FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated ________, 2003 between The CINTRA Select Fund, Inc. (the
"Fund"), a Maryland corporation, and CINTRA Fund Management, LLC (the
"Adviser"), a Delaware limited liability company.
In consideration of the mutual promises. and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is agreed by and between the parties hereto as follows:
1. In General
The Adviser agrees, all as more fully set forth herein, to act as
investment adviser to the Fund with respect to the investment of the Fund's
assets and to supervise and arrange the purchase of securities for and the sale
of securities held in the investment portfolio of the Fund.
2. Duties and obligations of the Adviser with respect to investments of
assets of the Fund
(a) Subject to the succeeding provisions of this paragraph and subject
to the direction and control of the Fund's Board of Directors, the Adviser
shall (i) act as investment adviser for and supervise and manage the
investment and reinvestment of the Fund's assets and in connection
therewith have complete discretion in purchasing and selling securities and
other assets for the Fund and in voting, exercising consents and exercising
all other rights appertaining to such securities and other assets on behalf
of the Fund; (ii) supervise continuously the investment program of the Fund
and the composition of its investment portfolio; and (iii) arrange, subject
to the provisions of paragraph 3 hereof, for the purchase and sale of
securities and other assets held in the investment portfolio of the Fund.
(b) In the performance of its duties under this Agreement, the Adviser
shall at all times act in compliance with the objectives, policies and
limitations for the Fund as in effect from time to time, and conform to,
and act in accordance with, any requirements imposed by (i) the provisions
of the Investment Company Act of 1940 (the "Act"), and of any rules or
regulations in force thereunder or other applicable rules or regulations;
(ii) any other applicable provision of law; (iii) the provisions of the
Articles of Incorporation and By-Laws of the Fund, as such documents are
amended from time to time; and (iv) any policies and determinations of the
Board of Directors of the Fund.
(c) The Adviser accepts such engagement and agrees, as its own
expense, to render the investment advisory services required hereunder and
to provide the office space, furnishings and equipment and the personnel
required by it to perform such services on the terms and for the
compensation provided herein.
(d) The Adviser will bear all costs and expenses of its employees and
any overhead incurred in connection with its duties hereunder and shall
bear the costs of any salaries or directors fees of any officers or
directors of the Fund who are affiliated persons (as defined in the Act) of
the Adviser.
(e) The Adviser shall give the Fund the benefit of its best judgment
and effort in rendering services hereunder, but the Adviser shall not be
liable for any act or omission or for any loss sustained by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(f) Nothing in this Agreement shall prevent the Adviser or any
director, officer, employee or other affiliate thereof from acting as
investment adviser for any other other person, firm or corporation, or from
engaging in any lawful activity, and shall not in any way limit or restrict
the Adviser or any of its partners, officers, employees or agents from
buying, selling or trading any securities for its or their own accounts or
for the accounts of others for whom it or they may be acting, provided,
however, that the Adviser will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations under
this Agreement.
3. Portfolio Transactions and Brokerage
The Adviser is authorized, for the purchase and sale of the Fund's
portfolio securities, to employ such securities dealers as may, in the judgment
of the Adviser, implement the policy of the Fund to obtain the best net results
taking into account such factors as price, including dealer spread, the size,
type and difficulty of the transaction involved, the firm's general execution
and operational facilities and the firm's risk in positioning the securities
involved. Consistent with this policy, the Adviser is authorized to direct the
execution of the Fund's portfolio transactions to dealers and brokers furnishing
statistical information or research deemed by the Adviser to be useful or
valuable to the performance of its investment advisory functions for the Fund.
The Adviser will promptly communicate to the Fund's administrator and to the
officers and Directors of the Fund such information relating to the portfolio
transactions as they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, by reason
of its having directed a securities transaction on behalf of the Fund to a
broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
4. Compensation of the Adviser
(a) The Fund agrees to pay to the Adviser and the Adviser agrees to accept
as full compensation for all services rendered by the Adviser as such, a fee
computed and payable monthly in an amount equal to 1.95% of the Fund's average
weekly net assets on an annualized basis, for the then-current fiscal year. For
any period less than a month during which this Agreement is in effect, the fee
shall be prorated according to the proportion which such period bears to a full
month of 28, 29, 30 or 31 days, as the case may be.
(b) For purposes of this Agreement, the average weekly net assets of the
Fund shall mean the average weekly value of the total assets of the Fund, minus
the sum of accrued liabilities (including accrued expenses) of the Fund and any
declared but unpaid dividends on the Common Shares issued by the Fund and any
Preferred Shares issued by the Fund (the "Preferred Shares") and any accumulated
dividends on any Preferred Shares, but without deducting the aggregate
liquidation value of the Preferred Shares. The average weekly net assets of the
Fund shall be calculated pursuant to the procedures adopted by resolutions of
the Directors of the Fund for calculating the net asset value of the Fund's
shares or delegating such calculations to third parties.
If at any time this Agreement is terminated, any fees or compensation for
services performed shall be pro rated to the effective date of termination, and
such pro rated fees or compensation shall be paid to the Adviser promptly upon
receipt of an invoice therefor. All rights of compensation under this Agreement
for services performed shall survive the termination of this Agreement.
5. Reports
The Fund and the Adviser agree to furnish each other, if applicable,
current prospectuses, proxy statements and reports to shareholders in
respect of the Fund, certified copies of their financial statements, and
such other information with regard to their affairs as each may reasonable
request.
6. Indemnity
(a) The Fund hereby agrees to indemnify the Adviser and each of the
Adviser's directors, officers, employees and agents (including any individual
who serves at the Adviser's request as director, officer, partner, trustee or
the like of another corporation or other entity) (each such person being an
"indemnitee") against any liabilities and expenses, including amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees (all as provided in accordance with applicable corporate law) reasonably
incurred by such indemnitee in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which he may be or may have been
involved as a party or otherwise or with which he may be or may have been
threatened, while acting in any capacity set forth above in this Section 6 or
thereafter by reason of his having acted in any such capacity, except with
respect to any matter as to which he shall have been adjudicated not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the Fund and furthermore, in the case of any criminal proceeding, so
long as he had no reasonable cause to believe that the conduct was unlawful,
provided, however, that (1) no indemnitee shall be indemnified hereunder against
any liability to the Fund or its shareholders or any expense of such indemnitee
arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross
negligence or (iv) reckless disregard of the duties involved in the conduct of
his position (the conduct referred to in such clauses (i) through (iv) being
sometimes referred to herein as "disabling conduct"), (2) as to any matter
disposed of by settlement or a compromise payment by such indemnitee, pursuant
to a consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless there has been a determination
that such settlement or compromise is in the best interests of the Fund and that
such indemnitee appears to have acted in good faith in the reasonable belief
that his action was in the best interest of the Fund and did not involve
disabling conduct by such indemnitee and (3) with respect to any action, suit or
other proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee was authorized by a majority of the full
Board of the Fund.
(b) The Fund shall make advance payments in connection with the
expenses of defending any action with respect to which indemnification
might be sought hereunder if the Fund receives a written affirmation of the
indemnitee's good faith belief that the standard of conduct necessary for
indemnification has been met and a written undertaking to reimburse the
Fund unless it is subsequently determined that it is entitled to such
indemnification and if the directors of the Fund determine that the facts
then known to them would not preclude indemnification. In addition, at
least one of the following conditions must be met: (A) the indemnitee shall
provide security for this undertaking, (B) the Fund shall be insured
against losses arising by reason of any lawful advances, or (C) a majority
of a quorum consisting of directors of the Fund who are neither "interested
persons" of the Fund (as defined in Section 2(a)(19) of the Act) nor
parties to the proceeding ("Disinterested Non-Party Directors") or an
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the indemnitee ultimately
will be found entitled to indemnification.
(c) All determinations with respect to indemnification hereunder shall
be made (1) by a final decision on the merits by a court or other body
before whom the proceeding was brought that such indemnitee is not liable
by reason of disabling conduct or, (2) in the absence of such a decision,
by (i) a majority vote of a quorum of the Disinterested Non-Party Directors
of the Fund, or (ii) if such a quorum is not obtainable or even, if
obtainable, if a majority vote of such quorum so directs, independent legal
counsel in a written opinion. All determinations regarding advance payments
in connection with the expense of defending any proceeding shall be
authorized in accordance with the immediately preceding clause (2) above.
The rights accruing to any indemnitee under these provisions shall not
exclude any other right to which he may be lawfully entitled.
7. License of the Adviser's Name
The Adviser hereby agrees to grant a non-exclusive license to the Fund
for use of its name in the name of the Fund for the term of this Agreement
and such license shall terminate upon termination of this Agreement.
8. Duration and Termination
This Agreement shall become effective on the date first set forth
above and shall continue until _______, 2005. This Agreement shall continue
thereafter from year to year, but only so long as such continuation is
specifically approved at least annually in accordance with the requirements
of the Act.
This Agreement may be terminated by the Adviser at any time without
penalty upon giving the Fund sixty days' written notice (which notice may
be waived by the Fund) and may be terminated by the Fund at any time
without penalty upon giving the Adviser sixty days' notice (which notice
may be waived by the Adviser), provided that such termination by the Fund
shall be directed or approved by the vote of a majority of the Directors of
the Fund in office at the time or by the vote of the holders of a
"majority" (as defined in the Investment Company Act of 1940) of the voting
securities of the Fund at the time outstanding and entitled to vote. This
Agreement shall terminate automatically in the event of its assignment (as
"assignment" is defined in the Act).
9. Notices
Any notice under this Agreement shall be in writing to the other party
at such address as the other party may designate from time to time for the
receipt of such notice and shall be deemed to be received on the earlier of
the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid.
10. Severability.
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.
11. Governing Law
This Agreement shall be construed in accordance with the laws of the
State of Maryland for contracts to be performed entirely therein without
reference to choice of law principles thereof and in accordance with the
applicable provisions of the Act.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers all as of the
day and the year first above written.
THE CINTRA SELECT FUND, INC.
By:
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CINTRA FUND MANAGEMENT, LLC
By:
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