ORBITEX LIFE SCIENCES & BIOTECHNOLOGY FUND, INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made as of the 29th day of June, 2000 by and between Orbitex
Life Sciences & Biotechnology Fund, Inc., a Maryland corporation (the "Fund"),
and Orbitex Management, Inc., a New York corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Fund intends to engage in business as a closed-end investment
company and is registered as such under the Investment Company Act of 1940, as
amended (the "Act");
WHEREAS, the Fund is authorized to issue shares of the Fund;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940; and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory and administrative services to the Fund with respect to the Fund in the
manner and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Services of the Adviser.
1.1 Investment Advisory Services. The Adviser shall act as the investment
adviser to the Fund and, as such, shall (i) obtain and evaluate such information
relating to the economy, industries, business, securities markets and securities
as it may deem necessary or useful in discharging its responsibilities
hereunder, (ii) formulate a continuing program for the investment of the assets
of the Fund in a manner consistent with its investment objective, policies and
restrictions, and (iii) determine from time to time securities to be purchased,
sold, retained or lent by the Fund, and implement those decisions, including the
selection of entities with or through which such purchases, sales or loans are
to be effected; provided, that the Adviser will place orders pursuant to its
investment determinations either directly with the issuer or with a broker or
dealer, and if with a broker or dealer, (a) will attempt to obtain the best
price and execution of its orders, and (b) may nevertheless in its discretion
purchase and sell portfolio securities from and to brokers who provide the
Adviser with research, analysis, advice and similar services and pay such
brokers in return a higher commission or spread than may be charged by other
brokers.
The Fund hereby authorizes any entity or person associated with the
Adviser, which is a member of a national securities exchange, to effect any
transaction on the exchange for the account of the Fund which is permitted by
Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Fund hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T)(a)(iv).
The Adviser shall carry out its duties with respect to the Fund's
investments in accordance with applicable law and the investment objective,
policies and restrictions set forth in the Fund's then-current Prospectus and
Statement of Additional Information, and subject to such further limitations as
the Fund may from time to time impose by written notice to the Adviser.
1.2 Administrative Services. The Adviser shall manage the Fund's business
and affairs and shall provide such services required for effective
administration of the Fund as are not provided by employees or other agents
engaged by the Fund; provided, that the Adviser shall not have any obligation
to provide under this Agreement any direct or indirect services to Fund
shareholders, any services related to the distribution of Fund shares, or any
other services which are the subject of a separate agreement or arrangement
between the Fund and the Adviser. Subject to the foregoing, in providing
administrative services hereunder, the Adviser shall:
1.2.1 Office Space, Equipment and Facilities. Furnish without cost to the
Fund, or pay the cost of, such office space, office equipment and office
facilities as are adequate for the Fund's need.
1.2.2 Personnel. Provide, without remuneration from or other cost to the
Fund, the services of individuals competent to perform all of the Fund's
executive, administrative and clerical functions which are not performed by
employees or other agents engaged by the Fund or by the Adviser acting in some
other capacity pursuant to a separate agreement or arrangement with the Fund.
1.2.3 Agents. Assist the Fund in selecting and coordinating the activities
of the other agents engaged by the Fund, including the Fund's shareholder
servicing agent, custodian, underwriter, administrator, independent auditors and
legal counsel.
1.2.4 Directors and Officers. Authorize and permit the Adviser's directors,
officers and employees who may be elected or appointed as Directors or officers
of the Fund to serve in such capacities, without remuneration from or other cost
to the Fund.
1.2.5 Books and Records. Assure that all financial, accounting and other
records required to be maintained and preserved by the Fund are maintained and
preserved by it or on its behalf in accordance with applicable laws and
regulations.
1.2.6 Reports and Filings. Assist in the preparation of (but not pay for)
all periodic reports by the Fund to its shareholders and all reports and filings
required to maintain the registration and qualification of the Fund and Fund
shares, or to meet other regulatory or tax requirements applicable to the Fund,
under federal and state securities and tax laws.
2. Expenses of the Fund.
2.1 Expenses to be Paid by Adviser. The Adviser shall pay all salaries,
expenses and fees of the officers, Directors and employees of the Fund who are
officers, directors or employees of the Adviser.
In the event that the Adviser pays or assumes any expenses of the Fund not
required to be paid or assumed by the Adviser under this Agreement, the Adviser
shall not be obligated hereby to pay or assume the same or any similar expense
in the future; provided, that nothing herein contained shall be deemed to
relieve the Adviser of any obligation to the Fund under any separate agreement
or arrangement between the parties.
2.2 Expenses to be Paid by the Fund. The Fund shall bear all expenses of
its operation, except those specifically allocated to the Adviser under this
Agreement or under any separate agreement between the Fund and the Adviser.
Subject to any separate agreement or arrangement between the Fund and the
Adviser, the expenses hereby allocated to the Fund, and not to the Adviser,
include but are not limited to:
2.2.1 Custody. All charges of depositories, custodians, and other agents
for the transfer, receipt, safekeeping, and servicing of its cash, securities,
and other property.
2.2.2 Shareholder Servicing. All expenses of maintaining and servicing
shareholder accounts, including, but not limited to, the charges of any
shareholder servicing agent, dividend disbursing agent or other agent engaged by
the Fund to service shareholder accounts.
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2.2.3 Shareholder Reports. All expenses of preparing, setting in type,
printing and distributing reports and other communications to shareholders.
2.2.4 Pricing and Portfolio Valuation. All expenses of computing the Fund's
net asset value per share, including any equipment or services obtained for the
purpose of pricing shares or valuing the Fund's investment portfolio.
2.2.5 Communications. All charges for equipment or services used for
communications between the Adviser or the Fund and any custodian, shareholder
servicing agent, portfolio accounting services agent, or other agent engaged by
the Fund.
2.2.6 Legal and Accounting Fees. All charges for services and expenses of
the Fund's legal counsel and independent accountants.
2.2.7 Directors' Fees and Expenses. All compensation of Directors other
than those affiliated with the Adviser, all expenses incurred in connection with
such unaffiliated Directors' services as Directors, and all other expenses of
meetings of the Directors and committees of the Directors.
2.2.8 Shareholder Meetings. All expenses incidental to holding meetings of
shareholders, including the printing of notices and proxy materials, and proxy
solicitations therefor.
2.2.9 Federal Registration Fees. All fees and expenses of registering and
maintaining the registration of the Fund under the Act and the registration of
the Fund's shares under the Securities Act of 1933 (the "1933 Act"), including
all fees and expenses incurred in connection with the preparation, setting in
type, printing, and filing of any Registration Statement, Prospectus and
Statement of Additional Information under the 1933 Act or the Act, and any
amendments or supplements that may be made from time to time.
2.2.10 State Registration Fees. All fees and expenses of taking required
action to permit the offer and sale of the Fund's shares under securities laws
of various states or jurisdictions, and of registration and qualification of the
Fund under all other laws applicable to the Fund or its business activities
(including registering the Fund as a broker-dealer, or any officer of the Fund
or any person as agent or salesperson of the Fund in any state).
2.2.11 Confirmations. All expenses incurred in connection with the issue
and repurchase of Fund shares, including the expenses of confirming all share
transactions.
2.2.12 Bonding and Insurance. All expenses of bond, liability, and other
insurance coverage required by law or regulation or deemed advisable by the
Directors of the Fund, including, without limitation, such bond, liability and
other insurance expenses that may from time to time be allocated to the Fund in
a manner approved by its Directors.
2.2.13 Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale or lending of the Fund's portfolio securities.
2.2.14 Taxes. All taxes or governmental fees payable by or with respect to
the Fund to federal, state or other governmental agencies, domestic or foreign,
including stamp or other transfer taxes.
2.2.15 Trade Association Fees. All fees, dues and other expenses incurred
in connection with the Fund's membership in any trade association or other
investment organization.
2.2.16 Nonrecurring and Extraordinary Expenses. Such nonrecurring and
extraordinary expenses as may arise including the 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 and agents.
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3. Advisory Fee.
3.1 Fee. As compensation for all services rendered, facilities provided and
expenses paid or assumed by the Adviser under this Agreement, the Fund shall pay
the Adviser on the last day of each month, or as promptly as possible
thereafter, a management fee at an annual rate of 1.75% of the Fund's average
daily net assets.
4. Records.
4.1 Tax Treatment. The Adviser shall maintain, or arrange for others to
maintain, the books and records of the Fund in such a manner that treats the
Fund as a separate entity for federal income tax purposes.
4.2 Ownership. All records required to be maintained and preserved by the
Fund pursuant to the provisions or rules or regulations of the Securities and
Exchange Commission under Section 31(a) of the Act and maintained and preserved
by the Adviser on behalf of the Fund are the property of the Fund and shall be
surrendered by the Adviser promptly on request by the Fund; provided, that the
Adviser may at its own expense make and retain copies of any such records.
5. Reports to Adviser.
The Fund shall furnish or otherwise make available to the Adviser such
copies of the Fund's Prospectus, Statement of Additional Information, financial
statements, proxy statements, reports and other information relating to its
business and affairs as the Adviser may, at any time or from time to time,
reasonably require in order to discharge its obligations under this Agreement.
6. Reports to the Fund.
The Adviser shall prepare and furnish to the Fund such reports, statistical
data and other information in such form and at such intervals as the Fund may
reasonably request.
7. Services to Other Clients.
Nothing herein contained shall limit the freedom of the Adviser or any
affiliated person of the Adviser to render investment management and
administrative services to other investment companies, to act as investment
adviser or investment counselor to other persons, firms or corporations, or to
engage in other business activities.
8. Limitation of Liability of Adviser and its Personnel.
Neither the Adviser nor any director, officer of employee of the Adviser
performing services for the Fund at the direction or request of the Adviser in
connection with the Adviser's discharge of its obligations hereunder shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with any matter to which this Agreement relates, and the
Adviser shall not be responsible for any action of the Directors of the Fund in
following or declining to follow any advice or recommendation of the Adviser or
any sub-adviser retained by the Adviser pursuant to Section 7 of this Agreement;
provided, that nothing herein contained shall be construed (i) to protect the
Adviser against any liability to the Fund or its shareholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of the Adviser's duties, or by reason of
the Adviser's reckless disregard of its obligations and duties under this
Agreement, or (ii) to protect any director, officer or employee of the Adviser
who is or was a Director or officer of the Fund against any liability of the
Fund or its shareholders to which such person would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such person's office with the Fund.
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9. Effect of Agreement.
Nothing herein contained shall be deemed to require to the Fund to take any
action contrary to its Articles of Incorporation or its Bylaws or any applicable
law, regulation or order to which it is subject or by which it is bound, or to
relieve or deprive the Directors of the Fund of their responsibility for and
control of the conduct of the business and affairs of the Fund.
10. Term of Agreement.
The term of this Agreement shall begin on the date first above written, and
unless sooner terminated as hereinafter provided, this Agreement shall remain in
effect for a period of two years from the date of this Agreement. Thereafter,
this Agreement shall continue in effect from year to year, subject to the
termination provisions and all other terms and conditions hereof; provided, such
continuance is approved at least annually by vote of the holders of a majority
of the outstanding voting securities of the Fund or by the Directors of the
Fund; provided, that in either event such continuance is also approved annually
by the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Directors of the Fund who are not parties to
this Agreement or interested persons of either party hereto. The Adviser shall
furnish to the Fund, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment thereof.
11. Amendment or Assignment of Agreement.
Any amendment to this Agreement shall be in writing signed by the parties
hereto; provided, that no such amendment shall be effective unless authorized
(i) by resolution of the Directors of the Fund, including the vote or written
consent of a majority of the Directors of the Fund who are not parties to this
Agreement or interested persons of either party hereto, and (ii) by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically and immediately in the event of its assignment.
12. Termination of Agreement.
This Agreement may be terminated as to the Fund at any time by either party
hereto, without the payment of any penalty, upon sixty (60) days' prior written
notice to the other party; provided, that in the case of termination as to the
Fund, such action shall have been authorized (i) by resolution of the Fund's
Board of Directors, including the vote or written consent of Directors of the
Fund who are not parties to this Agreement or interested persons of either party
hereto, or (ii) by vote of majority of the outstanding voting securities of the
Fund.
13. Use of Name.
The Fund is named the Orbitex Life Sciences & Biotechnology Fund, Inc. and
the Fund may be identified, in part, by the name "Orbitex." The Adviser hereby
grants to the Fund a nonexclusive right and license to use the Orbitex name and
as part of the name of the Fund 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 Adviser's
business as adviser or any extension, renewal or amendment thereof remain in
effect. The Fund agrees that it shall acquire no interest in the name "Orbitex,"
that all uses thereof by the Fund shall inure to the benefit of the Adviser and
that is shall not challenge the validity or Adviser's ownership thereof.
14. This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
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15. Interpretation and Definition of Terms.
Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the Act
shall be resolved by reference to such term or provision of the Act and to
interpretation thereof, if any, by the United States courts, or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission validly issued pursuant to the Act.
Specifically, the terms "vote of a majority of the outstanding voting
securities," "interested persons," "assignment" and "affiliated person," as used
in this Agreement shall have the meanings assigned to them by Section 2(a) of
the Act. In addition, when the effect of a requirement of the Act reflected in
any provision of this Agreement is modified, interpreted or relaxed by a rule,
regulation or order of the Securities and Exchange Commission, whether of
special or of general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
16. Captions.
The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
17. Execution in Counterparts.
This Agreement may be executed simultaneously in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of the date and year
first above written.
ORBITEX LIFE SCIENCES & BIOTECHNOLOGY
FUND, INC.
By:
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ORBITEX MANAGEMENT, INC.
By:
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