Exhibit No. EX-99.d
INVESTMENT ADVISORY AGREEMENT
JACOB INTERNET FUND INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 26, 1999
Jacob Asset Management LLC
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 Jacob Internet Fund Inc. (the "Fund"), 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 Fund'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 Fund'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
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 Fund'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 Fund'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 Fund'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 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 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 Fund'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.
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 1.25% 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
the last sentence of 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. You may from time to time and for such periods as you deem appropriate, or
for such time and to the extent agreed on Exhibit A, waive your fee and/or
assume expenses for the Fund (including initial organizational costs); provided,
however that with respect to any agreement set forth on Exhibit A you shall be
entitled to recoup such amounts for a period of up to three (3) years from the
date such fee was waived or such amount assumed.
(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 permit you to compensate banks,
broker-dealers, 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. Further, pursuant to the Fund's Distribution and Service
Plan and the Distribution Agreement, the Distributor will receive a distribution
fee to compensate the Distributor for providing distribution assistance or for
arranging for others to provide distribution assistance with respect to sales of
our shares. 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 or distribution assistance 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 November 26, 1999 and shall
continue in effect until October 31, 2001 and thereafter for successive
twelve-month periods (computed from each November 1), provided that such
continuation is specifically approved at least annually by the Fund'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 Fund's Directors who are neither party to this Agreement nor, other
than by their service as Directors of the Fund, 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. (a) 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.
(b) The Fund understands that you and your affiliates and employees,
as well as their agents privy to the transactions made in the Fund's account,
may, subject to the Fund's and to your Code of Ethics, purchase and sell
investments for either your or their own account, which investments may include
the same investments that the Fund's account is purchasing or selling; provided,
however, that no purchase or sale by you, or any of your affiliates, agents or
employees, or any of their agents privy to the transactions made in the Fund's
account, will be made in a manner which would result in any detriment to the
Fund, and such persons shall always keep the interests of the Fund first in
effecting any such transaction.
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: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Secretary
ACCEPTED:
JACOB ASSET MANAGEMENT LLC
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Chairman
Exhibit A
The Adviser hereby agrees that until August 31, 2000, the Adviser will
waive its fees and/or reimburse the Fund's operating expenses to the extent
necessary to ensure that the Fund's total operating expenses (on an annual
basis) do not exceed 2.00% of its average daily net assets, subject to possible
later recoupment as provided in Section 5(a) of this Agreement.
Executed as of this 20th day of September, 1999.
Jacob Asset Management LLC
By: /s/ Xxxx Xxxxx
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Jacob Internet Fund Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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