INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made on July 12, 2002, by and between Internet Growth Fund, Inc.,
a Maryland corporation (the "Fund") and CEF Advisers, Inc., a Delaware
corporation (the "Investment Manager").
WHEREAS the Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end management investment company; and
WHEREAS, the Fund desires to retain the Investment Manager to furnish
certain investment advisory and portfolio management services to the Fund, and
the Investment Manager desires to furnish such services;
NOW THEREFORE, 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 hereby agreed between the parties hereto as
follows:
1. The Fund hereby employs the Investment Manager to manage the investment and
reinvestment of its assets, including the regular furnishing of advice with
respect to the Fund's portfolio transactions subject at all times to the control
and oversight of the Fund's Board of Directors, for the period and on the terms
set forth in this Agreement. The Investment Manager hereby accepts such
employment and agrees during such period to render the services and to assume
the obligations herein set forth, for the compensation herein provided. The
Investment Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way, or otherwise be deemed an
agent of the Fund. The Investment Manager may enter into a contract
("Subadvisory Agreement") with an investment adviser in which the Investment
Manager delegates to such investment adviser any or all of its duties specified
in this Paragraph 1, provided that such Subadvisory Agreement meets all
requirements of the 1940 Act and rules thereunder.
2. The Fund assumes and shall pay all the expenses required for the conduct of
its business including, but not limited to, salaries of administrative and
clerical personnel, brokerage commissions, taxes, insurance, fees of the
transfer agent, custodian, legal counsel and auditors, association fees, costs
of filing, printing and mailing proxies, reports and notices to shareholders,
preparing, filing and printing the prospectus and statement of additional
information, payment of dividends, costs of stock certificates, costs of
shareholders meetings, fees of the independent directors, necessary office space
rental, all expenses relating to the registration or qualification of shares of
the Fund under applicable Blue Sky laws and reasonable fees and expenses of
counsel in connection with such registration and qualification and such
non-recurring expenses as may arise, including, without limitation, actions,
suits or proceedings affecting the Fund and the legal obligation which the Fund
may have to indemnify its officers and directors with respect thereto.
3. If requested by the Fund's Board of Directors, the Investment Manager may
provide other services to the Fund such as, without limitation, the functions of
billing, accounting, certain shareholder communications and services,
administering state and Federal registrations, filings and controls and other
administrative services. Any services so requested and performed will be for the
account of the Fund and the costs of the Investment Manager in rendering such
services shall be reimbursed by the Fund, subject to examination by those
directors of the Fund who are not interested persons of the Investment Manager
or any affiliate thereof.
4. The services of the Investment Manager are not to be deemed exclusive, and
the Investment Manager shall be free to render similar services to others in
addition to the Fund so long as its services hereunder are not impaired thereby.
5. The Investment Manager shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and regulations, including
but not limited to records required by Section 31(a) of the 1940 Act and the
rules thereunder, as the same may be amended from time to time, pertaining to
the investment management services performed by it hereunder and not otherwise
created and maintained by another party pursuant to a written contract with the
Fund. Where applicable, such records shall be maintained by the Investment
Manager for the periods and in the places required by Rule 31a-2 under the 1940
Act. The books and records pertaining to the Fund which are in the possession of
the Investment Manager shall be the property of the Fund. The Fund, or the
Fund's authorized representatives, shall have access to such books and records
at all times during the Investment Manager's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by the Investment Manager to the Fund or the Fund's authorized
representatives.
6. The Fund will pay the Investment Manager a fee for its services (the
"Advisory Fee") at the annual rate of 1.00% of the Fund's average daily net
assets. The Advisory Fee shall be accrued each calendar day during the term of
this Agreement and the sum of the daily fee accruals shall be paid monthly as
soon as practicable following the last day of each month. The daily fee accruals
will be computed by multiplying 1/365 by the annual rate and multiplying the
product by the net asset value of the Fund as determined in accordance with the
Fund's registration statement as of the close of business on the previous day on
which the American Stock Exchange (or such other exchange on which the Fund's
shares are principally traded) was open for business, or in such other manner as
the parties agree. The Investment Manager may from time to time and for such
periods as it deems appropriate reduce its compensation and/or assume expenses
of the Fund. If this Agreement becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be pro-rated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
7. The Investment Manager shall direct portfolio transactions to broker/dealers
for execution on terms and at rates which it believes, in good faith, to be
reasonable in view of the overall nature and quality of services provided by a
particular broker/dealer, including brokerage and research services and sales of
shares of the Fund and shares of other investment companies or series thereof
for which the Investment Manager or an affiliate thereof serves as investment
adviser. The Investment Manager may also allocate portfolio transactions to
broker/dealers that remit a portion of their commissions as a credit against
Fund expenses. With respect to brokerage and research services, the Investment
Manager may consider in the selection of broker/dealers brokerage or research
provided and payment may be made of a fee higher than that charged by another
broker/dealer which does not furnish brokerage or research services or which
furnishes brokerage or research services deemed to be of lesser value, so long
as the criteria of Section 28(e) of the Securities Exchange Act of 1934, as
amended, or other applicable laws are met. Although the Investment Manager may
direct portfolio transactions without necessarily obtaining the lowest price at
which such broker/dealer, or another, may be willing to do business, the
Investment Manager shall seek the best value for the Fund on each trade that
circumstances in the market place permit, including the value inherent in
on-going relationships with quality brokers. To the extent any such brokerage or
research services may be deemed to be additional compensation to the Investment
Manager from the Fund, it is authorized by this Agreement. The Investment
Manager may place brokerage for the Fund through an affiliate of the Investment
Manager, provided that: the Fund not deal with such affiliate in any transaction
in which such affiliate acts as principal; the commissions, fees or other
remuneration received by such affiliate be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time; and such brokerage be
undertaken in compliance with applicable law. The Investment Manager's fees
under this Agreement shall not be reduced by reason of any commissions, fees or
other remuneration received by such affiliate from the Fund.
8. A. This Agreement shall become effective upon the date hereinabove written
provided that this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of the Directors of the Fund who are not
parties to this Agreement, or interested persons of any such party and (ii) by
vote of a majority of the Fund's outstanding voting securities.
B. Unless sooner terminated as provided herein, this Agreement shall continue in
effect for two years from the above written date. Thereafter, if not terminated,
this Agreement shall continue automatically for successive periods of twelve
months each, provided that such continuance is specifically approved at least
annually (i) by a vote of a majority of the Directors of the Fund who are not
parties to this Agreement, or interested persons of any such party and (ii) by
the Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund.
C. This Agreement may be terminated without penalty at any time either by vote
of the Board of Directors of the Fund or by vote of a majority of the Fund's
outstanding voting securities on 60 days' written notice to the Investment
Manager, or by the Investment Manager on 60 days' written notice to the Fund.
This Agreement shall immediately terminate in the event of its assignment.
9. The Investment Manager shall not be liable to the Fund or any shareholder of
the Fund for any error of judgment or mistake of law or for any loss suffered by
the Fund or the Fund's shareholders in connection with the matters to which this
Agreement relates, but nothing herein contained shall be construed to protect
the Investment Manager against any liability to the Fund or the Fund's
shareholders by reason of willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by reason of its reckless
disregard of obligations and duties under this Agreement.
10. As used in this Agreement, the terms "interested person," "assignment," and
"majority of the outstanding voting securities" shall have the meanings provided
therefor in the 1940 Act, and the rules and regulations thereunder.
11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement, with respect to the subject hereof whether
oral or written. If any provision of this Agreement shall be held or made
invalid by a court or regulatory agency, decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
12. This Agreement shall be construed in accordance with and governed by the
laws of the State of New York, provided, however, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or regulation
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
ATTEST: INTERNET GROWTH FUND, INC.
/s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------ ------------------------------------
ATTEST: CEF ADVISERS, INC.
/s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------ ------------------------------------
