INVESTMENT ADVISORY AGREEMENT
AMERINDO FUNDS INC.
Xxx Xxxxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
May 30, 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, 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
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including: (a) brokerage and commission expenses; (b) foreign, federal, state or
local taxes, including issuance and 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
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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 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 30, 2000 and shall continue
in effect until May 29, 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.
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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 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/ XXXX X. XXXXX
--------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
ACCEPTED: May 30, 2000
AMERINDO INVESTMENT ADVISORS INC.
By: /S/ XXXXXXX XXXXXX-CARRIEU
-----------------------------------
Name: Xxxxxxx Xxxxxx-Carrieu
Title: Chief Financial Officer
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Schedule A
FUND NAME FEE* DATE
Amerindo Technology Fund II 1.50% May 30, 2000
Amerindo Internet B2B Fund 1.50% May 30, 2000
Amerindo Health & Biotechnology Fund 1.50% May 30, 2000
* of annual average daily net assets.
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