INVESTMENT ADVISORY AGREEMENT
AMERINDO FUNDS INC.
Xxx Xxxxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
May __, 2000
Amerindo Investment Advisors Inc.
Xxx Xxxxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting the assets of the series of Amerindo Funds Inc. (the "Company")
listed on Schedule A hereto, as amended from time to time, (each, a "Fund", and
collectively, the "Funds") in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By- Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectuses forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by the Company's Board of
Directors. We enclose copies of the documents listed above and will furnish you
such amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of the Company's Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our corporation itself might
or could do with respect to such purchases,
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sales or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such purchases, sales
or other transactions. In furtherance of such and subject to applicable law and
procedures adopted by the Company's Board of Directors, you may (i) pay
commissions to brokers other than yourself which are higher than such that might
be charged by another qualified broker to obtain brokerage and/or research
services considered by you to be useful or desirable for your investment
management of the Funds and/or other advisory accounts of yours and any
investment advisor affiliated with you; and (ii) consider the sales of shares of
the Funds by brokers including your affiliates as a factor in your selection of
brokers for portfolio transactions.
(c) You will report to the Company's Board of Directors at
each meeting thereof all changes in the Funds since your prior report, and will
also keep us in touch with important developments affecting the Funds and, on
your own initiative, will furnish us from time to time with such information as
you may believe appropriate for this purpose, whether concerning the individual
entities whose securities are included in the Funds the activities in which such
entities engage, Federal income tax policies applicable to our investments, or
the conditions prevailing in the economy generally. You will also furnish us
with such statistical and analytical information with respect to our portfolio
securities as you may believe appropriate or as we may reasonably request. In
making such purchases and sales of our portfolio securities, you will comply
with the policies set from time to time by the Company's Board of Directors as
well as the limitations imposed by our Articles of Incorporation, the provisions
of the Internal Revenue Code relating to regulated investment companies and the
1940 Act, and the limitations contained in our Registration Statement.
(d) It is understood that you may from time to time employ,
subcontract with or otherwise associate yourself with, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder.
(e) You or your affiliates will also provide supervisory
personnel who will be responsible for supervising and monitoring the performance
of our administrator (the "Administrator") in connection with its duties under
our Administrative Services Agreement. Such personnel may be your employees or
employees of your affiliates or of other organizations. It is understood that we
have retained, at our expense, the Administrator to perform the operational
components of the functions and services listed herein.
(f) You or your affiliates will also furnish us such
additional administrative supervision and such office facilities as you may
believe appropriate subject to the requirements of any regulatory authority to
which you may be subject. We will reimburse you for all of our operating costs
incurred by you, including rent, depreciation of equipment and facilities,
interest and amortization of loans financing equipment used by us and all the
expenses incurred to conduct our affairs. The amounts of such reimbursements
shall from time-to-time be agreed upon between us.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) foreign, federal,
state or local taxes, including issuance and
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transfer taxes incurred by or levied on us; (c) commitment fees, certain
insurance premiums and membership fees and dues in investment company
organizations; (d) interest charges on borrowings; (e) charges and expenses of
our custodian; (f) charges and expenses relating to the issuance, redemption,
transfer and dividend disbursing functions for us; (g) telecommunications
expenses; (h) recurring and non-recurring legal, accounting and recordkeeping
expenses; (i) costs of organizing and maintaining the Company's existence as a
corporation; (j) compensation, including directors' fees, of any of our
directors, officers or employees who are not your officers or employees or those
of the Administrator or their affiliates, and costs of other personnel providing
administrative and clerical services to us; (k) costs of providing shareholders'
services, including charges and expenses of persons providing confirmations of
transactions in a Fund's shares, periodic statements to shareholders and
recordkeeping services, and costs of shareholders' reports, proxy solicitations,
and corporate meetings; (l) fees and expenses of registering our shares under
the appropriate federal securities laws and of qualifying our shares under
applicable state securities laws, including expenses attendant upon the initial
registration and qualification of these shares and attendant upon renewals of,
or amendment to, those registrations and qualifications; (m) expenses of
preparing, printing and delivering the initial registration statement and of
preparing, printing and delivering the Prospectuses to existing shareholders and
of printing shareholder application forms for shareholder accounts; (n) fees and
expenses payable to the Adviser, distributor, Administrator, custodian, transfer
agent and dividend agent; and (o) any other distribution or promotional expenses
contemplated by an effective plan adopted by us pursuant to Rule 12b-1 under the
1940 Act. Our obligation for the foregoing expenses is limited by your agreement
to be responsible, while this Agreement is in effect, for any amount by which
our annual operating expenses, including distribution expenses (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which each Fund's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. (a) In consideration of the foregoing we will pay you an
annual fee as set forth on Schedule A. Your fee will be accrued by us daily, and
will be payable on the last day of each calendar month for services performed
hereunder during that month or on such other schedules as you shall request of
us in writing. You may waive your right to any fee to which you are entitled
hereunder, provided such waiver is delivered to us in writing. Any reimbursement
of our expenses, to which we may become entitled pursuant to the last sentence
of paragraph 3 hereof, will be paid to us at the end of the month for which
those expenses are accrued, at the same time as we pay you your fee.
(b) Pursuant to each Fund's Distribution and Service Plan and
the Shareholder Servicing Agreement, you will also act as a shareholder
servicing agent for each Fund
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pursuant to which each Fund is permitted to pay you a maximum of 0.25% per annum
of its average daily net assets to compensate you for providing shareholder
services and to permit you to compensate banks, savings and loans and other
financial institutions (the Adviser, with such other institutions, each a
"Shareholder Servicing Agent") whose clients are Fund shareholders for providing
shareholder services. In addition, you may use the advisory fee for distribution
of our shares and for servicing purposes including defraying the costs of
performing shareholder servicing functions on behalf of the Funds and to
compensate others with whom you may have entered into a written agreement for
performing shareholder servicing functions on behalf of the Funds. To the extent
that you or your affiliates directly may make payments to other third parties
who render shareholder support services and that such payments may be deemed
indirect financing of an activity primarily intended to result in the sale of
shares of a Fund within the context of Rule 12b-1 under the 1940 Act (the
"Rule"), then such payments by you shall be deemed to be authorized under the
Fund's Distribution and Service Plan adopted pursuant to the Rule. You will, in
your sole discretion, determine the amount of such payments and may from time to
time in your sole discretion increase or decrease the amount of such payments;
provided, however, that no such payment will increase the amount a Fund is
required to pay you or any person under this Agreement or any agreement. Any
payments made by you for such purposes are subject to compliance with the terms
of written agreements in a form satisfactory to the Fund's Board of Directors to
be entered into by you and the participating organization.
6. This Agreement will become effective on May ___, 2000 and
shall continue in effect until May __, 2002 and thereafter for successive
twelve-month periods (computed from each May 31), provided that such
continuation is specifically approved at least annually by the Company's Board
of Directors or by a majority vote of the holders of a Fund's outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of the Company's Directors who are neither party to this Agreement nor,
other than by their service as Directors of the Company, interested persons, as
defined in the 1940 Act, of any such person who is party to this Agreement. Upon
the effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of a
Fund's outstanding voting securities, as defined in the 1940 Act, or by a vote
of a majority of the entire Board of Directors, on sixty days' written notice to
you, or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. 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.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict your
right, or the right of any of your officers, directors or employees who may also
be a director, officer or employee of ours, or of a person affiliated with us,
as defined in the 1940 Act, to engage in any other business or to
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devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
(b) The Company understands that you and your affiliates and
employees, as well as their agents privy to the transactions made in the
Company's account, may, subject to the Company's and to your Code of Ethics,
purchase and sell investments for either your or their own account, which
investments may include the same investments that the Company's account is
purchasing or selling; provided, however, that no purchase or sale by you, or
any of your affiliates, agents or employees, or any of their agents privy to the
transactions made in the Company's account, will be made in a manner which would
result in any detriment to the Company, and such persons shall always keep the
interests of the Company first in effecting any such transaction.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
AMERINDO FUNDS INC.
By: /s/
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Name:
Title:
ACCEPTED: May __, 2000
AMERINDO INVESTMENT ADVISORS INC.
By: /s/
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Name:
Title:
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Schedule A
Fund Name Fee* Date
Amerindo Technology Fund II 1.50% May __, 2000
Amerindo Internet B2B Fund 1.50% May __, 2000
Amerindo Health & Biotechnology Fund 1.50% May __, 2000
* of annual average daily net assets.
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