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Exhibit (h)(3)
EXPENSE LIMITATION AGREEMENT
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 Avenue of the Americas
New York, New York 10105
July 7, 2000
ALLIANCE SELECT INVESTOR SERIES, INC.
1345 Avenue Of The Americas
New York, New York 10105
Dear Sirs:
Alliance Capital Management L.P. herewith confirms our
agreement with you as follows:
1. You are an open-end, non-diversified management
investment company registered under the Investment Company Act of
1940, as amended (the "Act"), and are authorized to issue shares
of separate series (portfolios), with each portfolio having its
own investment objective, policies and restrictions. You propose
to engage in the business of investing and reinvesting the assets
of each of your portfolios in accordance with applicable
limitations. Pursuant to an Advisory Agreement dated as of
July 13, 1998, as amended July 7, 2000 (the "Advisory
Agreement"), you have employed us to manage the investment and
reinvestment of such assets.
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2. We hereby agree that, notwithstanding any provision
to the contrary contained in the Advisory Agreement, we shall
limit as provided herein the aggregate expenses of every
character incurred by your Biotechnology Portfolio (the
"Portfolio"), including but not limited to the fees ("Advisory
Fees") payable to us pursuant to the Advisory Agreement (the
"Limitation"). Under the Limitation, we agree that, through July
31, 2001, such expenses shall not exceed a percentage (the
"Percentage Expense Limitation") of the average daily net assets
of the Portfolio equal to, on an annualized basis, 3.25% in the
case of the Class A shares and 3.95% in the case of the Class B
shares and the Class C shares. To determine our liability for
the Portfolio's expenses in excess of the Percentage Expense
Limitation, the amount of allowable fiscal-year-to-date expenses
shall be computed daily by prorating the Percentage Expense
Limitation based on the number of days elapsed within the fiscal
year of the Portfolio, or limitation period, if shorter (the
"Prorated Limitation"). The Prorated Limitation shall be
compared to the expenses of the Portfolio recorded through the
current day in order to produce the allowable expenses to be
recorded for the current day (the "Allowable Expenses"). If
Advisory Fees and other expenses of the Portfolio for the current
day exceed the Allowable Expenses, Advisory Fees for the current
day shall be reduced by such excess ("Unaccrued Fees"). In the
event such excess exceeds the amount due as Advisory Fees, we
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shall be responsible to the Portfolio for the additional excess
("Other Expenses Exceeding Limit"). If cumulative Unaccrued Fees
or cumulative Other Expenses Exceeding Limit remain at July 31,
2001, these amounts shall be paid to us in the future, provided
that (1) no such payment shall be made to us after June 30, 2003,
(2) such payment shall be made only to the extent that it does
not cause the Portfolio's aggregate expenses, on an annualized
basis, to exceed the Percentage Expense Limitation, and (3) no
such payment shall be made to us to the extent that the aggregate
of such payments would exceed the amount of organizational and
offering expenses (as defined by the Financial Accounting
Standards Board) recorded by you for financial reporting purposes
on or before July 31, 2001.
3. Nothing in this Agreement shall be construed as
preventing us from voluntarily limiting, waiving or reimbursing
your expenses outside the contours of this Agreement during any
time period before or after July 31, 2001; nor shall anything
herein be construed as requiring that we limit, waive or
reimburse any of your expenses incurred after July 31, 2001, or,
except as expressly set forth herein, prior to such date.
4. This Agreement shall become effective on the date
hereof and remain in effect until June 30, 2003. This Agreement
may be terminated by either party hereto upon not less than 60
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days' prior written notice to the other party. Upon the
termination or expiration hereof, we shall have no claim against
you for any amounts not reimbursed to us pursuant to the
provisions of paragraph 2.
5. This Agreement shall be construed in accordance
with the laws of the State of New York, provided, however, that
nothing herein shall be construed as being inconsistent with the
Act.
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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,
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its general
partner
/s/ John D. Carifa
By_____________________________
Agreed to and accepted
as of the date first set forth above.
ALLIANCE SELECT INVESTOR SERIES, INC.
/s/ Edmund P. Bergan, Jr.
By__________________________
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00250432.AA6
