FORM OF SHAREHOLDER SERVICING AGREEMENT
JACOB INTERNET FUND INC. (the "Fund")
Jacob Asset Management LLC
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We hereby employ you, pursuant to the Distribution and
Service Plan adopted by us in accordance with Rule 12b-1 (the "Plan") under the
Investment Company Act of 1940, as amended (the "Act"), to provide the services
listed below:
(a) You will perform, or arrange for others including
organizations whose customers or clients are shareholders of our corporation
(the "Shareholder Servicing Agents") to perform, all shareholder servicing
functions and maintenance of shareholder accounts not performed by us or by our
transfer agent ("Shareholder Services"). You may make payments from time to time
from any Shareholder Servicing Fees (as defined below) received under this
Agreement, to defray the costs of, and to compensate others, including
Shareholder Servicing Agents with whom our distributor has entered into written
agreements, for performing Shareholder Services.
(b) In consideration of your performance of the Shareholder
Services, we will pay you a service fee, as defined by Article III, Section
26(b)(9) of the Rules of Fair Practice, as amended, of the National Association
of Securities Dealers, Inc., at the annual rate of one quarter of one percent
(0.25%) of the Fund's average daily net assets (the "Shareholder Servicing
Fee"). 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 schedule 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.
(c) 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 either this Agreement or any management agreement
or distribution agreement between you and us, or otherwise.
2. 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 and the Shareholder
865469.1
Servicing Agents in rendering such services, and (ii) the cost of typesetting,
printing and delivering our prospectus to existing shareholders of the Portfolio
and of preparing and printing subscription application forms for shareholder
accounts.
3. Payments to Shareholder Servicing Agents to compensate
them for distributing our shares and/or 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 our distributor and the Shareholder Servicing Agents.
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
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 __________, 2000 and thereafter for successive
twelve-month periods (computed from each _____________), 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 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
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.
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 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
865469.1
-2-
similar or dissimilar nature, or to render services of any kind to another
corporation, firm, individual or association.
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,
JACOB INTERNET FUND INC.
By:______________________________________
Name:
Title:
ACCEPTED:
JACOB ASSET MANAGEMENT LLC
By: _________________________
Name:
Title:
865469.1
-3-
