Exhibit No. EX-99.e
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of November,
2003, by and among Jacob Internet Fund Inc., a Maryland corporation (the
"Corporation"), Jacob Asset Management of New York LLC, a New York limited
liability company (the "Adviser") and Quasar Distributors, LLC, a Delaware
limited liability company (the "Distributor").
WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of common stock ("Shares") in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, the Adviser serves as the investment adviser for the Corporation
and is duly registered under the Investment Advisers Act of 1940, as amended,
and any applicable state securities laws, as an investment adviser;
WHEREAS, the Corporation desires to retain the Distributor as principal
underwriter and distributor in connection with the offering and sale of the
Shares of each series listed on Exhibit A hereto (as amended from time to time)
(each a "Fund," and collectively the "Funds");
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a member of
the National Association of Securities Dealers, Inc. (the "NASD");
WHEREAS, the Bank Secrecy Act of 1970 and Title III of the USA PATRIOT Act
of 2001 (the "USA Patriot Act") and the implementing regulations thereunder
require certain financial institutions, such as the Company and the Distributor,
to develop and implement anti-money laundering and customer identification
programs (the "AML Rules");
WHEREAS, the NASD, Inc. has adopted Rule 3011 that requires NASD members to
implement anti-money laundering procedures, which are consistent with the AML
Rules.
WHEREAS, this Agreement has been approved by a vote of the Corporation's
board of directors ("Board") and its disinterested directors who are not parties
to this Agreement or interested persons of any party to this Agreement in
conformity with Section 15(c) of the 1940 Act; and
WHEREAS, the Distributor is willing to act as principal underwriter and
distributor for the Corporation on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Appointment of Quasar as Principal Underwriter and Distributor
The Corporation hereby appoints the Distributor as its agent to act as
principal underwriter in connection with the sale and distribution of Shares of
the Funds, on the terms and conditions set forth in this Agreement, and the
Distributor hereby accepts such appointment and agrees to perform the services
and duties set forth in this Agreement.
2. Services, Duties and Representations of the Distributor
A. The Distributor agrees to sell Shares of the Funds on a best efforts
basis as agent for the Corporation during the term of this Agreement, upon the
terms and at the current offering price (plus sales charge, if any) described in
the Prospectus. As used in this Agreement, the term "Prospectus" shall mean the
current prospectus, including the statement of additional information, as
amended or supplemented, relating to the Funds and included in the currently
effective registration statement or post-effective amendment thereto (the
"Registration Statement") of the Corporation under the Securities Act of 1933,
as amended (the "1933 Act") and the 0000 Xxx.
B. During the continuous public offering of Shares of the Funds, the
Distributor will hold itself available to receive orders for the purchase and
redemption of Shares of the Funds and will accept such orders on behalf of the
Corporation, provided the orders are in satisfactory form as described in the
Prospectus. Such orders shall be deemed effective at the time and in the manner
set forth in the Prospectus.
C. The Distributor, with the operational assistance of the Corporation's
transfer agent, shall make Shares available for sale and redemption through the
National Securities Clearing Corporation's Fund/SERV System.
D. In connection with all matters relating to this Agreement, the
Distributor agrees to act in conformity with the Corporation's Articles of
Incorporation and By-Laws, as each may be amended or supplemented, and with the
instructions of the Board and to comply with the requirements of the 1933 Act,
the 1934 Act, the 1940 Act, the regulations of the NASD and all other applicable
federal or state laws and regulations. The Distributor acknowledges and agrees
that it is not authorized to provide any information or make any representations
other than as contained in the Prospectus and any sales literature specifically
approved by the Corporation.
E. Distributor agrees to cooperate with the Corporation in the development
of all proposed advertisements and sales literature relating to the Funds. The
Distributor agrees to review all proposed advertisements and sales literature
for compliance with applicable laws and regulations, and shall file with
appropriate regulators those advertisements and sales literature it believes are
in compliance with such laws and regulations. The Distributor agrees to furnish
to the Corporation any comments provided by regulators with respect to such
materials and to use its best efforts to obtain the approval of the regulators
to such materials.
F. The Distributor agrees to act as agent for the Corporation to receive
and transmit promptly, to the Corporation's transfer agent, shareholder requests
for purchase and redemption of Shares.
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G. The Distributor agrees to cooperate with the Corporation and the Adviser
to negotiate and enter into selling or servicing agreements with such qualified
broker-dealers, financial institutions, third-party administrators, financial
advisers, or other counterparties as the Corporation or Adviser may determine,
in order that such counterparties also may sell or facilitate sales of Shares of
the Funds. The form of any agreement shall be mutually agreed upon and approved
by the Corporation and the Distributor.
H. The Distributor shall devote its best efforts to effect sales of Shares
of the Funds but shall not be obligated to sell any certain number of Shares.
I. The Distributor shall prepare or participate in the preparation of
reports for the Corporation's Board regarding its activities under this
Agreement as from time to time shall be reasonably requested by the Board, and
shall prepare reports regarding the use of 12b-1 payments received by the
Distributor, if any, on at least a quarterly basis.
J. The services furnished by the Distributor hereunder are not to be deemed
exclusive and the Distributor shall be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
The Corporation recognizes that from time to time officers and employees of the
Distributor may serve as directors, trustees, officers and employees of other
entities (including investment companies), that such other entities may include
the name of the Distributor as part of their name and that the Distributor or
its affiliates may enter into distribution, administration, fund accounting,
transfer agent or other agreements with such other entities. The Corporation
reserves the right to directly (1) issue Shares in connection with a merger,
consolidation, or recapitalization of the Corporation or any Fund(s); (2) issue
additional Shares to holders of Shares; or (3) issue Shares in connection with
any offer of exchange permitted by Section 11 of the 1940 Act.
K. The Distributor shall at all times during the term of this Agreement
remain registered as a broker-dealer under the 1934 Act and with all 50 states,
and shall also remain a member in good standing of the NASD. The Distributor
shall immediately notify the Corporation in writing in the event of any
investigation by a governmental or regulatory agency that is likely to affect
such registrations or membership, or if it receives written notification that
such registrations or membership has been temporarily or permanently suspended,
limited or terminated.
L. The Distributor represents and warrants that this Agreement has been
duly authorized by all necessary action by the Distributor under the 1934 Act
and any other applicable federal or state laws or regulations.
3. Duties and Representations of the Corporation
A. The Corporation represents that it is duly organized and in good
standing under the law of its jurisdiction of incorporation and registered as an
open-end management investment company under the 1940 Act. The Corporation
agrees that it will act in material conformity with its Articles of
Incorporation, By-Laws, its Registration Statement as may be amended from time
to time and resolutions and other instructions of its Board. The Corporation
agrees to comply in all material respects with the 1933 Act, the 1940 Act, and
all other applicable federal and state laws and regulations. The Corporation
represents and warrants that this Agreement has been duly authorized
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by all necessary action by the Corporation under the 1940 Act, state law and the
Corporation's Articles of Incorporation and By-Laws.
B. The Corporation, or its agent, shall take or cause to be taken all
necessary action to register Shares of the Funds under the 1933 Act and to
maintain an effective Registration Statement for such Shares in order to permit
the sale of Shares as herein contemplated. The Corporation authorizes the
Distributor to use the Prospectus, in the form furnished to the Distributor from
time to time, in connection with the sale of Shares.
C. The Corporation represents and agrees that all Shares to be sold by it,
including those offered under this Agreement, are validly authorized and, when
issued in accordance with the description in the Prospectus, will be fully paid
and nonassessable. The Corporation further agrees that it shall have the right
to suspend the sale of Shares of any Fund at any time in response to conditions
in the securities markets or otherwise, and to suspend the redemption of Shares
of any Fund at any time permitted by the 1940 Act or the rules of the Securities
and Exchange Commission ("SEC"). The Corporation shall advise the Distributor
promptly of any such determination.
D. The Corporation agrees to advise the Distributor promptly in writing:
(i) of any material correspondence or other communication by the SEC
or its staff relating to the Funds, including requests by the SEC for
amendments to the Registration Statement or Prospectus;
(ii) in the event of the issuance by the SEC of any stop-order
suspending the effectiveness of the Registration Statement then in effect
or the initiation of any proceeding for that purpose;
(iii) of the happening of any event which makes untrue any statement
of a material fact made in the Prospectus or which requires the making of a
change in such Prospectus in order to make the statements therein not
misleading; and
(iv) of all actions that may relate to the continued availability of
the Shares for sale by the Funds, taken by the SEC with respect to any
amendments to any Registration Statement or Prospectus which may from time
to time be filed with the SEC.
E. The Corporation shall file such reports and other documents as may be
required under applicable federal and state laws and regulations. The
Corporation shall notify the Distributor in writing of the states in which the
Shares may be sold and notify the Distributor in writing of any changes to such
information.
F. The Corporation agrees to file from time to time such amendments to its
Registration Statement and Prospectus as may be necessary in order that its
Registration Statement and Prospectus will not contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
G. The Corporation shall fully cooperate in the efforts of the Distributor
to sell and arrange for the sale of Shares and shall make available to the
Distributor a statement of each computation of net asset value. In addition, the
Corporation shall provide to the Distributor from time to time
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copies of all information, financial statements, and other papers that the
Distributor may reasonably request for use in connection with the distribution
of Shares, including, without limitation, copies of any audited financial
statements prepared for the Corporation by its independent public accountants
and such reasonable number of copies of the most current Prospectus, statement
of additional information and annual and interim reports to shareholders as the
Distributor may request. The Corporation shall forward a copy of any SEC
filings, including the Registration Statement, to the Distributor if each such
filing is separately requested by the Distributor within one business day of any
such filings. The Corporation represents that it will not use or authorize the
use of any advertising or sales material unless and until such materials have
been approved and authorized for use by the Distributor.
H. The Corporation represents and warrants that its Registration Statement
and any advertisements and sales literature of the Corporation (excluding
statements relating to the Distributor and the services it provides that are
based upon written information furnished by the Distributor expressly for
inclusion therein) shall not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and that all statements or
information furnished to the Distributor pursuant to this Agreement shall be
true and correct in all material respects.
4. Anti-Money Laundering Procedures
A. The parties acknowledge that compliance with the anti-money laundering
programs, when fully and properly implemented and enforced by each party, are
critical to preventing the Company from being used for money laundering purposes
or for the financing of terrorist activities, and that the Company is primarily
relying on service providers, including the Distributor, to implement procedures
consistent with such service provider's contractual obligations that are
reasonably designed to detect and deter money laundering activity that may occur
within the Company.
B. In accordance with the above representations, the Distributor agrees to
maintain, and shall cause any agents or representatives of the Distributor used
to perform services under the Agreement to maintain, an anti-money laundering
program that complies with applicable AML Rules ("AML Program").
C. The Distributor acknowledges that the Company will not have access to
detailed information about the beneficial owners of the Company's shares.
Accordingly, to the extent that the Distributor knows or reasonably should know
of: (i) suspected money laundering activity in connection with the Company; (ii)
violations of the AML Rules in connection with the Company; (iii) any reports
received by the Distributor from any federal regulator(s) pertaining to material
non-compliance with the AML Rules in connection with the Company; and (iv) any
action taken in response to (i) through (iii), the Distributor agrees to provide
prompt written notification to the Company.
D. Each party agrees not disclose to any third party, other than a federal
law enforcement or regulatory agency, or the Company's investment manager, any
information pertaining to suspected money-laundering activity that either party
may provide to the other party or to any federal or state law enforcement or
regulatory agency.
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5. Compensation
As compensation for the services performed and the expenses assumed by the
Distributor under this Agreement, Distributor shall be entitled to the fees and
expenses set forth in Exhibit B hereto which are payable promptly after the last
day of each month. Such fees and expenses shall be paid to Distributor by the
Corporation from Rule 12b-1 fees payable by the appropriate Fund or, if Rule
12b-1 fees are not sufficient to pay such fees and expenses, or if the Rule
12b-1 plan is discontinued, or if the Adviser otherwise determines that Rule
12b-1 fees shall not, in whole or in part, be used to pay the Distributor, the
Adviser shall be responsible for the payment of the amount of such fees not
covered by Rule 12b-1 payments.
6. Expenses
A. The Corporation shall bear all costs and expenses in connection with
registration of the Shares with the SEC and related compliance with state
securities laws, as well as all costs and expenses in connection with the
offering of the Shares and communications with shareholders of its Funds,
including but not limited to (i) fees and disbursements of its counsel and
independent public accountants; (ii) costs and expenses of the preparation,
filing, printing and mailing of Registration Statements and Prospectuses and
amendments thereto, as well as related advertising and sales literature, (iii)
costs and expenses of the preparation, printing and mailing of annual and
interim reports, proxy materials and other communications to shareholders of the
Funds; and (iv) fees required in connection with the offer and sale of Shares in
such jurisdictions as shall be selected by the Corporation pursuant to Section
3(E) hereof.
B. The Distributor shall bear the expenses of registration or qualification
of the Distributor as a dealer or broker under federal or state laws and the
expenses of continuing such registration or qualification. The Distributor does
not assume responsibility for any expenses not expressly assumed hereunder.
7. Indemnification
A. The Corporation shall indemnify, defend and hold the Distributor, and
each of its present or former members, officers, employees, representatives and
any person who controls or previously controlled the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all losses, claims, demands, liabilities, damages and expenses (including
the costs of investigating or defending any alleged losses, claims, demands,
liabilities, damages or expenses and any reasonable counsel fees incurred in
connection therewith) (hereinafter, collectively, "Losses") which the
Distributor, each of its present and former members, officers, employees or
representatives or any such controlling person, may incur under the 1933 Act,
the 1934 Act, any other statute (including Blue Sky laws) or any rule or
regulation thereunder, or under common law or otherwise, arising out of or based
upon: the Corporation's failure to adhere to its obligations hereunder; or, in
connection with the Corporation's performance of its duties hereunder, based
upon the Corporation's violation or alleged violation of any rule of the NASD,
SEC, or any jurisdiction wherein Shares of the Funds are sold; or arising out of
or based upon the Corporation's willful misfeasance, bad faith or negligence in
the performance of its duties hereunder; any untrue statement, or alleged untrue
statement of a material fact contained in the Registration Statement or any
Prospectus, as from time to time amended or supplemented, or in any annual or
interim report to shareholders, or in any advertisement or sales literature, or
arising out of
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or based upon any omission, or alleged omission, to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Corporation's obligation to
indemnify the Distributor and any of the foregoing indemnitees shall not be
deemed to cover any Losses arising out of any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
Prospectus, annual or interim report, or any such advertisement or sales
literature in reliance upon and in conformity with information relating to the
Distributor and furnished to the Corporation or its counsel by the Distributor
in writing and acknowledging the purpose of its use for the purpose of, and used
in, the preparation thereof. The Corporation's agreement to indemnify the
Distributor, and any of the foregoing indemnitees, as the case may be, with
respect to any action, is expressly conditioned upon the Corporation being
notified of such action or claim of loss brought against the Distributor, or any
of the foregoing indemnitees, within a reasonable time after the summons or
other first legal process or other communication giving information of the
nature of the claim shall have been served upon the Distributor, or such person,
unless the failure to give notice does not prejudice the Corporation. Such
notification shall be given by letter or by telegram addressed to the
Corporation's President, but the failure so to notify the Corporation of any
such action shall not relieve the Corporation from any liability which the
Corporation may have to the person against whom such action is brought by reason
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of the Corporation's indemnity agreement
contained in this Section 6(A).
B. The Corporation shall be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such Losses, but if the Corporation elects to assume the defense,
such defense shall be conducted by counsel chosen by the Corporation and
approved by the Distributor, which approval shall not be unreasonably withheld.
In the event the Corporation elects to assume the defense of any such suit and
retain such counsel, the indemnified defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by them. If the
Corporation does not elect to assume the defense of any such suit, or in case
the Distributor does not, in the exercise of reasonable judgment, approve of
counsel chosen by the Corporation or, if under prevailing law or legal codes of
ethics, the same counsel cannot effectively represent the interests of both the
Corporation and the Distributor, and each of its present or former members,
officers, employees, representatives or any controlling person, the Corporation
will reimburse the indemnified person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
Distributor and them. The Corporation's indemnification agreement contained in
Sections 6(A) and 6(B) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Distributor, and
each of its present or former members, officers, employees, representatives or
any controlling person, and shall survive the delivery of any Shares and the
termination of this Agreement. This agreement of indemnity will inure
exclusively to the Distributor's benefit, to the benefit of each of its present
or former members, officers, employees or representatives or to the benefit of
any controlling persons and their successors. The Corporation agrees promptly to
notify the Distributor of the commencement of any litigation or proceedings
against the Corporation or any of its officers or directors in connection with
the issue and sale of any of the Shares.
C. The Corporation shall advance attorney's fees and other expenses
incurred by any person in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this Section 6 to the
maximum extent permissible under applicable law.
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D. The Distributor shall indemnify, defend and hold the Corporation, and
each of its present or former directors, officers, employees, representatives,
and any person who controls or previously controlled the Corporation within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all Losses which the Corporation, and each of its present or former
directors, officers, employees, representatives, or any such controlling person,
may incur under the 1933 Act, the 1934 Act, any other statute (including Blue
Sky laws) or any rule or regulation thereunder, or under common law or
otherwise, arising out of or based upon: Distributor's failure to adhere to its
obligations hereunder; or, in connection with Distributor's performance of its
duties hereunder, based upon Distributor's violation or alleged violation of any
rule of the NASD, SEC, or any jurisdiction wherein Shares of the Funds are sold;
or arising out of or based upon the Distributor's willful misfeasance, bad faith
or negligence in the performance of its duties hereunder; or arising out of or
based upon any untrue, or alleged untrue, statement of a material fact contained
in the Corporation's Registration Statement or any Prospectus, as from time to
time amended or supplemented, or arising out of or based upon the omission, or
alleged omission, to state therein a material fact required to be stated therein
or necessary to make the statement not misleading, but only if such statement or
omission was made in reliance upon, and in conformity with, written information
relating to the Distributor and furnished to the Corporation or its counsel by
the Distributor for the purpose of, and used in, the preparation thereof. The
Distributor's agreement to indemnify the Corporation, and any of the foregoing
indemnitees, is expressly conditioned upon the Distributor's being notified of
any action or claim of loss brought against the Corporation, and any of the
foregoing indemnitees, such notification to be given by letter or telegram
addressed to the Distributor's President, within a reasonable time after the
summons or other first legal process or other communication giving information
of the nature of the claim shall have been served upon the Corporation or such
person unless the failure to give notice does not prejudice the Distributor, but
the failure so to notify the Distributor of any such action shall not relieve
the Distributor from any liability which the Distributor may have to the person
against whom such action is brought by reason of any such untrue, or alleged
untrue, statement or omission, otherwise than on account of the Distributor's
indemnity agreement contained in this Section 6(D).
E. The Distributor shall be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such Losses, but if the Distributor elects to assume the defense,
such defense shall be conducted by counsel chosen by the Distributor and
approved by the Corporation, which approval shall not be unreasonably withheld.
In the event the Distributor elects to assume the defense of any such suit and
retain such counsel, the indemnified defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by them. If the
Distributor does not elect to assume the defense of any such suit, or in case
the Corporation does not, in the exercise of reasonable judgment, approve of
counsel chosen by the Distributor or, if under prevailing law or legal codes of
ethics, the same counsel cannot effectively represent the interests of both the
Corporation and the Distributor, and each of its present or former members,
officers, employees, representatives or any controlling person, the Distributor
will reimburse the indemnified person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
the Corporation and them. The Distributor's indemnification agreement contained
in Sections 6(D) and (E) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Corporation, and
each of its present or former directors, officers, employees, representatives or
any controlling person, and shall survive the delivery of any Shares and the
termination of this Agreement. This Agreement of indemnity will inure
exclusively to the Corporation's benefit, to the benefit of each of its present
or former directors, officers, employees or representatives or to the benefit of
any controlling persons
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and their successors. The Distributor agrees promptly to notify the Corporation
of the commencement of any litigation or proceedings against the Distributor or
any of its officers or directors in connection with the issue and sale of any of
the Shares.
F. No person shall be obligated to provide indemnification under this
Section 6 if such indemnification would be impermissible under the 1940 Act, the
1933 Act, the 1934 Act or the rules of the NASD; provided, however, in such
event indemnification shall be provided under this Section 6 to the maximum
extent so permissible.
8. Obligations of the Corporation
This Agreement is executed by and on behalf of the Corporation and the
obligations of the Corporation hereunder are not binding upon any of the
directors, officers or shareholders of the Corporation individually but are
binding only upon the Corporation and with respect to the Funds to which such
obligations pertain.
9. Governing Law
This Agreement shall be construed in accordance with the laws of the State
of Delaware, without regard to conflicts of law principles. To the extent that
the applicable laws of the State of Delaware, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter shall
control, and nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the SEC thereunder.
10. Duration and Termination
A. This Agreement shall become effective with respect to each Fund listed
on Exhibit A hereof as of the date hereof and, with respect to each Fund not in
existence on that date, on the date an amendment to Exhibit A to this Agreement
relating to that Fund is executed. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for one year from the date hereof.
Thereafter, if not terminated, this Agreement shall continue automatically in
effect as to each Fund for successive one-year periods, provided such
continuance is specifically approved at least annually by (i) the Corporation's
Board or (ii) the vote of a "majority of the outstanding voting securities" of a
Fund, and provided that in either event the continuance is also approved by a
majority of the Corporation's Board who are not parties to this Agreement or
interested persons of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
B. Notwithstanding the foregoing, this Agreement may be terminated, without
the payment of any penalty, with respect to a particular Fund (i) through a
failure to renew this Agreement at the end of a term, (ii) upon mutual consent
of the parties, or (iii) upon no less than 60 days written notice, by either the
Corporation through a vote of a majority of the members of the Board or by vote
of a "majority of the outstanding voting securities" of a Fund, or by the
Distributor. The terms of this Agreement shall not be waived, altered, modified,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the Distributor and the Corporation. If required under the 1940 Act,
any such amendment must be approved by the Corporation's Board, including a
majority of the Corporation's Board who are not parties to this Agreement or
interested persons of any party to this Agreement, by vote cast in person at a
meeting for the purpose of voting
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on such amendment. In the event that such amendment affects the Adviser, the
written instrument shall also be signed by the Adviser. This Agreement will
automatically terminate in the event of its assignment.
11. Confidentiality
The Distributor agrees on behalf of its employees to treat all records
relative to the Corporation and prior, present or potential shareholders of the
Corporation as confidential, and not to use such records for any purpose other
than performance of the Distributor's responsibilities and duties under this
Agreement, except after notification and prior approval by the Corporation,
which approval shall not be unreasonably withheld, and may not be withheld where
the Distributor may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, when subject to governmental or regulatory audit or investigation,
or when so requested by the Corporation. Records and information which have
become known to the public through no wrongful act of the Distributor or any of
its employees, agents or representatives shall not be subject to this paragraph.
12. Miscellaneous
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. Any provision of this Agreement which may
be determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person," and "assignment" shall have the same meaning as such terms
have in the 1940 Act. In accordance with Section 248.11 of Regulation S-P ( 17
CFR 248.1-248.30), the Distributor will not directly or indirectly through an
affiliate, disclose any non-public personal information, as defined in
Regulation S-P, received from the Corporation or any Fund regarding any
shareholder, to any person that is not affiliated with the Corporation or any
Fund or with the Distributor and, provided that, any such information disclosed
to an affiliate of the Distributor shall be under the same limitations on
non-disclosure.
13. Notices
Any notice required or permitted to be given by any party to the others
shall be in writing and shall be deemed to have been given on the date delivered
personally or by courier service or 3 days after sent by registered or certified
mail, postage prepaid, return receipt requested or on the date sent and
confirmed received by facsimile transmission to the other parties' respective
addresses set forth below:
Notice to the Distributor shall be sent to:
Quasar Distributors, LLC
Attn: President
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000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Notice to the Corporation and the Adviser shall be sent to:
Jacob Internet Fund Inc.
Jacob Asset Management of New York, LLC
00 Xxxx 00xx Xxxxxx
Xxxxx 000X
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx
14. Counterparts
This agreement may be signed in multiple counterparts, which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
Jacob Internet Fund Inc. Quasar Distributors, LLC
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------- ----------------------
Xxxx Xxxxx Xxxxx X. Xxxxxxxxx
Title: Chairman Title: President
Jacob Asset Management of New York LLC (solely in acknowledgement of its
obligation under Part 5 of the Agreement)
By: /s/ Xxxx Xxxxx
----------------------
Xxxx Xxxxx
Title: Chairman
-11-
Exhibit A
to the
Distribution Agreement
Fund Names
Separate Series of Jacob Internet Fund Inc.
Name of Series Effective Date
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Jacob Internet Fund Inc. Common Stock 11/1/03
Jacob Internet Fund Inc. Quasar Distributors, LLC
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxx Xxxxx Xxxxx X. Xxxxxxxxx
Title: Chairman Title: President
Exhibit B
to the
Distribution Agreement
Fee Schedule
The total amount payable annually under the Distribution Agreement shall be
calculated at the annual rate of .10 of 1% (ten basis points) of the Fund's
average daily net assets (the "Total Distribution Fee"). The Total Distribution
Fee shall be allocated in the following manner:
1. First, from the Total Distribution Fee, the Distributor will receive a fee
for Basic Distribution Services plus Out of Pocket Expenses as follows:
Basic Distribution Services
o Fee at the annual rate of .01 of 1% (one basis point) of the
Fund's average daily net assets, payable monthly in arrears;
subject to a minimum annual fee, as follows: first class or
series -- $15,000; each additional class or series -- $3,000
Out-of-Pocket Expenses
Reasonable out-of-pocket expenses incurred by the Distributor in
connection with activities primarily intended to result in the sale of
Shares, including, without limitation:
o typesetting, printing and distribution of Prospectuses and
shareholder reports
o production, printing, distribution and placement of
advertising and sales literature and materials
o engagement of designers, free-xxxxx writers and public
relations firms
o long-distance telephone lines, services and charges
o postage
o overnight delivery charges
o NASD filing fees
o record retention
2. Thereafter, from any remaining amount of the Total Distribution Fee, the
Corporation will pay for or reimburse the Distributor for Advertising
Compliance Review/NASDR Filing and Licensing of Adviser's Staff as follows:
Advertising Compliance Review/NASDR Filings
o $150 per job for the first 10 pages (minutes if tape or
video); $20 per page (minutes if audio or video) thereafter.
o Non-NASDR filed materials, e.g. Internal Use Only materials:
o $100 per job for the first 10 pages (minutes if audio or
video); $20 per page (minutes if audio or video) thereafter.
o NASDR Expedited Service for 3 day turnaround:
o $1000 for the first 10 pages (minutes if audio or video) $25
per page (minutes if audio or video) thereafter. (Comments
are faxed. NASDR may not accept expedited request.)
Licensing of Adviser's Staff (if desired)
o $900 per year per Series 6 or 7 representative
o All associated NASD and State fees for Registered
Representatives, including license and renewal fees.
o travel, lodging and meals
3. Finally, if any amounts remain from the Total Distribution Fee, the
Distributor will use such amounts to satisfy distribution costs in the
manner directed by the Corporation or the Adviser.
Jacob Internet Fund Inc. Quasar Distributors, LLC
By: /s/Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxx Xxxxx Xxxxx X. Xxxxxxxxx
Title: Chairman Title: President
