explicitly provided herein.




       3.  Compensation.

       A.  Fulcrum Fee.   As full compensation for the services provided, facilities furnished and expenses paid
by the Adviser under this Agreement, the Fund agrees to pay the Adviser an annual investment advisory fee,
which increases and decreases proportionately based on the investment performance of the Fund in relation to
the investment record of the Credit Suisse First Boston High Yield Index, Developed Countries Only (the
“Index”). The advisory fee shall be computed and paid monthly as soon as practicable after the end of each
calendar month, as follows:


(i)	If the Fund’s investment performance for the 12 months immediately preceding the end of the
month is equivalent to the investment record of the Index for the same 12-month period, then the
advisory fee shall be computed at the annual rate of 0.90% of the Fund’s average net assets. The
rate at which the advisory fee is computed shall be increased or decreased from the 0.90% fulcrum
fee by 10% of the amount by which the investment performance of the Fund exceeds or is less than
the investment record of the Index, up to a maximum of 1.40% and down to a minimum of 0.40%.
For purposes of calculating the amount of the advisory fee, the Fund’s average net assets shall be
determined by taking the average of all determinations of such net assets during the applicable 12-
month period and the Fund’s net assets shall mean the total assets of the Fund minus accrued
liabilities of the Fund other than the principal amount of any outstanding senior securities
representing indebtedness (within the meaning of Section 18 of the 1940 Act). The investment
performance of the Fund and the investment record of the Index shall be determined in accordance
with the Advisers Act and the rules and regulations promulgated thereunder.

(ii)	The compensation payable to the Adviser after the end of each month shall be equal to the
amount of the annual advisory fee calculated as provided in sub-paragraph (i) above reduced by the
payments of advisory fees previously made by the Fund to the Adviser, net of any payments of
refunds of advisory fees by the Adviser to the Fund, in respect of the applicable 12-month period. In
the event that such prior payments should exceed the amount of the annual advisory fee payable
hereunder, the Adviser shall refund to the Fund such excess as soon as practicable after the end of
the month.

       B.  Proration.    If the Adviser shall serve for less than the whole of any month, the investment advisory
fee shall be prorated on the basis of the 12-month period immediately preceding the date of termination of this
Agreement.

       4.  Brokerage.    Subject to the approval of the Board of Directors of the Fund, the Adviser, in carrying
out its duties under Section 1. A., may cause the Fund to pay a broker-dealer which furnishes brokerage and
research services within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), a higher commission than that which might be charged by another broker-dealer, if such
commission is deemed reasonable in relation to the brokerage and research services provided by the broker-
dealer, viewed in terms of either that particular transaction or the overall responsibilities of the Adviser with
respect to the accounts as to which it exercises investment discretion (as such term is defined under Section
3(a)(35) of the Exchange Act).

       5.  Adviser’s Use of the Services of Others.    The Adviser may (at its cost except as contemplated by
Sections 2 and 4 of this Agreement) employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Adviser or the Fund with such statistical and other
factual information, such advice regarding economic factors and trends, such advice as to occasional
transactions in specific securities or such other information, advice or assistance as the Adviser may deem
necessary, appropriate or convenient for the discharge of its obligations hereunder or otherwise helpful to the
Fund, or in the discharge of the Adviser’s overall responsibilities with respect to the other accounts which it
serves as investment adviser.

       6.  Ownership of Records.    All records required to be maintained and preserved by the Fund pursuant
to the provisions of rules or regulations of the Securities and Exchange Commission under Section 31(a) of the
1940 Act and maintained and preserved by the Adviser on behalf of the Fund are the property of the Fund and
will be surrendered by the Adviser promptly on request by the Fund.

       7.  Limitation of Liability of Adviser.    The Adviser will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations hereunder the Adviser shall not be liable to the Fund or any of
its shareholders for any error of judgment or mistake of law or for any act or omission by the Adviser or for any
losses sustained by the Fund or its shareholders.

       8.  Services to Other Clients.    Subject to Section 12 of this Agreement, nothing contained in this
Agreement shall prevent the Adviser or any affiliated person of the Adviser from acting as investment adviser or
manager for any other person, firm or corporation and shall not in any way bind or restrict the Adviser or any
such affiliated person from buying, selling or trading any securities or commodities for their own accounts or for
the account of others for whom they may be acting. Nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Adviser 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 or dissimilar
nature.

       9.  Use of Adviser’s Name.    The Fund may include the name “Pacholder” or any other name derived
from the name “Pacholder” only for so long as this Agreement or any extension, renewal or amendment hereof
remains in effect, including any similar agreement with any organization which shall have succeeded to the
business of the Adviser as investment adviser. At such time as this Agreement or any extension, renewal or
amendment hereof, or such other similar agreement shall no longer be in effect, the Fund will (by corporate
action, if necessary) cease to use any name derived from the name “Pacholder”, any name similar thereto or any
other name indicating that it is advised by or otherwise connected with the Adviser, or with any organization
which shall have succeeded to the Adviser’s business as investment adviser.

       10.  Term of Agreement.    This Agreement shall become effective as of the date first written above and,
unless sooner terminated as provided herein shall continue in effect until June 30, 2007. Thereafter, if not
terminated, this Agreement shall continue in effect for successive periods of 12 months each ending on June 30
of each year, provided such continuance is specifically approved at least annually by the vote of holders of “a
majority of the outstanding voting securities” (as defined in the 1940 Act) of the Fund or by the Board of
Directors of the Fund, and, in either event, by the vote of a majority of the directors of the Fund who are not
parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at
a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, (a) the Fund may,
at any time and without the payment of any penalty, terminate this Agreement upon 30 days’ written notice to
the Adviser, either by majority vote of the directors of the Fund or by the vote of the holders of a majority of the
outstanding voting securities of the Fund; (b) this Agreement shall immediately terminate in the event of its
assignment (to the extent required by the 1940 Act and the rules thereunder) unless such automatic termination
shall be prevented by an exemptive order of the Securities and Exchange Commission; and (c) the Adviser may
terminate this Agreement without payment of penalty on 180 days’ written notice to the Fund. Any notice under
this Agreement shall be given in writing, addressed and delivered, or mailed post-paid, to the other party at the
principal office of such party.

       11.  Amendment.    This Agreement may be amended subject to the provisions of Section 15 of the 1940
Act, as modified by or interpreted by any applicable order or orders of the Securities and Exchange Commission
(“Commission”) or any rules or regulations adopted by, or interpretive releases of, the Commission, by the
parties without the vote or consent of the shareholders of the Fund to supply any omission, to cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, or if they deem it necessary to conform
this Agreement to the requirements of applicable federal laws or regulations, but neither the Fund nor the
Adviser shall be liable for failing to do so.

       12.  Allocation of Services.    The Adviser reserves the right to manage other investment accounts,
including those with investment objectives similar to the Fund. Securities considered as investments for the
Fund may also be appropriate for other investment accounts managed by the Adviser. Subject to applicable laws
and regulations, the Adviser will attempt to allocate equitably portfolio transactions among the portfolios of its
other investment accounts whenever decisions are made to purchase or sell securities by the Fund and one or
more of such other accounts simultaneously. In making such allocations, the main factors to be considered by
the Adviser will be the respective investment objectives of the Fund and such other accounts, the relative size of
portfolio holdings of the same or comparable securities, the availability of cash for investment by the Fund and
such other accounts, the size of investment commitments generally held by the Fund and such accounts, and the
opinions of the persons responsible for recommending investments to the Fund and such other accounts.

       13.  Governing Law.    This Agreement shall be construed in accordance with the laws of the State of
Ohio and the applicable provisions of the 1940 Act and the Advisers Act. To the extent the applicable law of the
State of Ohio, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act or the
Advisers Act, the latter shall control.

       IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement on the day
and year first above written.



WITNESS:

PACHOLDER HIGH YIELD FUND, INC.



/s/ Shannon A. King

By:
/s/ Gary J. Madich



Gary J. Madich, President





WITNESS:

J.P. MORGAN INVESTMENT MANAGEMENT
INC.


/s/ Joey Ann Madden

By:
/s/ James P. Shanahan, Jr.



James P. Shanahan, Jr., Managing Director




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