INVESTMENT ADVISORY AGREEMENT
Alleghany/Veredus SciTech Fund
AGREEMENT made this 30th day of June, 2000 by and between
Alleghany Funds, a Delaware business trust (the "Trust") on behalf of
Alleghany/Veredus SciTech Fund (the "Fund") and Veredus Asset
Management LLC (the "Adviser").
WHEREAS, the Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end, diversified
management investment company; and
WHEREAS, the Trust wishes to retain the Adviser to render
investment advisory services to the Fund, and the Adviser is willing to furnish
such services to the Fund.
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed between the Fund and the Adviser as
follows:
1. Appointment. The Trust hereby appoints the Adviser to act as
investment adviser to the Fund for the periods and on the terms set forth in
thisAgreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. Duties of Adviser. As investment adviser, the Adviser shall:
(i) manage the investment and reinvestment of the assets of the Fund, (ii)
continuously review, supervise and administer the investment program of the
Fund, (iii) determine in its discretion, the assets to be held uninvested, (iv)
provide the Trust with records concerning the Adviser's activities which are
required to be maintained by the Trust, and (v) render regular reports to the
Trust's officers and Board of Trustees concerning the Adviser's discharge of
the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Trustees of the Trust, and in compliance with the objectives, policies and
limitations set forth in the Fund's then effective prospectus and statement of
additional information. The Adviser accepts such employment and agrees to
render such services and to provide, at its own expense, the office space,
furnishings, equipment and the personnel required by it to perform such
services on the terms and for the compensation provided herein.
3. Portfolio Transactions. The Adviser shall select and monitor the
selection of the brokers or dealers that will execute the purchases and sales
of securities for the Fund and is directed to use its best efforts to ensure
that the best available price and most favorable execution of securities
transactions for the Fund are obtained. Subject to policies established by the
Board of Trustees of the Trust and communicated to the Adviser, it is
understood that the Adviser will not be deemed to have acted unlawfully, or to
have breached a fiduciary duty to the Trust or in respect of the Fund, or be
in breach of any obligation owing to the Trust or in respect of the Fund
under this Agreement, or otherwise, solely by reason of its having caused the
Fund to pay a member of a securities exchange, a broker or a dealer a
commission for effecting a securities transaction for the Fund in excess of the
amount of commission anothermember of an exchange, broker or dealer would
have charged if the Adviser determines in good faith that the commission paid
was reasonable in relation to the brokerage or research services provided by
such member, broker or dealer, viewed in terms of that particular transaction
or the Adviser's overall responsibilities with respect to the accounts,
including the Fund, as to which it exercises investment discretion. The
Adviser will promptly communicate to the officers and Trustees of the Trust
such information relating to Fund transactions as they may reasonably request.
4. Compensation of the Adviser. For the services to be
rendered by the Adviser as provided in Section 2 and 3 of this Agreement, the
Fund shall pay to the Adviser within five business days after the end of each
calendar month, a monthly fee of one-twelfth of 1.00% of the Fund's average
daily net assets for that month.
In the event of termination of this Agreement, the fee provided in this
Section 4 shall be paid on a pro-rata basis, based on the number of days during
which this Agreement was in effect.
5. Reports. The Fund and the Adviser agree to furnish to each
other such information regarding their operations with regard to their affairs
as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Fund are not impaired thereby
7. Liability of Adviser. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard by the Adviser of its
obligations and duties hereunder, the Adviser shall not be subject to any
liability whatsoever to the Fund, or to any shareholder of the Fund, for any
error of judgment, mistake of law or any other act or omission in the course
of, or connected with, rendering services hereunder including, without
limitation, for any losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security on behalf of the Fund.
8. Duration and Termination. The term of this Agreement
shall commence on the date which an amendment to the Trust's registration
statement establishing the Fund becomes effective (the "Effective Date"),
provided that first it is approved by the Board of Trustees of the Trust,
including a majority of those Trustees who are not parties to this Agreement or
interested persons of any party hereto, in the manner provided in Section 15(c)
of the 1940 Act, and by the holders of a majority of the outstanding voting
securities of the Fund; and shall continue in effect for eighteen months
thereafter. This Agreement may continue in effect after its initial term
only if such continuance is approved at least annually by (i) the Trustees
Board ofTrustees or (ii) by the vote of a majority of the outstanding voting
securities of the Fund; and in either event by a vote of a majority of those
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party in the manner provided in Section 15(c) of the 1940
Act. Notwithstanding the foregoing, this Agreement may be terminated:
(a) at any time without penalty by the Fund upon the vote of a majority of the
Trustees or by vote of the majority of the Fund's outstanding voting securities
upon sixty (60) days' written notice to the Adviser or (b) by the Adviser at
any time without penalty, upon sixty (60) days' written notice to the Fund.
This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act). Any notice under this Agreement shall
be given in writing, addressed and delivered or mailed postpaid, to the other
party at the principal office of such party.
As used in this Section 8, the terms "assignment", "interested person",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act and Rule 18f-2 thereunder.
9. Severability. If any provisions of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
10. Amendments. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall
be effective until approved by an affirmative vote of (i) a majority of the
outstanding voting securities of the Fund, and (ii) a majority of the Trustees,
including a majority of the Trustees who are not interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, if such approval is required by applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
ALLEGHANY FUNDS for
ATTEST ALLEGHANY/VEREDUS
SCITECH FUND
/s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
ATTEST VEREDUS ASSET
MANAGEMENT LLC
/s/Xxxxx X. Xxxxxxx By: /s/ B. Xxxxxxx Xxxxx
B. Xxxxxxx Xxxxx
President and Chief
Investment Officer
