As filed with the Securities and Exchange Commission on May 23, 1996
Registration No. 333-00767
ICA No. 811-07531
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. 1 /X/
Post-Effective Amendment No. / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 1 /X/
(Check appropriate box or boxes)
AMERINDO FUNDS INC.
(Exact Name of Registrant as Specified in Charter)
c/o Amerindo Funds Inc.
399 Park Avenue, New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 371-6360
DANA E. SMITH
Amerindo Funds Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
(Name and Address of Agent for Service)
Copy to: MICHAEL R. ROSELLA, Esq.
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a) of Rule 485
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
The Registrant declares that an indefinite amount of its shares of beneficial
interest is being registered by this Registration Statement pursuant to
Section 24(f) under the Investment Company Act of 1940, as amended, and Rule
24f-2 thereunder.
338469.4
<PAGE>
AMERINDO FUNDS INC.
Registration Statement on Form N-1A
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CROSS REFERENCE SHEET -
Pursuant to Rule 404(c)
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Part A
Item No. Prospectus Heading
<S> <C> <C>
1. Cover Page........................ Cover Page
2. Synopsis.......................... Prospectus Summary; Expense Summary
3. Condensed Financial
Information....................... Not Applicable
4. General Description of
Registrant........................ Cover Page; Investment Objective and
Policies; Additional Investment
Information and Risk Factors
5. Management of the Fund............ Management of the Fund
5a. Management's Discussion
of the Fund...................... Management of the Fund
6. Capital Stock and Other
Securities........................ Purchases of Shares; Reduction or
Elimination of Sales Loads; Redemption of
Shares; Description of Common Stock
7. Purchase of Securities Being
Offered........................... Purchases of Shares; Description of
Common Stock
8. Redemption or Repurchase.......... Redemption of Shares
9. Legal Proceedings................. Not Applicable
</TABLE>
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338469.4
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<TABLE>
<CAPTION>
Part B
Item No. Caption in Statement of Additional
Information
<S> <C> <C>
10. Cover Page........................ Cover Page
11. Table of Contents................. Table of Contents
12. General Information and
History........................... The Fund; Management of the Fund;
Description of Common Stock
13. Investment Objectives and
Policies.......................... Investment Objective, Policies and
Restrictions
14. Management of the Fund............ Management of the Fund
15. Control Persons and
Principal Holders of
Securities........................ Management of the Fund
16. Investment Advisory and
Other Services.................... Management of the Fund; Purchase and
Redemption; Counsel and Independent
Auditors
17. Brokerage Allocation.............. Brokerage and Portfolio Turnover
18. Capital Stock and Other
Securities........................ Description of Common Stock
19. Purchase, Redemption and
Pricing of Securities
Being Offered..................... Purchase and Redemption; Net Asset Value
20. Tax Status........................ Taxes
21. Underwriters...................... Management of the Fund
22. Calculations of Yield
Quotations of Money Market
Funds............................. Not Applicable
23. Financial Statements.............. Financial Statements (To be filed by
Amendment)
</TABLE>
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338469.4
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This is not a prospectus and shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
Subject to Completion Dated May __, 1996
PROSPECTUS , 1996
AMERINDO TECHNOLOGY FUND
One Embarcadero 399 Park Avenue
Suite 2300 18th Floor
San Francisco, CA 94111 New York, New York 10022
Amerindo Technology Fund (the "Fund"), a non-diversified, open-end,
management investment company, is a series of Amerindo Funds Inc. The Fund's
investment objective is to seek long-term capital appreciation by investing at
least 65% of its assets (although the Fund intends, as a non-fundamental
policy, to invest at least 80% of its assets) in the common stocks of
companies with business operations in the technology, technology-related and
science industries. As a result, the Fund's portfolio will be concentrated in
the securities of such industries as a group. Industries likely to be
represented in the portfolio include computers, networking and internetworking
software, computer aided design, telecommunications, media and information
services, hospital supply and medical devices and biotechnology. The Fund may
also invest in the stocks of companies that should benefit from the
commercialization of technological advances, although they may not be directly
involved in research and development. Current income is incidental to the
Fund's investment objective. The technology, technology-related and science
industries have exhibited and continue to demonstrate rapid growth, both
through increasing demand for existing products and services and the
broadening of the technology market. This Fund is designed for long-term
investors who understand and are willing to accept the risk of loss involved
in seeking long-term capital appreciation and should not be used as a
short-term trading vehicle. The Fund is also designed as a specialized
investment vehicle and is not intended to be used by an investor as a complete
investment program. See "Investment Objective" herein.
All subscriptions during the initial purchase period for shares of the
Fund will be deposited in an interest-bearing escrow account until the earlier
of (1) the acceptance by the Fund of subscriptions for shares of at least $100
million, or (2) 90 days from the date of this Prospectus. Each subscriber's
pro rata share of the interest earned in the escrow account will be used to
purchase additional full or fractional shares of the Fund. The escrow account
will be maintained with The Northern Trust Company, the Fund's custodian.
During this initial purchase period, investors purchasing Class A shares may
do so without incurring any initial sales load.
The Fund offers two classes of shares to investors, Class A and Class D
shares (each individually a "Class" or collectively the "Classes"). Class A
shares are sold subject to an initial sales load of up to 2.50%. Class D
shares are sold without an initial sales load. The Fund, on behalf of each
Class, has adopted a distribution and service plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended. Under the
Plan, each Class pays a servicing fee equal to 0.25% of its respective average
daily net assets and Class A pays a distribution fee equal to 0.25% of its
average daily net assets. The minimum initial investment for purchases of
Class A shares is $25,000 and the minimum subsequent investment is $2,500. The
minimum initial investment for purchases of Class D shares is $150,000 and the
minimum subsequent investment is $15,000.
Consistent with the Fund's investment objective of long-term capital
appreciation, shareholders in Class A and Class D shares may be subject to a
3.00% redemption fee for redeeming shares held less than one year. The
redemption fee is assessed against the net assets redeemed and is retained by
the Fund. See "Redemption of Shares".
The Fund will pay Amerindo Investment Advisors Inc., the Fund's investment
adviser (the "Adviser"), a monthly advisory fee at the annual rate of 1.50% of
the Fund's average daily net assets. This fee is higher than the fee paid by
most other mutual funds, however, the Board of Directors believes it to be
reasonable in light of the advisory services the Fund receives thereunder.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing and it should be retained
for future reference. Additional information about the Fund, including
additional information concerning risk factors relating to an investment in
the Fund, has been filed with the Securities and Exchange Commission in a
Statement of Additional Information for the Fund, dated May , 1996. This
information is incorporated by reference and is available without charge upon
request from Furman Selz LLC (the "Distributor"), 230 Park Avenue, New York,
New York 10169. General information about the Fund may be requested in writing
to the Fund, at 237 Park Avenue, New York, New York 10017 or by calling the
Fund at (1-888- TECH FUND).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
336637.10
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing in this Prospectus.
The Fund. Amerindo Technology Fund, a non-diversified, open-end, management
investment company, is a series of Amerindo Funds Inc. The Fund offers two
classes of shares to investors, Class A and Class D shares.
Investment Objective. The Fund's investment objective is to seek long-term
capital appreciation by investing at least 65% of its assets (although the
Fund intends, as a non-fundamental policy, to invest at least 80% of its
assets) in the common stocks of companies with business operations in the
technology, technology-related and science industries. As a result, the Fund's
portfolio will be concentrated in the securities of such industries as a
group. Industries likely to be represented in the portfolio include computers,
networking and internetworking software, computer aided design,
telecommunications, media and information services, hospital supply and
medical devices and biotechnology. The Fund may also invest in the stocks of
companies that should benefit from the commercialization of technological
advances, although they may not be directly involved in research and
development. This Fund is designed for long-term investors who understand and
are willing to accept the risk of loss involved in seeking long-term capital
appreciation and should not be used as a trading vehicle. Current income is
incidental to the Fund's investment objective. See "Investment Objective".
Management and Fees. The Fund will pay Amerindo Investment Advisors Inc., the
Fund's Adviser, a monthly advisory fee at the annual rate of 1.50% of each
Class's average daily net assets. This fee is higher than the fee paid by most
other mutual funds, however, the Board of Directors believes it to be
reasonable in light of the advisory services the Fund receives thereunder.
Furman Selz LLC serves as both the Fund's Administrator and Distributor. For
the services rendered to the Fund by the Administrator, the Fund pays the
Administrator an annual fee paid monthly equal to 0.15% of the Fund's
aggregate average daily net assets. The Administrator, however, has agreed to
voluntarily waive a portion of its fees as described under "Management of the
Fund--Administrator's Fees". The Administrator may not change this waiver
policy without the prior consent of the Fund's Board of Directors. The Fund,
on behalf of each Class, has adopted a distribution and service plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended. Under the Plan, each Class pays a servicing fee equal to 0.25% of its
respective average daily net assets and Class A pays a distribution fee equal
to 0.25% of its average daily net assets. See "Distribution and Service Plan".
How to Purchase Shares. Shares of the Fund may be purchased at the net asset
value per share next determined, plus any applicable sales load, after receipt
of an order by the Fund's transfer agent in proper form with accompanying
check or other bank wire payment arrangements satisfactory to the Fund. Class
A shares are sold subject to an initial sales load of up to 2.50%. Class D
shares are sold without an initial sales load. The minimum initial investment
in Class A is $25,000 and the minimum subsequent investment is $2,500. The
minimum initial investment for Class D shares is $150,000 and the minimum
subsequent investment is $15,000. See "Purchase of Shares".
Initial Purchase Period. All subscriptions during the initial purchase period
for shares of the Fund will be deposited in an interest-bearing escrow account
until the earlier of (1) the acceptance by the Fund of subscriptions for
shares of at least $100 million, or (2) 90 days from the date of this
Prospectus. Each subscriber's pro rata share of the interest earned in the
escrow account will be used to purchase additional full or fractional shares
of the Fund. The escrow account will be maintained with The Northern Trust
Company, the Fund's custodian. During this initial purchase period, investors
purchasing Class A shares may do so without incurring any initial sales load.
How to Sell Shares. Shares of the Fund may be redeemed by a shareholder at any
time at the net asset value per share next determined after the redemption
request is received by the Fund's transfer agent in proper order. Consistent
with the Fund's investment objective of long-term capital appreciation,
shareholders of both Class A and Class D may be subject to a 3.00% fee on the
redemption of shares held for less than one year. These redemption fees are
assessed against net assets and will be retained by the Fund. See "Redemption
of Shares".
Dividends and Reinvestment. Each dividend and capital gains distribution, if
any, declared by the Fund on its outstanding shares will, unless a shareholder
elects otherwise, be paid on the payment date in additional shares of the Fund
having an aggregate net asset value as of the ex-dividend date of such
dividend or distribution equal to the cash amount of such distribution.
Shareholders may change this election by notifying their shareholder servicing
agent or broker-dealer in writing at any time prior to the record date for a
particular dividend or distribution. There are no sales or other charges in
connection with the reinvestment of dividends and capital gains distributions.
There is no fixed dividend rate, and there can be no assurance that the Fund
will pay any dividends or realize any capital gains. The Fund, however,
currently intends to pay dividends and capital gains distributions, if any, at
least on an annual basis. See "Dividends and Distributions".
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336637.10
<PAGE>
Risk Factors. Investors should consider the risks of investing in the
technology, technology-related and science industries, smaller capitalized
companies, and foreign securities. Companies in rapidly changing fields of
science and technology face special risks such as competitive pressures and
technological obsolescence and may be subject to greater governmental
regulation than many other industries. Investments in smaller capitalized
companies may involve greater risks, such as limited product lines, markets
and financial or managerial resources. Investments in securities of foreign
issuers may involve risks that are not associated with domestic investments.
Foreign issuers may lack uniform accounting, auditing and financial reporting
standards, practices and requirements, and there is generally less publicly
available information about foreign issuers than there is about U.S. issuers.
See "Additional Investment Information and Risk Factors". The Fund should not
be used as a trading vehicle.
EXPENSE SUMMARY
Investor Transaction Expenses
Class A Class D
Maximum Sales
Load Imposed on
Purchases (as a
percentage of the
offering price) 2.50% None
Redemption Fees (for shares 3.00% 3.00%
held less than one year)
Estimated Annual Operating Expenses
(as a percentage of average net assets)
Management Fees 1.50% 1.50%
12b-1 Fees 0.50%* 0.25%
Other Expenses 0.50% 0.50%
Administration Fees 0.10%
Operating Expenses 0.40%
Total Estimated Annual
Operating Expenses 2.50% 2.25%
Example: An investor in the Fund would pay the following expenses on a
$1,000 investment in the Fund assuming a 5% annual return
reinvested and redemption at the end of each time period:
Year 1 Year 3
Class A $80 $104
Class D $53 $ 73
Assuming no redemption at the end of each time period:
Year 1 Year 3
Class A $50 $104
Class D $23 $ 73
The purpose of the expense table provided above is to assist investors in
understanding the various costs and expenses that an investor will bear
directly or indirectly. For a further discussion of these fees see "Management
of the Fund." The Adviser, Administrator and the Distributor may voluntarily
waive all or a portion of their respective Management Fee, Administrative Fee
or 12b-1 fees. The "Total Estimated Annual Operating Expenses", including
"Other Expenses", are based on the Fund's anticipated expenses for the current
fiscal year assuming net assets of $90,000.00. The "Example" set forth above
should not be considered a representation of past or future expenses; actual
expenses may be greater or less than those shown.
- --------
*Includes an annual distribution fee of 0.25% and an annual service fee of
0.25% of the Class A Shares' average daily net assets. As a result of the
asset-based sales charge, long-term shareholders of the Fund may pay more than
the economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
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336637.10
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective. The Fund's investment objective is to seek long-term
capital appreciation by investing at least 65% of its assets (although the
Fund intends, as a non-fundamental policy, to invest at least 80% of its
assets) in the common stocks of companies with business operations in the
technology, technology-related and science industries. As a result of this
investment policy, the Fund will concentrate in the securities of such
industries as a group. Industries likely to be represented in the portfolio
include computers, networking and internetworking software, computer aided
design, telecommunications, media and information services, hospital supply
and medical devices and biotechnology. The Fund may also invest in the stocks
of companies that should benefit from the commercialization of technological
advances, although they may not be directly involved in research and
development. Current income is incidental to the Fund's investment objective.
The investment objective is fundamental to the Fund and may not be changed
without shareholder approval. There can be no assurance that the Fund's
investment objective will be achieved.
This Fund is designed for long-term investors who understand and are willing
to accept the risk of loss involved in investing in a fund seeking long-term
capital appreciation. Investors should consider their investment goals, their
time horizon for achieving them, and their tolerance for risks before
investing in the Fund. If you seek an aggressive approach to capital growth
and can accept the above average level of price fluctuations that this Fund is
expected to experience, this Fund could be an appropriate part of your overall
investment strategy. The Fund should not be used as a trading vehicle and
should not be used as a complete investment program.
The Adviser believes that because of rapid advances in science and technology,
an investment in companies with business operations in these industries will
offer substantial opportunities for long-term capital appreciation. Of course,
prices of common stocks of even the best managed, most profitable corporations
are subject to market risk, which means their stock prices can decline. In
addition, swings in investor psychology or significant trading by large
institutional investors can result in price fluctuations.
The technology and science industries have exhibited and continue to
demonstrate rapid growth, both through increasing demand for existing products
and services and the broadening of the technology market. In general, the
stocks of large capitalized companies that are well established in the
technology market can be expected to grow with the market and will frequently
be found in the Fund's portfolio. The expansion of technology and
technology-related industries, however, also provides a favorable environment
for investment in small to medium capitalized companies. The Fund's investment
policy is not limited to any minimum capitalization requirement and the Fund
may hold securities without regard to the capitalization of the issuer. The
Adviser's overall stock selection for the Fund is not based on the
capitalization or size of the company but rather on an assessment of the
company's fundamental prospects. The Fund will not purchase stocks of
companies during their initial public offering. The Adviser anticipates,
however, that a significant portion of the Fund's holdings will be invested in
newly-issued securities.
Permitted Investments. Although the Fund will primarily invest in common
stocks issued by U.S. companies, the Fund also may invest in other types of
securities such as convertible stocks, preferred stocks, bonds and warrants,
as well as in foreign securities, when the investment in such securities is
considered consistent with the Fund's investment objective by the Adviser. The
Adviser does not currently intend to invest in these other types of securities
as a general matter.
The Fund will not invest more than 20% of its total assets in convertible
stocks, preferred stocks, bonds and warrants. The bonds in which the Fund may
invest are not required to be rated by a recognized rating agency. As a matter
of policy, however, the Fund will invest only in "investment grade" debt
securities (i.e., rated within the four highest ratings categories by a
nationally recognized statistical rating organization, e.g., BBB by Standard &
Poor's Corporation ("S&P"), Baa by Moody's Investor Services Inc. ("Moody's"),
BBB by Fitch Investors
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336637.10
<PAGE>
Services, Inc., or BBB by Duff & Phelps Credit Rating Co.) or, in the case of
unrated securities, debt securities that are, in the opinion of the Adviser,
of equivalent quality to "investment grade" securities. In addition, the Fund,
without limitation, will not necessarily dispose of any securities that fall
below investment-grade based upon the Adviser's determination as to whether
retention of such a security is consistent with the Fund's investment
objective.
The Fund may invest up to 20% of its assets in foreign securities. It is,
however, the present intention of the Fund to limit the investment in foreign
securities to no more than 5% of its assets. By investing a portion of its
assets in foreign securities, the Fund will attempt to take advantage of
differences among economic trends and the performance of securities markets in
various countries. To date, the market values of securities of issuers located
in different countries have moved relatively independently of each other.
During certain periods, the return on equity investments in some countries has
exceeded the return on similar investments in the United States. The Adviser
believes that, in comparison with investment companies investing solely in
domestic securities, it may be possible to obtain significant appreciation
from a portfolio of foreign investments and securities from various markets
that offer different investment opportunities and are affected by different
economic trends. International diversification reduces the effect that events
in any one country will have on the Fund's entire investment portfolio. On the
other hand, a decline in the value of the Fund's investments in one country
may offset potential gains from investments in another country.
The Fund's portfolio turnover rate will be influenced by the Fund's investment
objective, other investment policies, and the need to meet redemptions. While
the rate of portfolio turnover will not be a limiting factor when the Adviser
deems changes appropriate, it is anticipated that given the Fund's investment
objective, its annual portfolio turnover should not generally exceed 30%. (A
portfolio turnover rate of 35% would occur, for example, if all of the stocks
in the Fund were replaced over a period of approximately three years.)
The Fund's investment policies, unlike its investment objective, are not
fundamental and may be changed by the Board of Directors without shareholder
approval. If a percentage limitation is adhered to at the time an investment
is made, a later change in percentage resulting from changes in the value of
the Fund's securities will not be considered a violation of the Fund's
policies or restrictions.
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS
The Technology and Science Industries. Companies in the rapidly changing
fields of science and technology face special risks. For example, their
products or services may not prove commercially successful or may become
obsolete quickly. The value of the Fund's shares may be susceptible to factors
affecting the technology, technology-related and science industries and to
greater risk and market fluctuation than an investment in a fund that invests
in a broader range of portfolio securities not concentrated in any particular
industry. As such, the Fund is not an appropriate investment for individuals
who are not long-term investors and who, as their primary objective, require
safety of principal or stable income from their investments. The technology,
technology-related and science industries may be subject to greater
governmental regulation than many other industries and changes in governmental
policies and the need for regulatory approvals may have a material adverse
effect on these industries. Additionally, companies in these industries may be
subject to risks of developing technologies, competitive pressures and other
factors and are dependent upon consumer and business acceptance as new
technologies evolve.
Smaller Capitalized Companies. The Adviser believes that smaller capitalized
companies generally have greater earnings and sales growth potential than
larger capitalized companies. The level of risk will be increased to the
extent that the Fund has significant exposure to smaller capitalized or
unseasoned companies (those with less than a three-year operating history).
Investments in smaller capitalized companies may involve greater risks, such
as limited product lines, markets and financial or managerial resources. In
addition, less frequently-traded securities may be subject to more abrupt
price movements than securities of larger capitalized companies.
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336637.10
<PAGE>
Foreign Securities. Investments in securities of foreign issuers may involve
risks that are not associated with domestic investments, and there can be no
assurance that the Fund's foreign investments will present less risk than a
portfolio of domestic securities. Foreign issuers may lack uniform accounting,
auditing and financial reporting standards, practices and requirements, and
there is generally less publicly available information about foreign issuers
than there is about U.S. issuers. Governmental regulation and supervision of
foreign stock exchanges, brokers and listed companies may be less pervasive
than is customary in the United States. Securities of some foreign issuers are
less liquid, and their prices are more volatile, than securities of comparable
domestic issuers. Foreign securities settlements may in some instances be
subject to delays and related administrative uncertainties which could result
in temporary periods when assets of the Fund are uninvested and no return is
earned thereon and may involve a risk of loss to the Fund. Foreign securities
markets may have substantially less volume than U.S. markets and far fewer
traded issues. Fixed brokerage commissions on foreign securities exchanges are
generally higher than in the United States and transaction costs with respect
to smaller capitalization companies may be higher than those of larger
capitalization companies. Income from foreign securities may be reduced by a
withholding tax at the source or other foreign taxes. In some countries, there
may also be the possibility of expropriation or confiscatory taxation (in
which the Fund could lose its entire investment in a certain market),
limitations on the removal of monies or other assets of the Fund, political or
social instability or revolution, or diplomatic developments that could affect
investments in those countries. In addition, it may be difficult to obtain and
enforce a judgment in a court outside the U.S.
Foreign Currency. Investments in foreign securities will usually be
denominated in foreign currency, and the Fund may temporarily hold funds in
foreign currencies. The value of the Fund's investments denominated in foreign
currencies may be affected, favorably or unfavorably, by the relative strength
of the U.S. dollar, changes in foreign currency and U.S. dollar exchange rates
and exchange control regulations. The Fund may incur costs in connection with
conversions between various currencies. The Fund's net asset value per share
will be affected by changes in currency exchange rates. Changes in foreign
currency exchange rates may also affect the value of dividends and interest
earned, gains and losses realized on the sale of securities and net investment
income and gains, if any, to be distributed to shareholders by the Fund. The
rate of exchange between the U.S. dollar and other currencies is determined by
the forces of supply and demand in the foreign exchange markets (which in turn
are affected by interest rates, trade flow and numerous other factors,
including, in some countries, local governmental intervention).
Borrowing. The Fund may from time to time borrow money from banks for
temporary, extraordinary or emergency purposes. In addition, the Fund may
engage in reverse repurchase agreements which will be treated as a borrowing.
Such borrowing will not exceed an amount equal to one-third of the value of
the Fund's total assets less its liabilities and will be made at prevailing
interest rates.
Illiquid Securities. The Fund may invest up to 15% (currently 10%, subject to
changes in certain state securities regulations) of its net assets in illiquid
securities, including restricted securities (i.e., securities whose resale is
contractually restricted or securities that are not readily marketable) and
other securities that are not readily marketable, such as repurchase
agreements of more than one week's duration, provided, however, that any
illiquid securities purchased by the Fund will have been registered under the
Securities Act of 1933 (the "1933 Act").
Short Sales. The Fund may make short sales of securities "against-the-box." A
short sale "against-the-box" is a sale of a security that the Fund either owns
an equal amount of or has the immediate and unconditional right to acquire at
no additional cost. The Fund will make short sales "against-the-box" as a form
of hedging to offset potential declines in long positions in the same or
similar securities.
Temporary Investments. When the Adviser believes that market conditions
warrant a temporary defensive position, the Fund may invest up to 100% of its
assets in short-term instruments such as commercial paper, bank certificates
of deposit, bankers' acceptances, variable rate demand instruments or
repurchase agreements for such securities and securities of the U.S.
Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. Investments in domestic bank
certificates of deposit and bankers'
-6-
336637.10
<PAGE>
acceptances will be limited to banks that have total assets in excess of $500
million and are subject to regulatory supervision by the U.S. Government or
state governments. The Fund's investments in foreign short-term instruments
will be limited to those that, in the opinion of the Adviser, equate generally
to the standards established for U.S. short-term instruments.
Repurchase Agreements. The Fund's portfolio position in cash or
cash-equivalents may include entering into repurchase agreements. A repurchase
agreement is an instrument under which an investor purchases a U.S. Government
security from a vendor, with an agreement by the vendor to repurchase the
security at the same price, plus interest at a specified rate. Repurchase
agreements may be entered into with member banks of the Federal Reserve System
or "primary dealers" (as designated by the Federal Reserve Bank of New York)
in U.S. Government securities. Repurchase agreements usually have a short
duration, often less than one week. The Fund requires continual maintenance by
the Fund's custodian of the market value of underlying collateral in amounts
equal to, or in excess of, the value of the repurchase agreement including the
agreed upon interest. If the institution defaults on the repurchase agreement,
the Fund will retain possession of the underlying securities. In addition, if
bankruptcy proceedings are commenced with respect to the seller, realization
on the collateral by the Fund may be delayed or limited and the Fund may incur
additional costs. In such case the Fund will be subject to risks associated
with changes in the market value of the collateral securities. The Fund
intends to limit repurchase agreements to transactions with institutions
believed by the Adviser to present minimal credit risk. Repurchase agreements
may be considered to be loans under the Investment Company Act of 1940.
Non-Diversified Status. Because the Fund is "non-diversified", more of the
Fund's assets may be concentrated in the common stock of any single issuer,
which may make the value of Fund shares more susceptible to certain risks than
shares of a diversified mutual fund. The Fund intends to qualify for tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended. The Fund will diversify its assets so that, at the close of
each quarter of its taxable year: (a) at least 50% of the total value of its
assets is represented by cash and cash items, government securities and other
securities with respect to which the Fund will not invest more than 5% of its
total assets, at market value, in the securities of any one issuer or more
than 10% of the outstanding voting securities of any one issuer and (b) not
more than 25% of the total value of its assets is invested in securities of
any one issuer or of any two or more issuers controlled by the Fund, which,
pursuant to the regulations under such Code, may be deemed to be engaged in
the same, similar or related trades or businesses. Changes in the market value
of securities in the Fund's portfolio generally will not cause the Fund to
cease to qualify as a regulated investment company unless any failure to
satisfy these restrictions exists immediately after the acquisition of any
security or other property and is wholly or partly the result of such
acquisition.
Brokerage and Execution Policies. The Adviser is responsible for the selection
of broker-dealers and the negotiation of any brokerage commission rates paid
by the Fund. The Adviser's primary consideration in effecting a security
transaction will be execution at the most favorable price. In the
over-the-counter markets, where a majority of the portfolio securities are
expected to be traded, orders are placed with responsible primary
market-makers unless a more favorable execution or price is believed to be
obtainable. In selecting a broker-dealer to execute exchange-traded
securities, the Adviser will also consider the reliability, integrity and
financial condition of the broker-dealer, the size of and difficulty in
executing the order, the value of the expected contribution of the
broker-dealer to the investment performance of the Fund on a continuing basis,
as well as other factors such as the broker-dealer's ability to engage in
transactions in securities of issuers which are thinly traded. The Adviser
does not intend to employ a broker-dealer whose commission rates fall outside
of the prevailing ranges of execution costs charged by other broker-dealers
offering similar services.
Except as noted above, the foregoing investment policies are not fundamental
and the Board of Directors of the Fund may change such policies without the
vote of a majority of outstanding voting securities of the Fund. A more
detailed description of the Fund's investment policies, including a list of
those restrictions on the Fund's investment activities which cannot be changed
without such a vote, appears in the Statement of Additional Information.
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INVESTMENT RESTRICTIONS
As a non-diversified investment company, 50% of the assets of the Fund are
subject to the following limitations: (a) it may not invest more than 5% of
its total assets in the securities of any one issuer, except obligations of
the United States Government and its agencies and instrumentalities, and (b)
it may not own more than 10% of the outstanding voting securities of any one
issuer. As used in this Prospectus, the term "majority of the outstanding
shares" of the Fund means, respectively, the vote of the lesser of (i) 67% or
more of the shares of the Fund present at the meeting, if more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the outstanding shares of the Fund.
The Fund operates under certain investment restrictions which are deemed
fundamental policies of the Fund and may be changed only with the approval of
the holders of a majority of Fund's outstanding shares. In addition to other
restrictions listed in the Statement of Additional Information, the Fund may
not (except where specified):
(i) invest more than 15% (currently 10%, subject to certain states'
securities regulations) of the market value of the Fund's net assets
in illiquid investments (as defined herein under "Illiquid
Securities") and including foreign securities and bank participation
interests for which a readily available market does not exist;
(ii) purchase securities on margin or borrow money, except (a) from banks
for extraordinary or emergency purposes (not for leveraging or
investment) or (b) by engaging in reverse repurchase agreements,
provided that (a) and (b) in the aggregate do not exceed an amount
equal to one-third of the value of the total assets of the Fund less
its liabilities (not including the amount borrowed) at the time of
the borrowing, and further provided that 300% asset coverage is
maintained at all times;
(iii) purchase securities while borrowings exceed 15% of its total assets;
(iv) mortgage, pledge or hypothecate any assets except that the Fund may
pledge not more than one-third of its total assets to secure
borrowings made in accordance with paragraph (ii) above. However,
although not a fundamental policy of the Fund, as a matter of
operating policy in order to comply with certain state statutes, the
Fund will not pledge its assets in excess of an amount equal to 15%
of net assets; or
(v) lend portfolio securities of value exceeding in the aggregate
one-third of the market value of the Fund's total assets less
liabilities other than obligations created by these transactions.
MANAGEMENT OF THE FUND
Adviser. Amerindo Investment Advisors Inc. (the "Adviser"), a registered
investment adviser, is a California corporation with its principal offices
located at One Embarcadero, Suite 2300, San Francisco, California 94111 and
399 Park Avenue, New York, New York 10022. The Adviser, an emerging growth
stock manager specializing in the technology and healthcare sectors, has been
retained by the Board of Directors as the investment adviser for the Fund
pursuant to an Investment Advisory Agreement entered into by the Fund on
behalf of each Class. The Adviser had assets under management of approximately
$2.3 billion at December 31, 1995. The Adviser, however, has not managed the
assets of an investment company prior to the Fund. The Adviser supervises all
aspects of the Fund's operations and provides investment advice and portfolio
management services to the Fund. The Fund's Annual Report to Shareholders will
contain information regarding the Fund's performance and will be provided,
without charge, upon request. Subject to the supervision of the Fund's Board
of Directors, the Adviser makes the Fund's day-to-day investment decisions,
arranges for the execution of portfolio transactions and generally manages the
portfolio investments.
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In the early 1980's, Amerindo Investment Advisers Inc. pioneered the management
of dedicated emerging technology portfolios of high technology and healthcare
stocks designed to service the financial needs of the institutional investor. As
reported in the Wall Street Journal's Money Manager Scoreboard on January 18,
1996, Amerindo ranked first for its one-year and 5-year performance. Amerindo
did not have a 10-year performance number available. The Money Manager
Scoreboard was a ranking at December 31, 1995 of the estimated stock- market
performance of U.S. money managers with over $100 million under management,
excluding hedge fund managers. The 1, 5 and 10-year performance rankings, was
compiled by Thompson Investment Software, CDA Investment Technologies, utilizing
data provided by CDA/Spectrum, with respect to data on 754, 409, and 217
managers, respectively.
In addition to managing the assets of the Fund, the Adviser manages assets on
a discretionary basis for other clients and, as a result, the Adviser may
effect transactions in such clients' accounts in securities in which the Fund
currently holds or, in the near future may hold, a position. The Adviser makes
the determination to purchase or sell a security based on numerous factors,
including those that may be particular to one or more of its clients.
Therefore, it is possible that the Adviser will effect transactions in certain
securities for select clients, which may or may not include the Fund, that it
may not deem, in its sole discretion, as being appropriate for other clients,
which may or may not include the Fund.
The following persons will be primarily responsible for the day-to-day
management of the Fund's portfolio.
Alberto W. Vilar, 54, began his career with Citibank N.A. in New York in 1964
and worked there as an International Credit Officer until 1967. From 1967 to
1971, he served as Vice President, Portfolio Manager and Manager of the
Investment Management Division of Drexel Burnham Lambert in New York. From 1971
to 1973, he served as Executive Vice President, Portfolio Manager and Director
of Equity Strategy at M.D. Sass Investor Services in New York. In 1973, he
became Vice President and Portfolio Manager of Endowment Management & Research
Corporation in Boston. From 1977 to 1979, he served as Senior Vice President,
Director of Research, Chief Investment Strategist and Partnership Manager of the
Boston Company in Boston. He founded the predecessors of Amerindo Advisors
(U.K.) Limited and Amerindo Investment Advisors, Inc. (Panama) in 1979 and has
served since then as a Principal Portfolio Manager. Mr. Vilar holds the degrees
of B.A. in Economics from Washington & Jefferson College and an M.B.A. from Iona
College, and he completed the Doctoral Studies Program in Economics at New York
University. Mr. Vilar has been a Chartered Financial Analyst since 1975.
Dr. Gary A. Tanaka, 51, served as a Portfolio Manager for Crocker Bank in San
Francisco from 1971 to 1977, and as a Partnership Manager for Crocker Investment
Management Corp. in San Francisco from 1978 to 1980. From 1975 to 1980, he also
served as a Consultant to Andron Cechettini & Associates in San Francisco. In
1980, he joined the predecessors of Amerindo Advisors (U.K.) Limited and
Amerindo Investment Advisors, Inc. (Panama) as a Principal Portfolio Manager.
Dr. Tanaka holds the degrees of B.S. in Mathematics from Massachusetts Institute
of Technology and Ph.D. in Applied Mathematics from Imperial College, University
of London.
Ralph H. Cechettini, 55, was a Vice President, Portfolio Manager and Partner
of Shuman, Agnew & Company from 1970 until 1976. In 1976, Mr. Cechettini
founded the firm, Cechettini & Company, where he remained until 1979. In 1979,
he started the firm of Andron Cechettini & Associates, Inc., where he was
President and Chief Executive Officer until 1989. In 1989, Mr. Cechettini
founded R.H. Cechettini & Associates (currently named C.I.M.), an investment
advisory firm through which he continues to manage assets for clients and, as
a result, may from time to time purchase securities substantially similar to
those purchased by the Fund. Since February, 1991, Mr. Cechettini has been
employed by Amerindo as a Portfolio Manager and Senior Analyst. Mr. Cechettini
holds a B.S. degree in Business from the University of San Francisco.
Adviser's Fees. Pursuant to the terms of the Investment Advisory Agreement, the
Fund will pay monthly advisory fees equal to 1.50% of each Class' annual average
daily net assets. This fee is higher than the fee paid by most other mutual
funds, however, the Board of Directors believes it to be reasonable in light of
the advisory services
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the Fund receives thereunder. The Adviser will also receive the service fees of
0.25% of each Class' average daily net assets. Any portion of the advisory fees
received by the Adviser may be used by the Adviser to provide investor and
administrative services and for distribution of Fund shares. The Adviser may
voluntarily waive a portion of its fee or assume certain expenses of the Fund.
This would have the effect of lowering the overall expense ratio of the Fund and
of increasing yield to investors in the Fund. See "Expense Limitation" in the
Statement of Additional Information.
Administrator. The Administrator for the Fund is Furman Selz LLC (the
"Administrator"), which has its principal office at 230 Park Avenue, New York,
New York 10169, and is primarily an institutional brokerage whose activities
include membership on the New York, American, Boston, Midwest, Pacific and
Philadelphia Stock
Exchanges, investment banking activities with offices in New York and San
Francisco, and mutual fund administrative activities with approximately $20
billion under administration for numerous mutual funds.
The Administrator and its affiliate, Furman Selz Capital Management, Inc.,
serves as a investment adviser to numerous individual and institutional
accounts. The Administrator also serves as administrator and distributor of
other mutual funds. The Fund may invest in these funds or in any other fund
which may in the future be affiliated with the Administrator or any of its
affiliates.
Pursuant to an Administrative Services Agreement with the Fund, the
Administrator provides all administrative services necessary for the Fund,
other than those provided by the Adviser, subject to the supervision of the
Fund's Board of Directors. The Adviser and the Administrator will provide
persons to serve as officers of the Fund. Such officers may be directors,
officers or employees of the Adviser or the Administrator or their affiliates.
Administrator's Fees. For the services rendered to the Fund by the
Administrator, the Fund pays the Administrator an annual fee paid monthly
equal to 0.15% of the Fund's aggregate average daily net assets. The
Administrator, however, has agreed to voluntarily waive a portion of its fees
as follows: 0.10% of the Fund's aggregate average daily net assets up to $500
million, .075% of the Fund's aggregate average daily net assets between $500
and $1 billion, 0.060% of the Fund's aggregate average daily net assets
between $1 billion and $2 billion, and 0.050% of the Fund's aggregate average
daily net assets over $2 billion. The Administrator may not change this waiver
policy without the prior consent of the Fund's Board of Directors. For
additional information, see "Custodian, Transfer Agent and Dividend Agent." In
addition, the Administrator serves as the Fund's transfer agent and performs
Fund accounting services for which it is paid separately.
Both the Investment Advisory Agreement and the Administrative Services
Agreement is terminable by the Board of Directors of the Fund, the Adviser or
the Administrator, respectively, on sixty days' written notice and terminate
automatically in the event of an "assignment" as defined by the Investment
Company Act. Each Agreement shall remain in effect for two years from the date
of its initial approval, and subject to annual approval of the Fund's Board of
Directors for one-year periods thereafter. Each Agreement provides that in the
absence of willful misfeasance, bad faith or gross negligence on the part of
the Adviser or the Administrator, respectively, or reckless disregard of its
obligations thereunder, the Adviser or the Administrator shall not be liable
for any action or failure to act in accordance with its duties thereunder.
Distributor. Pursuant to the Distribution Agreement entered into with the
Fund, Furman Selz LLC (the "Distributor") will serve as the exclusive
distributor of the Fund's shares. The Distributor will receive the
distribution fee equal to 0.25% of the Class A shares' average daily net
assets under the terms of the Plan. The Distributor pays the promotional and
advertising expenses related to the distribution of the Fund's shares and for
the printing of all Fund prospectuses used in connection with the distribution
and sale of Fund shares. In addition, the distribution fee may be used by the
Distributor to compensate financial intermediaries for providing distribution
assistance with respect to the sale of Class A shares. See "Management of
Fund" in the Statement of Additional Information. The Distributor has entered
into a dealer agreement with Garal & Company, Inc. (an affiliate of the
Adviser) to participate in the offer and sale of shares of the Fund.
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Expenses. The Fund is responsible for payment of its expenses, including the
following expenses, without limitation: fees payable to the Adviser,
Administrator, Custodian, Transfer Agent and Dividend Agent; brokerage and
commission expenses; Federal, state or local taxes, including issuance and
transfer taxes incurred by or levied on them; commitment fees, certain insurance
premiums and membership fees and dues in investment company organizations;
interest charges on borrowings; telecommunications expenses; recurring and
nonrecurring legal and auditing expenses; costs of organizing and maintaining
the Fund's existence as a corporation; compensation, including directors' fees,
of any directors, officers or employees who are not the officers of the Adviser,
the Administrator or their affiliates; costs of other personnel providing
administrative and clerical services; costs of shareholders' services and costs
of shareholders' reports, proxy solicitations, and corporate meetings; fees and
expenses of registering the Fund's shares under the appropriate federal
securities laws and of qualifying its shares under applicable state securities
laws, including expenses attendant upon the initial registration and
qualification of these shares and attendant upon renewals of, or amendments to,
those registrations and qualifications; and expenses of preparing, printing and
delivering the Prospectus to existing investors and of printing investor
application forms for investor accounts. The Adviser and the Administrator have
each agreed to a reduction in the amounts payable to it and to reimburse the
Fund, as necessary, if in any fiscal year the sum of the Fund's expenses exceeds
the limits set by applicable regulations of state securities commissions.
PURCHASE OF SHARES
Initial Purchase Period. All subscriptions during the initial purchase period
for shares of the Fund will be deposited in an interest-bearing escrow account
until the earlier of (1) the acceptance by the Fund of subscriptions for
shares of at least $100 million, or (2) 90 days from the date of this
Prospectus. Each subscriber's pro rata share of the interest earned in the
escrow account will be used to purchase additional full or fractional shares
of the Fund. The escrow account will be maintained with The Northern Trust
Company, the Fund's custodian. During this initial purchase period, investors
purchasing Class A shares may do so without incurring any initial sales load.
Initial Investments by Wire. Subject to acceptance by the Distributor, shares
of each Class of the Fund may be purchased by wiring immediately available
federal funds (subject to each Class's minimum investment) to Investors
Fiduciary Trust Company (see instructions below). The minimum initial
investment in Class A is $25,000 and the minimum initial investment in Class D
is $150,000, each of which may be waived by the Fund, from time to time. A
completed Account Application should be forwarded to the Fund at the address
noted below under "Initial Investments by Mail" in advance of the wire.
Notification must be given to the Fund at 1-888-TECH FUND prior to 4:15 p.m.,
New York time, with funds to be wired on the next business day. (Prior
notification must also be received from investors with existing accounts.)
Funds should be wired through the Federal Reserve Bank to:
Investors Fiduciary Trust Company
Kansas City, MO
ABA# 101003621
Account # 7512996
F/B/O Amerindo Technology Fund
Ref. (Class)
Fund Acct. No. _______________
Federal fund purchases will be accepted only on a day on which the Fund, the
Distributor and the custodian bank are open for business.
Initial Investments by Mail. Subject to acceptance by the Fund's Distributor,
an account may be opened by completing and signing an Account Application and
mailing it to the Fund at the address noted below, together with a check
(subject to each Class's minimum investment) payable to:
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Amerindo Technology Fund
237 Park Avenue
New York, New York 10017
The minimum initial investment in Class A is $25,000 and the minimum initial
investment in Class D is $150,000, each of which may be waived by the Fund, from
time to time. Subject to acceptance by the Fund's Distributor, payment for the
purchase of shares received by mail will be credited to a shareholder's account
at the net asset value per share of the particular Class next determined after
receipt. Such payment need not be converted into federal funds (monies credited
to the Fund's custodian bank by a Federal Reserve Bank) before acceptance by the
Fund's Distributor.
Additional Investments. Additional investments may be made at any time
(subject to the minimum subsequent investment in Class A of $2,500 and the
minimum subsequent investment in Class D of $15,000) by purchasing shares of
the particular Class at net asset value, plus any applicable sales load, by
mailing a check to the Fund at the address noted under "Initial Investments by
Mail" (payable to Amerindo Technology Fund Class A/Class D) or by wiring
monies to the clearing bank as outlined above. Notification must be given to
the Fund at 1-888-TECH FUND - prior to 4:15 p.m., New York time, with funds to
be wired on the next business day.
Other Purchase Information. Investors may open accounts in the Fund only
through the exclusive Distributor for the Fund. Under the Distribution
Agreement, the Distributor, for nominal consideration and as agent for the
Fund, will solicit orders for the purchase of Fund shares, provided that any
subscriptions and orders will not be binding on the Fund until accepted by the
Fund as principal.
The purchase price paid for shares of each Class is the current public
offering price, that is, the next determined net asset value of the shares
after the order is placed plus any applicable sales charge, with respect to
Class A shares. See "Net Asset Value" herein. The sales load, with respect to
Class A shares, is a one-time charge paid at the time of purchase of shares,
most of which ordinarily goes to the investor's broker-dealer as compensation
for the services provided the investor. Class A Shares of the Fund are sold on
a continuous basis with a maximum front-end sales charge of 3.00% of the net
asset value per share. Class D Shares are sold without a front-end sales load.
Volume discounts are provided for both initial purchase, as well as for
additional purchases of Class A Shares of the Fund. See "Reduction or
Elimination of Sales Loads" herein. The Fund reserves the right to reject any
subscription for shares. In addition, the Fund does not intend to issue
certificates.
The Fund must receive an order and payment by the close of business for the
purchase to be effective and dividends to be earned on the same day. If funds
are received after the close of business, the purchase will become effective
and dividends will be earned on the next business day. Purchases made by check
will be invested and begin earning income on the next business day after the
check is received.
Shares of the Fund may be purchased in exchange for securities which are
permissible investments of the Fund, subject to the Adviser's determination
that the securities are acceptable. Securities accepted in exchange will be
valued at the mean between their bid and asked quotations. In addition,
securities accepted in exchange will be liquid securities that are not
restricted as to transfer and will have a value that is readily ascertainable
(and not established only by evaluation procedures) as evidenced by a listing
on NASDAQ, the American Stock Exchange or the New York Stock Exchange, or on
the basis of prices provided by a pricing service. The Fund and the Adviser
reserve the right to reject any such purchase order. Shareholders will bear
any costs associated with a purchase of Fund shares through such an exchange.
All purchases of the Fund's shares will be made in full and fractional shares
of the Fund calculated to three decimal places.
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Shares of the Fund may also be sold to corporations or other institutions such
as trusts, foundations or broker-dealers purchasing for the accounts of others
("Shareholder Organizations"). Investors purchasing and redeeming shares of
the Fund through a Shareholder Organization may be charged a transaction-based
fee or other fee for the services of such organization. Each Shareholder
Organization is responsible for transmitting to its customers a schedule of
any such fees and information regarding any additional or different conditions
regarding purchases and redemptions. Customers of Shareholder Organizations
should read this Prospectus in light of the terms governing accounts with
their organization. The Fund does not pay to or receive compensation from
Shareholder Organizations for the sale of the Fund's shares.
The Fund has available a form of Individual Retirement Account ("IRA") which
may be obtained from the Fund that permits the IRA to invest in either Class A
or Class D Shares of the Fund. The minimum investment for all retirement plans
investing in either Class of the Fund is the same as the minimum initial
investment for such Class - - $25,000 for Class A and $150,000 for Class D.
Investors desiring information regarding investments through IRAs should write
or telephone the Fund.
FOR CLASS A SHAREHOLDERS ONLY
REDUCTION OR ELIMINATION OF SALES LOADS
Volume Discounts. Volume discounts are provided if the total amount being
invested in Class A shares of the Fund reach the levels indicated in the sales
load schedule provided below. The applicable volume discount available to
investors is determined by aggregating all Class A share purchases of the
Fund. Volume discounts are also available to investors making sufficient
additional purchases of Class A Fund shares. The applicable sales charge may
be determined by adding to the total current value of Class A shares already
owned in the Fund the value of new purchases computed at the offering price on
the day the additional purchase is made. For example, if an investor
previously purchased, and still holds, Class A shares worth $70,000 at the
current offering price and purchases an additional $5,000 worth of Class A
shares, the sales charge applicable to the new purchase would be that
applicable to the $75,000 to $149,999 bracket in the sales load schedule
provided below.
Dealer Discount as a
Sales Sales Charge as a % of %
Amount of Purchase Charge Net Amount Invested of Offering Price
$25,000-74,999 2.50% 2.56% 2.50
$75,000-149,999 1.00% 1.01% 1.00
$150,000 and over 0 0 0
Letter of Intent. Any investor in Class A may sign a Letter of Intent,
available from the Fund, stating an intention to make purchases of Class A
shares totaling a specified amount on an aggregate basis within a period of
thirteen months. Purchases within the thirteen-month period can be made at the
reduced sales load applicable to the total amount of the intended purchase
noted in the Letter of Intent. If a larger purchase is actually made during
the period, then a downward adjustment will be made to the sales charge based
on the actual purchase size. Any shares purchased within 90 days preceding the
actual signing of the Letter of Intent are eligible for the reduced sales
charge and the appropriate price adjustment will be made on those share
purchases. A number of shares equal to % of the dollar amount of intended
purchases specified in the Letter of Intent is held in escrow by the
Distributor until the purchases are completed. Dividends and distributions on
the escrowed Class A shares are paid to the investor. If the intended
purchases are not completed during the Letter of Intent period, the investor
is required to pay the
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Fund an amount equal to the difference between the regular sales load applicable
to a single purchase of the number of Class A shares actually purchased and the
sales load actually paid. If such payment is not made within 20 days after
written request by the Fund, then the Fund has the right to redeem a sufficient
number of escrowed Class A shares to effect payment of the amount due. Any
remaining escrowed Class A shares are released to the investor's account.
Agreeing to a Letter of Intent does not obligate you to buy, or the Fund to
sell, the indicated amount of Class A shares. You should read the Letter of
Intent carefully before signing.
Purchased At Net Value. There is no initial sales charge for "Qualified
Persons". Qualified Persons is defined to include persons who are active or
retired Trustees, Directors, officers, partners, employees, clients,
independent professional contractors, shareholders or registered
representatives (including their spouses and children) of the Investment
Adviser, Distributor or any affiliates or subsidiaries thereof (the Directors,
officers or employees of which shall also include their parents and siblings
for all purchases of Fund shares) or any Director, officer, partner, employee
or registered representative (including their spouses and children) of any
Broker-Dealer who has executed a valid and currently active selling agreement
with the Distributor.
REDEMPTION OF SHARES
Shares of the Fund may be redeemed by mail, or, if authorized, by telephone.
The value of shares redeemed may be more or less than the purchase price,
depending on the market value of the investment securities held by the Fund.
By Mail. The Fund will redeem its shares at the net asset value next
determined after the request is received in "good order". The net asset value
per share of the Fund is determined as of 4:15 p.m., New York time, on each
day that the New York Stock Exchange, Inc. (the "NYSE"), the Fund and the
Distributor are open for business. Requests should be addressed to Amerindo
Technology Fund, 237 Park Avenue, New York, New York 10017.
Requests in "good order" must include the following documentation:
(a) a letter of instruction, if required, or a stock assignment
specifying the number of shares or dollar amount to be
redeemed, signed by all registered owners of the shares in
the exact names in which they are registered;
(b) any required signature guarantees (see "Signature Guarantees"
below); and
(c) other supporting legal documents, if required, in the case
of estates, trusts, guardianships, custodianships,
corporations, pension and profit sharing plans and other
organizations.
Signature Guarantees. To protect shareholder accounts, the Fund and its
transfer agent from fraud, signature guarantees are required to enable the
Fund to verify the identity of the person who has authorized a redemption from
an account. Signature guarantees are required for (1) redemptions where the
proceeds are to be sent to someone other than the registered shareholder(s)
and the registered address, and (2) share transfer requests. Signature
guarantees may be obtained from certain eligible financial institutions,
including but not limited to, the following: banks, trust companies, credit
unions, securities brokers and dealers, savings and loan associations and
participants in the Securities Transfer Association Medallion Program
("STAMP"), the Stock Exchange Medallion Program ("SEMP") or the New York Stock
Exchange Medallion Signature Program ("MSP"). Shareholders may contact the
Fund at 1-888-TECH FUND for further details.
By Telephone. Provided the Telephone Redemption Option has been authorized, a
redemption of shares may be requested by calling the Fund at 1-888-TECH FUND and
requesting that the redemption proceeds be mailed to the primary registration
address or wired per the authorized instructions. If the Telephone Redemption
Option is
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authorized, the Fund and its transfer agent may act on telephone instructions
from any person representing himself or herself to be a shareholder and believed
by the Fund or its transfer agent to be genuine. The transfer agent's records of
such instructions are binding and shareholders, and not the Fund or its transfer
agent, bear the risk of loss in the event of unauthorized instructions
reasonably believed by the Fund or its transfer agent to be genuine. The Fund
will employ reasonable procedures to confirm that instructions communicated are
genuine and, if it does not, it may be liable for any losses due to unauthorized
or fraudulent instructions. The procedures employed by the Fund in connection
with transactions initiated by telephone include tape recording of telephone
instructions and requiring some form of personal identification prior to acting
upon instructions received by telephone.
Further Redemption Information. Redemption proceeds for shares of the Fund
recently purchased by check may not be distributed until payment for the
purchase has been collected, which may take up to fifteen business days from
the purchase date. Shareholders can avoid this delay by utilizing the wire
purchase option.
Other than as described above, payment of the redemption proceeds will be made
within seven days after receipt of an order for a redemption. The Fund may
suspend the right of redemption or postpone the date at times when the NYSE or
the bond market is closed or under any emergency circumstances as determined
by the United States Securities and Exchange Commission (the "SEC").
If the Board of Directors determines that it would be detrimental to the best
interests of the remaining shareholders of the Fund to make a payment wholly
or partly in cash, the Fund may pay the redemption proceeds in whole or in
part by a distribution in-kind of readily marketable securities held by a Fund
in lieu of cash in conformity with applicable rules of the SEC. Investors
generally will incur brokerage charges on the sale of portfolio securities so
received in payment of redemptions.
Redemption Fee. The Fund is designed for long-term investors willing to accept
the risks associated with a long-term investment in the common stocks of
companies in the technology, technology-related and science industries. The
Fund is not designed for short-term traders whose frequent purchases and
redemptions can generate substantial cash flow. These cash flows can
unnecessarily disrupt the Fund's investment program. Short-term traders often
redeem when the market is most turbulent, thereby forcing the sale of
underlying securities held by the Fund at the worst possible time as far as
long-term investors are concerned. Additionally, short-term trading drives up
the Fund's transaction costs -- measured by both commissions and bid/ask
spreads -- which are borne by the remaining long-term investors. For these
reasons, the Fund assesses a 3.00% fee on the redemption of shares held for
less than one year. Redemption fees will be paid to the Fund to help offset
transaction costs. The fee does not apply to any shares purchased through
reinvested distributions (dividends and capital gains) or to shares held in
retirement plans (such as 401(k), 403(b), 457, Keogh, Profit Sharing Plans,
and Money Purchase Pension Plans). This fee also does not apply to shares held
in IRA accounts.
The Fund will use the first-in, first-out (FIFO) method to determine the
one-year holding period. Under this method, the date of the redemption will be
compared to the earliest purchase date of shares held in the account. If this
holding period is less than one year, the redemption fee will be assessed. In
determining "one year" the Fund will use the anniversary date of a
transaction. Thus, shares purchased on April 5, 1996, for example, will be
subject to the fee if they are redeemed on or prior to April 4, 1997. If they
are redeemed on or after April 5, 1997, the shares will not be subject to the
redemption fee.
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<PAGE>
DIVIDENDS AND DISTRIBUTIONS
At least 90% of each Class's net investment income, will be declared as
dividends and paid annually. If an investor's shares are redeemed prior to the
date on which dividends are normally declared and paid, accrued but unpaid
dividends will be paid with the redemption proceeds. Substantially all the
realized net capital gains for each Class, if any, are declared and paid on an
annual basis. Dividends are payable to investors of record at the time of
declaration. For a discussion of the taxation of dividends or distributions,
see "Taxes".
The net investment income of each Class for each business day is determined
immediately prior to the determination of net asset value. Net investment
income for other days is determined at the time net asset value is determined
on the prior business day. Shares of each Class earn dividends on the business
day their purchase is effective but not on the business day their redemption
is effective. See "Purchase of Shares" and "Redemption of Shares."
Choosing A Distribution Option. Distribution of dividends from each Class may
be made in accordance with several options. A shareholder may select one of
three distribution options:
1. Automatic Reinvestment Option. Both dividends and capital gains
distributions will be automatically reinvested in additional shares of the
Fund unless the investor has elected one of the other two options.
2. Cash Dividend Option. Dividends will be paid in cash, and capital gains,
if any, will be reinvested in additional shares.
3. All Cash Option. Both dividend and capital gains distributions will be
paid in cash.
NET ASSET VALUE
Net asset value per share for each Class is determined by subtracting from the
value of such Class's total assets the amount of its liabilities and dividing
the remainder by the number of its outstanding shares. The value of each
security for which readily available market quotations exist is based on a
decision as to the broadest and most representative market for the security;
the value is based either on the last sale price on a national securities
exchange, or, in the absence of recorded sales, at the readily available
closing bid price on such exchanges, or at the quoted bid price in the
over-the-counter market. Assets for which market quotations are not readily
available are valued in accordance with procedures established by the Fund's
Board of Directors, including use of an independent pricing service or
services which use prices based on yields or prices of comparable securities,
indications as to values from dealers and general market conditions.
The Fund computes each Class' net asset value once daily on Monday through
Friday, at 4:15 p.m. New York time, except on the holidays listed under "Net
Asset Value" in the Statement of Additional Information.
DISTRIBUTION AND SERVICE PLAN
The Fund, on behalf of each Class, has adopted a distribution and service
plan, pursuant to Rule 12b-1 under the Act (the "Rule"). The Rule provides
that an investment company which bears any direct or indirect expense of
distributing its shares must do so only in accordance with a plan permitted by
the Rule. The Plan provides that each Class will compensate the Adviser for
certain expenses and costs incurred in connection with providing shareholder
servicing and maintaining shareholder accounts and to compensate parties with
which it has written agreements and whose clients own shares of each Class for
providing servicing to their clients ("shareholder servicing"), which is
subject to a maximum service fee of 0.25% per annum of each Class's average
daily net assets. The Plan also provides that the Distributor is paid a fee
equal to 0.25% of Class A's average daily net assets, on an annual basis,
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<PAGE>
to enable it to provide promotional support to the Fund and to make payments to
broker-dealers and other financial institutions with which it has written
agreements and whose clients are Class A shareholders (each a "broker-dealer")
for providing distribution assistance.
Each shareholder servicing agent will, as agent for its customers, among other
things; answer customer inquiries regarding account status and history, the
manner in which purchases and redemptions of shares of the Fund may be effected
and certain other matters pertaining to the Fund; assist shareholders in
designating and changing dividend options, account designations and addresses;
provide necessary personnel and facilities to establish and maintain shareholder
accounts and records; assist in processing purchase and redemption transactions;
arrange for the wiring of funds; transmit and receive funds in connection with
customer orders to purchase or redeem shares; verify and guarantee shareholder
signatures in connection with redemption orders and transfers and changes in
shareholder designated accounts; furnish (either separately or on an integrated
basis with other reports sent to a shareholder by the Fund) monthly and year-end
statements and confirmations of purchases and redemptions, as required by Rule
10b-10 under the Securities Exchange Act of 1934; transmit, on behalf of the
Fund, proxy statements, annual reports, updating prospectuses and other
communications from the Fund to shareholders; receive, tabulate and transmit to
the Fund, proxies executed by shareholders with respect to meetings of
shareholders of the Fund; and provide such other related services as the Fund or
a shareholder may request.
The Plan provides that the Adviser and the Distributor may make payments from
time to time from their own resources which may include the advisory fee and
past profits for the following purposes: (i) to defray the costs of and to
compensate others, including financial intermediaries with whom the
Distributor or Adviser has entered into written agreements, for performing
shareholder servicing and related administrative functions; (ii) to compensate
certain financial intermediaries for providing assistance in distributing each
Class' shares; (iii) to pay the costs of printing and distributing the Fund's
prospectus to prospective investors; and (iv) to defray the cost of the
preparation and printing of brochures and other promotional materials,
mailings to prospective shareholders, advertising, and other promotional
activities, including the salaries and/or commissions of sales personnel in
connection with the distribution of the Fund's shares. The Distributor or the
Adviser, as the case may be, in their sole discretion, will determine the
amount of such payments made pursuant to the Plan with the shareholder
servicing agents and broker-dealers they have contracted with, provided that
such payments made pursuant to the Plan will not increase the amount which the
Fund is required to pay to the Distributor or the Adviser for any fiscal year
under the shareholder servicing agreements or otherwise. Any servicing fees
paid to the Adviser also may be used for purposes of (i) above and any asset
based sales charges paid to the Distributor also may be used for purposes of
(ii), (iii) or (iv) above.
Shareholder servicing agents and broker-dealers may charge investors a fee in
connection with their use of specialized purchase and redemption procedures
offered to investors by the shareholder servicing agents and broker-dealers.
In addition, shareholder servicing agents and broker-dealers offering purchase
and redemption procedures similar to those offered to shareholders who invest
in the Fund directly may impose charges, limitations, minimums and
restrictions in addition to or different from those applicable to shareholders
who invest in the Fund directly. Accordingly, the net yield to investors who
invest through shareholder servicing agents and broker-dealers may be less
than by investing in the Fund directly. An investor should read the Prospectus
in conjunction with the materials provided by the shareholder servicing agent
and broker-dealer describing the procedures under which Fund shares may be
purchased and redeemed through the shareholder servicing agent and
broker-dealer.
The Glass-Steagall Act limits the ability of a depository institution to
become an underwriter or distributor of securities. However, it is the Fund's
position that banks are not prohibited from acting in other capacities for
investment companies, such as providing administrative and shareholder account
maintenance services and receiving compensation from the Distributor for
providing such services. However, this is an unsettled area of the law and if
a determination contrary to the Fund's position is made by a bank regulatory
agency or court concerning shareholder servicing and administration payments
to banks from the Distributor, any such payments will be terminated and any
shares registered in the banks' names, for their underlying customers, will be
re-registered in the name of the customers at no cost to the Fund or its
shareholders. In addition, state securities laws on this issue
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<PAGE>
may differ from the interpretation of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
In accordance with the Rule, the Plan provides that all written agreements
relating to the Plan entered into by the Fund, on behalf of each Class, the
Distributor or the Adviser, and the shareholder servicing agents,
broker-dealers, or other organizations must be in a form satisfactory to the
Fund's Board of Directors. In addition, the Plan requires the Fund and the
Distributor to prepare, at least quarterly, written reports setting forth all
amounts expended for distribution purposes by the Fund and the Distributor
pursuant to the Plan and identifying the distribution activities for which
those expenditures were made.
PERFORMANCE INFORMATION
The Fund, on behalf of each Class, may from time to time include yield,
effective yield and total return information in advertisements or reports to
investors or prospective investors. The "yield" refers to income generated by
an investment in a particular Class of the Fund over a thirty-day period. This
income is then "annualized." That is, the amount of income generated by the
investment during that month is assumed to be generated each month over a
12-month period and is shown as a percentage of the investment. The "effective
yield" is calculated similarly but, when annualized, the monthly income earned
by an investment in a particular Class of the Fund is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The "total
return" of the Fund is required to be included in any advertisement containing
each Class' yield. Total return is the average annual total return for the
period which began at the inception of a particular Class of the Fund and
ended on the date of the most recent balance sheet, and is computed by finding
the average annual compound rates of return over the period that would equate
the initial amount invested to the ending redeemable value. For a description
of the methods used to calculate total return, see the Statement of Additional
Information. Yield, effective yield and total return may fluctuate daily and
do not provide a basis for determining future yields, effective yields or
total returns. For Class A Shares, the annual total rate of return and yield
figures will assume payment of the maximum initial sales load at the time of
purchase. One-, five- and ten-year periods will be shown, unless the Class of
the Fund has been in existence for a shorter period.
The yields and the net asset values of each Class of shares of the Fund will
vary based on the current market value of the securities held by the Fund and
changes in such Class' expenses. The Adviser, the Administrator or the
Distributor may voluntarily waive a portion of their fees on a month-to-month
basis. These actions would have the effect of increasing the net income (and
therefore the yield and total rate of return) of a Class of shares of the Fund
during the period such waivers are in effect. These factors and possible
differences in the methods used to calculate the yields and total rates of
return should be considered when comparing the yields or total rates of return
of a Class of the Fund to yields and total rates of return published for other
investment companies and other investment vehicles.
The Fund's Annual Report to Shareholders will contain information regarding
the Fund's performance and will be provided, without charge, upon request.
DESCRIPTION OF COMMON STOCK
The Fund was incorporated in the State of Maryland on February 6, 1996. The
authorized capital stock of the Fund consists of one billion shares of stock
having a par value of one-tenth of one cent ($.001) per share. The Fund's Board
of Directors is authorized to divide the unissued shares into separate series of
stock, each series representing a separate, additional investment portfolio. The
Board currently has authorized the division of the unissued shares into two
Classes. Shares of any series or class will have identical voting rights, except
where, by law, certain matters must be approved by a majority of the shares of
the affected series or class. Each share of any series or
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<PAGE>
class of shares when issued will have equal dividend, distribution, liquidation
and voting rights for which it will be issued, and each fractional share will
have those rights in proportion to the percentage that the fractional share
represents of a whole share. Shares will be voted in the aggregate. There are no
conversion or preemptive rights in connection with any shares of the Fund. All
shares, when issued in accordance with the terms of the offering, will be fully
paid and non-assessable. Shares are redeemable at net asset value, at the option
of the investor.
The shares of the Fund have non-cumulative voting rights, which means that the
holders of more than 50% of the shares outstanding voting for the election of
directors can elect 100% of the directors if the holders choose to do so, and,
in that event, the holders of the remaining shares will not be able to elect any
person or persons to the Board of Directors. Unless specifically requested by an
investor who is an investor of record, the Fund does not issue certificates
evidencing Fund shares. On April 30, 1996, the Adviser purchased $100,000 shares
of the Fund at an initial purchase price of $10.00 per share.
TAXES
The Fund intends to elect to qualify under the Internal Revenue Code of 1986,
as amended (the "Code"), as a regulated investment company. As a regulated
investment company, the Fund will not be subject to federal income taxes on
the investment company taxable income and long-term capital gains that it
distributes to its investors, provided that at least 90% of its investment
company taxable income for the taxable year is distributed. The Fund's policy
is to distribute as dividends each year 100% (and in no event less than 90%)
of its investment company taxable income. If for any taxable year a Portfolio
does not qualify as a regulated investment company, all of its taxable income
will be taxed to it at corporate rates and no distribution will be deductible.
The Fund has adopted a policy of declaring dividends annually, in an amount
based on its net investment income. Dividends paid from taxable income and
distributions of any realized short-term capital gains are taxable to
investors as ordinary income for federal income tax purposes, whether received
in cash or reinvested in additional shares of the Fund. Distributions of net
realized capital gains after utilization of capital loss carryforwards, if
any, are made annually to meet applicable distribution and excise tax
requirements. If shares that are redeemed have been held by the investor for
more than one year, the investor will generally realize a long-term capital
gain or loss upon a redemption. An investor who acquires shares shortly before
the Fund pays a dividend will be required to include the dividend in income
even though the dividend represents, in effect, a return of capital.
The Fund is required, subject to certain exemptions, to withhold at a rate of
31% from dividends paid or credited to investors in addition to the proceeds
from the redemption of Fund shares, if a correct taxpayer identification
number, certified when required, is not on file with the Fund. Corporate
investors are not subject to this requirement.
The Code imposes a nondeductible 4% excise tax on the Fund unless it meets
certain requirements with respect to distributions of net ordinary income and
capital gain net income. It is anticipated that this provision will not have
any material impact on the Fund.
Dividends and interest paid by foreign issuers may be subject to withholding
and other foreign taxes, which may decrease the net return on foreign
investments as compared to dividends and interest paid by domestic issuers.
The Fund does not expect that it will qualify to elect to pass through to its
investors the right to take a foreign tax credit for foreign taxes withheld
from dividends and interest payments.
For federal income tax purposes, distributions of net capital gains (the excess
of net long-term capital gains over net short-term capital loss), if any, are
taxable as net capital gains regardless of the length of time investors have
owned their shares. A preferential tax rate for net capital gains is currently
applicable for individual shareholders. Generally, on the sale or exchange of
obligations held for more than one year, gain realized by the Fund will be
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<PAGE>
long-term capital gain. Such capital gain, if any, will be distributed as
capital gain dividends. Capital gain dividends, designated as such in a written
notice to investors mailed not later than 60 days after the Fund taxable year
closes, will be taxed as long-term capital gain. However, if an investor
receives a capital gain dividend and sells shares after holding them for six
months or less (not including periods during which the investor holds an
offsetting position), then any loss realized on the sale will be treated as
long-term capital loss to the extent of such capital gain dividend.
The federal, state and local income tax rules that apply to the Fund and its
investors have changed extensively in recent years, and investors should
recognize that additional changes may be made in the future, some of which
could have an adverse effect on the Fund and its investors for federal and/or
state and local income tax purposes.
Investors in the Fund should consult their tax advisors about the federal,
state and local tax consequences of an investment in the Fund in light of
their own individual circumstances.
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND AGENT
The Northern Trust Company serves as custodian for the Fund's cash and
securities. The Custodian does not assist in, and is not responsible for,
investment decisions involving assets of the Fund. Furman Selz LLC, the Fund's
Administrator and Distributor, also acts as the Fund's transfer and dividend
agent. The Fund pays the Administrator $__ per year per account, plus
out-of-pocket expenses, for such services.
COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the issuance of shares of common stock of the
Fund are passed upon by Battle Fowler LLP, 75 East 55th Street, New York, New
York 10022. Morrison, Brown, Argiz & Co., P.A., 9795 South Dixie Highway,
Miami, Florida 33156, have been selected as auditors for the Fund.
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<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY......................................................... 2
EXPENSE SUMMARY............................................................ 3
INVESTMENT OBJECTIVE AND POLICIES.......................................... 4
ADDITIONAL INVESTMENT INFORMATION AND RISK FACTORS......................... 5
INVESTMENT RESTRICTIONS.................................................... 8
MANAGEMENT OF THE FUND..................................................... 8
PURCHASE OF SHARES......................................................... 11
REDUCTION OR ELIMINATION OF SALES LOADS.................................... 13
REDEMPTION OF SHARES....................................................... 14
DIVIDENDS AND DISTRIBUTIONS................................................ 15
NET ASSET VALUE............................................................ 16
DISTRIBUTION AND SERVICE PLAN.............................................. 16
PERFORMANCE INFORMATION.................................................... 18
DESCRIPTION OF COMMON STOCK................................................ 18
TAXES...................................................................... 19
CUSTODIAN, TRANSFER AGENT AND DIVIDEND AGENT............................... 20
COUNSEL AND INDEPENDENT AUDITORS........................................... 20
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AMERINDO TECHNOLOGY FUND
STATEMENT OF ADDITIONAL INFORMATION
May , 1996
This Statement of Additional Information sets forth information
which may be of interest to investors but which is not necessarily included in
the Fund's Prospectus, dated May , 1996 (the "Prospectus"). This Statement of
Additional Information is not a prospectus and should be read in conjunction
with the Prospectus, a copy of which may be obtained without charge by writing
to the Fund at 237 Park Avenue, New York, New York 10017. This Statement of
Additional Information is incorporated by reference into the Prospectus in its
entirety.
338027.6
<PAGE>
THE FUND
Amerindo Technology Fund (the "Fund"), a non-diversified,
open-end, management investment company, is a series of Amerindo Funds Inc.
which was incorporated under Maryland law on February 6, 1996. The Fund offers
two classes of shares to investors -- Class A and Class D shares (a "Class" or
the "Classes"). This Fund is designed for long-term investors who understand
and are willing to accept the risk of loss involved in seeking long-term
capital appreciation. The Fund is also designed as a specialized investment
vehicle and is not intended to be used by an investor as a complete investment
program. The Fund should not be used as a trading vehicle. Amerindo Investment
Advisors Inc. (the "Adviser"), manages the investments of the Fund from
day-to-day in accordance with the Fund's investment objective and policies.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
A detailed description of the types and quality of the
securities in which the Fund may invest is given in the Prospectus and is
incorporated herein by reference. The investment objective is fundamental and
may be changed only with the approval of a majority of the Fund's outstanding
shares. There can be no assurance that the Fund's investment objective will be
achieved.
The Fund's investment objective is to seek long-term capital
appreciation by investing at least 65% of its assets (although the Fund
intends, as a non-fundamental policy, to invest at least 80% of its assets) in
the common stocks of companies with business operations in the technology,
technology-related and science industries. Current income is incidental to the
Fund's investment objective. The investment objective is fundamental to the
Fund and may not be changed without shareholder approval. There can be no
assurance that the Fund's investment objective will be achieved.
This Fund is designed for long-term investors who understand
and are willing to accept the risk of loss involved in investing in a mutual
fund seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance
for risks before investing in the Fund. If you seek an aggressive approach to
capital growth and can accept the above average level of price fluctuations
that this Fund is expected to experience, this Fund could be an appropriate
part of your overall investment strategy. The Fund should not be used as a
trading vehicle.
DESCRIPTION OF THE FUND'S INVESTMENT SECURITIES AND DERIVATIVES
The Technology and Science Industries
The Adviser believes that because of rapid advances in science
and technology, an investment in companies with business operations in these
industries will offer substantial opportunities for long-term capital
appreciation. Of course, prices of common stocks of even the best managed,
most profitable corporations are subject to market risk, which means their
stock prices can decline. In addition, swings in investor psychology or
significant trading by large institutional investors can result in price
fluctuations. Industries likely to be represented in the portfolio include
computers, networking and internetworking software, computer aided design,
telecommunications, media and information services, hospital supply and
medical devices and biotechnology. The Fund may also invest in the stocks of
companies that should benefit from the commercialization of technological
advances, although they may not be directly involved in research and
development.
The technology and science industries have exhibited and
continue to exhibit rapid growth, both through increasing demand for existing
products and services and the broadening of the technology market. In general,
the stocks of large capitalized companies that are well established in the
technology market can be expected to grow with the market and will frequently
be found in the Fund's portfolio. The expansion of technology and
technology-related industries, however, also provides a favorable environment
for investment in small to medium capitalized companies. The Fund's investment
policy is not limited to any minimum capitalization requirement and the Fund
may hold securities without regard to the capitalization of the issuer. The
Adviser's overall stock selection for the Fund is not based on the
capitalization or size of the company but rather on an assessment of the
company's fundamental prospects. The Adviser anticipates that a majority of
the Fund's holdings will be invested in the stocks of companies which are
purchased during their initial public offerings.
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<PAGE>
Companies in the rapidly changing fields of science and
technology face special risks. For example, their products or services may not
prove commercially successful or may become obsolete quickly. The value of the
Fund's shares may be susceptible to factors affecting the technology,
technology-related and science industries and to greater risk and market
fluctuation than an investment in a fund that invests in a broader range of
portfolio securities not concentrated in any particular industry. As such, the
Fund is not an appropriate investment for individuals who are not long-term
investors and who, as their primary objective, require safety of principal or
stable income from their investments. The technology, technology-related and
science industries may be subject to greater governmental regulation than many
other industries and changes in governmental policies and the need for
regulatory approvals may have a material adverse effect on these industries.
Additionally, companies in these industries may be subject to risks of
developing technologies, competitive pressures and other factors and are
dependent upon consumer and business acceptance as new technologies evolve.
Foreign Securities
The Fund may invest in certain foreign securities. Investment
in obligations of foreign issuers and in direct obligations of foreign nations
involves somewhat different investment risks from those affecting obligations
of United States domestic issuers. There may be limited publicly available
information with respect to foreign issuers and foreign issuers are not
generally subject to uniform accounting, auditing and financial standards and
requirements comparable to those applicable to domestic companies. There may
also be less government supervision and regulation of foreign securities
exchanges, brokers and listed companies than in the United States. Foreign
securities markets have substantially less volume than domestic securities
exchanges and securities of some foreign companies are less liquid and more
volatile than securities of comparable domestic companies. Brokerage
commissions and other transaction costs on foreign securities exchanges are
generally higher than in the United States. Dividends and interest paid by
foreign issuers may be subject to withholding and other foreign taxes, which
may decrease the net return on foreign investments as compared to dividends
and interest paid to the Fund by domestic companies. Additional risks include
future political and economic developments, the possibility that a foreign
jurisdiction might impose or change withholding taxes on income payable with
respect to foreign securities, the possible seizure, nationalization or
expropriation of the foreign issuer or foreign deposits and the possible
adoption of foreign governmental restrictions such as exchange controls.
U.S. Government Obligations
U.S. Government obligations are obligations which are backed by
the full faith and credit of the United States, by the credit of the issuing
or guaranteeing agency or by the agency's right to borrow from the U.S.
Treasury. They include (i) U.S. Treasury obligations, which differ only in
their interest rates, maturities and times of issuance as follows: U.S.
Treasury bills (maturity of one year or less), U.S. Treasury notes (maturity
of one year or ten years), U.S. Treasury bonds (generally maturities of more
than ten years); and (ii) obligations issued or guaranteed by U.S. Government
agencies and instrumentalities that are supported by the full faith and credit
of the United States (such as securities issued by the Government National
Mortgage Association, the Federal Housing Administration, the Department of
Housing and Urban Development, the Export-Import Bank, the General Services
Administration and the Maritime Administration, and certain securities issued
by the Farmers' Home Administration and the Small Business Administration,
most of which are explained below under the section entitled "Mortgage-Backed
Securities"). The maturities of U.S. Government obligations usually range from
three months to thirty years.
Repurchase Agreements
When the Fund purchases securities, it may enter into a
repurchase agreement with the seller wherein the seller agrees, at the time of
sale, to repurchase the security at a mutually agreed upon time and price. The
Fund may enter into repurchase agreements with member banks of the Federal
Reserve System and with broker-dealers who are recognized as primary dealers
in United States government securities by the Federal Reserve Bank of New
York. Although the securities subject to the repurchase agreement might bear
maturities exceeding one year, settlement for the repurchase would never be
more than 397 days after the Fund's acquisition of the securities and normally
would be within a shorter period of time. The resale price will be in excess
of the purchase price, reflecting an agreed upon market rate effective for the
period of time the Fund's money will be invested in the security, and will not
be related to the coupon rate of the purchased security. At the time the Fund
enters into a repurchase agreement the value of the underlying security,
including accrued interest, will be equal to or exceed the value of the
repurchase agreement, and, in the case of a repurchase agreement exceeding one
day, the seller will agree that the value of the underlying security,
including accrued interest, will at all times be equal to or exceed the value
of the repurchase agreement. The Fund may engage in a repurchase agreement
with respect
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<PAGE>
to any security in which it is authorized to invest, even though the
underlying security may mature in more than one year. The collateral securing
the seller's obligation must be of a credit quality at least equal to the
Fund's investment criteria for securities in which it invests and will be held
by the Custodian or in the Federal Reserve Book Entry System.
For purposes of the Investment Company Act of 1940, a
repurchase agreement is deemed to be a loan from the Fund to the seller
subject to the repurchase agreement and is therefore subject to the Fund's
investment restriction applicable to loans. It is not clear whether a court
would consider the securities purchased by the Fund subject to a repurchase
agreement as being owned by the Fund or as being collateral for a loan by the
Fund to the seller. In the event of the commencement of bankruptcy or
insolvency proceedings with respect to the seller of the securities before
repurchase of the security under a repurchase agreement, the Fund may
encounter delay and incur costs before being able to sell the security. Delays
may involve loss of interest or decline in price of the security. If the court
characterized the transaction as a loan and the Fund has not perfected a
security interest in the security, the Fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Fund would be at the risk of losing some
or all of the principal and income involved in the transaction. As with any
unsecured debt obligation purchased for the Fund, the Adviser seeks to
minimize the risk of loss through repurchase agreements by analyzing the
creditworthiness of the obligor, in this case the seller. Apart from the risk
of bankruptcy or insolvency proceedings, there is also the risk that the
seller may fail to repurchase the security, in which case the Fund may incur a
loss if the proceeds of the sale to a third party are less than the repurchase
price. However, if the market value of the securities subject to the
repurchase agreement becomes less than the repurchase price (including
interest), the Fund involved will direct the seller of the security to deliver
additional securities so that the market value of all securities subject to
the repurchase agreement will equal or exceed the repurchase price. It is
possible that a Fund will be unsuccessful in seeking to impose on the seller a
contractual obligation to deliver additional securities.
Hedging Transactions
The Fund may, but does not currently intend to, enter into
hedging transactions. Hedging is a means of transferring risk which an
investor does not desire to assume during an uncertain market environment. The
Fund is permitted to enter into the transactions solely (a) to hedge against
changes in the market value of portfolio securities or (b) to close out or
offset existing positions. The transactions must be appropriate to reduction
of risk; they cannot be for speculation. In particular, the Fund may write
covered call options on securities or stock indices. By writing call options,
the Fund limits its profit to the amount of the premium received. By writing a
covered call option, the Fund assumes the risk that it may be required to
deliver the security having a market value higher than its market value at the
time the option was written. The Fund will not write options if immediately
after such sale the aggregate value of the obligations under the outstanding
options would exceed 25% of the Fund's net assets.
To the extent the Fund uses hedging instruments which do not
involve specific portfolio securities, offsetting price changes between the
hedging instruments and the securities being hedged will not always be
possible, and market value fluctuations of the Fund may not be completely
eliminated. When using hedging instruments that do not specifically correlate
with securities in the Fund, the Adviser will attempt to create a very closely
correlated hedge.
Options Transactions
The Fund may, but does not currently intend to, enter into
options transactions. The Fund may purchase call and put options on securities
and on stock indices in an attempt to hedge its portfolio and to increase its
total return. Call options may be purchased when it is believed that the
market price of the underlying security or index will increase above the
exercise price. Put options may be purchased when the market price of the
underlying security or index is expected to decrease below the exercise price.
The Fund may also purchase all options to provide a hedge against an increase
in the price of a security sold short by it. When the Fund purchases a call
option, it will pay a premium to the party writing the option and a commission
to the broker selling the option. If the option is exercised by the Fund, the
amount of the premium and the commission paid may be greater than the amount
of the brokerage commission that would be charged if the security were
purchased directly.
In addition, the Fund may write covered call options on
securities or stock indices. By writing options, the Fund limits its profits
to the amount of the premium received. By writing a call option the Fund
assumes the risk that it may be required to deliver the security at a market
value higher than its market value at the time the option was written plus the
difference between the original purchase price of the stock and the strike
price. By writing a put option, the Fund assumes the risk that it may be
required to purchase the underlying security at a price in excess of its
current market value.
-3-
338027.6
<PAGE>
Lending of Securities
The Fund may, but does not currently intend to, lend its
portfolio securities to qualified institutions as determined by the Adviser.
By lending its portfolio securities, the Fund attempts to increase its income
through the receipt of interest on the loan. Any gain or loss in the market
price of the securities loaned that may occur during the term of the loan will
be for the account of the Fund in such transaction. The Fund will not lend
portfolio securities if, as a result, the aggregate of such loans exceeds 33%
of the value of its total assets (including such loans). All relevant facts
and circumstances, including the creditworthiness of the qualified
institution, will be monitored by the Adviser, and will be considered in
making decisions with respect to lending of securities, subject to review by
the Fund's Board of Directors. The Fund may pay reasonable negotiated fees in
connection with loaned securities, so long as such fees are set forth in a
written contract and their reasonableness is determined by the Fund's Board of
Directors.
Variable-Amount Master Demand Notes
The Fund may purchase variable amount master demand notes
("VANs"). VANs are debt obligations that provide for a periodic adjustment in
the interest rate paid on the instrument and permit the holder to demand
payment of the unpaid principal balance plus accrued interest at specified
intervals upon a specified number of days' notice either from the issuer or by
drawing on a bank letter of credit, a guarantee, insurance or other credit
facility issued with respect to such instrument.
The VANs in which the Fund may invest are payable on not more
than thirty calendar days' notice either on demand or at specified intervals
not exceeding one year depending upon the terms of the instrument. Variable
rate demand instruments with demand features in excess of 7 days are
considered illiquid. The terms of the instruments provide that interest rates
are adjustable at intervals ranging from daily to up to one year and their
adjustments are based upon the prime rate of a bank or other appropriate
interest rate adjustment index as provided in the respective instruments. The
Fund will decide which variable rate demand instruments it will purchase in
accordance with procedures prescribed by its Board of Directors to minimize
credit risks.
The VANs that the Fund may invest in include participation
certificates purchased by the Fund from banks, insurance companies or other
financial institutions in fixed or variable rate, or taxable debt obligations
(VANs) owned by such institutions or affiliated organizations. A participation
certificate gives the Fund an undivided interest in the obligation in the
proportion that the Fund's participation interest bears to the total principal
amount of the obligation and provides the demand repurchase feature described
below. Where the institution issuing the participation does not meet the
Fund's high quality standards, the participation is backed by an irrevocable
letter of credit or guaranty of a bank (which may be a bank issuing a
confirming letter of credit, or a bank serving as agent of the issuing bank
with respect to the possible repurchase of the certificate of participation or
a bank serving as agent of the issuer with respect to the possible repurchase
of the issue) or insurance policy of an insurance company that the Board of
Directors of the Fund has determined meets the prescribed quality standards
for the Fund. The Fund has the right to sell the participation certificate
back to the institution and, where applicable, draw on the letter of credit,
guarantee or insurance after no more than 30 days' notice either on demand or
at specified intervals not exceeding 397 days (depending on the terms of the
participation), for all or any part of the full principal amount of the Fund's
participation interest in the security, plus accrued interest. The Fund
intends to exercise the demand only (1) upon a default under the terms of the
bond documents, (2) as needed to provide liquidity to the Fund in order to
make redemptions of the Fund's shares, or (3) to maintain a high quality
investment portfolio. The institutions issuing the participation certificates
will retain a service and letter of credit fee (where applicable) and a fee
for providing the demand repurchase feature, in an amount equal to the excess
of the interest paid on the instruments over the negotiated yield at which the
participations were purchased by the Fund. The total fees generally range from
5% to 15% of the applicable prime rate* or other interest rate index. With
respect to insurance, the Fund will attempt to have the issuer of the
participation certificate bear the cost of the insurance, although the Fund
retains the option to purchase insurance if necessary, in which case the cost
of insurance will be an expense of the Fund subject to the expense limitation
on investment company expenses prescribed by any state in which the Fund's
shares are qualified for sale. The Adviser has been instructed by the Fund's
Board of Directors to continually monitor the pricing, quality and liquidity
of the variable rate demand
- --------
* The "prime rate" is generally the rate charged by a bank to its most
creditworthy customers for short term loans. The prime rate of a
particular bank may differ from other banks and will be the rate
announced by each bank on a particular day. Changes in the prime rate may
occur with great frequency and generally become effective on the date
announced.
-4-
338027.6
<PAGE>
instruments held by the Fund, including the participation certificates, on the
basis of published financial information and reports of the rating agencies
and other bank analytical services to which the Fund may subscribe. Although
these instruments may be sold by the Fund, the Fund intends to hold them until
maturity, except under the circumstances stated above.
While the value of the underlying variable rate demand
instruments may change with changes in interest rates generally, the variable
rate nature of the underlying variable rate demand instruments should minimize
changes in value of the instruments. Accordingly, as interest rates decrease
or increase, the potential for capital appreciation and the risk of potential
capital depreciation is less than would be the case with a portfolio of fixed
income securities. The Fund may contain VANs on which stated minimum or
maximum rates, or maximum rates set by state law limit the degree to which
interest on such VANs may fluctuate; to the extent it does, increases or
decreases in value may be somewhat greater than would be the case without such
limits. In the event that interest rates increased so that the variable rate
exceeded the fixed-rate on the obligations, the obligations could no longer be
valued at par and this may cause the Fund to take corrective action, including
the elimination of the instruments. Because the adjustment of interest rates
on the VANs is made in relation to movements of the applicable banks' "prime
rate", or other interest rate adjustment index, the VANs are not comparable to
long-term fixed-rate securities. Accordingly, interest rates on the VANs may
be higher or lower than current market rates for fixed-rate obligations or
obligations of comparable quality with similar maturities.
For purposes of determining whether a VAN held by a Fund
matures within 397 days from the date of its acquisition, the maturity of the
instrument will be deemed to be the longer of (1) the period required before
the Fund is entitled to receive payment of the principal amount of the
instrument or (2) the period remaining until the instrument's next interest
rate adjustment. If a variable rate demand instrument ceases to meet the
investment criteria of the Fund, it will be sold in the market or through
exercise of the repurchase demand.
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment
restrictions which may not be changed unless approved by a majority of the
Fund's outstanding shares. The Fund may not:
(1) Make portfolio investments other than as described under
"Investment Objective, Policies and Restrictions" or any other form of
investment, where applicable, which meets the Fund's investment criteria, as
determined by the Adviser and the Board of Directors, and which is consistent
with the Fund's objective and policies.
(2) Borrow Money. This restriction shall not apply to borrowing
from banks for temporary or emergency (not leveraging) purposes, including the
meeting of redemption requests that might otherwise require the untimely
disposition of securities, in an amount up to one-third of the value of the
Fund's total assets (including the amount borrowed) valued at market less
liabilities (not including the amount borrowed) at the time the borrowing was
made. While borrowings exceed 15% of the value of the Fund's total assets, the
Fund will not make any investments. Interest paid on borrowings will reduce
net income.
(3) Pledge, hypothecate, mortgage or otherwise encumber its
assets, except in an amount up to 15% of the value of its net assets and only
to secure borrowings for temporary or emergency purposes.
(4) Sell securities short or purchase securities on margin, or
engage in the purchase and sale of put, call, straddle or spread options or in
writing such options, except to the extent that securities subject to a demand
obligation and stand-by commitments may be purchased as set forth under
"Investment Objective, Policies and Risks."
(5) Underwrite the securities of other issuers, except insofar
as the Fund may be deemed an underwriter under the Securities Act of 1933 in
disposing of a portfolio security.
(6) Invest more than an aggregate of 15% of its net assets in
repurchase agreements maturing in more than seven days, variable rate demand
instruments exercisable in more than seven days or securities that are not
readily marketable, except as described in the Fund's Prospectus.
-5-
338027.6
<PAGE>
(7) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests, but
this shall not prevent the Fund from investing in Government obligations
secured by real estate or interests in real estate.
(8) Make loans to others, except through the purchase of
portfolio investments, including repurchase agreements, as described under
"Investment Objective, Policies and Risks."
(9) Invest more than 25% of its assets in the securities of
"issuers" in any single industry other than the technology, technology-related
and science industries taken as a whole, and provided also that there shall be
no limitation on the Fund to purchase obligations issued or guaranteed by the
United States government, its agencies or instrumentalities. When the assets
and revenues of an agency, authority, instrumentality or other political
subdivision are separate from those of the government creating the issuing
entity and a security is backed only by the assets and revenues of the entity,
the entity would be deemed to be the sole issuer of the security. Similarly,
in the case of an industrial revenue bond, if that bond is backed only by the
assets and revenues of the non-governmental issuer, then such non-governmental
issuer would be deemed to be the sole issuer. If, however, in either case, the
creating government guarantees a security, such a guarantee would be
considered a separate security and would be treated as an issue of such
government.
(10) Invest in securities of other investment companies, except
(i) the Fund may purchase unit investment trust securities where such unit
investment trusts meet the investment objectives of the Fund and then only up
to 5% of the Fund's net assets, except as they may be acquired as part of a
merger, consolidation or acquisition of assets and (ii) as permitted by
Section 12(d) of the Act.
(11) Issue senior securities except insofar as the Fund may be
deemed to have issued a senior security in connection with any permitted
borrowing.
Percentage Restrictions
Any investment restrictions herein which involve a maximum
percentage of securities or assets shall not be considered to be violated if
the change in the percentage holding results from changes in the value of the
Fund's securities. Investment restrictions that involve a maximum percentage
of securities or assets will be considered to be violated, however, if an
excess over the percentage occurs immediately after, and is caused by, an
acquisition or disposition of securities or assets of, or borrowings by, the
Fund.
MANAGEMENT OF THE FUND
The directors and officers of the Fund and their principal
occupations during the past five years are set forth below. Their titles may
have varied during this period. Asterisks indicate that those directors are
"interested persons" (as defined in the Investment Company Act of 1940) of the
Fund. Unless otherwise indicated, the address of each director and officer is
399 Park Avenue, New York, New York 10022.
-6-
338027.6
<PAGE>
<TABLE>
Officers and Directors of the Fund
<S> <C>
*ALBERTO W. VILAR Mr. Vilar is Chairman of the Board of Directors and Chief Executive Officer
Amerindo Investment Advisors Inc. of the Fund. He began his career with Citibank N.A. in New York in 1964
One Embarcadero and worked there as an International Credit Officer until 1967. From 1967 to
Suite 2300 1971, he served as Vice President, Portfolio Manager and Manager of the
San Francisco, CA 94111 Investment Management Division of Drexel Burnham Lambert in New York.
399 Park Avenue From 1971 to 1973, he served as Executive Vice President, Portfolio Manager
18th Floor and Director of Equity Strategy at M.D. Sass Investor Services in New York.
New York, NY 10022 In 1973, he became Vice President and Portfolio Manager of Endowment
(55) Management & Research Corporation in Boston. From 1977 to 1979, he
served as Senior Vice President, Director of Research, Chief Investment
Strategist and Partnership Manager of the Boston Company in Boston. He
founded the predecessors of Amerindo Advisors (U.K.) Limited and Amerindo
Investment Advisors, Inc. (Panama) in 1979 and has served since then as a
Principal Portfolio Manager. He holds the degrees of B.A. in Economics from
Washington & Jefferson College and an M.B.A. from Iona College, and he
completed the Doctoral Studies Program in Economics at New York
University. He has been a Chartered Financial Analyst since 1975.
*DR. GARY A. TANAKA Dr. Tanaka is Director, President of the Fund and Chief Executive Officer of
Amerindo Investment Advisors Inc. the Fund. He served as a Portfolio Manager for Crocker Bank in San
43 Upper Grosvenor Street Francisco from 1971 to 1977, and as a Partnership Manager for Crocker
London, England W1X9PG Investment Management Corp. in San Francisco from 1978 to 1980. From
(51) 1975 to 1980, he also served as a Consultant to Andron Cechettini &
Associates in San Francisco. In 1980, he joined the predecessors of Amerindo
Advisors (U.K.) Limited and Amerindo Investment Advisors, Inc. (Panama) as
a Principal Portfolio Manager. Dr. Tanaka holds the degrees of B.S. in
Mathematics from Massachusetts Institute of Technology and Ph.D. in Applied
Mathematics from Imperial College, University of London.
DR. JOHN RUTLEDGE Dr. Rutledge is Director of the Fund. He also is Chairman of Rutledge &
Rutledge & Company, Inc. Company, Inc., a merchant banking firm, since 1991 and serves as a director
One Greenwich Office Park of Earle M. Jorgensen Company, Lazard Freres Funds, Fluidrive, Inc.,
Greenwich, CT 06831 General Medical Corporation, Medical Specialties Group, United Refrigerated
(47) Services, Inc. and Utenduhl Capital Partners and is a special advisor to Kelso
& Companies, Inc. He is the author of books and investment publications,
writes a monthly column in Forbes Magazine and is a frequent contributor to
periodicals.
JUDE T. WANNISKI Mr. Wanniski is a Director of the Fund. He also has been president of
Polyconomics, Inc. Polyconomics, Inc. since 1978 and serves as a director for Repap Enterprises
86 Maple Avenue Inc.
Morristown, NJ 07960
(59)
</TABLE>
- --------
* "Interested person" of the Fund, as defined in the Investment Company Act.
-7-
338027.6
<PAGE>
<TABLE>
<S> <C>
SARAH L. GORDON-WILD Ms. Gordon-Wild is the Vice President of and Secretary to the Fund.
Amerindo Investment Advisors Inc. She has been a biotechnology analyst with Amerindo Investment Advisors Inc.
399 Park Avenue since March 1990.
New York, NY 10022
(37)
DANA E. SMITH Ms. Smith is the Vice President of and Treasurer to the Fund. She has been
Amerindo Investment Advisors Inc. the Compliance Officer of Amerindo Investment Advisors Inc. since April
399 Park Avenue 1993. From December 1991 to March 1993, she was a Mutual Fund
New York, NY 10022 Marketing Associate at Lazard Freres Asset Management and an officer of The
(37) Lazard Funds, Inc.
ANTHONY CIULLA Mr. Ciulla is the Vice President of the Fund. He has been the Senior Trader
Amerindo Investment Advisors Inc. of Amerindo Investment Advisers Inc. since October 1, 1990.
One Embarcadero
Suite 2300
San Francisco, CA 94111
(64)
RALPH H. CECHETTINI Mr. Cechettini is a Vice President of the Fund. He has been a Portfolio
Amerindo Investment Advisors Inc. Manager with Amerindo Investment Advisers Inc. since February, 1991.
One Embarcadero
Suite 2300
San Francisco, CA 94111
(55)
</TABLE>
<TABLE>
COMPENSATION TABLE
(Estimated for the year ended April 30, 1997)
<CAPTION>
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual from Fund and
Name of Person Position Compensation from Accrued as Part of Benefits upon Fund Complex
Fund Fund Expenses Retirement Paid to Directors
<S> <C> <C> <C> <C>
Alberto W. Vilar $ 0 $ 0 $ 0 $ 0
Director
Dr. Gary A. Tanaka 0 0 0 0
Director
Dr. John Rutledge 30,000 0 0 30,000
Director
Jude T. Wanniski 30,000 0 0 30,000
Director
</TABLE>
Each Director who is not an interested person of the Fund
receives a base annual fee of $25,000 which is paid by the Fund, plus $1,250 for
each meeting attended.
Investment Adviser
Amerindo Investment Advisors Inc., a registered investment
adviser, is a California corporation, with its principal offices located at One
Embarcadero, Suite 2300, San Francisco, California 94111 and 399 Park Avenue,
New York,
-8-
338027.6
<PAGE>
New York 10022. The Adviser has been employed by the Board of Directors to
serve as the investment adviser of the Fund pursuant to an Investment Advisory
Agreement entered into by the Fund on behalf of each Class. Currently, the
Adviser's only investment company client is the Fund. The Adviser supervises
all aspects of the Fund's operations and provides investment advice and
portfolio management services to the Fund. Pursuant to the Advisory Agreement
and subject to the supervision of the Fund's Board of Directors, the Adviser
makes the Fund's day-to-day investment decisions, arranges for the execution
of portfolio transactions and generally manages the Fund's investments.
The Adviser provides persons satisfactory to the Board of
Directors of the Fund to serve as officers of the Fund. Such officers, as well
as certain other employees and directors of the Fund, may be directors, officers
or employees of the Adviser or its affiliates.
The Adviser also may provide the Fund with supervisory personnel
who will be responsible for supervising the performance of administrative
services, accounting and related services, net asset value and yield
calculation, reports to and filings with regulatory authorities, and services
relating to such functions. However, the Administrator will provide personnel
who will be responsible for performing the operational components of such
services. The personnel rendering such supervisory services may be employees of
the Adviser, of its affiliates or of other organizations. The Advisory Agreement
was approved on May 14, 1996 by the Board of Directors, including a majority of
the directors who are not interested persons (as defined in the Investment
Company Act of 1940) of the Fund or the Adviser.
The Advisory Agreement has a term which extends to April 30, 1998
and may be continued in force thereafter for successive twelve-month periods
beginning each May 1, 1998, provided that such continuance is specifically
approved annually by majority vote of the Fund's outstanding voting securities
or by the Board of Directors, and in either case by a majority of the directors
who are not parties to the Advisory Agreement or interested persons of any such
party, by votes cast in person at a meeting called for the purpose of voting on
such matter.
The Advisory Agreement is terminable without penalty by the Fund
on sixty days' written notice when authorized either by majority vote of the
outstanding voting shares of the Fund or by a vote of a majority of the Fund's
Board of Directors, or by the Adviser on sixty days' written notice, and will
automatically terminate in the event of its assignment. The Advisory Agreement
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or of reckless disregard of its
obligations thereunder, the Adviser shall not be liable for any action or
failure to act in accordance with its duties thereunder.
Adviser's Fees
Pursuant to the terms of the Advisory Agreement, the Fund, on
behalf of each Class, will pay a monthly advisory fee equal to 1.50% of the
Fund's average daily net asset per annum. This fee is higher than the fee paid
by most other mutual funds; however, the Board of Directors believes that this
fee is reasonable in light of the advisory services performed by the Adviser for
the Fund. Any portion of the advisory fees received by the Adviser may be used
by the Adviser to provide investor and administrative services and for
distribution of Fund shares. The Adviser may voluntarily waive a portion of its
fee or assume certain expenses of the Fund. This would have the effect of
lowering the overall expense ratio of the Fund and of increasing yield to
investors. See "Expense Limitation" below.
Expense Limitation
The Adviser has agreed to reimburse the Fund for its expenses
(exclusive of interest, taxes, brokerage, and extraordinary expenses) which in
any year exceed the limits on investment company expenses prescribed by any
state in which the Fund's shares are qualified for sale. For the purpose of this
obligation to reimburse expenses, the Fund's annual expenses are estimated and
accrued daily, and any appropriate estimated payments are made to it on a
monthly basis. From time to time, the Adviser may voluntarily assume certain
expenses of the Fund. This would have the effect of lowering the overall expense
ratio and of increasing yield to investors. Subject to the obligations of the
Adviser to reimburse the Fund for its excess expenses as described above, the
Fund has, under the Advisory Agreement, confirmed its obligation for payment of
all other expenses, including without limitation: fees payable to the Adviser,
Administrator, Custodian, Transfer Agent and Dividend Agent; brokerage and
commission expenses; federal, state or local taxes, including issuance and
transfer taxes incurred by or levied on it; commitment fees, certain insurance
premiums and membership fees and dues in investment company organizations;
interest charges on borrowings; telecommunications expenses; recurring and
non-recurring legal and accounting expenses; costs of organizing and maintaining
the Fund's existence as a corporation; compensation, including directors' fees,
of any directors, officers or employees who are not also officers of the Adviser
or its affiliates and costs of other personnel providing administrative and
clerical services; costs of stockholders' services and costs of stockholders'
-9-
338027.6
<PAGE>
reports, proxy solicitations, and corporate meetings; fees and expenses of
registering its shares under the appropriate Federal securities laws and of
qualifying its shares under applicable state securities laws, including
expenses attendant upon the initial registration and qualification of these
shares and attendant upon renewals of, or amendments to, those registrations
and qualifications; and expenses of preparing, printing and delivering the
Prospectus to existing shareholders and of printing shareholder application
forms for shareholder accounts.
The Fund may from time-to-time hire its own employees or contract
to have management services performed by third parties, and the management of
the Fund intends to do so whenever it appears advantageous to the Fund. The
Fund's expenses for employees and for such services are among the expenses
subject to the expense limitation described above.
Administrator
The Administrator for the Fund is Furman Selz LLC (the
"Administrator"), which has its principal office at 230 Park Avenue, New York,
New York 10169, and is primarily an institutional brokerage firm with membership
on the New York, American, Boston, Midwest, Pacific and Philadelphia Stock
Exchanges.
The Administrator serves as a investment adviser to numerous
individual and institutional accounts. The Administrator also serves as
administrator and distributor of other mutual funds. The Fund may invest in
these mutual funds or in any other mutual fund which may in the future be
affiliated with the Administrator or any of its affiliates.
Pursuant to an Administrative Services Agreement with the Fund,
the Administrator provides all administrative services necessary for the Fund,
other than those provided by the Adviser, subject to the supervision of the
Fund's Board of Directors. The Administrator will provide persons to serve as
officers of the Fund. Such officers may be directors, officers or employees of
the Administrator or its affiliates.
The Administrative Services Agreement is terminable by the Board
of Directors of the Fund or the Administrator on sixty days' written notice and
terminates automatically in the event of its "assignment" as defined by the 1940
Act. The Agreement shall remain in effect for two years from the date of its
initial approval, and subject to annual approval of the Fund's Board of
Directors for one-year periods thereafter. The Agreement provides that in the
absence of willful misfeasance, bad faith or gross negligence on the part of the
Administrator or reckless disregard of its obligations thereunder, the
Administrator shall not be liable for any action or failure to act in accordance
with its duties thereunder.
Under the Administrative Services Agreement, the Administrator
provides all administrative services, including, without limitation: (i)
provides services of persons competent to perform such administrative and
clerical functions as are necessary to provide effective administration of the
Fund, including maintaining certain books and records described in Rule 31a-1
under the 1940 Act, and reconciling account information and balances among the
Fund's Custodian and Adviser; (ii) overseeing the performance of administrative
and professional services to the Fund by others, including the Fund's Custodian;
(iii) preparing, but not paying for, the periodic updating of the Fund's
Registration Statement, Prospectus and Statement of Additional Information in
conjunction with Fund counsel, including the printing of such documents for the
purpose of filings with the Securities and Exchange Commission and state
securities administrators, preparing the Fund's tax returns, and preparing
reports to the Fund's shareholders and the Securities and Exchange Commission;
(iv) preparing in conjunction with Fund counsel, but not paying for, all filings
under the securities or "Blue Sky" laws of such states or countries as are
designated by the Distributor, which may be required to register or qualify, or
continue the registration or qualification, of the Fund and/or its shares under
such laws; (v) preparing notices and agendas for meetings of the Fund's Board of
Directors and minutes of such meetings in all matters required by the 1940 Act
to be acted upon by the Board; (vi) monitoring daily and periodic compliance
with respect to all requirements and restrictions of the Investment Company Act,
the Internal Revenue Code and the Prospectus; and (vii) monitoring and
evaluating daily income and expense accruals, and sales and redemptions of
shares of the Fund.
The Administrator also provides the Fund with all accounting
services, including: (i) daily computation of net asset value; (ii) maintenance
of security ledgers and books and records as required by the Investment Company
Act; (iii) production of the Fund's listing of portfolio securities and general
ledger reports; (iv) reconciliation of accounting records; and (v) calculation
of yield and total return for the Fund.
-10-
338027.6
<PAGE>
Administrator's Fees
For the services rendered to the Fund by the Administrator, the
Fund pays the Administrator an annual fee paid monthly equal to 0.15% of the
Fund's aggregate average daily net assets. The Administrator, however, has
agreed to voluntarily waive a portion of its fees as follows: 0.10% of the
Fund's aggregate average daily net assets up to $500 million, 0.075% of the
Fund's aggregate average daily net assets between $500 and $1 billion, 0.060% of
the Fund's aggregate average daily net assets between $1 billion and $2 billion,
and 0.050% of the Fund's aggregate average daily net assets over $2 billion. The
Administrator may not change this waiver policy without the prior consent of the
Fund's Board of Directors.
In return for providing the Fund with all accounting related
services, the Fund pays the Administrator [an annual fee paid monthly equal to
$35,000, plus out-of-pocket expenses for such services.
Custodian, Transfer Agent and Dividend Agent
The Northern Trust Company serves as custodian for the Fund's
cash and securities. Pursuant to a Custodian Agreement with the Fund, it is
responsible for maintaining the books and records of the Fund's portfolio
securities and cash. The Custodian does not assist in, and is not responsible
for, investment decisions involving assets of the Fund. Furman Selz LLC, the
Fund's Administrator, also acts as the Fund's transfer and dividend agent.
TAXES
The Fund will elect to qualify under the Internal Revenue Code of
1986, as amended ("the Code"), as a regulated investment company. As a regulated
investment company, the Fund will not be subject to federal income taxes on its
investment company taxable income and the long-term capital gains that it
distributes to its shareholders, provided that at least 90% of its investment
company taxable income for the taxable year is distributed, and numerous other
requirements concerning regulated investment companies are satisfied. The Fund's
policy is to distribute as dividends each year 100% (and in no event less than
90%) of its investment company taxable income. The Fund will be treated as a
separate corporation and generally will have to comply with the qualifications
and other requirements applicable to regulated investment companies. If for any
taxable year the Fund does not qualify as a regulated investment company, all of
its taxable income would be taxable at corporate rates and no distributions
would qualify as tax exempt.
The Fund has adopted a policy of declaring dividends annually in
an amount based on its net investment income. The amount of each dividend may
differ from actual net investment income calculated in accordance with federal
income tax principles. Dividends paid from taxable income, if any, and
distributions of any realized short term capital gains are taxable to
shareholders as ordinary income, whether received in cash or reinvested in
additional shares of the Fund. Distributions of net realized capital gains after
utilization of capital loss carryforwards, if any, are made annually to meet
applicable distribution and excise tax requirements. Distributions paid by the
Fund may result in a liability (or increased liability) under the alternative
minimum tax.
The Fund may be subject to state or local tax in jurisdictions in
which the Fund is organized or may be deemed to be doing business. However,
Maryland taxes regulated investment companies in a manner that is generally
similar to the federal income tax rules described herein.
Distributions may be subject to state and local income taxes. In
addition, the treatment of the Fund and its shareholders in those states that
have income tax laws might differ from their treatment under the federal income
tax laws.
The Code imposes a nondeductible 4% excise tax on the Fund unless
it meets certain requirements with respect to distributions of ordinary income
and capital gain net income. The formula requires payment to shareholders during
a calendar year of distributions representing at least 98% of the Fund's
ordinary income for the calendar year, plus at least 98% of the excess of its
capital gains over its capital losses realized during the one-year period ending
October 31 during such year, which shall be reduced (but not below net capital
gain) by the amount of the Fund's net ordinary loss for the year. It is
anticipated that this provision will not have any material impact on the Fund.
Dividends and interest paid by foreign issuers may be subject to
withholding and other foreign taxes, which may decrease the net return on
foreign investments as compared to dividends and interest paid by domestic
issuers. The
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<PAGE>
Fund does not expect that it will qualify to elect to pass through to its
shareholders the right to take a foreign tax credit for foreign taxes withheld
from dividends and interest payments.
For federal income tax purposes, distributions of net capital
gains (the excess of net long-term capital gains over net short-term capital
loss), if any, are taxable as net capital gains regardless of the length of time
shareholders have owned their shares. Although the Tax Reform Act of 1986
eliminated the preferential treatment previously available for net capital
gains, the preferential treatment for net capital gains was restored, to some
extent, by the Revenue Reconciliation Act of 1990, which, in limited
circumstances, places a 28% ceiling on the marginal rate applicable to net
capital gains realized by individuals. Distributions attributable to short-term
capital gains (whether from tax exempt or taxable obligations) are taxable as
ordinary income for federal income tax purposes. Generally, on the sale or
exchange of obligations held for more than one year, gain realized by the Fund
will be long-term capital gain. Such capital gain, if any, will be distributed
as capital gain dividends. Capital gain dividends, designated as such in a
written notice to investors mailed not later than 60 days after the Fund's
taxable year closes, will be taxed as long-term capital gain. However, if an
investor receives a capital gain dividend and sells shares after holding them
for six months or less (not including periods during which the shareholder holds
an offsetting position), then any loss realized on the sale will be treated as
long-term capital loss to the extent of such capital gain dividend. If any net
capital gains are retained by the Fund for reinvestment, requiring federal
income taxes thereon to be paid by it, the Fund will elect to treat such capital
gains as having been distributed to shareholders. As a result, shareholders will
report such capital gains as net capital gains, will be able to claim their
share of federal income taxes paid by the Fund on such gains as a credit against
their own federal income tax liability, and will be entitled to increase the
adjusted tax basis of their Fund shares by 65% of their share of the
undistributed gain. Distributions of net capital gains are not eligible for the
dividends received deduction.
All taxable dividends from investment company taxable income are
taxable as ordinary income. It is not expected that any income distributions
from the Fund will qualify for the dividends received deduction for
corporations.
Distributions of investment company taxable income and net
realized capital gains will be taxable as described above, whether received in
shares or in cash. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for federal income tax purposes in each
share so received equal to the value of a share on the reinvestment date.
Redemptions of shares may result in tax consequences (gain or
loss) to shareholders and are also subject to reporting requirements.
The Tax Reform Act of 1986 contained a provision limiting
miscellaneous itemized deductions for individuals and certain other
shareholders, such as estates and trusts, to the extent such miscellaneous
itemized deductions do not exceed 2% of adjusted gross income for a taxable
year. However, the Revenue Reconciliation Act of 1989 provided an exemption from
the limitation for publicly-offered regulated investment companies.
Interest incurred or continued to purchase shares of the Fund is
generally treated as investment interest, and in the case of non-corporate
taxpayers is deductible only to the extent of net investment income. Under rules
used by the Internal Revenue Service to determine when borrowed funds are used
for the purpose of purchasing or carrying particular assets, the purchase of
shares may be considered to have been made with borrowed funds even though the
borrowed funds are not directly traceable to the purchase of shares.
Under the federal income tax law, the Fund will be required to
report to the Internal Revenue Service all distributions of taxable income and
capital gains as well as gross proceeds from the redemption or exchange of Fund
shares, except in the case of exempt shareholders, which include most
corporations. Under the backup withholding provisions of Section 3406 of the
Code, distributions of taxable income and capital gains and proceeds from the
redemption or exchange of the shares of a regulated investment company may be
subject to withholding of federal income tax at the rate of 31% in the case of
non-exempt shareholders who fail to furnish the investment company with their
taxpayer identification numbers and their required certifications regarding
their status under the federal income tax law. If the withholding provisions are
applicable, any such distributions and proceeds, whether taken in cash or
reinvested in additional shares, will be reduced by the amounts required to be
withheld. Corporate shareholders should provide the Fund with their taxpayer
identification numbers and should certify their exempt status in order to avoid
possible erroneous application of backup withholding.
The foregoing discussion of U.S. federal income tax law relates
solely to the application of that law to U.S. persons, i.e., U.S. citizens and
residents and U.S. domestic corporations, partnerships, trusts and estates. Each
shareholder who is not a U.S. person should consider the U.S. and foreign tax
consequences of ownership of Fund shares, including the
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<PAGE>
possibility that such a shareholder may be subject to a U.S. withholding tax
at a rate of 30% (or at a lower rate under an applicable income tax treaty) on
amounts constituting ordinary income received by such person, where such
amounts are treated as income from U.S. sources under the Code.
The federal, state and local income tax rules that apply to the
Fund and its shareholders have changed extensively in recent years, and
investors should recognize that additional changes may be made in the future,
some of which could have an adverse affect on the Fund and its investors for
federal and/or state and local tax purposes. Shareholders should consult their
tax advisors about the application of the provisions of tax law described in
this statement of additional information in light of their particular federal
and state tax situations.
PURCHASE AND REDEMPTION
Furman Selz LLC serves as the exclusive distributor of the Fund's
shares pursuant to its Distribution Agreement with the Fund (the "Distributor").
Investors may open accounts in the Fund only through the exclusive Distributor
for the Fund. Under the Distribution Agreement, the Distributor, for nominal
consideration and as agent for the Fund, will solicit orders for the purchase of
Fund shares, provided that any subscriptions and orders will not be binding on
the Fund until accepted by the Fund as principal.
Shares of Class A may be purchased at the net asset value per
share next determined, plus any applicable sales load, after receipt of an order
by the Fund's transfer agent in proper form with accompanying check or other
bank wire payment arrangements satisfactory to the Fund. Shares of Class D are
sold without an initial sales load. Class A shares are sold subject to an
initial sales load of up to 3.00%. The Fund's minimum initial investment for
Class A shares is $25,000 and the minimum subsequent investment for Class A
Shares is $2,500. The minimum initial investment for Class D shares is $150,000
and the minimum subsequent investment for Class D shares is $15,000.
Shares of the Fund may be redeemed by a shareholder at any time
at the net asset value per share next determined after the redemption request is
received by the Fund's Distributor or transfer agent in proper order.
Shareholders in each Class may be subject to a 3.00% fee on the redemption of
shares held for less than one year. These redemption fees are assessed against
net assets and will be retained by the Fund.
The material relating to the purchase, redemption and exchange of
Fund shares in the Prospectus is incorporated herein by reference and investors
should refer to the Prospectus for information relating to these areas.
DIVIDENDS AND DISTRIBUTIONS
Net investment income is declared as dividends and paid annually.
Substantially all the realized net capital gains for the Fund, if any, are
declared and paid on an annual basis. Dividends are payable to shareholders of
record at the time of declaration.
Dividends of the Fund are automatically reinvested in additional
Fund shares unless the shareholder has elected to have them paid in cash.
The net investment income of the Fund for each business day is
determined immediately prior to the determination of net asset value. Net
investment income for other days is determined at the time net asset value is
determined on the prior business day. See "Purchase of Shares" and "Redemption
of Shares" in the Prospectus.
NET ASSET VALUE
Net asset value per share is determined by subtracting from the
value of the Fund's total assets the amount of its liabilities and dividing the
remainder by the number of its outstanding shares. The value of each security
for which readily available market quotations exist is based on a decision as to
the broadest and most representative market for the security; the value is based
either on the last sale price on a national securities exchange, or, in the
absence of recorded sales, at the readily available closing bid price on such
exchanges, or at the quoted bid price in the over-the-counter market. Assets for
which market quotations are not readily available are valued in accordance with
procedures established by the Fund's
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<PAGE>
Board of Directors, including use of an independent pricing service or
services which use prices based on yields or prices of comparable Government
obligations, indications as to values from dealers and general market
conditions.
The Fund computes its net asset value once daily on Monday
through Friday, except that the net asset value is not computed for the Fund on
the holidays listed herein. The Fund does not determine net asset value per
share on the following holidays: New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
The Fund computes net asset value at 4:15 p.m. New York Time. The
days on which a Fund's net asset value is determined are its business days.
COMPUTATION OF YIELD AND PERFORMANCE INFORMATION
The Fund computes yield based on a 30-day (or one month) period
ended on the date of the most recent balance sheet included in the registration
statement, computed by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of the
period, according to the following formula:
YIELD = 2[( a-b + 1)6 - 1]
-----
cd
<TABLE>
<S> <C> <C>
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the period that were entitled to dividends.
d = the maximum offering price per share on the last day of the period.
</TABLE>
Actual future yields will depend on the type, quality, and
maturities of the investments held by the Fund, changes in interest rates on
investments, and the Fund's expenses during the period.
Computation of Total Return
The total return must be displayed in any advertisement
containing the Fund's yield. Total return is the average annual total return for
the 1-, 5- and 10-year period ended on the date of the most recent balance sheet
included in the Statement of Additional Information, computed by finding the
average annual compounded rates of return over 1-, 5- and 10-year periods that
would equate the initial amount invested to the ending redeemable value
according to the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial investment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1000 payment made at the beginning of the 1-,
5- or 10-year periods at the end of the 1-, 5-
or 10-year periods (or fractions thereof).
Because the Fund has not had a registration in effect for 1, 5 or 10 years,
the period during which the registration has been effective shall be
substituted.
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<PAGE>
Yield information may be useful for reviewing the performance of
the Fund and for providing a basis for comparison with other investment
alternatives. However, unlike bank deposits or other investments which pay a
fixed yield for a stated period of time, the Fund's yield does fluctuate, and
this should be considered when reviewing performance or making comparisons.
From time to time evaluations of performance of the Fund made by
independent sources may be used in advertisements. These sources may include
Lipper Analytical Services, Wiesenberger Investment Company Service, Donoghue's
Money Fund Report, Barron's, Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Personal Investor, Bank Rate Monitor, and The Wall
Street Journal. From time to time evaluations of performance of the Adviser made
by independent sources may be used in advertisements of the Fund.
DESCRIPTION OF COMMON STOCK
The Fund was incorporated in the State of Maryland on February 6,
1996. The authorized capital stock of the Fund consists of one billion shares of
stock having a par value of one-tenth of one cent ($.001) per share. The Fund's
Board of Directors is authorized to divide the unissued shares into separate
classes and series of stock, each series representing a separate, additional
investment portfolio. The Board currently has authorized the division of the
unissued shares into two Classes. Shares of any class or series will have
identical voting rights, except where, by law, certain matters must be approved
by a majority of the shares of the affected class or series. Each share of any
class or series of shares when issued has equal dividend, distribution,
liquidation and voting rights within the class or series for which it was
issued, and each fractional share has those rights in proportion to the
percentage that the fractional share represents of a whole share. Shares will be
voted in the aggregate. There are no conversion or preemptive rights in
connection with any shares of the Fund. All shares, when issued in accordance
with the terms of the offering, will be fully paid and non-assessable. Shares
are redeemable at net asset value, at the option of the investor.
The shares of the Fund have non-cumulative voting rights, which
means that the holders of more than 50% of the shares outstanding voting for the
election of directors can elect 100% of the directors if the holders choose to
do so, and, in that event, the holders of the remaining shares will not be able
to elect any person or persons to the Board of Directors. Unless specifically
requested by an investor who is a investor of record, the Fund does not issue
certificates evidencing Fund shares.
As a general matter, the Fund will not hold annual or other
meetings of the Fund's shareholders. This is because the By-laws of the Fund
provide for annual meetings only (a) for the election of directors, (b) for
approval of revisions to the Fund's investment advisory agreement, (c) for
approval of revisions to the Fund's distribution agreement with respect to a
particular class or series of stock, and (d) upon the written request of holders
of shares entitled to cast not less than twenty-five percent of all the votes
entitled to be cast at such meeting. Annual and other meetings may be required
with respect to such additional matters relating to the Fund as may be required
by the Investment Company Act of 1940 (the "Act") including the removal of Fund
directors and communication among shareholders, any registration of the Fund
with the Securities and Exchange Commission or any state, or as the Directors
may consider necessary or desirable. Each Director serves until the next meeting
of shareholders called for the purpose of considering the election or reelection
of such Director or of a successor to such Director, and until the election and
qualification of his or her successor, elected at such meeting, or until such
Director sooner dies, resigns, retires or is removed by the vote of the
shareholders.
Rule 18f-2 under the Act provides that any matter required to be
submitted by the provisions of the Act or applicable state law, or otherwise, to
the holders of the outstanding voting securities of an investment company such
as the Fund shall not be deemed to have been effectively acted upon unless
approved by the holders of a majority of the outstanding shares of each class or
series affected by such matter, i.e., by a majority of the Fund's outstanding
shares. Rule 18f-2 further provides that a class or series shall be deemed to be
affected by a matter unless it is clear that the interests of each class or
series in the matter are substantially identical or that the matter does not
affect any interest of such class or series. However, the Rule exempts the
selection of independent public accountants, the approval of principal
distribution contracts and the election of directors from the separate voting
requirements of the Rule.
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<PAGE>
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
The Fund, on behalf of each Class, has adopted a distribution and
service plan, pursuant to Rule 12b-1 under the Act (the "Rule"). The Rule
provides that an investment company which bears any direct or indirect expense
of distributing its shares must do so only in accordance with a plan permitted
by the Rule. The Plan provides that each Class of the Fund will compensate the
Distributor or the Adviser for certain expenses and costs incurred in connection
with providing shareholder servicing and maintaining shareholder accounts and to
compensate parties with which it has written agreements and whose clients own
shares of either Class of shares of the Fund for providing servicing to their
clients ("shareholder servicing"), which is subject to a maximum of 0.25% per
annum of each Class' average daily net assets. The Plan also provides that the
Distributor is also paid a fee equal to 0.25% of the Class A shares' average
daily net assets on an annual basis to permit it to make payments to
broker-dealers and other financial institutions with which it has written
agreements and whose clients are Fund shareholders (each a "broker-dealer") for
providing distribution assistance and promotional support to the Fund.
Each shareholder servicing agent and broker-dealer will, as agent
for its customers, among other things: answer customer inquiries regarding
account status and history, the manner in which purchases and redemptions of
shares of each Class of the Fund may be effected and certain other matters
pertaining to the Fund; assist shareholders in designating and changing dividend
options, account designations and addresses; provide necessary personnel and
facilities to establish and maintain shareholder accounts and records; assist in
processing purchase and redemption transactions; arrange for the wiring of
funds; transmit and receive funds in connection with customer orders to purchase
or redeem shares; verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder designated accounts;
furnish monthly and year-end statements and confirmations of purchases and
redemptions, as required by Rule 10b- 10 under the Securities Exchange Act of
1934; transmit to shareholders of each Class proxy statements, annual reports,
updated prospectuses and other communications; receive, tabulate and transmit
proxies executed by shareholders with respect to meetings of shareholders of the
Fund; and provide such other related services as the Fund or a shareholder may
request.
The Plan, the shareholder servicing agreements and the
Distribution Agreement each provide that the Adviser and the Distributor may
make payments from time to time from their own resources which may include the
advisory fee and the asset based sales charges and past profits for the
following purposes: (i) to defray the costs of and to compensate others,
including financial intermediaries with whom the Distributor or Adviser has
entered into written agreements, for performing shareholder servicing and
related administrative functions of each Class; to compensate certain financial
intermediaries for providing assistance in distributing Class shares; (ii) to
pay the costs of printing and distributing the Fund's prospectus to prospective
investors; and (iii) to defray the cost of the preparation and printing of
brochures and other promotional materials, mailings to prospective shareholders,
advertising, and other promotional activities, including the salaries and/or
commissions of sales personnel in connection with the distribution of the Fund's
shares. Further, it provides that the Adviser may use its service fee for the
purposes enumerated in (i) above and any asset based sales charges paid to the
Distributor also may be used for purposes of (ii) or (iii) above. The
Distributor or the Adviser, as the case may be, in their sole discretion, will
determine the amount of such payments made pursuant to the Plan with the
shareholder servicing agents and broker-dealers with whom they have contracted,
provided that such payments made pursuant to the Plan will not increase the
amount which a Class is required to pay to the Distributor or the Adviser for
any fiscal year under the shareholder servicing agreements or otherwise.
Shareholder servicing agents and broker-dealers may charge
investors a fee in connection with their use of specialized purchase and
redemption procedures offered to investors by the shareholder servicing agents
and broker-dealers. In addition, shareholder servicing agents and broker-dealers
offering purchase and redemption procedures similar to those offered to
shareholders who invest in the fund directly may impose charges, limitations,
minimums and restrictions in addition to or different from those applicable to
shareholders who invest in the Fund directly. Accordingly, the net yield to
investors who invest through shareholder servicing agents and broker-dealers may
be less than realized by investing in the Fund directly. An investor should read
the Prospectus in conjunction with the materials provided by the shareholder
servicing agent and broker-dealer describing the procedures under which Fund
shares may be purchased and redeemed through the shareholder servicing agent and
broker-dealer.
The Glass-Steagall Act limits the ability of a depository
institution to become an underwriter or distributor of securities. However, it
is the Fund's position that banks are not prohibited from acting in other
capacities for investment companies, such as providing administrative and
shareholder account maintenance services and receiving compensation from the
Distributor for providing such services. However, this is an unsettled area of
the law and if a determination contrary
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<PAGE>
to the Fund's position concerning shareholder servicing and administration
payments to banks from the Distributor is made by a bank regulatory agency or
court, any such payments will be terminated and any shares registered in the
banks' names, for their underlying customers, will be re-registered in the
names of the customers at no cost to each Class or its shareholders. In
addition, state securities laws on this issue may differ from the
interpretation of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state law.
In accordance with the Rule, the Plan provides that all written
agreements relating to the Plan entered into by the Fund, on behalf of each
Class, the Distributor or the Adviser, and the shareholder servicing agents,
broker-dealers, or other organizations, must be in a form satisfactory to the
Fund's Board of Directors. In addition, the Plan requires the Fund and the
Distributor to prepare, at least quarterly, written reports setting forth all
amounts expended for distribution purposes by the Fund and the Distributor
pursuant to the Plan and identifying the distribution activities for which those
expenditures were made.
BROKERAGE AND PORTFOLIO TURNOVER
Brokerage
The Adviser makes the Fund's portfolio decisions. In the
over-the-counter market, where a majority of the portfolio securities are
expected to be traded, orders are placed with responsible primary market-makers
unless a more favorable execution or price is believed to be obtainable.
Regarding exchange-traded securities, the Adviser determines the broker to be
used in each specific transaction with the objective of negotiating a
combination of the most favorable commission and the best price obtainable on
each transaction (generally defined as best execution). When consistent with the
objective of obtaining best execution, brokerage may be directed to persons or
firms supplying investment information to the Adviser, or portfolio transactions
may be effected by the Adviser. Neither the Fund nor the Adviser has entered
into agreements or understandings with any brokers regarding the placement of
securities transactions because of research services they provide. To the extent
that such persons or firms supply investment information to the Adviser for use
in rendering investment advice to the Fund, such information may be supplied at
no cost to the Adviser and, therefore, may have the effect of reducing the
expenses of the Adviser in rendering advice to the Fund. While it is impossible
to place an actual dollar value on such investment information, its receipt by
the Adviser probably does not reduce the overall expenses of the Adviser to any
material extent. Consistent with the Rules of Fair Practice of the National
Association of Securities Dealers, Inc., and subject to seeking best execution,
the Adviser may consider sales of shares of the Fund as a factor in the
selection of brokers to execute portfolio transactions for the Fund.
The investment information provided to the Adviser is of the type
described in Section 28(e) of the Securities Exchange Act of 1934 and is
designed to augment the Advisor's own internal research and investment strategy
capabilities. Research services furnished by brokers through which the Fund
effects securities transactions are used by the Adviser in carrying out its
investment management responsibilities with respect to all its clients'
accounts. There may be occasions where the transaction cost charged by a broker
may be greater than that which another broker may charge if the Adviser
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of brokerage and research services provided by the
executing broker. The Adviser may consider the sale of shares of the Fund by
brokers including the Distributor as a factor in its selection of brokers of
Fund transactions.
A majority of the portfolio securities that the Fund purchases or
sells will be done as principal transactions. In addition, debt instruments are
normally purchased directly from the issuer, from banks and financial
institutions or from an underwriter or market maker for the securities. There
usually are not brokerage commissions paid for any such purchases. Any
transactions involving such securities for which the Fund pays a brokerage
commission will be effected at the best price and execution available. Purchases
from underwriters of portfolio securities include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers serving as
market makers include the spread between the bid and asked price. The Fund may
purchase Government obligations with a demand feature from banks or other
financial institutions at a negotiated yield to the Fund based on the applicable
interest rate adjustment index for the security. The interest received by the
Fund is net of a fee charged by the issuing institution for servicing the
underlying obligation and issuing the participation certificate, letter of
credit, guarantee or insurance and providing the demand repurchase feature.
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<PAGE>
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner deemed
in the best interest of shareholders of the Fund rather than by a formula. The
primary consideration is prompt execution of orders in an effective manner at
the most favorable price.
Investment decisions for the Fund will be made independently from
those for any other investment companies or accounts that may become managed by
the Adviser or its affiliates. If, however, the Fund and other investment
companies or accounts managed by the Adviser are simultaneously engaged in the
purchase or sale of the same security, the transactions will be averaged as to
price and allocated equitably to each account. In some cases, this policy might
adversely affect the price paid or received by the Fund or the size of the
position obtainable for the Fund. In addition, when purchases or sales of the
same security for the Fund and for other investment companies managed by the
Adviser occur contemporaneously, the purchase or sale orders may be aggregated
in order to obtain any price advantage available to large denomination
purchasers or sellers.
In addition to managing the assets of the Fund, the Adviser
manages assets on a discretionary basis for other clients and, as a result, the
Adviser may effect transactions in such clients' accounts in securities in which
the Fund currently holds or, in the near future may hold, a position. The
Adviser makes the determination to purchase or sell a security based on numerous
factors, including those that may be particular to one or more of its clients.
Therefore, it is possible that the Adviser will effect transactions in certain
securities for select clients, which may or may not include the Fund, that it
may not deem, in its sole discretion, as being appropriate for other clients,
which may or may not include the Fund.
Portfolio Turnover
The Fund's average annual portfolio turnover rate, i.e., the
ratio of the lesser of sales or purchases to the monthly average value of the
portfolio (excluding from both the numerator and the denominator all securities
with maturities at the time of acquisition of one year or less) is expected to
be low. Purchases and sales are made for the Fund whenever necessary in the
Adviser's opinion, to meet the Fund's investment objective. In order to qualify
as a regulated investment company, less than 30% of the Fund's gross income
(including tax exempt income) must be derived from the sale or other disposition
of stock, securities or certain investments held for less than three months.
Although increased Fund turnover may increase the likelihood of additional
capital gains for the Fund, the Fund expects to satisfy the 30% income test.
COUNSEL AND INDEPENDENT AUDITORS
Legal matters in connection with the issuance of shares of common
stock of the Fund are passed upon by Battle Fowler LLP, 75 East 55th Street, New
York, New York 10022. Morrison, Brown, Argiz & Co., P.A., 9795 South Dixie
Highway, Miami, Florida 33156, have been selected as auditors for the Fund.
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<PAGE>
TABLE OF CONTENTS
PAGE
THE FUND .......................................................... 1
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS...................... 1
DESCRIPTION OF THE FUND'S INVESTMENT SECURITIES...................... 1
The Technology and Science Industries..................... 1
Foreign Securities........................................ 2
U.S. Government Obligations............................... 2
Repurchase Agreements..................................... 2
Hedging Transactions...................................... 3
Options Transactions...................................... 3
Lending of Securities..................................... 4
Variable-Amount Master Demand Notes....................... 4
INVESTMENT RESTRICTIONS.............................................. 5
Percentage Restrictions................................... 6
MANAGEMENT OF THE FUND............................................... 6
Investment Adviser........................................ 8
Adviser's Fees............................................ 9
Expense Limitation........................................ 9
Administrator............................................. 10
Administrator's Fees...................................... 11
Custodian, Transfer Agent and Dividend Agent.............. 11
TAXES .......................................................... 11
PURCHASE AND REDEMPTION.............................................. 13
DIVIDENDS AND DISTRIBUTIONS.......................................... 13
NET ASSET VALUE...................................................... 13
COMPUTATION OF YIELD AND PERFORMANCE INFORMATION..................... 14
Computation of Total Return............................... 14
DESCRIPTION OF COMMON STOCK.......................................... 15
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN.......................... 16
BROKERAGE AND PORTFOLIO TURNOVER..................................... 17
Brokerage ................................................ 17
Portfolio Turnover........................................ 18
COUNSEL AND INDEPENDENT AUDITORS..................................... 18
338027.6
-i-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of
Amerindo Funds, Inc.:
Amerindo Technology Fund
We have audited the accompanying statement of assets and liabilities of Amerindo
Funds, Inc. (Amerindo Technology Fund) as of May 15, 1996. This financial
statement is the responsibility of the Fund's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash held by the custodian as of May 15, 1996. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Amerindo
Funds, Inc. (Amerindo Technology Fund) as of May 15, 1996, in conformity with
generally accepted accounting principles.
Morrison, Brown, Argiz & Company
Certified Public Accountants
Miami, Florida
May 15, 1996
C/M 12034.0001 369708.1
<PAGE>
AMERINDO FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 15, 1996
AMERINDO
TECHNOLOGY
ASSETS: FUND
Cash............................................... $100,000
Deferred Organizational
Expenses (Note 3)................................ 126,645
----------
Total Assets...................................... 226,645
----------
LIABILITIES:
Organizational expenses
Payable........................................... 126,645
Commitments and Contingencies
(Notes 1 and 3)
-------------
Total Liabilities.................................. 126,645
-------------
NET ASSETS: $100,000
=============
Capital Stock - $.001 par value;
1 billion shares authorized
Authorized - Shares Outstanding
Class A 5,000
Class D 5,000
---------------
Net Asset Value
per share $10.00
===============
See accompanying Notes to Financial Statement
Note 1
Amerindo Technology Fund (the "Fund") was incorporated in Maryland on
February 6, 1996. The Fund has had no operations other than those relating to
organizational matters and the issuance of 10,000 Common Shares, at an initial
purchase price of $10.00 per share, to Amerindo Investment Advisors, Inc. The
Fund is registered under the Investment Company Act of 1940, as amended (the
"1940 Act") and consists of two classes of shares, Class A shares and Class D
shares. Class A shares are sold subject to an initial sales load of up to 3.00%
and a minimum initial investment of $25,000. Class D shares are sold without an
initial sales load and a minimum initial investment of $150,000. The Fund's
investment objective is long-term capital appreciation, thus both Class A shares
and Class D shares may be subject to a 3.00% redemption fee for redeeming shares
held less than one year. The Fund operates as a non-diversified, open-end
management investment company. In the event that, at any time during the five
year period beginning with the effective date of the registration statement, the
initial shares acquired by Amerindo Investment Advisors, Inc. prior to such date
are redeemed by any holder thereof, the redemption proceeds payable in respect
of such shares will be reduced by the pro rata share (based on the proportionate
share of the initial shares redeemed to the total number of initial shares
outstanding at the time of such redemption) of the then unamortized
organizational expenses as of the date of such redemption. In the event that the
Fund liquidates before the deferred organizational expenses are fully amortized,
Amerindo Investment Advisors Inc. shall bear such unamortized deferred
organizational expenses.
Note 2
The Fund has entered into an investment advisory agreement (the
"Investment Advisory Agreement") with Amerindo Investment Advisors Inc., a
California corporation (the "Adviser"). The Investment Advisory Agreement
provides for the Fund to pay the Adviser an investment advisory fee calculated
and accrued daily and paid monthly at the annual rates of 1.50% of each Class's
average daily net assets. The Advisor has agreed to a reduction in the amounts
payable to it and to reimburse the Fund, as necessary, if in any fiscal year the
sum of the Fund's expenses exceeds the limits set by applicable regulations of
California state securities commissions.
The Fund has entered into an fund administrative agreement (the
"Administrative Services Agreement") with Furman Selz LLC ("Furman Selz") in
order to provide the Fund with administrative, fund accounting, dividend
disbursing and transfer agency services. The services under the Administration
Agreement include day-to-day administration of matters related to the corporate
existence of the Fund (other than rendering investment advice), maintenance of
its records, preparation of reports, supervision of the Fund's arrangement with
its custodian and assistance in the preparation the Fund's Registration
Statement under federal and state laws. Pursuant to the Administration
Agreement, the Fund will pay Furman Selz the following fees for its services:
(I) a monthly administrator's fee computed at an annual rate of 0.15% of the
average daily net assets of the Fund, and (ii) an annual fund accounting fee of
$30,000. Under the terms of the Fund Administration Agreement, the Administrator
also maintains certain of the Fund's books and furnishes, at its own expense,
such office space, facilities, equipment, supplies, clerical help and
bookkeeping and legal services as the Fund may reasonably require in the
operation of its business.
The Fund has entered into a distribution agreement (the "Distribution
Agreement") with Furman Selz (the "Distributor"). Under the Distribution
Agreement, the Distributor, as agent of the Fund, has agreed to use its best
efforts as sole distributor of the Funds' shares. The Distributor pays the
promotional and advertising expenses related to the distribution and sale of
Fund shares. Class A shares may be subject to a 12b-1 fee of up to 0.25% of
average daily net assets and a shareholder servicing fee of up to 0.25% of
average daily net assets. Class D shares will be subject to a 12b-1 fee of up to
0.25% of average daily net assets. The Fund's Board of Directors may, in the
future, authorize the issuance of additional series of capital stock for the
Funds.
Certain officers and/or directors of the Fund are officers and/or
directors of the Administrator and Adviser of their affiliates. The Northern
Trust Company serves as the Fund's Custodian.
Note 3
Costs incurred in connection with the organization and initial
registration of the Fund have been deferred and are being amortized on a
straightline basis over sixty months beginning with the Funds' commencement of
operations. In the event any of the initial shares of the Funds are redeemed
during the amortization period, the redemption proceeds will be reduced by a pro
rata portion of any unamortized organizational expenses in the proportion as the
number of shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
<PAGE>
PART C - OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
* (A) FINANCIAL STATEMENTS
Included in Prospectus:
(1) Expense Summary
Included in Statement of Additional Information:
(1) Report of independent accountants dated May 15, 1996; and
(2) Statement of Assets and Liabilities dated May 15, 1996
(B) EXHIBITS
* (1) Articles of Incorporation of the Registrant.
* (2) By-Laws of the Registrant.
(3) Not applicable.
(4) Not applicable.
(5) Form of Investment Advisory Agreement.
(6) Form of Distribution Agreements.
(7) Not applicable.
(8) Form of Custody Agreement.
(9) Form of Fund Administration Agreement.
(9.1) Form of Transfer Agency Agreement.
(10) Consent of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and as to the use of their name under the
heading "Counsel and Independent Auditors" in the Prospectus
and Statement of Additional Information.
(11) Consent of Morrison, Brown, Argiz & Company, certified
public accountants.
(12) Not Applicable.
(13) Subscription Letter.
(14) Not Applicable.
(15) Distribution and Service Plan.
(15.1)Form of Shareholder Servicing Agreements.
(16) Not applicable.
(17) Not Applicable.
(18) Multi-Class Plan pursuant to Rule 18f-3 under the 1940 Act.
(19) Powers of Attorney.
- --------
* Filed as an exhibit to the Registrant's Registration Statement,
333-00767, filed on February 7, 1996 and incorporated herein by
reference.
-4-
338469.4
<PAGE>
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
Number of Record Holders
Title of Class as of May 23, 1996
--------------- ---------------------
Shares of Common Stock 1
Item 27. INDEMNIFICATION.
(a) In accordance with Section 2-418 of the General Corporation Law
of the State of Maryland, Article NINTH of the Registrant's
Articles of Incorporation provides as follows:
"NINTH: (1) The Corporation shall indemnify (i) its currently
acting and former directors and officers, whether serving the
Corporation or at its request any other entity, to the fullest
extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the fullest extent permitted
by law, and (ii) other employees and agents to such extent as shall
be authorized by the Board of Directors or the By-Laws and as
permitted by law. Nothing contained herein shall be construed to
protect any director or officer of the Corporation against any
liability to the Corporation or its security holders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office. The foregoing rights of
indemnification shall not be exclusive of any other rights to which
those seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such by-laws, resolutions or
contracts implementing such provisions or such indemnification
arrangements as may be permitted by law. No amendment of the
charter of the Corporation or repeal of any of its provisions shall
limit or eliminate the right of indemnification provided hereunder
with respect to acts or omissions occurring prior to such amendment
or repeal.
(2) To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, and the Investment
Company Act of 1940, no director or officer of the Corporation
shall be personally liable to the Corporation or its stockholders
for money damages; provided, however, that nothing herein shall be
construed to protect any director or officer of the Corporation
against any liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office. No amendment of
the charter of the Corporation or repeal of any of its provisions
shall limit or eliminate the limitation of liability provided to
directors and officers hereunder with respect to any act or
omission occurring prior to such amendment or repeal."
[(b) In Section [ ] of the Distribution Agreement relating to the
securities being offered hereby, the Registrant agrees to indemnify
and hold harmless any person who controls Furman Selz LLC, within
the meaning of the Securities Act of 1933, against certain types of
civil liabilities arising in connection with the Registration
Statement or Prospectus.]
-5-
338469.4
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The description of the Registrant's adviser, Amerindo Investment
Advisors Inc., under the caption "Management of the Fund" in the Prospectus
and "Management of the Fund" in the Statement of Additional Information
constituting parts A and B, respectively, of the Registration Statement are
incorporated herein by reference.
Item 29. PRINCIPAL UNDERWRITERS.
(a) Furman Selz LLC located at 230 Park Avenue, New York, New York
10169 is the Registrant's Distributor.
(b) The following are the directors and officers of Furman Selz
LLC. The principal business address of each of these persons is 230 Park
Avenue, New York, New York 10169:
Positions and Offices Positions and Offices
Name With the Distributor With Registrant
Edmund A. Hajim Chairman of the Board & CEO None
Roy L. Furman President None
Bernard T. Selz Chairman of the None
Executive Committee
Steven D. Blecher Executive Vice President None
and Secretary
Elizabeth Q. Solazzo Executive Vice President
and Assistant Secretary None
Michael C. Petrycki Executive Vice President None
John Steinhardt Executive Vice President None
William Shutzer Executive Vice President None
Fred Fraenkel Executive Vice President None
Michael Weisberg Executive Vice President None
William P. Collins Executive Vice President None
Brian P. Friedman Executive Vice President None
Robert J. Miller Treasurer None
Thalia M. Cody Assistant Secretary None
(c) There are no affiliated persons of the Underwriter who are not
affiliated with the Registrant.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder, in general, are maintained in the physical possession of
Registrant at Amerindo Funds Inc., 399 Park Avenue, New York, New York 10022;
Furman Selz LLC, 230 Park Avenue, New York, New York 10169, the Registrant's
transfer and accounting agent will maintain physical possession of
Registrant's shareholder and fund accounting records; and The Northern Trust
Company, the custodian will maintain physical possession of the Registrant's
custodial records.
Item 31. MANAGEMENT SERVICES.
Not Applicable.
Item 32. UNDERTAKINGS.
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment,
using financial statements which need not be certified,
within four to six months from the effective date of its
Securities Act Registration Statement.
(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the registrants latest
annual report to shareholders, upon request and without
charge.
-6-
338469.4
<PAGE>
(d) The Registrant undertakes (although not required to hold
annual shareholder meetings) if requested to do so by the
holders of at least 10% of its outstanding shares, to call a
meeting of shareholders for the purpose of voting upon the
question of removal of a director or directors and to assist
in communications with other shareholders as required by
Section 16(c).
-7-
338469.4
<PAGE>
Exhibit Index
(B) EXHIBITS
(1) Articles of Incorporation of the Registrant.
(2) By-Laws of the Registrant.
(3) Not applicable.
(4) Not applicable.
(5) Form of Investment Advisory Agreement.
(6) Form of Distribution Agreements.
(7) Not applicable.
(8) Form of Custody Agreement.
(9) Form of Fund Administration Agreement.
(9.1) Form of Transfer Agency Agreement.
(10) Consent of Battle Fowler LLP as to the legality of the
securities being registered, including their consent to the
filing thereof and as to the use of their name under the
heading "Counsel and Independent Auditors" in the Prospectus
and Statement of Additional Information.
(11) Consent of Morrison, Brown, Argiz & Company, certified public
accountants.
(12) Not Applicable.
(13) Subscription Letter.
(14) Not Applicable.
(15) Distribution and Service Plan.
(15.1)Form of Shareholder Servicing Agreements.
(16) Not applicable.
(17) Not Applicable.
(18) Multi-Class Plan pursuant to Rule 18f-3 under the 1940 Act.
(19) Powers of Attorney.
-8-
338469.4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Pre-Effective Amendment No. 1 to its Registration Statement to be signed on
its behalf by the undersigned, the 14th day of May, 1996.
AMERINDO FUNDS INC.
By:/s/ ALBERTO W. VILAR
Alberto W. Vilar, Chairman
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to its Registration Statement has been signed
below by the following persons in the capacities indicated below on May 14,
1996.
Signature Title Date
(1) Principal Executive Officers:
By:/s/ ALBERTO W. VILAR Chairman and May 14, 1996
Alberto W. Vilar Chief Executive
Officer
By:/s/ DANA E. SMITH Vice President May 14, 1996
Dana E. Smith and Treasurer
(2) Majority of Directors
Alberto W. Vilar Director May 14, 1996
By: /s/ ALBERTO W. VILAR
Gary A. Tanaka Director May 14, 1996
By: /s/ GARY A. TANAKA
John Rutledge Director May 14, 1996
By: /s/ JOHN RUTLEDGE
Jude T. Wanniski Director May 14, 1996
By: /s/ JUDE T. WANNISKI
-10-
338469.4
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AMERINDO TECHNOLOGY FUND
A SERIES OF
AMERINDO FUNDS INC.
One Embarcadero
Suite 2300
San Francisco, CA 94111
May 14, 1996
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
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 Amerindo Technology Fund (the "Fund"), a series of Amerindo Funds
Inc. (the "Company"), 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 Prospectus 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
340822.1
<PAGE>
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 Fund and/or other advisory accounts of yours and
any investment advisor affiliated with you; and (ii) consider the sales of
shares of the Fund 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 Fund since your prior report, and will also
keep us in touch with important developments affecting the Fund 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 Fund 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 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 or as we may reasonably request 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 transfer taxes incurred by or
levied on us; (c) commitment fees, certain insurance premiums
-2-
340822.1
<PAGE>
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 the 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 Prospectus 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 the 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 equal to 1.50% of the Fund's annual average daily net assets. 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 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 the Fund's Distribution and Service Plan and the
Shareholder Servicing Agreement, you will also act as a shareholder servicing
agent for the Fund pursuant to which the Fund is permitted to pay you a maximum
of 0.25% per annum of the Fund's average daily net assets to compensate you for
providing shareholder services and to
-3-
340822.1
<PAGE>
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 Fund and to compensate others
with whom you may have entered into a written agreement for performing
shareholder servicing functions on behalf of the Fund. 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
the 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 the 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 14, 1996 and shall
continue in effect until April 30, 1998 and thereafter for successive
twelve-month periods (computed from each May 1), 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 the 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 the
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. 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.
-4-
340822.1
<PAGE>
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.,
AMERINDO TECHNOLOGY FUND
By: ____________________
Name:
Title:
ACCEPTED: May 14, 1996
AMERINDO INVESTMENT ADVISORS INC.
By: ________________________________
Name:
Title:
-5-
340822.1
DISTRIBUTION AGREEMENT
AMERINDO TECHNOLOGY FUND
A series of Amerindo Funds Inc. (the "Fund")
Class A Shares
One Embarcadero
Suite 2300
San Francisco, California 94111
May 14, 1996
Furman Selz LLC
230 Park Avenue
New York, New York 10169
Gentlemen:
1. In consideration of the agreements on your part herein contained
and of the payment by us to you of a front-end sales load as described in our
most current Prospectus as in effect from time to time and of a compensatory
asset-based sales charges in an amount not to exceed 0.25% per annum of the
Fund's common stock designated Class A shares' (the "Class A Shares") average
daily net assets and on the terms and conditions set forth herein, we have
agreed that you shall be, for the period of this agreement, a distributor, as
our agent, for the unsold portion of the Class A Shares, $.001 par value per
share, as may be effectively registered from time-to-time under the Securities
Act of 1933, as amended (the "1933 Act"). This Agreement is being entered into
and the payment of the asset-based sales charges are being made to you pursuant
to the Distribution and Service Plan (the "Plan") adopted by us on behalf of the
Fund in accordance with Rule 12b-l under the Investment Company Act of 1940, as
amended (the "1940 Act").
2. You will make payments from time-to-time from your fees payable
hereunder and your own resources and past profits for the following purposes:
(i) to compensate certain financial intermediaries with whom you
have written contracts for providing assistance in distributing the Class
A shares;
(ii) to pay the costs of printing and distributing the Fund's
prospectus to prospective investors; and
(iii) to defray the cost of the preparation and printing of brochures
and other promotional materials, mailings to prospective shareholders,
advertising, and other
364788.1
<PAGE>
promotional activities, including salaries and/or commissions of sales
personnel in connection with the distribution of the Class A shares.
3. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of the Class A Shares of the Fund represented by the Fund as
shall then be effectively registered under the 1933 Act. You shall have the
right, as principal, to purchase Class A Shares of the Fund represented by the
Fund at its respective net asset value and to sell such shares to the public
against orders therefor at the applicable public offering price, as defined
below. You shall also have the right, as principal, to sell shares to dealers
against orders therefor at the public offering price less a concession
determined in accordance with the terms of the Fund's current Prospectus. The
public offering price shall be the net asset value of the Class A Shares, plus
any applicable sales charges, all as set forth in the Fund's current Prospectus
and Statement of Additional Information.
4. All subscriptions for Class A Shares obtained by you shall be
directed to us for acceptance and shall not be binding on us until accepted by
us. You shall have no authority to make binding subscriptions on our behalf. We
reserve the right to sell Class A Shares through other distributors or directly
to investors through subscriptions received by us at our principal office. The
right given to you under this Agreement shall not apply to any Class A Shares
issued in connection with (a) the merger or consolidation of any other
investment company with us, (b) our acquisition by purchase or otherwise of all
or substantially all of the assets or stock of any other investment company, or
(c) the reinvestment in shares of our common stock by our stockholders of
dividends or other distributions or any other offering by us of securities to
our stockholders.
5. You will use your best efforts to obtain subscriptions to the
Class A Shares upon the terms and conditions contained herein and in our
Prospectus, as in effect from time-to-time. You will send to us promptly all
subscriptions placed with you. We shall furnish you from time-to-time, for use
in connection with the offering of the Class A Shares, such other information
with respect to us and the Class A Shares as you may reasonably request. We
shall supply you with such copies of our Registration Statement and Prospectus,
as in effect from time-to-time, as you may request. Except as we may authorize
in advance and in writing, you are not authorized to give any information or to
make any representation that is not contained in the Registration Statement or
Prospectus, as then in effect. You may use employees, agents and other persons,
at your cost and expense, to assist you in carrying out your obligations
hereunder, but no such employee, agent or other person shall be deemed to be our
agent or have any rights under this Agreement. You may sell our Class A Shares
to or through qualified brokers, dealers and financial institutions under
selling and servicing agreements, provided that no dealer, financial institution
or other person shall be appointed or authorized to act as our agent without our
prior written consent. We acknowledge that you as Distributor to the Fund in
connection with the Fund's Class A Shares, pursuant to the Distribution and
Service Plan with the Fund, may arrange for broker-dealers whose customers or
clients are Fund shareholders (each a "Broker-Dealer") to enter
-2-
364788.1
<PAGE>
into agreements with you as the Distributor pursuant to which the Broker-Dealers
will be compensated directly by the Distributor for functions not performed by
the Adviser, the Adviser's Shareholder Servicing Agents, the Distributor, the
Administrator or the Transfer Agent. Such payments will be made only pursuant to
written agreements approved in form and substance by our Board of Directors to
be entered into by the Distributor and the Broker Dealers. It is recognized that
we shall have no obligation or liability to you, the people or entities with
whom you contract or any Broker-Dealer for any such payments under such
agreements with Broker-Dealers. Our obligation is solely to make payments to the
Adviser under both the Advisory Agreement and the Shareholder Servicing
Agreement and to you the Distributor, under this Distribution Agreement. All
sales of our shares effected through you will be made in compliance with all
applicable federal securities laws and regulations and the Constitution, rules
and regulations of the National Association of Securities Dealers, Inc.
6. We reserve the right to suspend the offering of the Class A
Shares at any time, in the absolute discretion of our Board of Directors, and
upon notice of such suspension, you shall cease to offer the Class A Shares
hereunder.
7. Both of us will cooperate with each other in taking such action
as may be necessary to qualify the Class A Shares for sale under the securities
laws of such states as we may designate, provided, that you shall not be
required to register as a broker-dealer or file a consent to service of process
in any such state where you are not now so registered. Pursuant to the Advisory
Agreement dated May 14, 1996 between us and the Adviser, we will pay all fees
and expenses of registering the Class A Shares under the 1933 Act and of
qualification of the Class A Shares, and to the extent necessary, our
qualification under applicable state securities laws. You will pay all expenses
relating to your broker-dealer qualification.
8. We represent to you that our Registration Statement and
Prospectus have been carefully prepared to date in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder. We represent and
warrant to you, as of the date hereof, that our Registration Statement and
Prospectus contain all statements required to be stated therein in accordance
with the 1933 Act and the 1940 Act and the SEC's rules and regulations
thereunder; that all statements of fact contained therein are or will be true
and correct at the time indicated or the effective date, as the case may be; and
that neither our Registration Statement nor our Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Class A Shares. We will from time-to-time file such amendment or amendments to
our Registration Statement and Prospectus as, in the light of future
development, shall, in the opinion of our counsel, be necessary in order to have
our Registration Statement and Prospectus at all times contain all material
facts required to be stated therein or necessary to make any statements therein
not misleading to a purchaser of shares of our common stock. If we shall not
file such amendment or amendments within fifteen days after our receipt of a
-3-
364788.1
<PAGE>
written request from you to do so, you may, at your option, terminate this
agreement immediately. We will not file any amendment to our Registration
Statement or Prospectus without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement shall in any way limit our
right to file such amendments to our Registration Statement or Prospectus, of
whatever character, as we may deem advisable, such right being in all respects
absolute and unconditional. We represent and warrant to you that any amendment
to our Registration Statement or Prospectus hereafter filed by us will be
carefully prepared in conformity within the requirements of the 1933 Act and the
1940 Act and the SEC's rules and regulations thereunder and will, when it
becomes effective, contain all statements required to be stated therein in
accordance with the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder; that all statements of fact contained therein will, when
the same shall become effective, be true and correct; and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
shares.
9. We agree to indemnify, defend and hold you, and any person who
controls you within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you or any such controlling
person may incur, under the 1933 Act or the 1940 Act, or under common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in our Registration Statement or Prospectus in effect
from time-to-time or arising out of or based upon any alleged omission to state
a material fact required to be stated in either of them or necessary to make the
statements in either of them not misleading, provided, however, that in no event
shall anything herein contained be so construed as to protect you against any
liability to us or our security holders to which you would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of your, duties, or by reason of your reckless disregard of your
obligations and duties under this agreement. Our agreement to indemnify you and
any such controlling person is expressly conditioned upon our being notified of
any action brought against you or any such controlling person, such notification
to be given by letter or by telegram addressed to us at our principal office and
sent to us by the person against whom such action is brought within ten days
after the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to the person against whom such action is brought
other than on account of our indemnity agreement contained in this paragraph 9.
We will be entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by us and approved by
you. In the event we do elect to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case we do not elect to assume the defense of any such suit, or
in case you, in good faith, do not approve of counsel chosen by us, we will
reimburse you or the controlling person or persons named as defendant or
defendants in such
-4-
364788.1
<PAGE>
suit, for the fees and expenses of any counsel retained by you or them. Our
indemnification agreement contained in this paragraph 9 and our representations
and warranties in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of you or any controlling
person and shall survive the sale of any Class A Shares made pursuant to
subscriptions obtained by you. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your successors and assigns, and
to the benefit of any of your controlling persons and their successors and
assigns. We agree promptly to notify you of the commencement of any litigation
or proceeding against us in connection with the issue and sale of any Class A
Shares.
10. You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of Section 15
of the 1933 Act, free and harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which we, our officers or directors, or any such
controlling person may incur under the 1933 Act or under common law or
otherwise, but only to the extent that such liability or expense incurred by us,
our officers or directors or such controlling person shall arise out of or be
based upon any alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our Registration
Statement or Prospectus as in effect from time-to-time, or shall arise out of or
be based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or
Prospectus or necessary to make such information not misleading. Your agreement
to indemnify us, our officers and directors, and any such controlling person is
expressly conditioned upon your being notified of any action brought against us,
our officers or directors or any such controlling person, such notification to
be given by letter or telegram addressed to you at your principal office and
sent to you by the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been served. You shall
have a right to control the defense of such action, with counsel of your own
choosing, satisfactory to us, if such action is based solely upon such alleged
misstatement or omission on your part, and in any other event you and we, our
officers or directors or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure to notify you of any such action shall not relieve you from any
liability which you may have to us, to our officers or directors, or to such
controlling person other than on account of your indemnity agreement contained
in this paragraph 10.
11. We agree to advise you immediately:
(a) of any request by the SEC for amendments to our
Registration Statement or Prospectus or for additional information,
(b) of the issuance by the SEC of any stop order suspending
the effectiveness of our Registration Statement or Prospectus or the initiation
of any proceedings for that purpose,
-5-
364788.1
<PAGE>
(c) of the happening of any material event which makes untrue
any statement made in our Registration Statement or Prospectus or which requires
the making of a change in either of them in order to make the statements therein
not misleading, and
(d) of all action of the SEC with respect to any amendments
to our Registration Statement or Prospectus.
12. This Agreement will become effective on the date hereof and will
remain in effect thereafter for successive twelve-month periods (computed from
each May 1), provided that such continuation is specifically approved at least
annually by vote of our Board of Directors and of a majority of those of our
directors who are not interested persons (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of the Plan or in any
agreements related to the Plan, cast in person at a meeting called for the
purpose of voting on this Agreement. In the event that the Distribution and
Service Plan is either terminated or is no longer valid, this Agreement
automatically and immediately terminates. This Agreement may be terminated at
any time, without the payment of any penalty, by vote of a majority of our
entire Board of Directors and by a vote of a majority of our Directors who are
not interested persons (as defined in the 1940 Act) and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan, or by vote of a majority of our outstanding voting
securities, as defined in the Act, on sixty days' written notice to you, or by
you on sixty days' written notice to us.
13. 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 SEC thereunder.
14. 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 another
corporation, firm, individual or association.
-6-
364788.1
<PAGE>
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.,
AMERINDO TECHNOLOGY FUND
By: _________________________
Name:
Title:
Accepted:
May 14, 1996
FURMAN SELZ LLC
By: ________________________________
Name:
Title:
-7-
364788.1
<PAGE>
DISTRIBUTION AGREEMENT
AMERINDO TECHNOLOGY FUND
A series of Amerindo Funds Inc. (the "Fund")
Class D Shares
One Embarcadero
Suite 2300
San Francisco, California 94111
May 14, 1996
Furman Selz LLC
230 Park Avenue
New York, New York 10169
Gentlemen:
1. In consideration of the agreements on your part herein contained
and on the terms and conditions set forth herein, we have agreed that you shall
be, for the period of this agreement, a distributor, as our agent, for the
unsold portion of the Class D Shares, $.001 par value per share, as may be
effectively registered from time-to-time under the Securities Act of 1933, as
amended (the "1933 Act"). This agreement is being entered into pursuant to the
Distribution and Service Plan (the "Plan") adopted by us on behalf of the Fund
in accordance with Rule 12b-l under the Investment Company Act of 1940, as
amended (the "1940 Act").
2. You may make payments from time-to-time from your own resources
for the following purposes:
(i) to compensate certain financial intermediaries with whom you
have written contracts for providing assistance in distributing the Class
D shares;
(ii) to pay the costs of printing and distributing the Fund's
prospectus to prospective investors; and
(iii) to defray the cost of the preparation and printing of brochures
and other promotional materials, mailings to prospective shareholders,
advertising, and other promotional activities, including salaries and/or
commissions of sales personnel in connection with the distribution of the
Class D shares.
3. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of the Class D Shares of the Fund represented by the Fund as
shall then be effectively registered under the
363205.1
<PAGE>
1933 Act. You shall have the right, as principal, to purchase Class D Shares of
the Fund represented by the Fund at its respective net asset value and to sell
such shares to the public against orders therefor at the applicable public
offering price, which shall be the net asset value of the Class D Shares, as set
forth in the Fund's current Prospectus and Statement of Additional Information.
4. All subscriptions for Class D Shares obtained by you shall be
directed to us for acceptance and shall not be binding on us until accepted by
us. You shall have no authority to make binding subscriptions on our behalf. We
reserve the right to sell Class D Shares through other distributors or directly
to investors through subscriptions received by us at our principal office. The
right given to you under this agreement shall not apply to any Class D Shares
issued in connection with (a) the merger or consolidation of any other
investment company with us, (b) our acquisition by purchase or otherwise of all
or substantially all of the assets or stock of any other investment company, or
(c) the reinvestment in shares of our common stock by our stockholders of
dividends or other distributions or any other offering by us of securities to
our stockholders.
5. You will use your best efforts to obtain subscriptions to the
Class D Shares upon the terms and conditions contained herein and in our
Prospectus, as in effect from time-to-time. You will send to us promptly all
subscriptions placed with you. We shall furnish you from time-to-time, for use
in connection with the offering of the Class D Shares, such other information
with respect to us and the Class D Shares as you may reasonably request. We
shall supply you with such copies of our Registration Statement and Prospectus,
as in effect from time-to-time, as you may request. Except as we may authorize
in advance and in writing, you are not authorized to give any information or to
make any representation that is not contained in the Registration Statement or
Prospectus, as then in effect. You may use employees, agents and other persons,
at your cost and expense, to assist you in carrying out your obligations
hereunder, but no such employee, agent or other person shall be deemed to be our
agent or have any rights under this Agreement. You may sell our Class D Shares
to or through qualified brokers, dealers and financial institutions under
selling and servicing agreements, provided that no dealer, financial institution
or other person shall be appointed or authorized to act as our agent without our
prior written consent. We acknowledge that you as Distributor to the Fund in
connection with the Fund's Class D Shares, pursuant to the Distribution and
Service Plan with the Fund, may arrange for broker-dealers whose customers or
clients are Fund shareholders (each a "Broker-Dealer") to enter into agreements
with you as the Distributor for functions not performed by the Adviser, the
Adviser's Shareholder Servicing Agents, the Distributor, the Administrator or
the Transfer Agent. It is recognized that we shall have no obligation or
liability to you, the people or entities with whom you contract or any
Broker-Dealer for any payments under such agreements with Broker-Dealers. Our
obligation is solely to make payments to the Adviser under both the Advisory
Agreement and the Shareholder Servicing Agreement. All sales of our shares
effected through you will be made in compliance with all applicable federal
securities laws and regulations and the Constitution, rules and regulations of
the National Association of Securities Dealers, Inc.
-2-
363205.1
<PAGE>
6. We reserve the right to suspend the offering of the Class D
Shares at any time, in the absolute discretion of our Board of Directors, and
upon notice of such suspension, you shall cease to offer the Class D Shares
hereunder.
7. Both of us will cooperate with each other in taking such action
as may be necessary to qualify the Class D Shares for sale under the securities
laws of such states as we may designate, provided, that you shall not be
required to register as a broker-dealer or file a consent to service of process
in any such state where you are not now so registered. Pursuant to the Advisory
Agreement dated May 14, 1996 between us and the Adviser, we will pay all fees
and expenses of registering the Class D Shares under the 1933 Act and of
qualification of the Class D Shares, and to the extent necessary, our
qualification under applicable state securities laws. You will pay all expenses
relating to your broker-dealer qualification.
8. We represent to you that our Registration Statement and
Prospectus have been carefully prepared to date in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder. We represent and
warrant to you, as of the date hereof, that our Registration Statement and
Prospectus contain all statements required to be stated therein in accordance
with the 1933 Act and the 1940 Act and the SEC's rules and regulations
thereunder; that all statements of fact contained therein are or will be true
and correct at the time indicated or the effective date, as the case may be; and
that neither our Registration Statement nor our Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Class D Shares. We will from time-to-time file such amendment or amendments to
our Registration Statement and Prospectus as, in the light of future
development, shall, in the opinion of our counsel, be necessary in order to have
our Registration Statement and Prospectus at all times contain all material
facts required to be stated therein or necessary to make any statements therein
not misleading to a purchaser of shares of our common stock. If we shall not
file such amendment or amendments within fifteen days after our receipt of a
written request from you to do so, you may, at your option, terminate this
agreement immediately. We will not file any amendment to our Registration
Statement or Prospectus without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement shall in any way limit our
right to file such amendments to our Registration Statement or Prospectus, of
whatever character, as we may deem advisable, such right being in all respects
absolute and unconditional. We represent and warrant to you that any amendment
to our Registration Statement or Prospectus hereafter filed by us will be
carefully prepared in conformity within the requirements of the 1933 Act and the
1940 Act and the SEC's rules and regulations thereunder and will, when it
becomes effective, contain all statements required to be stated therein in
accordance with the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder; that all statements of fact contained therein will, when
the same shall become effective, be true and correct; and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or
-3-
363205.1
<PAGE>
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of our shares.
9. We agree to indemnify, defend and hold you, and any person who
controls you within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you or any such controlling
person may incur, under the 1933 Act or the 1940 Act, or under common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in our Registration Statement or Prospectus in effect
from time-to-time or arising out of or based upon any alleged omission to state
a material fact required to be stated in either of them or necessary to make the
statements in either of them not misleading, provided, however, that in no event
shall anything herein contained be so construed as to protect you against any
liability to us or our security holders to which you would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of your, duties, or by reason of your reckless disregard of your
obligations and duties under this agreement. Our agreement to indemnify you and
any such controlling person is expressly conditioned upon our being notified of
any action brought against you or any such controlling person, such notification
to be given by letter or by telegram addressed to us at our principal office and
sent to us by the person against whom such action is brought within ten days
after the summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from any
liability which we may have to the person against whom such action is brought
other than on account of our indemnity agreement contained in this paragraph 9.
We will be entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by us and approved by
you. In the event we do elect to assume the defense of any such suit and retain
counsel of good standing approved by you, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them; but in case we do not elect to assume the defense of any such suit, or
in case you, in good faith, do not approve of counsel chosen by us, we will
reimburse you or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
you or them. Our indemnification agreement contained in this paragraph 9 and our
representations and warranties in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of you or any
controlling person and shall survive the sale of any Class D Shares made
pursuant to subscriptions obtained by you. This agreement of indemnity will
inure exclusively to your benefit, to the benefit of your successors and
assigns, and to the benefit of any of your controlling persons and their
successors and assigns. We agree promptly to notify you of the commencement of
any litigation or proceeding against us in connection with the issue and sale of
any Class D Shares.
10. You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of Section 15
of the 1933 Act, free and harmless from and against any and all claims, demands,
liabilities, and expenses
-4-
363205.1
<PAGE>
(including the cost of investigating or defending such claims, demands or
liabilities and any reasonable counsel fees incurred in connection therewith)
which we, our officers or directors, or any such controlling person may incur
under the 1933 Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by us, our officers or directors or such
controlling person shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished in writing by
you to us for use in our Registration Statement or Prospectus as in effect from
time-to-time, or shall arise out of or be based upon any alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement or Prospectus or necessary to make such
information not misleading. Your agreement to indemnify us, our officers and
directors, and any such controlling person is expressly conditioned upon your
being notified of any action brought against us, our officers or directors or
any such controlling person, such notification to be given by letter or telegram
addressed to you at your principal office and sent to you by the person against
whom such action is brought, within ten days after the summons or other first
legal process shall have been served. You shall have a right to control the
defense of such action, with counsel of your own choosing, satisfactory to us,
if such action is based solely upon such alleged misstatement or omission on
your part, and in any other event you and we, our officers or directors or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which you may have to
us, to our officers or directors, or to such controlling person other than on
account of your indemnity agreement contained in this paragraph 10.
11. We agree to advise you immediately:
(a) of any request by the SEC for amendments to our
Registration Statement or Prospectus or for additional information,
(b) of the issuance by the SEC of any stop order suspending
the effectiveness of our Registration Statement or Prospectus or the initiation
of any proceedings for that purpose,
(c) of the happening of any material event which makes untrue
any statement made in our Registration Statement or Prospectus or which requires
the making of a change in either of them in order to make the statements therein
not misleading, and
(d) of all action of the SEC with respect to any amendments to
our Registration Statement or Prospectus.
12. This Agreement will become effective on the date hereof and will
remain in effect thereafter for successive twelve-month periods (computed from
each May 1), provided that such continuation is specifically approved at least
annually by vote of our Board of Directors and of a majority of those of our
directors who are not interested persons (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation
-5-
363205.1
<PAGE>
of the Plan or in any agreements related to the Plan, cast in person at a
meeting called for the purpose of voting on this Agreement. In the event that
the Distribution and Service Plan is either terminated or is no longer valid,
this Agreement automatically and immediately terminates. This Agreement may be
terminated at any time, without the payment of any penalty, by vote of a
majority of our entire Board of Directors and by a vote of a majority of our
Directors who are not interested persons (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan, or by vote of a majority of our outstanding
voting securities, as defined in the Act, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
13. 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 SEC thereunder.
14. 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 another
corporation, firm, individual or association.
-6-
363205.1
<PAGE>
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.,
AMERINDO TECHNOLOGY FUND
By: _____________________________
Name:
Title:
Accepted:
May 14, 1996
FURMAN SELZ LLC
By: ________________________________
Name:
Title:
-7-
363205.1
CUSTODY AGREEMENT
AGREEMENT dated as of the ___ day of May, 1996, between AMERINDO FUNDS
INC., a corporation organized under the laws of the State of Maryland, having
its principal office and place of business at 399 Park Avenue, New York, NY
10022 (the "Company"), and THE NORTHERN TRUST COMPANY (the "Custodian"), an
Illinois Company with its principal place of business at 50 South LaSalle
Street, Chicago, Illinois 60675.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set
forth, the Company and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) The "1940 Act" shall mean the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time.
(b) "Authorized Person" shall be deemed to include the Chairman of the
Board of Directors, the President, and any Vice President, the
Secretary, the Treasurer or any other person, whether or not any such
person is an officer or employee of the Company, duly authorized by the
Board of Directors to give Oral Instructions and Written Instructions
on behalf of the Company and listed in the certification annexed hereto
as Schedule A or such other certification as may be received by the
Custodian from time to time.
(c) "Board of Directors" shall mean the Board of Directors of
the Company.
(d) "Book-Entry System" shall mean the Federal Reserve/
Treasury book-entry system for United States and federal agency
Securities, its successor or successors and its nominee or nominees.
(e) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given to the Custodian, which is actually received by the Custodian and
signed on behalf of the Company by any two Authorized Persons or any
two officers thereof.
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(f) "Articles of Incorporation" shall mean the Articles of
Incorporation of the Company dated February 6, 1996, as amended.
(g) "Depository" shall mean The Depository Trust Company, a clearing
agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, in which the
Custodian is hereby specifically authorized to make deposits. The term
"Depository" shall further mean and include any other person to be
named in a Certificate authorized to act as a depository under the 1940
Act, its successor or successors and its nominee or nominees.
(h) "Fund Accountant" shall mean the person appointed by the Company
who performs the daily calculations of the net asset values of the
Portfolio and determines the amount of cash available in the Portfolio
on a daily basis for investment. The Fund Accountant shall be
identified to the Custodian in writing.
(i) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the Government of the United States or agencies or
instrumentalities thereof, commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations each
of which will qualify as a first tier security under Rule 2a-7 of the
1940 Act, where the purchase or sale of such securities normally
requires settlement in federal funds on the same day as such purchase
or sale, and repurchase agreements with respect to any of the foregoing
types of securities.
(j) "Oral Instructions" shall mean an oral communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person.
(k) "Portfolio" refers to the Amerindo Technology Fund or any such
other separate and distinct investment portfolio as may from time to
time be created and designated by the Company in accordance with the
provisions of the Articles of Incorporation and Certificate of
Designation and which the Company and the Custodian shall have agreed
in writing shall be subject to this Agreement pursuant to the
provisions of Section 5(b).
(l) "Prospectus" shall mean the Company's current prospectus and
statement of additional information relating to the registration of the
Portfolio's Shares under the Securities Act of 1933, as amended.
(m) "Shares" refers to the shares of common stock of the Portfolio.
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(n) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodity interests and investments from time to time owned
by the Portfolio.
(o) "Sub-Custodian" shall mean and include (i) any branch of the
Custodian, (ii) any branch of a "qualified U.S. bank," as that term is
defined in Rule 17f-5 under the 1940 Act, (iii) any "eligible foreign
custodian," as that term is defined in Rule 17f-5 under the 1940 Act,
approved by the Board of Directors and having a contract with the
Custodian which contract has been approved by the Board of Directors,
and (iv) any securities depository or clearing agency, incorporated or
organized under the laws of a country other than the United States,
which operates the central system for handling of securities or
equivalent book-entries in that country or a transnational system for
the central handling of securities or equivalent book-entries, which
securities depository or clearing agency has been approved by the Board
of Directors; provided, that the Custodian or a Sub-Custodian has
entered into an agreement with such securities depository or clearing
agency.
(p) "Transfer Agent" shall mean the person which performs as the
transfer agent, dividend disbursing agent and shareholder servicing
agent for the Company.
(q) "Written Instructions" shall mean a written communication actually
received by the Custodian from a person reasonably believed by the
Custodian to be an Authorized Person by any system whereby the
receiver of such communication is able to verify through codes or
otherwise with a reasonable degree of certainty the authenticity of
the sender of such communication; however, "Written Instructions" from
the Company to the Custodian shall mean a facsimile or an electronic
communication transmitted by fund accountants, transfer agents and/or
the manager(s) (who have been provided an access code by the Company)
and actually received by the Custodian. Except as otherwise provided
in this Agreement, "Written Instructions" may include instructions
given on a standing basis.
2. Appointment of Custodian.
(a) The Company hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies owned by or in the
possession of the Portfolio during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
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3. Appointment and Removal of Sub-Custodians.
(a) The Custodian may appoint one or more Sub-Custodians to act as
Depository or Depositories or as sub-custodian or sub-custodians of
Securities and moneys at any time owned by any Portfolio, upon terms
and conditions as are specified in this Agreement. The Custodian shall
oversee the maintenance of any Securities or moneys of any Portfolio by
any Sub-Custodian.
(b) If, after the initial approval of Sub-Custodians by the Board of
Directors in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of the Portfolio, it will
so notify the Company and provide it with information reasonably
necessary to determine any such new Sub-Custodian's eligibility under
Rule 17f-5 under the 1940 Act, including a copy of the proposed
agreement with such Sub-Custodian. The Company shall at the meeting of
the Board of Directors next following receipt of such notice and
information give a written approval or disapproval of the proposed
action.
(c) The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule
17f-5(a)(1)(iii).
(d) If the Custodian intends to remove any Sub-Custodian previously
approved by the Board of Directors, it shall so notify the Company and
move the property of the Portfolio deposited with such Sub-Custodian to
another Sub-Custodian previously approved by the Board of Directors.
The Custodian shall promptly take such steps as may be required to
remove any Sub-Custodian that has ceased to meet the requirements of
Rule 17f-5 under the 1940 Act.
(e) The Custodian hereby warrants to the Company that in its opinion,
after due inquiry, the established procedures to be followed by each
Sub-Custodian (that is not being used as a foreign securities
depository or clearing agency) in connection with the safekeeping of
property of the Portfolio pursuant to this Agreement afford protection
for such property not materially different from that afforded by the
Custodian's established safekeeping procedures with respect to similar
property held by it (and its securities depositories) in Chicago,
Illinois.
4. Use of Sub-Custodians.
With respect to property of a Portfolio which is maintained by the
Custodian in the custody of a Sub-Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as belonging to the
Portfolio any property held by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of the Securities
placed in its care to be held in an eligible foreign securities
depository, such Sub-Custodian
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<PAGE>
will be required by its agreement with the Custodian to identify on its
books such Securities as being held for the account of the Custodian as
a custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be subject only to the
instructions of the Custodian or its agents; and any Securities held in
an eligible foreign securities depository for the account of a
Sub-Custodian will be subject only to the instructions of such
Sub-Custodian.
(d) The Custodian will only deposit property of a Portfolio in an
account with a Sub-Custodian which includes exclusively the assets held
by the Custodian for its customers, and will cause such account to be
designated by such Sub-Custodian as a special custody account for the
exclusive benefit of customers of the Custodian.
5. Compensation.
(a) The Company will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule B and incorporated herein for the
existing Portfolio. Such Fee Schedule does not include out-of-pocket
disbursements of the Custodian for which the Custodian shall be
entitled to bill separately. Out-of-pocket disbursements may include
only the items specified in Schedule B and which may be modified by the
Custodian if the Company consents in writing to the modification.
(b) The parties hereto will agree upon the compensation for acting as
Custodian for any Portfolio hereafter established and designated, and
at the time that the Custodian commences serving as such for said
Portfolio, such agreement shall be reflected in a Fee Schedule for that
Portfolio, dated and signed by an officer of each party hereto, which
shall be attached to Schedule B of this Agreement.
(c) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule B of this Agreement a revised Fee
Schedule, dated and signed by an officer of each party hereto.
(d) The Custodian will bill the Company for its services to the
Portfolio hereunder as soon as practicable after the end of each
calendar quarter, and said billings will be detailed in accordance with
the Fee Schedule for the Company. The Company will promptly pay to the
Custodian the amount of such billing. The Custodian shall have a claim
of payment against the property in the Portfolio for any compensation
or expense amount owing to the Custodian in connection with the
Portfolio from time to time under this Agreement.
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<PAGE>
(e) The Custodian (not the Company) will be responsible for the payment
of the compensation of each Sub-Custodian.
6. Custody of Cash and Securities
(a) Receipt and Holding of Assets. The Company will deliver or cause to
be delivered to the Custodian and the Sub-Custodians all Securities and
monies owned by the Portfolio at any time during the period of this
Agreement and shall specify the Portfolio to which the Securities and
monies are to be specifically allocated. The Custodian will not be
responsible for such Securities and monies until actually received by
it or by a Sub-Custodian. The Company shall instruct the Custodian from
time to time in its sole discretion, by means of Written Instructions,
as to the manner in which and in what amounts Securities, and monies of
the Portfolio are to be deposited on behalf of the Portfolio in the
Book-Entry System or a Depository; provided, however, that prior to the
deposit of Securities of the Portfolio in the Book-Entry System or a
Depository, including a deposit in connection with the settlement of a
purchase or sale, the Custodian shall have received a Certificate
specifically approving such deposits by the Custodian or a
Sub-Custodian in the Book-Entry System or a Depository. Securities and
monies of the Portfolio deposited in the Book-Entry System or a
Depository will be deposited in accounts which include only assets held
by the Custodian for its customers.
(b) Accounts and Disbursements. The Custodian shall establish and
maintain a separate account for the Portfolio and shall credit to the
separate account all monies received by it or a Sub-Custodian for the
account of such Portfolio and shall disburse, or cause a Sub-Custodian
to disburse, the same only:
1. In payment for Securities purchased for the Portfolio, as
provided in Section 7 hereof;
2. In payment of dividends or distributions with respect to
the Shares of such Portfolio, as provided in Section 10
hereof;
3. In payment of original issue or other taxes with respect
to the Shares of such Portfolio, as provided in Section 11(c)
hereof;
4. In payment for Shares which have been redeemed by such
Portfolio, as provided in Section 11 hereof;
5. In payment of fees and in reimbursement of the expenses
and liabilities of the Custodian attributable to the Company,
as provided in Sections 5 and 15(h) hereof;
6. Pursuant to Written Instructions setting forth the name of
the
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<PAGE>
Portfolio and the name and address of the person to whom the
payment is to be made, the amount to be paid and the purpose
for which payment is to be made.
(c) Fail Float. In the event that any payment made for the Portfolio
under this Section 6 exceeds the funds available in the Portfolio's
account, the Custodian or relevant Sub-Custodian, as the case may be,
may, in its discretion, advance the Company on behalf of the Portfolio
an amount equal to such excess and such advance shall be deemed an
overdraft from the Custodian or such Sub-Custodian to the Portfolio
payable on demand, bearing interest at the rate of interest customarily
charged by the Custodian or such Sub-Custodian on similar overdrafts.
(d) Confirmation and Statements. Promptly after the close of business
on each business day, the Custodian shall furnish the Company with
confirmations and a summary of all transfers to or from the account of
the Portfolio during said day. Such summary shall include without
limitation, as to property acquired for the Portfolio, the identity of
the entity having physical possession of such property. Where
securities purchased by the Portfolio are in a fungible bulk of
securities registered in the name of the Custodian (or its nominee) or
shown on the Custodian's account on the books of a Depository, the
Book-Entry System or a Sub-Custodian, the Custodian shall by book entry
or otherwise identify the quantity of those securities belonging to the
Portfolio. At least monthly, the Custodian shall furnish the Company
with a detailed statement of the Securities and monies held by it and
all Sub-Custodians for the Portfolio. In the absence of the filing in
writing with the Custodian by the Company of exceptions or objections
to any such statement within 90 days after the date that a material
defect is reasonably discoverable, the Company shall be deemed to have
approved such statement; and in such case or upon written approval of
the Company of any such statement the Custodian shall, to the extent
permitted by law and provided the Custodian has met the standard of
care in Section 14 hereof, be released, relieved and discharged with
respect to all matters and things set forth in such statement as though
such statement had been settled by the decree of a court of competent
jurisdiction in an action in which the Company and all persons having
any equity interest in the Company were parties.
(e) Registration of Securities and Physical Separation. All Securities
held for the Portfolio which are issued or issuable only in bearer
form, except such Securities as are held in the Book-Entry System,
shall be held by the Custodian or a Sub-Custodian in that form; all
other Securities held for the Portfolio may be registered in the name
of the Portfolio, in the name of any duly appointed registered nominee
of the Custodian or a Sub-Custodian as the Custodian or such
Sub-Custodian may from time to time determine, or in the name of the
Book-Entry System or a Depository or their successor or successors, or
their nominee or nominees. The Company reserves the right to instruct
the Custodian as to the
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<PAGE>
method of registration and safekeeping of the Securities. The Company
agrees to furnish to the Custodian appropriate instruments to enable
the Custodian or any Sub-Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or
in the name of the Book-Entry System or a Depository, any Securities
which the Custodian of a Sub-Custodian may hold for the account of the
Portfolio and which may from time to time be registered in the name of
the Portfolio. The Custodian shall hold all such Securities
specifically allocated to the Portfolio which are not held in the
Book-Entry System or a Depository in a separate account for the
Portfolio in the name of the Portfolio physically segregated at all
times from those of any other person or persons.
(f) Segregated Accounts. Upon receipt of a Written Instruction, the
Custodian will establish segregated accounts on behalf of the Portfolio
to hold liquid or other assets as it shall be directed by a Written
Instruction and shall increase or decrease the assets in such
Segregated Accounts only as it shall be directed by subsequent Written
Instruction.
(g) Collection of Income and Other Matters Affecting Securities. Unless
otherwise instructed to the contrary by a Written Instruction, the
Custodian, by itself or through the use of the Book-Entry System or a
Depository with respect to Securities therein deposited, shall, or
shall instruct the relevant Sub-Custodian to:
1. Collect all income due or payable with respect to
Securities held for the Portfolio in accordance with this
Agreement;
2. Present for payment and collect the amount payable upon
all Securities which may mature or be called, redeemed or
retired, or otherwise become payable;
3. Surrender Securities in temporary form for definitive
Securities;
4. Execute any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect; and
5. Hold directly, or through the Book-Entry System or a
Depository with respect to Securities therein deposited, for
the account of the Portfolio all rights and similar
Securities issued with respect to any Securities held by the
Custodian or relevant Sub-Custodian for the Portfolio.
If the Custodian or any Sub-Custodian causes the
account of the Portfolio to be credited on the payable date
for interest, dividends or redemptions, the Portfolio will
promptly return to the Custodian any such amount or property
so credited upon oral or written notification
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that neither the Custodian nor the relevant Sub-Custodian can
collect such amount or property in the ordinary course of
business. The Custodian or such Sub-Custodian, as the case
may be, shall have no duty or obligation to institute legal
proceedings, file a claim or proof of claim in any insolvency
proceeding or take any other action with respect to the
collection of such amount or property beyond reasonable
commercial collection procedures unless it is specifically
requested to do so by the Company and indemnified to its
satisfaction for any liability, cost or expense arising
therefrom.
(h) Delivery of Securities and Evidence of Authority. Upon receipt of a
Written Instruction and not otherwise, except for subparagraphs 5, 6,
7, and 8 of this section 6(h) which may be effected by Oral or Written
Instructions, the Custodian, directly or through the use of the
Book-Entry System or a Depository, shall, or shall instruct the
relevant Sub-Custodian to:
1. Execute and deliver or cause to be executed and delivered
to such persons as may be designated in such Written
Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Company as
owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for
the Portfolio in exchange for other Securities or cash issued
or paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for
the Portfolio to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement in the
separate account for the Portfolio certificates of deposit,
interim receipts or other instruments or documents as may be
issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of
the assets specifically allocated to the separate account of
the Portfolio and take such other steps as shall be stated in
Written Instructions to be for the purpose of effectuating
any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Company;
5. Deliver Securities upon sale of such Securities for the
account of the Portfolio pursuant to Section 7;
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6. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by the Portfolio;
7. Deliver Securities owned by the Portfolio to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided,
however, that in any such case the cash or other
consideration is to be delivered to the Custodian or
Sub-Custodian, as the case may be;
8. Deliver Securities for delivery in connection with any
loans of securities made by the Portfolio but only against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Company which may be in the
form of cash or obligations issued by the United States
Government, its agencies or instrumentalities;
9. Deliver Securities for delivery as security in connection
with any borrowings by the Portfolio requiring a pledge of
Portfolio assets, but only against receipt of the amounts
borrowed;
10. Deliver Securities to the Transfer Agent or to the
holders of Shares in connection with distributions in kind,
as may be described from time to time in the Prospectus, in
satisfaction of requests by holders of Shares for repurchase
or redemption;
11. Deliver Securities owned by the Portfolio for any purpose
expressly permitted by and in accordance with procedures
described in the Prospectus; and
12. Deliver Securities owned by the Portfolio for any other
proper business purpose, but only upon receipt of, in
addition to Written Instructions, a certified copy of a
resolution of the Board of Directors signed by an Authorized
Person and certified by the Secretary of the Company,
specifying the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper business purpose, and naming the
person or persons to whom delivery of such Securities shall
be made.
(i) Endorsement and Collection of Checks, Etc. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of
the Portfolio.
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7. Purchase and Sale of Investments of the Portfolio.
(a) Promptly after each purchase of Securities for the Portfolio, the
Company shall deliver to the Custodian (i) with respect to each
purchase of Securities which are not Money Market Securities, a Written
Instruction and (ii) with respect to each purchase of Money Market
Securities, either a Written Instruction or Oral Instruction, in either
case specifying with respect to each purchase: (1) the name of the
Portfolio to which such Securities are to be specifically allocated;
(2) the name of the issuer and the title of the Securities; (3) the
number of shares or the principal amount purchased and accrued
interest, if any; (4) the date of purchase and settlement; (5) the
purchase price per unit; (6) the total amount payable upon such
purchase; and 7) the name of the person from whom or the broker through
whom the purchase was made, if any. The Custodian or specified
Sub-Custodian shall receive the Securities purchased by or for the
Portfolio and upon receipt thereof shall pay to the broker or other
person designated by the Company out of the monies held for the account
of the Portfolio the total amount payable upon such purchase, provided
that the same conforms to the total amount payable as set forth in such
Written or Oral Instruction.
(b) Promptly after each sale of Securities of the Portfolio, the
Company shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Written
Instruction, and (ii) with respect to each sale of Money Market
Securities, either Written Instructions or Oral Instructions, in either
case specifying with respect to such sale: (1) the name of the
Portfolio to which the Securities sold were specifically allocated; (2)
the name of the issuer and the title of the Securities; (3) the number
of shares or principal amount sold, and accrued interest, if any; (4)
the date of sale; (5) the sale price per unit; (6) the total amount
payable to the Portfolio upon such sale; and (7) the name of the broker
through whom or the person to whom the sale was made. The Custodian or
relevant Sub-Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the Company upon
receipt of the total amount payable to the Portfolio upon such sale,
provided that the same conforms to the total amount payable to the
Portfolio as set forth in such Written or Oral Instruction. Subject to
the foregoing, the Custodian or relevant Sub-Custodian may accept
payment in such form as shall be satisfactory to it, and may deliver
Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
(c) Notwithstanding (a) and (b) above, cash in the Portfolio may be
invested by the Custodian for short term purposes pursuant to standing
Written Instructions from the Company.
(d) If the Custodian or any Sub-Custodian causes the account of the
Portfolio to be credited or debited on contractual settlement date with
cash or Securities in connection with any sale, exchange or purchase
prior to receipt and reconciliation,
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the Custodian or such Sub-Custodian, as the case may be, may reverse
such credit or debit if the related transaction fails to settle within
a reasonable period of time or if securities delivered by the Custodian
or Sub-Custodian are returned by the recipient. Upon oral or written
notification to the Portfolio of a credit reversal pursuant to this
section 7(d), the Portfolio will promptly return to the Custodian any
such amount or property so credited.
8. Lending of Securities.
If the Portfolio is permitted by the terms of the Articles of
Incorporation and Certificate of Designation and the Prospectus to lend
Securities, then the Board of Directors may approve a separate written
agreement between the Company and the Custodian authorizing the
Custodian to lend such Securities. Such agreement may provide for the
payment of additional reasonable compensation to the Custodian.
9. Investment in Futures and Options
The Custodian shall pursuant to Written Instructions (which may be
standing instructions) from an Authorized Person (i) transfer initial
margin to a safekeeping bank or, with respect to options, broker; (ii)
pay or demand variation margin to or from a designated futures
commission merchant or other broker based on daily marking to market
calculations and in accordance with accepted industry practices; and
(iii) subject to the consent of the Custodian, enter into separate
procedural, safekeeping or other agreements with safekeeping banks,
futures commission merchants and other brokers pursuant to which such
banks and, in the case of options, brokers, will act as custodian for
initial margin deposits in transactions involving futures contracts and
options. The Custodian shall have no custodial or investment
responsibility for any assets transferred to a safekeeping bank,
futures commission merchant or broker pursuant to this paragraph.
10. Payment of Dividends or Distributions.
(a) The Company shall furnish to the Custodian the vote of the Board of
Directors or the Dividend Committee thereof, as the case may be,
certified by the Secretary of the Company (i) authorizing the
declaration of distributions with respect to the Portfolio on a
specified periodic basis and authorizing the Custodian to rely on Oral
or Written Instructions specifying the date of the declaration of such
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the
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<PAGE>
amount payable per Share to the shareholders of record as of the record
date and the total amount payable to the Transfer Agent on the payment
date, or (ii) setting forth the date of declaration of any distribution
by the Portfolio, the date of payment thereof, the record date as of
which shareholders entitled to payment shall be determined, the amount
payable per share to the shareholders of record as of the record date
and the total amount payable to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral Instructions, or
Written Instructions, as the case may be, the Custodian shall pay the
total amount payable to the Transfer Agent out of the monies
specifically allocated to and held for the account of the Portfolio.
11. Sale and Redemption of Shares of the Company.
(a) Whenever the Company shall sell any Shares of the Portfolio, the
Company shall deliver or cause to be delivered to the Custodian a
Written Instruction duly specifying:
1. The name of the Portfolio whose Shares were sold;
2. The number of Shares sold, trade date, and price; and
3. The amount of money to be received by the Custodian for
the sale of such Shares.
The Custodian understands and agrees that Written Instructions may be
furnished subsequent to the purchase of Shares of the Portfolio and
that the information contained therein will be derived from the sales
of Shares as reported to the Company by the Transfer Agent.
(b) Upon receipt of such money from the Transfer Agent, the Custodian
shall credit such money to the separate account of the Portfolio
specified in (a)(1) above.
(c) Upon issuance of any Shares of the Portfolio in accordance with the
foregoing provisions of this Section 11, the Custodian shall pay all
original issue or other taxes required to be paid in connection with
such issuance upon the receipt of a Written Instruction specifying the
amount to be paid.
(d) Except as provided hereafter, whenever any Shares of the Portfolio
are redeemed, the Company shall cause the Transfer Agent to promptly
furnish to the Custodian Written Instructions specifying:
1. The name of the Portfolio whose Shares were redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares redeemed.
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<PAGE>
The Custodian further understands that the information
contained in such Written Instructions will be derived from the
redemption of Shares as reported to the Company by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the
number of Shares of the Portfolio being redeemed pursuant to valid
instructions as described in the Prospectus, the Custodian shall make
payment to the Transfer Agent out of the monies specifically allocated
to and held for the account of the Portfolio specified in (d)(1) above
of the total amount specified in a Written Instruction issued pursuant
to paragraph (d) of this Section 11.
12. Indebtedness.
(a) The Company will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Company borrows money, using
Securities as collateral, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such bank will
loan to the Company against delivery of a stated amount of collateral.
The Company shall promptly deliver to the Custodian Written
Instructions stating with respect to each such borrowing: (1) the name
of the Portfolio for which the borrowing is to be made; (2) the name of
the bank; (3) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note, duly
endorsed by the Company, or other loan agreement; (4) the time and
date, if known, on which the loan is to be entered into (the "borrowing
date"); (5) the date on which the loan becomes due and payable; (6) the
total amount payable to the Company for the separate account of the
Portfolio on the borrowing date; (7) the market value of Securities to
be delivered as collateral for such loan, including the name of the
issuer, the title and the number of shares or the principal amount of
any particular Securities; (8) whether the Custodian is to deliver such
collateral through the Book-Entry System or a Depository; and (9) a
statement that such loan is in conformance with the 1940 Act and the
Prospectus.
(b) Upon receipt of the Written Instruction referred to in paragraph
(a) above, the Custodian shall deliver on the borrowing date the
specified collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set
forth in the Written Instruction. The Custodian may, at the option of
the lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. The Custodian
shall deliver as additional collateral in the manner directed by the
Company from time to time such Securities specifically allocated to the
Portfolio as may be specified in Written Instruction to collateralize
further any transaction described in this Section 12. The Company shall
cause all Securities released from collateral status to be returned
directly to the Custodian, and the Custodian shall receive from time to
time such return of
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<PAGE>
collateral as may be tendered to it. In the event that the Company
fails to specify in Written Instruction all of the information required
by this Section 12, the Custodian shall not be under any obligation to
deliver any Securities. Collateral returned to the Custodian shall be
held hereunder as it was prior to being used as collateral.
13. Corporate Action
Whenever the Custodian or any Sub-Custodian (other than a foreign
securities depository or clearing agency) receives information
concerning Securities held for the Portfolio which requires
discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bond issues, stock
repurchase plans and rights offerings, or legal notices or other
material intended to be transmitted to Securities holders ("Corporate
Actions"), the Custodian will give the Company notice of such Corporate
Actions to the extent that the Custodian's central corporate actions
department has actual knowledge of a Corporate Action in time to notify
its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action
is received which bears an expiration date, the Custodian will endeavor
to obtain Written or Oral Instructions from the Company, but if such
Instructions are not received in time for the Custodian to take timely
action, or actual notice of such Corporate Action was received too late
to seek such Instructions, the Custodian is authorized to sell, or
cause a Sub-Custodian to sell, such rights entitlement or fractional
interest and to credit the applicable account with the proceeds and to
take any other action it deems, in good faith, to be appropriate, in
which case, provided it has met the standard of care in Section 15
hereof, it shall be held harmless by the Portfolio involved for any
such action.
The Custodian will deliver proxies to the Company or its designated
agent pursuant to special arrangements which may have been agreed to in
writing between the parties hereto. Such proxies shall be executed in
the appropriate nominee name relating to Securities registered in the
name of such nominee but without indicating the manner in which such
proxies are to be voted; and where bearer Securities are involved,
proxies will be delivered in accordance with Written or Oral
Instructions from Authorized Persons.
14. Persons Having Access of the Portfolios.
(a) No Company or agent of the Company, and no officer, director,
employee or agent of the Company's investment adviser, of any
sub-investment adviser of the Company, or of the Company, shall have
physical access to the assets of the Portfolio held by the Custodian or
any Sub-Custodian or be authorized or permitted to withdraw any
investments of the Portfolio, nor shall the Custodian or
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<PAGE>
any Sub-Custodian deliver any assets of the Portfolio to any such
person. No officer, director, employee or agent of the Custodian who
holds any similar position with the Company's investment adviser, with
any sub-investment adviser of the Company or with the Company shall
have access to the assets of the Portfolio.
(b) Nothing in this Section 14 shall prohibit any officer, employee or
agent of the Company, or any officer, director, employee or agent of
the investment adviser, of any sub investment adviser of the Company or
of the Company, from giving Oral Instructions or Written Instructions
to the Custodian or executing a Certificate so long as it does not
result in delivery of or access to assets of the Portfolio prohibited
by paragraph (a) of this Section 14.
(c) The Custodian represents that it maintains a system that is
reasonably designed to prevent unauthorized persons from having access
to the assets that it holds (by any means) for its customers.
15. Concerning the Custodian.
(a) Scope of Services. The Custodian shall be obligated to perform only
such services as are set forth in this Agreement or expressly contained
in a Certificate, Written Instructions or Oral Instructions given to
the Custodian which are not contrary to the provisions of this
Agreement.
(b) Standard of Care.
1. The Custodian will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of
property of the Portfolio. The Custodian shall be liable to,
and shall indemnify and hold harmless the Company from and
against any loss which shall occur as the result of the
failure of the Custodian or a Sub-Custodian (other than a
foreign securities depository or clearing agency) to exercise
reasonable care with respect to their respective obligations
under this Agreement and the safekeeping of such property. The
determination of whether the Custodian or Sub-Custodian has
exercised reasonable care in connection with the safekeeping
of Portfolio property shall be made in light of the standards
applicable to the Custodian with respect to similar property
held by it in Chicago, Illinois. The determination of whether
the Custodian or Sub-Custodian has exercised reasonable care
in connection with their other obligations under this
Agreement shall be made in light of prevailing standards
applicable to professional custodians in the jurisdiction in
which such custodial services are performed. In the event of
any loss to the Company by reason of the failure of the
Custodian or a Sub-Custodian (other than a foreign securities
depository or clearing agency) to exercise reasonable care,
the Custodian shall be liable to the Company only to the
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<PAGE>
extent of the Company's direct damages and expenses, which
damages, for purposes of property only, shall be determined
based on the market value of the property which is the subject
of the loss at the date such loss occurred and without
reference to any special condition or circumstances.
2. The Custodian will not be responsible for any act,
omission, default or for the solvency of any foreign
securities depository or clearing agency approved by the Board
of Directors pursuant to Section (1)(n) or Section 3 hereof.
3. The Custodian will not be responsible for any act,
omission, default or for the solvency of any broker or agent
(not referred to in paragraph (b)(2) above) which it or a
Sub-Custodian appoints and uses unless such appointment and
use is made or done negligently or in bad faith. In the event
such an appointment and use is made or done negligently or in
bad faith, the Custodian shall be liable to the Company only
for direct damages and expenses (determined in the manner
described in paragraph (b)(1) above) resulting from such
appointment and use and, in the case of any loss due to an
act, omission or default of such agent or broker, only to the
extent that such loss occurs as a result of the failure of the
agent or broker to exercise reasonable care ("reasonable care"
for this purpose to be determined in light of the prevailing
standards applicable to agents or brokers, as appropriate, in
the jurisdiction where services are performed).
4. The Custodian shall be entitled to rely, and may act upon
the advice of counsel (who may be counsel for the Company) on
all matters and shall be without liability for any action
reasonably taken or omitted in good faith and without
negligence pursuant to such advice.
5. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the Custodian and reasonably believed by the Custodian to be
genuine and to be signed by two officers of the Company. The
Custodian shall be entitled to rely upon any Written
Instructions or Oral Instructions actually received by the
Custodian pursuant to the applicable Sections of this
Agreement and reasonably believed by the Custodian to be
genuine and to be given by an Authorized Person. The Company
agrees to forward to the Custodian Written Instructions from
an Authorized Person confirming such Oral Instructions in such
manner so that such Written Instructions are received by the
Custodian, whether by hand delivery, telex or otherwise, by
the close of business on the same day that such Oral
Instructions are given to the Custodian. The Company agrees
that the fact that such confirming instructions are not
received by the Custodian shall in no way affect the validity
of the transactions or enforceability of the transactions
hereby
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<PAGE>
authorized by the Company. The Company agrees that the
Custodian shall incur no liability to the Company in (i)
acting upon Oral Instructions given to the Custodian hereunder
concerning such transactions provided such instructions
reasonably appear to have been received from a duly Authorized
Person or (ii) deciding not to act solely upon Oral
Instructions, provided that the Custodian shall be required to
contact the giver of such Oral Instructions and request
written confirmation immediately following any such decision
not to act.
6. The Custodian shall supply the Company and/or Fund
Accountant with such daily information regarding the cash and
securities positions and activity of the Portfolio as the
Custodian and the Company and/or Fund Accountant shall from
time to time agree. It is understood that such information
will not be audited by Custodian and Custodian represents that
such information will be the best information then available
to the Custodian. The Custodian shall have no responsibility
whatsoever for the pricing of Portfolio Securities or for the
failure of the Company and/or Fund Accountant to reconcile
differences between the information supplied by the Custodian
and information obtained by the Company and/or Fund Accountant
from other sources, including but not limited to pricing
vendors and the Company's investment adviser. Subject to the
foregoing, to the extent that any miscalculation by the
Company and/or Fund Accountant of the Portfolio's net asset
value is attributable to the willful misfeasance, bad faith or
negligence of the Custodian (including any Sub-Custodian other
than a foreign securities depository or clearing agency) in
supplying or omitting to supply the Company and/or Fund
Accountant with information as aforesaid, the Custodian shall
be liable to the Company for any resulting loss (subject to
such de minims rule of change in value as the Board of
Directors may from time to time adopt).
(c) Limit of Duties. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by
the Portfolio, the legality of the purchase thereof, or the
propriety of the amount specified by the Company for payment
therefor;
2. The legality of the sale of any Securities by the
Portfolio or the propriety of the amount of consideration for
which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or
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<PAGE>
the propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of the Portfolio;
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the exclusive
benefit of the Company, but hereby warrants that as of the date of this
Agreement it is maintaining a bankers Blanket Bond and hereby agrees to
notify the Company in the event that such bond is canceled or otherwise
lapses.
(e) Consistent with and without limiting the language contained in
Section 15(b), it is specifically acknowledged that the Custodian shall
have no duty or responsibility to:
1. Question Written Instructions or Oral Instructions or
make any suggestions to the Company or an Authorized
Person regarding such Instructions unless the
Custodian actual knowledge that such person is no
longer authorized to give such instructions;
2. Supervise or make recommendations with respect to
investments or the retention of Securities;
3. Subject to Section 15(b)(3) hereof, evaluate or
report to the Company or an Authorized Person
regarding the financial condition of any broker,
agent or other party to which Securities are
delivered or payments are made pursuant to this
Agreement; or
4. Review or reconcile trade confirmations received
from brokers.
(f) Amounts Due for Transfer Agent. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount due to the Portfolio from the Transfer Agent nor to take any
action to effect payment or distribution by the Transfer Agent of any
amount paid by the Custodian to the Transfer Agent in accordance with
this Agreement.
(g) No Duty to Ascertain Authority. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Company and specifically allocated
to the Portfolio are such as may properly be held by the Company under
the provisions of the Articles of Incorporation and Certificate of
Designation and the Prospectus.
(h) Indemnification. The Company agrees to indemnify and hold the
Custodian harmless from all loss, cost, taxes, charges, assessments,
claims, and
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<PAGE>
liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the 1940 Act and state or foreign securities laws) and
expenses (including reasonable attorneys fees and disbursements)
arising directly or indirectly from any action taken or omitted by the
Custodian (i) at the request or on the direction of or in reliance on
the advice of the Company or in reasonable reliance upon the Prospectus
or (ii) upon a Certificate or Oral or Written Instructions; provided,
that the aforegoing indemnity shall not apply to any loss, cost, tax,
charge, assessment, claim, liability or expense to the extent the same
is attributable to the Custodian's or any Sub-Custodian's (other than a
foreign securities depository or clearing agency) negligence, willful
misconduct, bad faith or reckless disregard of duties and obligations
under this Agreement or any other agreement relating to the custody of
Company property.
(i) The Company on behalf of the Portfolio involved agrees to hold the
Custodian harmless from any liability or loss resulting from the
imposition or assessment of any taxes or other governmental charges on
the Portfolio.
(j) Without limiting the foregoing, the Custodian shall not be liable
for any loss which results from:
1. the general risk of investing, or
2. subject to Section 15(b) hereof, investing or holding
property in a particular country including, but not
limited to, losses resulting from nationalization,
expropriation or other governmental actions;
regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations;
and market conditions which prevent the orderly
execution of securities transactions or affect the
value of property held pursuant to this Agreement.
(k) No party shall be liable to the other for any loss due to forces
beyond their control including but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God.
(1) Inspection of Books and Records. The books and records of the
Custodian shall be open to inspection and audit at reasonable times by
officers and auditors employed by the Company and by the appropriate
employees of the Securities and Exchange Commission.
(m) Accounting Control Reports. The Custodian shall provide the Company
with any report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System, each Depository, and each
Sub-Custodian and with an annual report on its own systems of internal
accounting control.
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(n) Disaster Recovery. The Custodian represents and warrants that it
has in place, and will maintain, commercially reasonable backup and
disaster recovery procedures.
16. Term and Termination.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter as
the parties may, mutually agree.
(b) Either of the parties hereto may terminate this Agreement with
respect to the Portfolio by giving to the other party a notice in
writing specifying the date of such termination, which, in case the
Company is the terminating party, shall be not less than 60 days after
the date of receipt of such notice or, in case the Custodian is the
terminating party, shall be not less than 90 days after the date of
receipt of such notice. In the event such notice is given by the
Company, it shall be accompanied by a certified vote of the Board of
Directors, electing to terminate this Agreement with respect to the
Portfolio and designating a successor custodian or custodians, which
shall be a person qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, the Company shall,
on or before the termination date, deliver to the Custodian a certified
vote of the Board of Directors, designating a successor custodian or
custodians. In the absence of such designation by the Company, the
Custodian may designate a successor custodian, which shall be a person
qualified to so act under the 1940 Act. If the Company fails to
designate a successor custodian with respect to the Portfolio, the
Company shall upon the date specified in the notice of termination of
this Agreement and upon the delivery by the Custodian of all Securities
(other than Securities held in the Book-Entry System which cannot be
delivered to the Company) and monies then owned by the Portfolio, be
deemed to be its own custodian and the Custodian shall thereby be
relieved of all duties and responsibilities pursuant to this Agreement,
other than the duty with respect to Securities held in the Book-Entry
System which cannot be delivered to the Company.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 16, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and monies then held by the
Custodian and specifically allocated to the Portfolio, after deducting
all fees, expenses and other amounts for the payment or reimbursement
of which it shall then be entitled with respect to the Portfolio.
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<PAGE>
17. Limitation of Liability.
The Company and the Custodian agree that the obligations of the Company
under this Agreement shall not be binding upon any of the Directors,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Company individually, but are binding only
upon the assets and property of the Company or of the Portfolio
thereof. The execution and delivery of this Agreement have been
authorized by the Board of Directors of the Company, and signed by an
authorized officer of the Company, acting as such, and neither such
authorization by such the Board of Directors nor such execution and
delivery by such officer shall be deemed to have been made by any of
them or any shareholder of the Company individually or to impose any
liability on any of them or any shareholder of the Company personally,
but shall bind only the assets and property of the Company or of the
Portfolio thereof.
18. Miscellaneous.
(a) Annexed hereto as Schedule A is a certification signed by two of
the present officers of the Company setting forth the names and the
signatures of the present Authorized Persons. The Company agrees to
furnish to the Custodian a new certification (or other written notice)
in the event that any such present Authorized Person ceases to be such
an Authorized Person or in the event that other or additional
Authorized Persons are elected or appointed. Until such new
certification (or other written notice) shall be received, the
Custodian shall be fully protected in acting under the provisions of
this Agreement upon Oral Instructions or signatures of the present
Authorized Persons as set forth in the last delivered certification.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at its address stated on the first page hereof or at such
other place as the Custodian may from time to time designate in
writing.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Company, shall be sufficiently
given if addressed to the Company and mailed or delivered to it at its
offices at its address shown on the first page hereof or at such other
place as the Company may from time to time designate in writing, with a
copy to:
(d) This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality
as this Agreement, (i) authorized and approved by a vote of the Board
of Directors, including a majority of the members of the Board of
Directors who are not "interested persons" of the Company (as defined
in the 1940 Act), or
22
<PAGE>
(ii) authorized and approved by such other procedures as may be
permitted or required by the 1940 Act.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Company
without the written consent of the Custodian, or by the Custodian
without the written consent of the Company authorized or approved by a
vote of the Board of Directors, and any attempted assignment without
such written consent shall be null and void.
(f) This Agreement shall be construed in accordance with the laws of
the State of Illinois.
(g) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective representatives duly authorized as
of the day and year first above written.
AMERINDO FUNDS INC.
By: _______________________________________
Name:
Title:
THE NORTHERN TRUST COMPANY
By: ______________________________________
Name:
Title:
FUND ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 14th day of May, 1996 by and between
AMERINDO FUNDS INC., a Maryland corporation (the "Company"), and FURMAN SELZ
LLC, a Delaware corporation.
W I T N E S S E T H :
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company wishes to retain Furman Selz to provide certain
administration and accounting services with respect to shares of the Company's
portfolio; Amerindo Technology Fund (the "Fund"), and Furman Selz is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Furman Selz to provide
certain administration and accounting services to the Company for the period and
on the terms set forth in this Agreement. Furman Selz agrees to comply with all
relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. In the event that the Company establishes one or more portfolios
other than the Fund with respect to which the Company decides to retain Furman
Selz to act as administrator and accounting services provider, the Company shall
so notify Furman Selz in writing. If Furman Selz is willing to render such
services, Furman Selz shall promptly notify the Company in writing whereupon
such portfolio shall be deemed to be a Fund hereunder.
2. Delivery of Documents. The Company has furnished
Furman Selz with copies properly certified or authenticated of
each of the following:
(a) Resolutions of the Company's Board of Directors authorizing
the appointment of Furman Selz to provide certain administration and accounting
services to the Company and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Company's officers and other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Company;
(c) The Company's Articles of Incorporation filed with the
Maryland Department of Assessments and Taxation on February 6, 1996 and all
amendments thereto (the "Articles");
(d) The Company's By-Laws and all amendments thereto
(the "By-Laws");
(e) (i) The Advisory Agreement between Amerindo
Investment Advisors Inc. and the Company with respect to the
Fund;
C/M 12034.0001 369051.1
<PAGE>
(f) The Distribution Agreement between Furman Selz LLC
and the Company dated as of May 14, 1996;
(g) The Custodian Agreement between The Northern Trust
Company and the Company dated as of May 14, 1996;
(h) The Transfer Agency Agreement between Furman Selz (in its
capacity as transfer agent, the "Transfer Agent") and the Company dated as of
May 14, 1996;
(i) The Company's most recent Registration Statement on Form N-1A
under the Securities Act of 1933 (the "1933 Act") and under the 1940 Act (File
Nos. 333-00767 and 811-07531), as filed with the SEC relating to shares of the
Company's Capital Stock, $.001 par value ("Shares"), and all amendments thereto;
(j) The Company's most recent prospectus and statement
of additional information and all amendments and supplements
thereto (the "Prospectus"); and
(k) Before the Company engages in any transaction regulated by
the Commodity Futures Trading Commission ("CFTC"), a copy of either (i) a filed
notice of eligibility to claim the exclusion from the definition of "commodity
pool operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Company by the CFTC which states that the Company will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has been granted the Company by the CFTC which states that the
CFTC will not take any enforcement action if the Company does not register as a
"commodity pool operator."
The Company will furnish Furman Selz from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any officer of the Company and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Directors of the Company to give Oral and Written
Instructions on behalf of the Company and listed on Appendix A listing persons
duly authorized to give Oral and Written Instructions on behalf of the Company
as may be received by Furman Selz from time to time.
(b) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Furman Selz
from an Authorized Person or from a person reasonably believed by Furman Selz to
be an Authorized Person. The Company agrees to deliver to Furman Selz, at the
time and in the manner specified in Paragraph 4(b) of this Agreement, Written
Instructions confirming Oral Instructions.
(c) "Written Instructions". As used in this
Agreement, the term "Written Instructions" means written
instructions delivered by hand, mail, tested telegram, cable,
telex or facsimile sending device, including buy or sell tickets
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and computer transmissions and received by Furman Selz, signed by
two Authorized Persons.
4. Instructions Consistent with Articles, etc.
(a) Unless otherwise provided in this Agreement,
Furman Selz shall act only upon Oral and Written Instructions. Although Furman
Selz may know of the provisions of the Articles and By-Laws of the Company,
Furman Selz may assume that any Oral or Written Instructions received hereunder
are not in any way inconsistent with any provisions of such Articles or By-Laws
or any vote, resolution or proceeding of the Shareholders, or of the Board of
Directors, or of any committee thereof.
(b) Furman Selz shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by Furman Selz
pursuant to this Agreement. The Company agrees to forward to Furman Selz Written
Instructions confirming Oral Instructions in such manner that the Written
Instructions are received by Furman Selz, whether by hand delivery, telex,
facsimile sending device or otherwise, by the close of business of the same day
that such Oral Instructions are given to Furman Selz. The Company agrees that
the fact that such confirming Written Instructions are not received by Furman
Selz shall in no way affect the validity of the transactions or enforceability
of the transactions authorized by the Company by giving Oral Instructions. The
Company agrees that Furman Selz shall incur no liability to the Company in
acting upon Oral Instructions given to Furman Selz hereunder concerning such
transactions, provided such instructions reasonably appear to have been received
from an Authorized Person.
5. Services on a Continuing Basis.
(a) Subject to the supervision and control of the Company's Board
of Directors, Furman Selz, as administrator, will assist in supervising various
aspects of the Company's administrative operations, and undertakes to do the
following specific services:
(1) Maintaining office facilities (which may be
in the offices of Furman Selz or a corporate affiliate, but shall
be in such location as the Company shall reasonably determine);
(2) Furnishing statistical and research data,
clerical, and stationery and office supplies.
(3) Preparing and filing with the SEC
Post-Effective Amendments to the Company's Registration Statement, Notices of
Annual or Special Meetings of Shareholders and Proxy materials relating to such
meetings; accumulating information for and, subject to the approval by the
Company's Treasurer, preparing reports to the Company's shareholders of record
and the SEC including, but not necessarily limited to: Semi-Annual Reports on
Form N-SAR and the preparation and filing of Notices pursuant to Rule 24f-2;
(4) Preparing and filing various reports or other
documents required by federal, state and other applicable laws and regulations
other than those required to be filed by Furman
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Selz as the Company's accounting services provider, or by the
Company's Custodian or Transfer Agent;
(5) Reviewing and providing advice and counsel on
all sales literature (e.g., advertisements, brochures and
shareholder communications) with respect to each of the Fund;
(6) Performing corporate secretarial duties which
will include, among other things, maintaining the necessary corporate records
and the good standing status of the Company in all states in which it is
qualified to do business, preparation of all agendas, notices and minutes for
meetings of the Company's Board of Directors and shareholders, preparation of
all resolutions to be voted upon by the Board of Directors, and preparation
and/or consideration of supporting information for such meetings;
(7) Assist in monitoring and assist in developing
compliance procedures for each Fund which will include, among other matters,
procedures to monitor compliance with each Fund's investment objective,
policies, restrictions, tax matters and applicable laws and regulations;
(8) Monitoring the Company's arrangements with
respect to services provided by financial institutions which are, or wish to
become, shareholder servicing agents for the Company ("Shareholder Servicing
Agents"). With respect to Shareholding Servicing Agents, Furman Selz shall
specifically monitor and review the services rendered by the Shareholder
Servicing Agents to their customers, who are the beneficial owners of Shares,
pursuant to agreements between the Company and such Shareholder Servicing Agents
("Shareholder Servicing Agreements"), including, among other things, reviewing
the qualifications of financial institutions wishing to be Shareholder Servicing
Agents, assisting in the execution and delivery of Shareholder Servicing
Agreements, reporting to the Board of Directors with respect to the amounts paid
or payable by the Company from time to time under the Shareholder Servicing
Agreements and the nature of the services provided by Shareholder Servicing
Agents, and maintaining appropriate records in connection with its monitoring
duties;
(9) Determining the jurisdictions in which the
Shares shall be registered or qualified for sale and, in connection therewith,
shall be responsible for the maintenance of the registration or qualification of
Shares for sale under the securities laws of any state. Payment of share
registration fees and any fees for qualifying or continuing the qualification of
any Fund as a dealer or broker shall be made by that Fund;
(10) Providing the services of certain persons who
may be appointed as officers of the Company by the Company's
Board of Directors;
(11) Preserving for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under said Act. Furman Selz further agrees that all such records which it
maintains for the Company are the property
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of the Company and further agrees to surrender promptly to the
Company any of such records upon the Company's request; and
(12) Providing legal advice and counsel to the
Company with respect to regulatory matters including: monitoring regulatory and
legislative developments which may affect the Company and assisting in the
strategic response to such developments, counseling and assisting the Company in
routine regulatory examinations or investigations of the Company, and working
closely with outside counsel to the Company in response to any litigation or
non-routine regulatory matters.
In performing its duties as administrator of the Company, Furman
Selz (a) will act in accordance with the Articles, By-Laws, Prospectus and with
the instructions and directions of the Board of Directors of the Company and
will conform to and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations and (b) will consult with legal
counsel to the Company, as necessary and appropriate.
(b) As of the date of this Agreement, Furman Selz will perform
the following accounting functions on an ongoing basis:
(1) Journalize the Company's investment, capital
share, income and expense activities;
(2) Verify investment buy/sell trade tickets when
received from Amerindo Investment Advisors Inc. and transmit
trades to the Company's Custodian for proper settlement;
(3) Maintain individual ledgers for investment
securities;
(4) Maintain historical tax lots for each
security;
(5) Maintain financial records in accordance
with the 1940 Act and Rules and Regulations thereunder;
(6) Reconcile, on a daily basis, cash and
investment balances of the Company with the Custodian, and
provide Amerindo Investment Advisors Inc. with the beginning cash
balance available each day for investment purposes;
(7) Update the cash availability throughout the
day as required by Amerindo Investment Advisors Inc.;
(8) Post to and prepare the Company's Statement
of Assets and Liabilities and the Statement of Operations;
(9) Calculate various contractual expenses (e.g.,
advisory and custody fees);
(10) Monitor the expense accruals and notify
Company management of any proposed adjustments;
(11) Control all disbursements from the Company
and authorize such disbursements upon Written Instructions;
(12) Calculate capital gains and losses, if
applicable;
(13) Determine the Company's net income;
(14) Obtain security market quotes from services
approved by Amerindo Investment Advisors Inc., or if such quotes are
unavailable, then obtain such prices from Amerindo Investment
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Advisors Inc., and in either case calculate the market value of
the Company's investments;
(15) Transmit or mail a copy of the daily
portfolio valuation to Amerindo Investment Advisors Inc.; (16)
Compute the net asset value of the Company; (17) Compute
the Company's yields and portfolio
average dollar-weighted maturity daily, and as needed, total
return, expense ratios and portfolio turnover rate;
(18) Mark securities to market based upon quotes
furnished by Amerindo Investment Advisors Inc. or an independent
pricing agent;
(19) Assist in monitoring compliance and assist in
the development of compliance procedures for each Fund which will include, among
other matters, to monitor compliance with each Fund's investment objective,
policies, restrictions, tax matters and applicable laws and regulations; and
(20) As appropriate, transmit to the Custodian
Written or Oral Instructions received from Amerindo Investment
Advisors Inc.
(c) In addition to the accounting services described in the foregoing
Paragraph 5(b), Furman Selz will, commencing on the date of this Agreement:
(1) Prepare monthly financial statements which will include, but will
not be limited to, the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses;
(2) Prepare monthly broker security transactions
summaries;
(3) Prepare monthly security transaction listings;
(4) Supply various Company statistical data as requested on
an ongoing basis;
(5) Assist in the preparation of support schedules
necessary for completion of Federal, state and excise tax
returns;
(6) Assist in the preparation of the Company's Semi-Annual
Reports with the SEC on Form N-SAR;
(7) Assist in the preparation of the Company's annual,
semi-annual, and quarterly Shareholder reports;
(8) Assist with the preparation of registration statements
on N-1A and other filings relating to the registration of Shares;
and
(9) Assist in monitoring the Company's status as a regulated investment
company under Sub-chapter M of the Internal Revenue Code of 1986, as amended.
6. Records. Commencing with the date of this Agreement,
Furman Selz shall keep the following records:
(a) all books and records with respect to the
Company's books of account; and
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(b) records of the Company's securities transactions,
portfolio valuations and securities positions.
The books and records pertaining to the Company which are in the
possession of Furman Selz shall be the property of the Company. If this
Agreement is terminated pursuant to paragraph 15 hereunder, Furman Selz shall
deliver all such books and records to the Company, or such party as the Company
may designate. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws and rules and
regulations. The Company, or the Company's authorized representatives, shall
have access to such books and records at all times during Furman Selz's normal
business hours. Upon the reasonable request of the Company, copies of any such
books and records shall be provided by Furman Selz to the Company or the
Company's authorized representative at the Company's expense.
7. Liaison With Accountants. Commencing with the date of this Agreement,
Furman Selz shall act as liaison with the Company's independent public
accountants and shall provide account analyses, fiscal year summaries, and other
audit related schedules. Furman Selz shall take all reasonable action in the
performance of its obligations under this Agreement to assure that the necessary
information is made available to such accountants for the expression of their
opinion, as such may be required by the Company from time to time.
8. Confidentiality. Furman Selz agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Company and its prior, present or potential Shareholders and relative to
Amerindo Investment Advisors Inc. and its prior, present or potential customers,
except, after prior notification to and approval in writing by the Company,
Amerindo Investment Advisors Inc., which approval shall not be unreasonably
withheld and may not be withheld where Furman Selz may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Company or Amerindo Investment Advisors Inc. as appropriate.
9. Equipment Failures. In the event of equipment failures beyond Furman
Selz's control, Furman Selz shall, at no additional expense to the Company, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto. Furman Selz shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
10. Right to Receive Advice.
(a) Advice of Company. If Furman Selz shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive, from the
Company directions or advice, including Oral or Written Instructions where
appropriate.
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<PAGE>
(b) Advice of Counsel. If Furman Selz shall be in doubt as to any
question of law involved in any action to be taken or omitted by Furman Selz, it
may request advice at its own cost from counsel of its own choosing (who may be
counsel for Amerindo Investment Advisors Inc., the Company or Furman Selz, at
the option of Furman Selz).
(c) Conflicting Advice. In case of conflict between directions,
advice or Oral or Written Instructions received by Furman Selz pursuant to
subsection (a) of this paragraph and advice received by Furman Selz pursuant to
subsection (b) of this paragraph, Furman Selz shall be entitled to rely on and
follow the advice received pursuant to the latter provision alone.
(d) Protection of Furman Selz. Furman Selz shall be protected in
any action or inaction which it takes in reliance on any directions, advice or
Oral or Written Instructions received pursuant to subsections (a) or (b) of this
paragraph which Furman Selz, after receipt of any such directions, advice or
Oral or Written Instructions, in good faith believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be. However,
nothing in this paragraph shall be construed as imposing upon Furman Selz any
obligation (i) to seek such directions, advice or Oral or Written Instructions,
or (ii) to act in accordance with such directions, advice or Oral or Written
Instructions when received, unless, under the terms of another provision of this
Agreement, the same is a condition to Furman Selz's properly taking or omitting
to take such action. Nothing in this subsection shall excuse Furman Selz when an
action or omission on the part of Furman Selz constitutes willful misfeasance,
bad faith, gross negligence or reckless disregard by Furman Selz of its duties
under this Agreement.
11. Compliance with Governmental Rules and Regulations. Furman Selz
undertakes to comply with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction.
12. Compensation. For the services provided and the expenses assumed by
Furman Selz under this Agreement, the Company will pay to Furman Selz a monthly
fee at an annual rate of 0.15% of the average daily net assets of the Fund, plus
an annual fee of $30,000 for each Fund.
13. Indemnification. The Company agrees to indemnify and hold harmless
Furman Selz and its nominees from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising under
the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including attorneys' fees and disbursements (as long as such attorney
has been retained with the consent of the Company, which consent shall not be
unreasonably withheld), arising directly or indirectly from any action or thing
which Furman Selz takes or does or omits to take or do (i) at the request or on
the direction of or in reliance on
C/M 12034.0001 369051.1
<PAGE>
the advice of the Company or (ii) upon Oral or Written Instructions, provided,
that neither Furman Selz nor any of its nominees shall be indemnified against
any liability to the Company or to its Shareholders (or any expenses incident to
such liability) arising out of Furman Selz's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties and obligations under this
Agreement. In order that the indemnification provision contained in this
Paragraph 13 shall apply, it is understood that if in any case the Company may
be asked to indemnify or save Furman Selz harmless, the Company shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that Furman Selz will use all reasonable
care to identify and notify the Company promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Company. The Company shall have the option to defend
Furman Selz against any claim which may be the subject of this indemnification
and, in the event that the Company so elects, it will so notify Furman Selz and
thereupon the Company shall take over complete defense for the claim, and Furman
Selz shall in such situation incur no further legal or other expenses for which
it shall seek indemnification under this Paragraph 13. Furman Selz shall in no
case confess any claim or make any compromise or settlement in any case in which
the Company will be asked to indemnify Furman Selz, except with the Company's
prior written consent.
14. Responsibility of Furman Selz. Furman Selz shall be under no duty to
take any action on behalf of the Company except as specifically set forth herein
or as may be specifically agreed to by Furman Selz in writing. In the
performance of its duties hereunder, Furman Selz shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits in performing services provided for under this Agreement but
Furman Selz shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of
Furman Selz or reckless disregard by Furman Selz of its duties under this
Agreement. Furman Selz shall be responsible for and shall hold the Company
harmless from all loss, cost, damage and expense, including reasonable attorney
fees (as long as such attorney has been retained with the consent of Furman
Selz, which consent shall not be unreasonably withheld), incurred by it
resulting from any claim, demand, action or suit arising out of Furman Selz's
own grossly negligent failure to perform its duties under this Agreement. In
order that the indemnification provision contained in this Paragraph 14 shall
apply, it is understood that if in any case Furman Selz may be asked to
indemnify or save the Company harmless, Furman Selz shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Company will use all reasonable care to identify and
notify Furman Selz promptly concerning any situation which presents or appears
likely to present the
C/M 12034.0001 369051.1
<PAGE>
probability of such a claim for indemnification against Furman Selz. Furman Selz
shall have the option to defend the Company against any claim which may be the
subject of this indemnification and, in the event that Furman Selz so elects, it
will so notify the Company and thereupon Furman Selz shall take over complete
defense for the claim, and the Company shall in such situation incur no further
legal or other expenses for which it shall seek indemnification under this
Paragraph 14. The Company shall in no case confess any claim or make any
compromise or settlement in any case in which Furman Selz will be asked to
indemnify the Company, except with Furman Selz's prior written consent.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, Furman Selz in connection with its duties under
this Agreement shall not be under any duty or obligation to inquire into and
shall not be liable for or in respect of (a) the validity or invalidity or
authority or lack thereof of any Oral or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this Agreement, and
which Furman Selz reasonably believes to be genuine; or (b) delays or errors or
loss of data occurring by reason of circumstances beyond Furman Selz's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 9),
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply. Notwithstanding the
foregoing, Furman Selz shall use its best efforts to mitigate the effects of the
events in clause (b) above, although such efforts shall not impute any liability
thereto. Furman Selz expressly disclaims all responsibility for consequential
damages, including but not limited to any that may result from performance or
non-performance of any duty or obligation whether express or implied in this
Agreement, and also expressly disclaims any express or implied warranty of
products or services provided in connection with this Agreement.
Any person, even though also an officer, Director, partner, employee or
agent of Furman Selz, shall be deemed, when rendering services to the Company or
acting on any business of the Company (other than services or business in
connection with Furman Selz' duties as administrator or accounting services
provider hereunder), to be acting solely for the Company and not as an officer,
Director, partner, employee or agent or one under he control or discretion of
Furman Selz even though paid by it.
15. Duration and Termination. This Agreement shall continue in effect
until two years from the date hereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) by the Company's Board of Directors and (b) by the vote, cast in
person at a meeting called for the purpose, of a majority of the Company's
Directors who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such
C/M 12034.0001 369051.1
<PAGE>
party. This Agreement may be terminated at any time, without the payment of any
penalty, by a vote of a majority of the Company's outstanding voting securities
(as defined in the 1940 Act) or by a vote of a majority of the Company's entire
Board of Directors on 60 days' written notice to Furman Selz or by Furman Selz
on 60 days' written notice to the Company.
16. Notices. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to Furman
Selz at Furman Selz's address, 230 Park Avenue, New York, New York 10169,
attention John J. Pileggi; (b) if to the Company, at the address of the Company;
or (c) if to neither of the foregoing, at such other address as shall have been
notified to the sender of any such Notice or other communication. A Notice may
be mailed, in which case it shall be deemed to have been given three days after
it is sent, or if sent by facsimile sending device, it shall be deemed to have
been given immediately, or if sent by messenger, it shall be deemed to have been
given on the day it is delivered, or if sent by confirming telegram, cable,
telex and facsimile sending device it shall be deemed to have been given
immediately. All postage, cable, telex, or facsimile sending device charges
arising from the sending of a Notice hereunder shall be paid by the sender.
17. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are necessary
to effectuate the purposes hereof.
18. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the
party against which enforcement of such change or waiver is
sought.
19. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
20. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties thereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. If any provision 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. This Agreement shall be binding and shall inure
to the benefit of the parties hereto and their respective successors.
21. Governing Law. This Agreement shall be governed by the
laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below on the day and year first
above written.
AMERINDO FUNDS INC.
Attest: By:________________________
Title:
FURMAN SELZ LLC
Attest: By:________________________
Title: Director
TABLE OF CONTENTS
Page
1. Appointment 1
2. Delivery of Documents 2
3. Definitions 4
4. Instructions Consistent with Articles, etc 5
5. Services on a Continuing Basis 6
6. Records 13
7. Liaison With Accountants 14
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8. Confidentiality 15
9. Equipment Failures 15
10. Right to Receive Advice 15
11. Compliance with Governmental Rules and Regulations 17
12. Compensation 17
13. Indemnification 17
14. Responsibility of Furman Selz 19
15. Duration and Termination 22
16. Notices 22
17. Further Actions 23
18. Amendments 23
19. Counterparts 23
20. Miscellaneous 24
21. Governing Law 24
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TRANSFER AGENCY AGREEMENT
THIS AGREEMENT is made as of the 14th day of May, 1996 between AMERINDO
FUNDS INC., a Maryland corporation (the "Company"), and FURMAN SELZ LLC, a
Delaware corporation (the "Transfer Agent").
R E C I T A L
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain the Transfer Agent to serve as
the Company's transfer agent, registrar, and dividend disbursing agent, and the
Transfer Agent is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Transfer Agent to serve
as transfer agent, registrar and dividend disbursing agent for the Company with
respect to the shares of the Company's one existing investment portfolio,
Amerindo Technology Fund (collectively, the "Fund"), for the period and on the
terms set forth in this Agreement. In the event that the Company establishes one
or more portfolios other than the Fund with respect to which the Company decides
to retain the Transfer Agent to act as transfer agent hereunder, the Company
shall so notify the Transfer Agent in writing. If the Transfer Agent is willing
to render such services, the Transfer Agent shall promptly notify the Company in
writing whereupon such portfolio shall be deemed to be a Fund hereunder.
2. Delivery of Documents. The Company has furnished the
Transfer Agent with copies properly certified or authenticated of
each of the following:
(a) Resolutions of the Company's Board of Directors authorizing
the appointment of the Transfer Agent as transfer agent and registrar and
dividend disbursing agent for the Company and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Company's officers and other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Company
and to execute stock certificates representing Shares;
(c) the Company's Articles of Incorporation filed with the
Department of Assessments and Taxation of the State of Maryland on September 8,
1993, and all amendments thereto (the "Articles");
(d) The Company's By-Laws and all amendments thereto
(the"By-Laws");
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(e) (i) The Advisory Agreement between Amerindo
Investment Advisors Inc. ("AMERINDO") and the Company with
respect to the Fund;
(f) The Custodian Agreement between The Northern Trust Company
and the Company dated as of May 14, 1996 (referred to herein as the "Custodian"
for the period during which the agreement between the Company and such entity is
in effect);
(g) The Fund Administration Agreement between Furman Selz LLC
(the "Administrator") and the Company dated as of May 14, 1996;
(h) The Distribution Agreement between Furman Selz LLC (the
"Distributor") and the Company dated as of May 14, 1996;
(i) The Company's most recent Registration Statement on Form N-1A
under the Securities Act of 1933 (the "1933 Act") and udner the 1940 Actas filed
with the SEC relating to shares of the Company's Capital Stock, $.001 par value
(the "Shares"), and all amendments thereto;
(j) The Company's most recent prospectus and statement
of additional information and all amendments and supplements
thereto (the "Prospectus"); and
(k) Before the Company engages in any transaction regulated by
the Commodity Futures Trading Commission ("CFTC"), a copy of either (i) a filed
notice of eligibility to claim the exclusion from the definition of "commodity
pool operator" contained in Section 2(a)(1)(A) of the Commodity Exchange Act
("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Company by the CFTC which states that the Company will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has been granted the Company by the CFTC which states that the
CFTC will not take any enforcement action if the Company does not register as a
"commodity pool operator".
The Company will furnish the Transfer Agent from time to time
with copies, properly certified or authenticated, of all amendments of or
supplements to the foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any officer of the Company and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Directors of the Company to give Oral and Written
Instructions on behalf of the Company and listed on the Certificate annexed
hereto as Appendix A or any amendment thereto as may be received by the Transfer
Agent from time to time.
(b) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by the Transfer
Agent from an Authorized Person or from a person reasonably believed by the
Transfer Agent to be an Authorized Person. The Company agrees to deliver to the
Transfer Agent, at the time and in the manner specified in Paragraph 4(b)
C/M 12034.0001 369048.1
<PAGE>
of this Agreement, Written Instructions confirming Oral
Instructions.
(c) "Written Instructions". As used in this Agreement, the term
"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device including buy or sell
tickets, computer transmissions, and received by the Transfer Agent and signed
by an Authorized Person.
4. Instructions Consistent with Articles, etc.
(a) Unless otherwise provided in this Agreement, the
Transfer Agent shall act only upon Oral or Written Instructions. Although the
Transfer Agent may know of the provisions of the Articles and By-Laws of the
Company, the Transfer Agent may assume that any Oral or Written Instructions
received hereunder are not in any way inconsistent with any provisions of such
Articles or By-Laws or any vote, resolution or proceeding of the Shareholders,
or of the Board of Directors, or of any committee thereof.
(b) The Transfer Agent shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by the Transfer
Agent pursuant to this Agreement. The Company agrees to forward to the Transfer
Agent Written Instructions confirming Oral Instructions in such manner that the
Written Instructions are received by the Transfer Agent by the close of business
of the same day that such Oral Instructions are given to the Transfer Agent. The
Company agrees that the fact that such confirming Written Instructions are not
received by the Transfer Agent shall in no way affect the validity of the
transactions or enforceability of the transactions authorized by the Company by
giving Oral Instructions. The Company agrees that the Transfer Agent shall incur
no liability to the Company in acting upon Oral Instructions given to the
Transfer Agent hereunder concerning such transactions, provided such Oral
Instructions reasonably appear to have been received from an Authorized Person.
5. Transactions Not Requiring Instructions. In the
absence of contrary Written Instructions, the Transfer Agent is
authorized to take the following actions:
(a) Issuance of Shares. Upon receipt of a purchase order from the
Distributor for the purchase of Shares and sufficient information to enable the
Transfer Agent to establish a Shareholder account, and after confirmation of
receipt or crediting of Federal funds for such order from the Company's
Custodian, the Transfer Agent shall issue and credit the account of the investor
or other record holder with Shares in the manner described in the Prospectus.
(b) Transfer of Shares; Uncertificated Securities. Where a
Shareholder does not hold a certificate representing the number of Shares in his
account and does provide the Transfer Agent with instructions for the transfer
of such Shares which include appropriate documentation to permit a transfer,
then the Transfer Agent shall register such Shares and shall deliver them
C/M 12034.0001 369048.1
<PAGE>
pursuant to instructions received from the transferor, pursuant to the rules and
regulations of the SEC, and the law of the State of Maryland relating to the
transfer of shares of common stock.
(c) Share Certificates. If at any time the Company
issues share certificates, the following provisions will apply:
(i) The Company will supply the Transfer Agent with a sufficient
supply of share certificates representing Shares, in the form approved from time
to time by the Board of Directors of the Company, and, from time to time, shall
replenish such supply upon request of the Transfer Agent. Such share
certificates shall be properly signed, manually or by facsimile signature, by
the duly authorized officers of the Company, whose names and positions shall be
set forth on Appendix A, and shall bear the trust seal or facsimile thereof of
the Company, and notwithstanding the death, resignation or removal of any
officer of the Company, such executed certificates bearing the manual or
facsimile signature of such officer shall remain valid and may be issued to
Shareholders until the Transfer Agent is otherwise directed by Written
Instructions.
(ii) In the case of the loss or destruction of any certificate
representing Shares, no new certificate shall be issued in lieu thereof, unless
there shall first have been furnished an appropriate bond of indemnity issued by
the surety company approved by the Transfer Agent.
(iii) Upon receipt of signed share certificates, which shall be
in proper form for transfer, and upon cancellation or destruction thereof, the
Transfer Agent shall countersign, register and issue new certificates for the
same number of Shares and shall deliver them pursuant to instructions received
from the transferor, the rules and regulations of the SEC, and the law of the
state of Maryland relating to the transfer of shares of common stock.
(iv) Upon receipt of the share certificates, which shall be in
proper form for transfer, together with the Shareholder's instructions to hold
such share certificates for safekeeping, the Transfer Agent shall reduce such
Shares to uncertificated status, while retaining the appropriate registration in
the name of the Shareholder upon the transfer books.
(v) Upon receipt of written instructions from a Shareholder of
uncertificated securities for a certificate in the number of shares in his
account, the Transfer Agent will issue such share certificates and deliver them
to the Shareholder.
(d) Redemption of Shares. Upon receipt of a redemption order from
the Distributor, the Transfer Agent shall redeem the number of Shares indicated
thereon from the redeeming Shareholder's account and receive from the Company's
Custodian and disburse to the redeeming Shareholder the redemption proceeds
therefor, or arrange for direct payment of redemption proceeds to such
Shareholders by the Company's Custodian, in accordance with such procedures and
controls as are mutually agreed upon from time to time by and among the Company,
the Transfer Agent and the
C/M 12034.0001 369048.1
<PAGE>
Company's Custodian. Authority to perform the above shall be suspended when the
Company suspends the Shareholders' right of redemption, provided that the
Company delivers Notice of such suspension to the Transfer Agent.
6. Authorized Shares. The Company's authorized shares of capital stock
consists of 1,000,000,000 (one billion) shares of Common Stock, par value $.001
per Share. The Transfer Agent shall record issues of all Shares and shall notify
the Company in case any proposed issue of Shares by the Company for a particular
Fund shall result in an over-issue for that Fund. In case any such issue of
Shares would result in such an over-issue, the Transfer Agent shall refuse to
issue said Shares and shall not countersign and issue certificates for such
Shares. The Company agrees to notify the Transfer Agent promptly of any change
in the number of authorized Shares or their classification and of any change in
the number of Shares registered under the 1933 Act.
7. Dividends and Distributions.
(a) The Company shall furnish the Transfer Agent with appropriate
evidence of action by the Company's Board of Directors authorizing the
declaration and payment of dividends and distributions as described in the
Prospectus. After deducting any amount required to be withheld by any applicable
tax laws, rules and regulations or other applicable laws, rules and regulations,
the Transfer Agent shall in accordance with the instructions in proper form from
a Shareholder and the provisions of the Company's Articles and Prospectus, issue
and credit the account of the Shareholder with Shares, or, if the Shareholder so
elects, pay such dividends to the Shareholder in the manner described in the
Prospectus. In lieu of receiving from the Company's Custodian and paying to
Shareholders cash dividends or distributions, the Transfer Agent may arrange for
the direct payment of cash dividends and distributions to Shareholders by the
Company's Custodian, in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among the Company, the Transfer
Agent and the Company's Custodian.
(b) The Transfer Agent shall prepare, file with the Internal
Revenue Service and other appropriate taxing authorities, and address and mail
to Shareholders such returns and information relating to dividends and
distributions paid by the Company as are required to be so prepared, filed and
mailed by applicable laws, rules and regulations, or such substitute form of
notice as may from time to time be permitted or required by the Internal Revenue
Service. On behalf of the Company, the Transfer Agent shall mail certain
requests for Shareholders' certifications under penalties of perjury and pay on
a timely basis to the appropriate Federal authorities any taxes to be withheld
on dividends and distributions paid by the Company, all as required by
applicable Federal tax laws and regulations.
In accordance with the Prospectus and such procedures and
controls as are mutually agreed upon from time to time by and among the Company,
the Transfer Agent and the Company's
C/M 12034.0001 369048.1
<PAGE>
Custodian, the Transfer Agent shall (a) arrange for issuance of Shares obtained
through (1) transfers of funds from Shareholders' accounts at financial
institutions, (2) a Pre-Authorized Check Plan, if any, and (3) a Right of
Accumulation, if any; (b) arrange for the exchange of Shares for shares of such
other funds designated by the Company from time to time; and (c) arrange for
systematic withdrawals from the account of a Shareholder participating in the
Systematic Withdrawal Plan, if any.
8. Communications with Shareholders.
(a) Communications to Shareholders. The Transfer
Agent will address and mail all communications by the Company to its
Shareholders, including reports to Shareholders, confirmations of purchases and
sales of Company Shares, monthly statements, dividend and distribution notices
and proxy material for its meetings of Shareholders. The Transfer Agent will
receive and tabulate the proxy cards for the meetings of the Company's
Shareholders.
(b) Correspondence. The Transfer Agent will answer such
correspondence from Shareholders, securities brokers and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Transfer Agent and the Company.
9. Records. The Transfer Agent shall maintain records of
the accounts for each Shareholder showing the following
information:
(a) name, address and United States Tax Identification
or Social Security number;
(b) number and class of Shares held and number and class of
Shares for which certificates, if any, have been issued, including certificate
numbers and denominations;
(c) historical information regarding the account of each
Shareholder, including dividends and distributions paid and the date and price
for all transactions on a Shareholder's account;
(d) any stop or restraining order placed against a
Shareholder's account;
(e) any correspondence relating to the current
maintenance of a Shareholder's account;
(f) information with respect to withholdings; and
(g) any information required in order for the Transfer
Agent to perform any calculations contemplated or required by this Agreement.
The books and records pertaining to the Company which are in the
possession of the Transfer Agent shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws and rules and regulations. The Company, or
the Company's authorized representatives, shall have access to such books and
records at all times during the Transfer Agent's normal business hours. Upon the
reasonable request of the Company, copies of any such books and records shall be
provided by the
C/M 12034.0001 369048.1
<PAGE>
Transfer Agent to the Company or the Company's authorized representative at the
Company's expense.
10. Ongoing Functions. The Transfer Agent will perform the
following functions on an ongoing basis:
(a) furnish state-by-state registration and sales
reports to the Administrator;
(b) calculate Account Executive load or compensation
payment and provide such information to the Company, if any;
(c) calculate dealer commissions for the Company, if
any;
(d) provide toll-free lines for direct Shareholder use, plus
customer liaison staff with on-line inquiry capacity;
(e) mail duplicate confirmations to dealers of their clients'
activity, whether executed through the dealer or directly with the Transfer
Agent, if any;
(f) provide detail for underwriter or broker confirmations and
other participating dealer Shareholder accounting, in accordance with such
procedures as may be agreed upon between the Company and the Transfer Agent, if
any;
(g) provide Shareholder lists and statistical
information concerning accounts to the Company; and
(h) provide timely notification of Company activity and such
other information as may be agreed upon from time to time between the Transfer
Agent and the Custodian, to the Company or the Custodian.
11. Cooperation with Accountants. The Transfer Agent shall cooperate
with the Company's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their opinion as such may be required by the Company from time to
time.
12. Confidentiality. The Transfer Agent agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Company and its prior, present or potential Shareholders and relative to
AMERINDO and its prior, present or potential customers, except, after prior
notification to and approval in writing by the Company, AMERINDO, which approval
shall not be unreasonably withheld and may not be withheld where the Transfer
Agent may be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company or AMERINDO as appropriate.
13. Equipment Failures. In the event of equipment failures beyond the
Transfer Agent's control, the Transfer Agent shall, at no additional expense to
the Company, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The foregoing obligation shall not
extend to computer terminals located outside of premises maintained by the
Transfer Agent. The Transfer Agent shall enter into and shall maintain in effect
with appropriate parties one or more
C/M 12034.0001 369048.1
<PAGE>
agreements making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available.
14. Right to Receive Advice.
(a) Advice of Company. If the Transfer Agent shall be in doubt as
to any action to be taken or omitted by it, it may request, and shall receive,
from the Company directions or advice, including Oral or Written Instructions
where appropriate.
(b) Advice of Counsel. If the Transfer Agent shall be in doubt as
to any question of law involved in any action to be taken or omitted by the
Transfer Agent, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for AMERINDO, the Company or the Transfer Agent at
the option of the Transfer Agent).
(c) Conflicting Advice. In case of conflict between directions,
advice or Oral or Written Instructions received by the Transfer Agent pursuant
to subparagraph (a) of this Paragraph and advice received by the Transfer Agent
pursuant to subparagraph (b) of this Paragraph, the Transfer Agent shall be
entitled to rely on and follow the advice received pursuant to the latter
provision alone.
(d) Protection of the Transfer Agent. The Transfer Agent shall be
protected in any action or inaction which it takes in reliance on any
directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this Paragraph which the Transfer Agent, after
receipt of any such directions, advice or Oral or Written Instructions, in good
faith believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be. However, nothing in this Paragraph shall be
construed as imposing upon the Transfer Agent any obligation (i) to seek such
directions, advice or Oral or Written Instructions, or (ii) to act in accordance
with such directions, advice or Oral or Written Instructions when received,
unless, under the terms of another provision of this Agreement, the same is a
condition to the Transfer Agent's properly taking or omitting to take such
action. Nothing in this subparagraph shall excuse the Transfer Agent when an
action or omission on the part of the Transfer Agent constitutes willful
misfeasance, bad faith, gross negligence or reckless disregard by the Transfer
Agent of its duties and obligations under this Agreement.
15. Compliance with Governmental Rules and Regulations. The Transfer
Agent undertakes to comply with all applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction.
16. Compensation. As compensation for the services
rendered by the Transfer Agent during the term of this Agreement,
the Company will pay to the Transfer Agent monthly fees plus
certain of the Transfer Agent's expenses relating to such
services, as shall be agreed to from time to time by the Company
C/M 12034.0001 369048.1
<PAGE>
and the Transfer Agent. The Company and the Transfer Agent have initially agreed
to the compensation set forth on Exhibit A attached hereto.
17. Indemnification. The Company agrees to indemnify and hold harmless
the Transfer Agent and its nominees and sub-contractors from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and
any state and foreign securities and blue sky laws, all as or to be amended from
time to time) and expenses, including attorneys' fees and disbursements (as long
as such attorney has been retained with the consent of the Company, which
consent shall not be unreasonably withheld), arising directly or indirectly from
any action or thing which the Transfer Agent takes or does or omits to take or
do (i) at the request or on the direction of or in reliance on the advice of the
Company or (ii) upon Oral or Written Instructions, provided, that neither the
Transfer Agent nor any of its nominees or sub-contractors shall be indemnified
against any liability to the Company or to its Shareholders (or any expenses
incident to such liability) arising out of the Transfer Agent's or such
nominee's or such sub-contractor's own willful misfeasance, bad faith or gross
negligence or reckless disregard of its duties in connection with the
performance of its duties and obligations specifically described in this
Agreement. In order that the indemnification provision contained in this
Paragraph 17 shall apply, it is understood that if in any case the Company may
be asked to indemnify or save the Transfer Agent harmless, the Company shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Transfer Agent will use all
reasonable care to identify and notify the Company promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the Company. The Company shall have the option
to defend the Transfer Agent against any claim which may be the subject of this
indemnification and, in the event that the Company so elects, it will so notify
the Transfer Agent and thereupon the Company shall take over complete defense
for the claim, and the Transfer Agent shall in such situation incur no further
legal or other expenses for which it shall seek indemnification under this
Paragraph 17. The Transfer Agent shall in no case confess any claim or make any
compromise or settlement in any case in which the Company will be asked to
indemnify the Transfer Agent, except with the Company's prior written consent.
18. Responsibility of the Transfer Agent. The Transfer Agent shall be
under no duty to take any action on behalf of the Company except as specifically
set forth herein or as may be specifically agreed to by the Transfer Agent in
writing. In the performance of its duties hereunder, the Transfer Agent shall be
obligated to exercise care and diligence and to act in good faith and to use its
best efforts within reasonable limits to insure
C/M 12034.0001 369048.1
<PAGE>
the accuracy and completeness of all services performed under this Agreement.
The Transfer Agent shall be responsible for and shall hold the Company harmless
from all loss, cost, damage and expense, including reasonable attorney fees (as
long as such attorney has been retained with the consent of the Transfer Agent,
which consent shall not be unreasonably withheld), incurred by it resulting from
any claim, demand, action or suit arising out of the Transfer Agent's own
negligent failure to perform its duties under this Agreement. In order that the
indemnification provision contained in this Paragraph 18 shall apply, it is
understood that if in any case the Transfer Agent may be asked to indemnify or
save the Company harmless, the Transfer Agent shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Company will use all reasonable care to indemnify
and notify the Transfer Agent promptly concerning any situation which presents
or appears likely to present the probability of such a claim for indemnification
against the Transfer Agent. The Transfer Agent shall have the option to defend
the Company against any claim which may be subject to this indemnification and,
in the event that the Transfer Agent so elects, it will so notify the Company
and thereupon the Transfer Agent shall take over complete defense for the claim,
and the Company shall in such situation incur no further legal or other expenses
for which it shall seek indemnification under this Paragraph 18. The Company
shall in no case confess any claim or make any compromise or settlement in any
case in which the Transfer Agent will be asked to indemnify the Company except
with the Transfer Agent's prior written consent.
To the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, however, the Transfer Agent shall not
be liable for any act or omission which does not constitute willful misfeasance,
bad faith or gross negligence on the part of the Transfer Agent or reckless
disregard of such duties, obligations and responsibilities. Without limiting the
generality of the foregoing or of any other provision of this Agreement, the
Transfer Agent in connection with its duties under this Agreement shall not be
under any duty or obligation to inquire into and shall not be liable for or in
respect of (a) the validity or invalidity or authority or lack thereof of any
Oral or Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, if any, and which the Transfer Agent
reasonably believes to be genuine, or (b) delays or errors or loss of data
occurring by reason of circumstances beyond the Transfer Agent's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 13),
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply. Notwithstanding the
foregoing, the Transfer Agent shall use its best efforts to mitigate the effects
of the events set forth in clause (b) above,
C/M 12034.0001 369048.1
<PAGE>
although such efforts shall not impute any liability thereto. The Transfer
Agreement expressly disclaims all responsibility for consequential damages,
including but not limited to any that may result from performance or
non-performance of any duty or obligation whether express or implied in this
Agreement, and also expressly disclaims any express or implied warranty of
products or services provided in connection with this Agreement.
19. Duration and Termination. This Agreement shall continue in effect
until two years from the date thereof and thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually (a) by the company's Board of Directors and (b) by the vote, cast in
person at a meeting called for the purpose, of the majority of the Company's
Directors who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such party. This Agreement may be terminated at
any time, without the payment of any penalty, by a vote of a majority of the
Company's outstanding voting securities (as defined in the 1940 Act) or by a
vote of a majority of the Company's entire Board of Directors on 60 days'
written notice to the Transfer Agent or by the Transfer Agent on 60 days'
written notice to the Company.
20. Registration as a Transfer Agent. The Transfer Agent represents that
it is currently registered with the appropriate federal agency for the
registration of transfer agents, and that it will remain so registered for the
duration of this Agreement. The Transfer Agent agrees that it will promptly
notify the Company in the event of any material change in its status as a
registered transfer agent. Should the Transfer Agent fail to be registered with
the appropriate federal agency as a transfer agent at any time during this
Agreement, the Company may, on written notice to the Transfer Agent, immediately
terminate this Agreement.
21. Notices. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to the
Transfer Agent at Furman Selz LLC, 230 Park Avenue, New York, New York 10169,
attention: John J. Pileggi; (b) if to the Company, at the address of the
Company; or (c) if to neither of the foregoing, at such other address as shall
have been notified to the sender of any such Notice or other communication. A
Notice may be sent by first-class mail, in which case it shall be deemed to have
been given five days after it is sent, or if sent by messenger, it shall be
deemed to have been given on the day it is delivered, or if sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to have
been given immediately. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
C/M 12034.0001 369048.1
<PAGE>
22. Further Actions. Each party agrees to perform such
further acts and execute such further documents as are necessary
to effectuate the purposes hereof.
23. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the
party against which enforcement of such change or waiver is
sought.
24. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
25. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to Oral Instructions. The captions in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. If
any provision 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. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
26. Governing Law. This Agreement shall be governed by the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
AMERINDO FUNDS, INC.
Attest: _____________________ By: ________________________
FURMAN SELZ LLC
Attest: _____________________ By: ________________________
Title:
EXHIBIT A
TRANSFER AGENCY AGREEMENT
COMPENSATION
C/M 12034.0001 369048.1
<PAGE>
The Transfer Agent shall receive an account maintenance fee of $15 per year for
each account which is in existence at any time during the month for which
payment is made, such fee to be paid in equal monthly installments, plus
out-of-pocket expenses. The Transfer Agent shall be entitled to this account
maintenance fee on all accounts maintained in its records during the year,
including those accounts which have a zero balance during any portion of the
year. There is a $12,000 per year per fund minimum for the transfer agent
service
INDEX
Page
1. Appointment 1
2. Delivery of Documents 2
3. Definitions 4
4. Instructions Consistent with Articles, etc. 5
5. Transactions Not Requiring Instructions 6
6. Authorized Shares 9
7. Dividends and Distributions 10
8. Communications with Shareholders 12
9. Records 13
10. Ongoing Functions 14
11. Cooperation with Accountants 15
12. Confidentiality 15
13. Equipment Failures 16
14. Right to Receive Advice 16
15. Compliance with Governmental Rules and Regulations 18
16. Compensation 18
17. Indemnification 18
18. Responsibility of the Transfer Agent 20
C/M 12034.0001 369048.1
<PAGE>
19. Duration and Termination 23
20.Registration as a Transfer Agent 23
21. Notices 24
22. Further Actions 25
23. Amendments 25
24. Counterparts 25
25. Miscellaneous 25
26. Governing Law 26
C/M 12034.0001 369048.1
<PAGE>
BATTLE FOWLER LLP
A LIMITED LIABILITY PARTNERSHIP
75 East 55th Street
New York, New York 10022
(212) 856-7000
(212) 856-7053
(212) 856-7816
May 22, 1996
Amerindo Technology Fund
A series of Amerindo Funds Inc.
399 Park Avenue
New York, New York 10022
Gentlemen:
We have acted as counsel to Amerindo Technology Fund, a series of
Amerindo Funds Inc., a Maryland corporation (the "Fund"), in connection with the
preparation and filing of Registration Statement No. 333-00767 on Form N-1A and
all amendments thereto (the "Registration Statement") covering shares of Common
Stock, par value $.001 per share, of the Fund.
We have examined copies of the Articles of Incorporation and
By-Laws of the Fund, the Registration Statement, and such other corporate
records, proceedings and documents, including the consent of the Board of
Directors and the minutes of the meeting of the Board of Directors of the Fund,
as we have deemed necessary for the purpose of this opinion. In our examination
of such material, we have assumed the genuineness of all signatures and the
conformity to original documents of all copies submitted to us. As to various
questions of fact material to such opinion, we have relied upon statements and
certificates of officers and representatives of the Fund and others.
We are not admitted to the practice of law in any jurisdiction
but the State of New York and we do not express any opinion as to the laws of
other states or jurisdictions except as to matters of Federal law and, with
respect to the limited scope of this opinion, Maryland corporate law.
368211.1
<PAGE>
2
Amerindo Technology Fund May 22, 1996
Based upon and subject to the foregoing, we are of the opinion
that the shares of Common Stock, par value $.001 per share, of the Fund, to be
issued in accordance with the terms of the offering, as set forth in the
Prospectus and Statement of Additional Information included as part of the
Registration Statement, and when issued and paid for, will constitute validly
authorized and legally issued shares of Common Stock, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to us in
the Registration Statement under the heading in the Prospectus and
in the Statement of Information: "Counsel and Independent
Auditors".
Very truly yours,
368211.1
INDEPENDENT AUDITOR'S CONSENT
We consent to the use in this Registration Statement of Amerindo Funds, Inc. on
Form N-1A of our report dated May 15, 1996, appearing in the Prospectus, which
is part of this Registration Statement.
We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.
Morrison, Brown, Argiz & Company
Certified Public Accountants
Miami, Florida
May 15, 1996
C/M: 12034.0001 369795.1
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
May 14, 1996
Board of Directors of
Amerindo Technology Fund
A series of Amerindo Funds Inc.
One Embarcadero
Suite 2300
San Francisco, CA 94111
Gentlemen:
I hereby subscribe for 10,000 shares of the Common Stock, $.001 par
value per share, of Amerindo Technology Fund, a series of Amerindo Funds Inc.
(the "Fund"), a Maryland corporation (the "Corporation") in shares of Class D
of the Fund, at $10.00 per share for an aggregate purchase price of $100,000.
My payment in full is confirmed.
I hereby represent and agree that I am purchasing these shares of stock
for investment purposes, for my own account and risk and not with a view to
any sale, division or other distribution thereof within the meaning of the
Securities Act of 1933 as amended, nor with any present intention of
distributing or selling such shares. I further agree that if any of such
shares are redeemed during the period that the deferred organizational
expenses of the Corporation are being amortized, I will reimburse the
Corporation the then unamortized organizational expenses in the same ratio as
the number of shares redeemed bears to the number of such shares held at the
time of redemption.
Very truly yours,
AMERINDO INVESTMENT ADVISORS, INC.
By: /S/ Alberto W. Vilar
Confirmed and Accepted:
AMERINDO FUNDS INC.,
AMERINDO TECHNOLOGY FUND
By: /S/ Dana E. Smith
364558.1
AMERINDO TECHNOLOGY FUND
A series of Amerindo Funds Inc.
Distribution and Service Plan Pursuant to Rule
12b-l Under the Investment Company Act of 1940
The Plan is adopted by Amerindo Technology Fund, a series of Amerindo
Funds Inc. (the "Fund"), in accordance with the provisions of Rule 12b-1 under
the Investment Company Act of 1940, as amended (the "1940 Act").
The Plan
1. The Fund has entered into a Distribution Agreement with Furman
Selz LLC (the "Distributor"), in a form satisfactory to the Fund's Board of
Directors, under which the Distributor will act as distributor of the Fund's
shares. Pursuant to the Distribution Agreement, the Distributor will receive
compensatory payments from the Fund in an amount as set forth in such
Agreement and, as agent of the Fund (i) will solicit orders for the purchase
of the Fund's shares, provided that any subscriptions and orders for the
purchase of the Fund's shares will not be binding on the Fund until accepted
by the Fund as principal; and (ii) will make payments to broker-dealers
("Broker-Dealers") and other financial institutions with which it has written
agreements and whose clients are Fund shareholders, for providing distribution
assistance on behalf of the Fund.
2. The Fund also has entered into a Shareholder Servicing Agreement
with Amerindo Investment Advisors Inc. (the "Adviser"), in a form satisfactory
to the Fund's Board of Directors, which provides that the Adviser will receive
shareholder servicing fees from the Fund in an amount as set forth in such
Agreement for performing shareholder servicing functions. The Adviser may use
such fees to compensate other parties (each a "Shareholder Servicing Agent")
with which it has written agreements and whose clients are Fund shareholders
for performing shareholder servicing functions on behalf of the Fund.
3. Additionally, the Adviser and the Distributor may make payments
from time to time from their own resources (which may include the advisory
fees of the Adviser and past profits for the following purposes:
(i) to defray the costs of, and to compensate others, including
financial intermediaries with whom the Adviser or the Distributor have
entered into written agreements, for performing shareholder servicing and
related administrative functions on behalf of the Fund;
361811.1
<PAGE>
(ii) to compensate certain financial intermediaries with whom the
Adviser or the Distributor have entered into written agreements for
providing assistance in distributing the Fund's shares;
(iii) to pay the costs of printing and distributing the Fund's
prospectus to prospective investors; and
(iv) to defray the cost of the preparation and printing of
brochures and other promotional materials, mailings to prospective
shareholders, advertising, and other promotional activities, including
salaries and/or commissions of sales personnel in connection with the
distribution of the Fund's shares.
The Distribution Agreement, pursuant to the Plan, will further provide that
the Distributor, in its sole discretion, will determine the amount of the
payments to be paid to the Broker-Dealers or other financial institutions with
whom it has contracted, provided, however, that such payments will not
increase the amount that the Fund is otherwise required to pay to the
Distributor during any fiscal year under the Distribution Agreement. The
Shareholder Servicing Agreement, pursuant to the Plan, will further provide
that the Adviser, in its sole discretion, will determine the amount of the
payments to be paid to the Shareholder Servicing Agents with whom it has
contracted, provided that such payments will not increase the amount which the
Fund is otherwise required to pay to the Adviser during any fiscal year under
the Shareholder Servicing Agreement.
4. In addition, under the shareholder Servicing Agreement, the
Adviser may make payments from time to time from its servicing fees to
Shareholder Servicing Agents for the purpose enumerated in paragraph 3(i)
above and the Distributor may make payments from time to time from its fees
under the Distribution Agreement to Broker-Dealers or other financial
institutions for the purpose enumerated in paragraphs 3(ii), (iii) and (iv).
5. The Fund will pay for (i) telecommunications expenses,
including the cost of dedicated lines and CRT terminals, incurred by the
Distributor and the Adviser in carrying out their obligations under their
respective Distribution and Shareholder Servicing Agreements, and (ii)
typesetting, printing and delivering the Fund's prospectus to existing
shareholders and preparing and printing subscription application forms for
shareholder accounts.
6. Payments by the Distributor to Broker-Dealers or other
financial institutions and payments by the Adviser to Shareholder Servicing
Agents for the purpose of distributing the Fund's shares and providing
shareholder servicing are subject to compliance by the Distributor and the
Adviser with the terms of written agreements in a form satisfactory to the
Fund's Board of Directors to be entered into between the Distributor and the
Broker-Dealers, and between the Adviser and the Shareholder Servicing Agents.
-2-
361811.1
<PAGE>
7. The Fund and the Distributor will prepare and furnish to the
Fund's Board of Directors, at least quarterly, written reports setting forth
all amounts expended for these purposes by the Distributor and the Adviser,
pursuant to the Plan and identifying the activities for which such
expenditures were made.
8. The Plan became effective upon approval by (i) a majority of
the outstanding voting securities of the Fund (as defined in the 1940 Act),
and (ii) a majority of the Board of Directors of the Fund, including a
majority of the Directors who are not interested persons (as defined in the
1940 Act) of the Fund and who have no direct or indirect financial interest in
the operation of the Plan or in any agreement entered into in connection with
the Plan, pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of the Plan.
9. The Plan will remain in effect from year to year after its
adoption, unless earlier terminated in accordance with its terms, and
thereafter may continue in effect for successive annual periods if approved
each year in the manner described in clause (ii) of paragraph 8 hereof.
10. The Plan may be amended at any time with the approval of the
Board of Directors of the Fund, provided that (i) any material amendments of
the terms of the Plan will be effective only upon approval as provided in
clause (ii) of paragraph 8 hereof, and (ii) any amendment which increases
materially the amount which may be spent by the Fund pursuant to the Plan will
be effective only upon the additional approval as provided in clause (i) of
paragraph 8 hereof.
11. The Plan may be terminated without penalty at any time (i) by
a vote of the majority of the entire Board of Directors of the Fund and by a
vote of a majority of the Directors of the Fund who are not interested persons
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related to the Plan,
or (ii) by a vote of a majority of the outstanding voting securities of the
Fund (as defined in the Act).
Dated: May 14, 1996
-3-
361811.1
SHAREHOLDER SERVICING AGREEMENT
AMERINDO TECHNOLOGY FUND
A series of Amerindo Funds Inc. (the "Fund")
Class A Shares
One Embarcadero
Suite 2300
San Francisco, California 94111
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, California 94111
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We hereby employ you, pursuant to the Distribution and Service
Plan dated May 14, 1996 adopted by us in accordance with Rule 12b-l (the
"Plan") under the Investment Company Act of 1940, as amended (the "1940 Act"),
to provide the services listed below:
(a) You will perform, or arrange for others including broker-dealers,
banks, savings and loans and other financial institutions with which you have
written agreements and whose clients are Class A Fund shareholders (each
institution a "Shareholder Servicing Agent") to perform, all shareholder
servicing functions not performed by us, by the Distributor or by our Transfer
Agent.
(b) In consideration of the foregoing we will pay you a fee at the
annual rate of one quarter of one percent (0.25%) of the Fund's Class A
shares' (the "Class A Shares") average daily net assets to compensate you for
providing shareholder services to our Class A shareholders. Your payment 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
schedule as you shall request us in writing. You may waive your right to any
fee or payment to which you are entitled hereunder, provided such waiver is
delivered to us in writing.
(c) You may make payments from time to time from your Shareholder
Servicing Fee to defray the costs of, and to compensate other Shareholder
Servicing Agents with whom you shall enter into a written agreement for
performing shareholder servicing and related administrative functions on
behalf of the Class A Shares.
363240.1
<PAGE>
You will in your sole discretion determine the amount of any payments
made by you pursuant to this Agreement, and you 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 which we are required
to pay to you under this Agreement.
2. Except as otherwise provided herein, you will be responsible for
the payment of all expenses incurred by you in rendering the foregoing
services, except that we will pay (i) telecommunications expenses, including
the cost of dedicated lines and CRT terminals, incurred by you, the
Distributor, the Broker-Dealers (as defined in our Distribution Agreement with
our distributor) and Shareholder Servicing Agents in rendering such services,
and (ii) the cost of typesetting, printing and delivering our prospectus to
existing Class A shareholders of the Fund and of preparing and printing
subscription application forms for Class A shareholder accounts.
3. (a) The written agreements between you and Shareholder Servicing
Agents may only be made with Shareholder Servicing Agents who maintain a
servicing relationship, and will, as agents for their customers, perform the
following services for Class A Shareholders, including but not limited to:
answer customer inquiries regarding account status and history, the manner in
which purchases and redemptions of shares of the Fund may be effected and
certain other matters pertaining to the Fund; assist shareholders in
designating and changing dividend options, account designations and
addressees; provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; assist in processing purchase and
redemption transactions; arrange for the wiring of funds; transmit and receive
funds in connection with customer orders to purchase or redeem shares; verify
and guarantee shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts; furnish (either
separately or on an integrated basis with other reports sent to a Class A
shareholder by the Fund) monthly and year-end statements and confirmation of
purchases and redemptions; transmit, on behalf of the Fund, proxy statements,
annual reports, updating prospectuses and other communications from the Fund
to Class A shareholders of the Fund; receive, tabulate and transmit to the
Fund proxies executed by shareholders with respect to meeting of Class A
shareholders of the Fund; and provide such other related services as the Fund
or a Class A shareholder may request. Shareholder Servicing Agents may waive
all or a portion of their Shareholder Servicing Fees.
(b) Payments to Shareholder Servicing Agents to compensate them for
providing shareholder servicing and related administrative functions are
subject to compliance by them with the terms of written agreements
satisfactory to our Board of Directors to be entered into between you and the
Shareholder Servicing Agents.
(c) Shareholder Servicing Agents will be compensated directly by you.
We shall have no obligation or liability to you, them or any Shareholder
Servicing Agent for any such payments under such agreements with Shareholder
Servicing Agents. Our obligation is
-2-
363240.1
<PAGE>
solely to make payments to you, the Adviser, under the Advisory Agreement and
this Shareholder Servicing Agreement and to the Distributor under the
Distribution Agreement.
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 Class A
shareholders 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. This Agreement will become effective on the date hereof and will
remain in effect until April 30, 1998 and thereafter for successive
twelve-month periods (computed from each May 1) provided that such
continuation is specifically approved at least annually by vote of our Board
of Directors and of a majority of those of our directors who are not
interested persons (as defined in the 1940 Act) and have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan, cast in person at a meeting called for the purpose of voting on
this Agreement. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of a majority of our entire Board of
Directors, and by a vote of a majority of our Directors who are not interested
persons (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan, or by vote of a majority of our outstanding Class A voting
securities, as defined in the 1940 Act, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
6. 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 thereunder.
7. 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 another
corporation, firm, individual or association.
-3-
363240.1
<PAGE>
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.,
AMERINDO TECHNOLOGY FUND
By: ________________________
Name:
Title:
ACCEPTED:
May 14, 1996
AMERINDO INVESTMENT ADVISORS INC.
By: ________________________
Name:
Title:
-4-
363240.1
<PAGE>
SHAREHOLDER SERVICING AGREEMENT
AMERINDO TECHNOLOGY FUND
A series of Amerindo Funds Inc. (the "Fund")
Class D Shares
One Embarcadero
Suite 2300
San Francisco, California 94111
Amerindo Investment Advisors Inc.
One Embarcadero
Suite 2300
San Francisco, California 94111
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We hereby employ you, pursuant to the Distribution and Service
Plan dated May 14, 1996 adopted by us in accordance with Rule 12b-l (the
"Plan") under the Investment Company Act of 1940, as amended (the "1940 Act"),
to provide the services listed below:
(a) You will perform, or arrange for others including broker-dealers,
banks, savings and loans and other financial institutions with which you have
written agreements and whose clients are Class B Fund shareholders (each
institution a "Shareholder Servicing Agent") to perform, all shareholder
servicing functions not performed by us, by the Distributor or by our Transfer
Agent.
(b) In consideration of the foregoing we will pay you a fee at the
annual rate of one quarter of one percent (0.25%) of the Fund's Class D
shares' (the "Class D Shares") average daily net assets to compensate you for
providing shareholder services to our Class D shareholders. Your payment 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
schedule as you shall request us in writing. You may waive your right to any
fee or payment to which you are entitled hereunder, provided such waiver is
delivered to us in writing.
(c) You may make payments from time to time from your Shareholder
Servicing Fee to defray the costs of, and to compensate other Shareholder
Servicing Agents with whom you shall enter into a written agreement for
performing shareholder servicing and related administrative functions on
behalf of the Class D Shares.
363251.1
<PAGE>
You will in your sole discretion determine the amount of any payments
made by you pursuant to this Agreement, and you 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 which we are required
to pay to you under this Agreement.
2. Except as otherwise provided herein, you will be responsible for
the payment of all expenses incurred by you in rendering the foregoing
services, except that we will pay (i) telecommunications expenses, including
the cost of dedicated lines and CRT terminals, incurred by you, the
Distributor, the Broker-Dealers (as defined in our Distribution Agreement with
our distributor) and Shareholder Servicing Agents in rendering such services,
and (ii) the cost of typesetting, printing and delivering our prospectus to
existing Class D shareholders of the Fund and of preparing and printing
subscription application forms for Class D shareholder accounts.
3. (a) The written agreements between you and Shareholder Servicing
Agents may only be made with Shareholder Servicing Agents who maintain a
servicing relationship, and will, as agents for their customers, perform the
following services for Class D Shareholders, including but not limited to:
answer customer inquiries regarding account status and history, the manner in
which purchases and redemptions of shares of the Fund may be effected and
certain other matters pertaining to the Fund; assist shareholders in
designating and changing dividend options, account designations and
addressees; provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; assist in processing purchase and
redemption transactions; arrange for the wiring of funds; transmit and receive
funds in connection with customer orders to purchase or redeem shares; verify
and guarantee shareholder signatures in connection with redemption orders and
transfers and changes in shareholder designated accounts; furnish (either
separately or on an integrated basis with other reports sent to a Class D
shareholder by the Fund) monthly and year-end statements and confirmation of
purchases and redemptions; transmit, on behalf of the Fund, proxy statements,
annual reports, updating prospectuses and other communications from the Fund
to Class D shareholders of the Fund; receive, tabulate and transmit to the
Fund proxies executed by shareholders with respect to meeting of Class D
shareholders of the Fund; and provide such other related services as the Fund
or a Class D shareholder may request. Shareholder Servicing Agents may waive
all or a portion of their Shareholder Servicing Fees.
(b) Payments to Shareholder Servicing Agents to compensate them for
providing shareholder servicing and related administrative functions are
subject to compliance by them with the terms of written agreements
satisfactory to our Board of Directors to be entered into between you and the
Shareholder Servicing Agents.
(c) Shareholder Servicing Agents will be compensated directly by you.
We shall have no obligation or liability to you, them or any Shareholder
Servicing Agent for any such payments under such agreements with Shareholder
Servicing Agents. Our obligation is
-2-
363251.1
<PAGE>
solely to make payments to you, the Adviser, under the Advisory Agreement and
this Shareholder Servicing Agreement and to the Distributor under the
Distribution Agreement.
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 Class D
shareholders 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. This Agreement will become effective on the date hereof and will
remain in effect until April 30, 1998 and thereafter for successive
twelve-month periods (computed from each May 1) provided that such
continuation is specifically approved at least annually by vote of our Board
of Directors and of a majority of those of our directors who are not
interested persons (as defined in the 1940 Act) and have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan, cast in person at a meeting called for the purpose of voting on
this Agreement. This Agreement may be terminated at any time, without the
payment of any penalty, by vote of a majority of our entire Board of
Directors, and by a vote of a majority of our Directors who are not interested
persons (as defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan, or by vote of a majority of our outstanding Class D voting
securities, as defined in the 1940 Act, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
6. 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 thereunder.
7. 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 another
corporation, firm, individual or association.
-3-
363251.1
<PAGE>
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.,
AMERINDO TECHNOLOGY FUND
By: ____________________________
Name:
Title:
ACCEPTED:
May 14, 1996
AMERINDO INVESTMENT ADVISORS INC.
By: __________________________
Name:
Title:
-4-
363251.1
AMERINDO TECHNOLOGY FUND
a series of
AMERINDO FUNDS INC.
FORM OF RULE 18f-3 MULTI-CLASS PLAN
I. Introduction.
Pursuant to Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), the following sets forth the method for
allocating fees and expenses between the Class A and Class D shares of
Amerindo Technology Fund, a series of Amerindo Funds Inc. (the "Fund"). In
addition, this Rule 18f-3 Multi-Class Plan (the "Plan") sets forth the
shareholder servicing and distribution arrangements between the Class A and
Class D shares of the Fund.
The Fund is a non-diversified, open-end, management investment
company registered under the 1940 Act and the shares of which are registered
on Form N-1A under the Securities Act of 1933, as amended and the 1940 Act.
Upon the effective date of this Plan, the Fund hereby elects to offer multiple
classes of shares pursuant to the provisions of Rule 18f-3 and this Plan.
II. Allocation of Expenses.
Pursuant to Rule 18f-3 under the 1940 Act, the Company shall
allocate to each of the Class A and Class D shares of the Fund (i) any fees
and expenses incurred by the Fund in connection with the distribution of each
class of shares under a distribution and service plan adopted for such class
of shares pursuant to Rule 12b-1, and (ii) any fees and expenses incurred by
the Fund under a shareholder servicing plan in connection with the provision
of shareholder services to the holders of each class of shares. In addition,
pursuant to Rule 18f-3, the Fund may allocate the following fees and expenses
to a particular class of shares:
(i) transfer agent fees identified by the transfer agent as
being attributable to such class of shares;
(ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports,
prospectuses, reports, and proxies to current
shareholder of such class of shares or to regulatory
agencies with respect to such class of shares;
(iii) blue sky registration or qualification fees incurred by
such class of shares;
C/M: 12034.0001 364799.1
<PAGE>
(iv) Securities and Exchange Commission registration fees
incurred by such class of shares;
(v) the expense of administrative personnel and services
(including, but not limited to, those of a fund
accountant, [custodian]1 or divided paying agent
charged with calculating net asset values or
determining or paying dividends) as required to
support the shareholders of such class of shares;
(vi) litigation or other legal expenses relating solely to
such class of shares;
(vii) fees of the Company's Directors incurred as a result of
issues relating to such class of shares; and
(viii) independent accountants' fees relating solely to such
class of shares.
The initial determination of the class expenses that will be
allocated by the Company to a particular class of shares and any subsequent
changes thereto will be reviewed by the Board of Directors and approved by a
vote of the Directors of the Company, including a majority of the Directors
who are not interested persons of the Company.
Income, realized and unrealized capital gains and losses, and any
expenses of the Fund not allocated to a particular class pursuant to this Plan
shall be allocated to each class of the Fund on the basis of the net assets of
that class in relation to the total net assets of the Fund.
III. Class Arrangements.
The following summarizes the Rule 12b-1 distribution and
shareholder servicing fees applicable to each class of shares of the Fund.
Additional details regarding such fees and services, as well as any other
services offered to shareholders, are set forth in the Fund's current
Prospectus and Statement of Additional Information.
A. Class A Shares -
1. Initial Maximum Sales Load: 3.00%.
2. Contingent Deferred Sales Charge: None.
- --------
1. Rule 18f-3 requires that services related to the management of the
portfolio's assets, such as custodial fees, be borne by the fund and not
by class.
-2-
C/M: 12034.0001 364799.1
<PAGE>
3. Redemption Fee: 3% for shares held less than one year.
4. Rule 12b-1 Distribution Fees: 0.25% per annum of the
average daily net assets of the Class.
5. Shareholder Servicing Fees: 0.25% per annum of the
average daily net assets of the Class.
B. Class D Shares -
1. Initial Sales Load: None.
2. Contingent Deferred Sales Charge: None.
3. Redemption Fee: 3% for shares held less than one year.
4. Rule 12b-1 Distribution Fees: None.
5. Shareholder Servicing Fees: 0.25% per annum of the
average daily net assets of the Class.
IV. Board Review.
The Board of Directors of the Fund shall review this Plan as
frequently as they deem necessary. Prior to any material amendments to this
Plan, the Fund's Board of Directors, including a majority of the Directors
that are not interested persons of the Fund, shall find that the Plan, as
proposed to be amended (including any proposed amendments to the method of
allocating class and/or fund expenses, is in the best interest of each class
of shares of the Fund individually and the Fund as a whole. In considering
whether to approve any proposed amendments(s) to the Plan, the Directors of
the Fund shall request and evaluate such information as they consider
reasonably necessary to evaluate the proposed amendments(s) to the Plan.
In making its initial determination to approve this Plan, the
Board has focused on, among other things, the relationship between or among
the classes and has examined potential conflicts of interest among classes
regarding the allocation of fees, services, waivers and reimbursement of
expenses, and voting rights. The Board has evaluated the level of services
provided to each class and the cost of those services to ensure that the
services are appropriate and the allocation of expenses is reasonable. In
approving any subsequent amendments to this Plan, the Board shall focus on and
evaluate such factors as well as any others deemed necessary by the Board.
-3-
C/M: 12034.0001 364799.1
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each of the undersigned directors
of Amerindo Technology Fund, a series of Amerindo Funds Inc., a Maryland
corporation (the "Fund"), hereby constitutes and appoints ALBERTO W. VILAR,
GARY A. TANAKA, and DANA E. SMITH, each as their true and lawful
attorneys-in-fact and agents, with full power and authority to act as such,
with full power of substitution and resubstitution, for the undersigned and in
the undersigned's name, place and stead, in any and all capacities, to do any
and all acts and things and to execute any and all instruments that any of
said attorneys and agents may deem necessary or advisable in connection with
the Fund's Amendments to Registration Statement on Form N-1A to enable the
Fund to comply with the Securities Act of 1933, as amended, with any
regulations, rules or requirements of the Securities and Exchange Commission
thereunder, and with any state blue sky laws or regulations in connection
therewith, including specifically, but without limiting the generality of the
foregoing, power and authority to sign the names of the undersigned to the
Registration Statement on Form N-1A, to any amendment to such Registration
Statement, and to any instrument or document filed with said Commission as a
part of or in connection with such Registration Statement or any amendment
thereto, and the undersigned hereby ratify and confirm all that said attorneys
and agents, or their substitutes or resubstitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents
effective as of the 14th day of May, 1996.
/s/ John Rutledge
_______________________________
John Rutledge
366073.1
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each of the undersigned directors
of Amerindo Technology Fund, a series of Amerindo Funds Inc., a Maryland
corporation (the "Fund"), hereby constitutes and appoints ALBERTO W. VILAR,
GARY A. TANAKA, and DANA E. SMITH, each as their true and lawful
attorneys-in-fact and agents, with full power and authority to act as such,
with full power of substitution and resubstitution, for the undersigned and in
the undersigned's name, place and stead, in any and all capacities, to do any
and all acts and things and to execute any and all instruments that any of
said attorneys and agents may deem necessary or advisable in connection with
the Fund's Amendments to Registration Statement on Form N-1A to enable the
Fund to comply with the Securities Act of 1933, as amended, with any
regulations, rules or requirements of the Securities and Exchange Commission
thereunder, and with any state blue sky laws or regulations in connection
therewith, including specifically, but without limiting the generality of the
foregoing, power and authority to sign the names of the undersigned to the
Registration Statement on Form N-1A, to any amendment to such Registration
Statement, and to any instrument or document filed with said Commission as a
part of or in connection with such Registration Statement or any amendment
thereto, and the undersigned hereby ratify and confirm all that said attorneys
and agents, or their substitutes or resubstitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents
effective as of the 14th day of May, 1996.
/s/ Jude T. Wanniski
________________________________
Jude T. Wanniski
366073.1
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each of the undersigned directors
of Amerindo Technology Fund, a series of Amerindo Funds Inc., a Maryland
corporation (the "Fund"), hereby constitutes and appoints ALBERTO W. VILAR and
DANA E. SMITH, each as their true and lawful attorneys-in-fact and agents,
with full power and authority to act as such, with full power of substitution
and resubstitution, for the undersigned and in the undersigned's name, place
and stead, in any and all capacities, to do any and all acts and things and to
execute any and all instruments that any of said attorneys and agents may deem
necessary or advisable in connection with the Fund's Amendments to
Registration Statement on Form N-1A to enable the Fund to comply with the
Securities Act of 1933, as amended, with any regulations, rules or
requirements of the Securities and Exchange Commission thereunder, and with
any state blue sky laws or regulations in connection therewith, including
specifically, but without limiting the generality of the foregoing, power and
authority to sign the names of the undersigned to the Registration Statement
on Form N-1A, to any amendment to such Registration Statement, and to any
instrument or document filed with said Commission as a part of or in
connection with such Registration Statement or any amendment thereto, and the
undersigned hereby ratify and confirm all that said attorneys and agents, or
their substitutes or resubstitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned have subscribed these presents
effective as of the 14th day of May, 1996.
/s/ Gary A. Tanaka
______________________________
Gary A. Tanaka
366073.1
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