FORM OF CUSTODIAN SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 27th day of
August, 1999, by and between Jacob Internet Fund (hereinafter referred to as the
"Company") and Firstar Bank Milwaukee, N.A., a limited liability company
organized under the laws of the State of Wisconsin (hereinafter referred to as
the "Custodian").
WHEREAS, the Company is an open-end management investment company
which are registered under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Custodian is a federally regulated banking
institution; and
WHEREAS, the Company desires that the securities and cash of each
portfolio (each hereinafter referred to as the "Fund") shall be hereafter held
and administered by Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Company and Custodian agree as follows:
1. Definitions
The word "securities" as used herein includes stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the Company by any
two of the President, a Vice President, the Secretary and the Treasurer of the
Company, or any other persons duly authorized to sign by the Board of the
Company.
The word "Board" shall mean Board of Directors of the Company.
2. Names, Titles, and Signatures of the Company Officers
An officer of the Company will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of the
Company, together with any changes which may occur from time to time.
3. Additional Series
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The Company is authorized to issue separate Series of shares of
beneficial interest representing interests in separate investment
portfolios ("Series"). The parties intend that each Series established
by the Company, now or in the future, be covered by the terms and
conditions of this Agreement.
4. Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or
accounts in the name of each Fund, subject only to draft or order by Custodian
acting pursuant to the terms of this Agreement. Custodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Company. Custodian shall make payments of cash
to, or for the account of, the Company from such cash only:
(a) for the purchase of securities for the portfolio of the Fund
upon the delivery of such securities to Custodian, registered
in the name of the Company or of the nominee of Custodian
referred to in Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of the common stock
of the Fund upon delivery thereof to Custodian, or upon proper
instructions from the Company;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund
held by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Company of the Company.
Before making any such payment, Custodian shall receive (and may
rely upon) an officers' certificate requesting such payment and stating that it
is for a purpose permitted under the terms of item (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Company issues appropriate
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oral or facsimile instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by Custodian
for the account of each Fund.
C. Custodian shall, upon receipt of proper instructions, make
federal funds available to the Company as of specified times agreed upon from
time to time by the Company and the Custodian in the amount of checks received
in payment for shares of the Fund which are deposited into the Fund's account.
5. Segregated Accounts
Upon receipt of proper instructions, the Custodian shall establish
and maintain a segregated account(s) for and on behalf of each Fund, into which
account(s) may be transferred cash and/or securities.
6. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have sole power to release or deliver any
securities of the Company held by it pursuant to this Agreement. Custodian
agrees to transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefor;
(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities
alone or other securities and cash whether pursuant to any
plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms
into other securities;
(f) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
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(h) for the purpose of redeeming in kind shares of common stock of
the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefor shall
be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this
Section 5 and also, in respect of item (i), upon receipt of an officers'
certificate 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
corporate purpose, and naming the person or persons to whom delivery of such
securities shall be made, provided, however, that an officers' certificate need
not precede any such transfer, exchange or delivery of a money market
instrument, or any other security with same or next-day settlement, if the
President, a Vice President, the Secretary or the Treasurer of the Company
issues appropriate oral or facsimile instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two business
days thereafter.
7. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to
the contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of each Fund, which call for payment
upon presentation and hold the cash received by it upon such payment for the
account of the Fund; (b) collect interest and cash dividends received, with
notice to the Company, for the account of the Fund; (c) hold for the account of
the Fund hereunder all stock dividends, rights and similar securities issued
with respect to any securities held by it hereunder; and (d) execute, as agent
on behalf of the Company, all necessary ownership certificates required by the
Internal Revenue Code of 1986, as amended (the "Code") or the Income Tax
Regulations (the "Regulations") of the United States Treasury Department (the
"Treasury Department") or under the laws of any state now or hereafter in
effect, inserting the Company's name on such certificates as the owner of the
securities covered thereby, to the extent it may lawfully do so.
8. Registration of Securities
Except as otherwise directed by an officers' certificate,
Custodian shall register all securities, except such as are in bearer form, in
the name of a registered nominee of Custodian as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder or in any
provision of any subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any
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state. All securities held by Custodian hereunder shall be at all times
identifiable in its records held in an account or accounts of Custodian
containing only the assets of the particular Fund.
The Company shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of the Company and which may from
time to time be registered in the name of the Company.
9. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of a Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the Company
all notices, proxies and proxy soliciting materials with respect to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Company), but
without indicating the manner in which such proxies are to be voted.
10. Transfer Tax and Other Disbursements
The Series of the Company shall pay or reimburse Custodian from
time to time for any transfer taxes payable upon transfers of securities made
hereunder, and for all other necessary and proper disbursements and expenses
made or incurred by Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as may
be required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws of
any state, to exempt from taxation any exempt transfers and/or deliveries of any
such securities.
11. Concerning Custodian
Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith
and without negligence and willful misconduct upon any certificate herein
described or certified copy of any resolution of the Board, and may rely on the
genuineness of any such document which it may in good faith believe to have been
validly executed.
The Company agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including reasonable counsel fees) incurred or assessed against it
or by its nominee in connection with the performance of this Agreement, except
such as may arise from its or its nominee's own negligent
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action, negligent failure to act or willful misconduct. Custodian is authorized
to charge any account of the relevant Series of the Company for such items.
In the event of any advance of cash for any purpose made by
Custodian resulting from orders or instructions of the Company, or in the event
that Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Company shall be security therefor.
Custodian agrees to indemnify and hold harmless the Company from all charges,
expenses, assessments, and claims/liabilities (including reasonable counsel
fees) incurred or assessed against it in connection with the performance of this
Agreement, except such as may arise from the Fund's own bad faith, negligent
action, negligent failure to act, or willful misconduct.
12. Subcustodians
Custodian is hereby authorized to engage another bank or Company
companies as a subcustodian for all or any part of the Company's assets, so long
as any such bank or Company organized under the laws of any state of the United
States, having an aggregate capital, surplus and undivided profit, as shown by
its last published report, of not less than Two Million Dollars ($2,000.000) and
provided further that, if the Custodian utilizes the services of a subcustodian,
the Custodian shall remain fully liable and responsible for any losses caused to
the Company by the subcustodian as fully as if the Custodian was directly
responsible for any such losses under the terms of this Agreement.
Notwithstanding anything contained herein, if the Company requires
the Custodian to engage specific subcustodians for the safekeeping and/or
clearing of assets, the Company agrees to indemnify and hold harmless Custodian
from all claims, expenses and liabilities incurred or assessed against it in
connection with the use of such subcustodian in regard to the Company's assets,
except as may arise from Custodian's own bad faith, negligent action, negligent
failure to act or willful misconduct.
13. Reports by Custodian
Custodian shall furnish the Company periodically as agreed upon
with a statement summarizing all transactions and entries for the account of the
Company. Custodian shall furnish to the Company, at the end of every month, a
list of the portfolio securities for the Fund showing the aggregate cost of each
issue. The books and records of Custodian pertaining to its actions under this
Agreement shall be open to inspection and audit at reasonable times by officers
of, and by auditors employed by, the Company.
14. Deposits of Securities in Securities Depositories
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No provision of this Agreement shall be deemed to prevent the use
by Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Company of the Company approves by resolution the
use of such central securities clearing agency or securities depository.
15. Records
To the extent that Custodian in any capacity prepares or maintains
any records required to be maintained and preserved by the Company pursuant to
the provisions of the Investment Company Act of 1940, as amended, or the rules
and regulations promulgated thereunder, Custodian agrees to make any such
records available to the Company upon request and to preserve such records for
the periods prescribed in Rule 3 1 a-2 under the Investment Company Act of 1940,
as amended.
16. Termination or Assignment
This Agreement may be terminated by the Company, or by Custodian,
on ninety (90) days notice, prior to the two year anniversary given in writing
and sent by registered mail to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or to the Companies at:
Jacob Internet Fund
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
as the case may be. Upon any termination of this Agreement, pending appointment
of a successor to Custodian or a vote of the shareholders of the Fund to
dissolve or to function without a custodian of its cash, securities and other
property, Custodian shall not deliver cash, securities or other property of the
Fund to the Company, but may deliver them to a bank or Company companies of its
own selection having an aggregate capital, surplus and undivided profits, as
shown by its last published report of not less than Two Million Dollars
($2,000,000) as a Custodian for the Company to be held under terms similar to
those of this Agreement, provided, however, that Custodian shall not be required
to make any such delivery or payment until full payment shall have been made by
the Company of all liabilities constituting a charge on or against the
properties then held by Custodian or on or against Custodian, and until full
payment shall have been made to Custodian of all its fees, compensation, costs
and expenses, subject to the provisions of Section 10 of this Agreement.
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This Agreement may not be assigned by Custodian without the consent
of the Company, authorized or approved by a resolution of its Board of Company.
17. Notices
Notices of any kind to be given by either party to the other party shall be
in writing and shall be duly given if mailed or delivered as follows: Notice
to FTC shall be sent to
Firstar Bank Milwaukee, N.A.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
And notice to the Company shall be sent to:
Jacob Internet Fund
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by a duly authorized officer or one or more counterparts as of
the day and year first written above.
____________________ FIRSTAR BANK MILWAUKEE, N.A.
By:______________________________ By:________________________________
Attest: _________________________ Attest:____________________________
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Schedule A
Mutual Fund Custody Services
Domestic Portfolios
Annual Fee Schedule
Name of Series
The Jacob Internet Fund
Annual fee based upon market value
$.20 per $1,000 (2.0 basis points)
Minimum annual fee per fund - $3,000
Investment transactions (purchase, sale, exchange, tender,
redemption, maturity, receipt, delivery):
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$8.00 per principal reduction on pass-through certificates
$75.00 per Euroclear
$35.00 per option/futures contract
Variable Amount Demand Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is 1/4
of 1%, is deducted from the variable amount note income at the time it is
credited to your account.
Extraordinary expenses: Based on time and complexity involved.
Out-of-pocket expenses: Charged to the account, including but not limited to:
$10.00 per variation margin transaction
$10.00 per Fed wire deposit or withdrawal
Fees are billed monthly, based upon market value at the beginning of the month
