FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into as of this 27th day of August,
1999, by and between The Jacob Internet Fund, a Maryland Corporation organized
under the laws of the State of Maryland (hereinafter referred to as the
"Company") on behalf of any of its series as described in Part IV of this
Agreement (each such series is hereafter referred to as a "Fund" and,
collectively as the "Funds"), and Firstar Mutual Fund Services, LLC, a limited
liability company organized under the laws of the State of Wisconsin
(hereinafter referred to as "Firstar").
WHEREAS, The Company is a open-ended management investment company
which is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Firstar is in the business of providing fund administration
services for the benefit of its customers.
NOW, THEREFORE, the Company and Firstar do mutually promise and agree
as follows:
I. Appointment of Administrator
The Company hereby appoints Firstar as Administrator of the Funds on
the terms and conditions set forth in this Agreement, and Firstar
hereby accepts such appointment and agrees to perform the services
and duties set forth in this Agreement in consideration of the
compensation provided for herein.
II. Duties and Responsibilities of Firstar
A. General Fund Management
1. Act as liaison among all fund service providers.
2. Coordinate corporate formalities and Board communication
by:
a. preparing and distributing meeting agendas and
board materials including board resolutions
and various financial, administrative and
regulatory reports;
b. attending all regular or special board
meetings, preparing and distributing
minutes of such meetings and
maintaining the corporate records and
minute book for the Company;
c. updating directors' and officers' biographical
information and questionnaires; and
d. evaluating independent auditor.
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3. Audits
a. Prepare appropriate schedules and assist
independent auditors.
b. Provide information to SEC and facilitate
audit process.
c. Provide office facilities for auditors and
SEC staff as appropriate.
4. Assist in overall operations of the Company, including
the provision of office facilities, executive and
administrative services and Firstar personnel to serve as
officers of the Company to facilitate Company operations,
all at Firstar's expense with the exception of the costs
incurred when attending Board of Companyee meetings; and
to provide stationary and office supplies at the
Company's expense.
5. Create and maintain operations and compliance
calendars and/or a compliance manual for the
Company, detailing schedules for the various
responsibilities of Firstar.
6. Shareholder Communications. Coordinate printing
and distribution of prospectuses, statements of
additional information, stickers (supplements) to
prospectuses or statements of additional
information, annual and semi-annual shareholder
reports and proxy statements.
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with 1940 Act
requirements, including:
1) Asset diversification tests;
2) Total return and yield calculations;
3) Code of ethics for independent,
disinterested directors;
4) Compliance with fidelity bond coverage require-
ments of Rule 17g-1 under the 1940 Act; and
5) Compliance with the NASD sales charge rule,
including the calculation and monitoring of
the sales charge cap and remaining amount for
asset-based sales charges.
b. Periodically monitor and report at Fund's quarterly
board meeting or more frequently as required,
compliance with the policies investment limitations
and reinvestment restrictions of each Fund as set
forth in its prospectus and statement of additional
information.
2. Blue Sky Compliance
a. Prepare and file with the appropriate state
securities authorities any and all required
compliance or notice filings relating to the sales,
qualification or registration of the securities of
each Fund so as to enable
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each Fund to make a continuous offering of its
shares in the fifty states, Puerto Rico, U.S. Virgin
Islands, and Guam ("Blue Sky Jurisdictions").
b. Monitor sales and qualification status and make
appropriate renewal filings in each Blue Sky
Jurisdiction.
c. File prospectuses, statements of additional
information or proxy statements for the Company in
Blue Sky Jurisdictions as requested by the Company
or such jurisdictions.
3. SEC Registration and Reporting
a. Assist in the preparation and filing of
post-effective amendments to the Company's
Registration Statement on Form N-1A to reflect the
addition or deletion of Funds, general amendments,
or annual updates including the preparation of
Financial Data Schedules; and prepare and file
supplements ("stickers") to any prospectus or
statement of additional information for a Fund.
b. Prepare and file annual and semi-annual reports to
shareholders as required under the 1940 Act, along
with annual and semiannual reports on Form N-SAR
(which shall be series and class-specific, as
appropriate).
c. Assist in the preparation and filing of proxy
statements, as requested by the Company (matters to
be voted on may be class-specific), prepare minutes
of shareholder meetings, and record ballot results
and interface with proxy solicitation companies as
required.
d. Prepare and file documents required to report and
calculate Federal securities registration fees (such
as notices on Form 24F-2).
e. File fidelity bond and any joint insurance
agreements as required by Rule 17g-1 under the 1940
Act.
f. Provide for the XXXXX-ization or other appropriate
preparation of all documents described above which
must be filed electronically with the SEC.
4. IRS Compliance
a. Periodically monitor the Company's status as a
regulated investment company under Subchapter M of
the Internal Revenue Code, as amended, through
review of the following:
1) Asset diversification requirements;
2) Qualifying income requirements; and
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3) Distribution requirements.
b. Monitor short testing as required.
c. Calculate required distributions as required
(including excise tax distributions).
C. Financial Reporting
1. Prepare monthly expense reports (by series and class
where appropriate) including expense figures and
accruals, monitoring of expense caps or reimbursements
and calculation of advisory fees and 12b-1 accruals or
payments; and calculate expense ratios for quarterly,
semiannual or annual periods.
2. Prepare unaudited financial statements (by series and
class where appropriate) for use in shareholder reports
or prospectuses and statements of additional information.
3. Prepare other monthly operational reports as required
including:
a. Sales figures (including shares sold, redeemed and
reinvested, changes in share price in net sales and
numbers of shareholders);
b. Performance information (including total return or
yield for the month, quarter, year-to-date, fiscal
year or average annual one-, five- or ten-year
periods); and
c. Portfolio information (including turnover, top ten
holdings, book gains/losses per share; net
income/book income per share; basis).
4. Provide financial data required by Fund prospectus and
statements of additional information.
5. Prepare financial reports for shareholders, the board,
the SEC, and independent auditors.
6. Supervise the Company's Custodian and Fund Accounts in
the maintenance of each Funds general ledger and in the
preparation of each Fund's financial statements
including oversight of expense accruals and payments, of
the determination of net asset value of each Fund and of
the Fund's shares, and of the declaration and payment of
dividends and other distributions to shareholders.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal
and state tax returns including forms 1120/8613 with any
necessary schedules.
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2. Prepare state income breakdowns where relevant.
3. File 1099 Miscellaneous for payments to directors and
other service providers.
4. Monitor wash losses.
5. Calculate eligible dividend income for corporate
shareholders.
III. Compensation
The Company agrees to pay Firstar for performance of the duties
listed in this Agreement and the fees and out-of-pocket expenses as
set forth in the attached Schedule A.
These fees may be changed from time to time, subject to mutual
written Agreement between the Company and Firstar.
The Company agrees to pay all fees and reimbursable expenses within
ten (10) business days following the mailing of the billing notice.
IV. Additional Funds
In the event that the Company establishes one or more Funds with
respect to which it desires to have Firstar render fund
administration services, under the terms hereof, it shall so notify
Firstar in writing, and if Firstar agrees in writing to provide such
services, such Funds will be subject to the terms and conditions of
this Agreement, and shall be maintained and accounted for by Firstar
on a discrete basis. The Funds currently covered by this Agreement
are: Jacob Internet Fund.
V. Performance of Services; Limitation of Liability
A. Firstar shall exercise reasonable care in the performance of
its duties under this Agreement. Firstar shall not be liable
for any loss suffered by the Fund in connection with matters
to which this Agreement relates, including losses resulting
from mechanical breakdowns or the failure of communication or
power supplies beyond Firstar's control, except a loss
resulting from Firstar's refusal or failure to comply with the
terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its
duties under this Agreement. Notwithstanding any other
provision of this Agreement, the Fund shall indemnify and hold
harmless Firstar from and against any and all claims, demands,
losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which Firstar may sustain or incur
or which may be asserted against Firstar by any person arising
out of any action taken or omitted to be taken by it in
performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or
oral instruction provided to Firstar by any duly authorized
officer of the Company, such duly authorized officer to be
included in a list of authorized officers furnished to Firstar
and as amended from time to time in writing by resolution of
the Board of Companyees of the Company.
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In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, Firstar
shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues
beyond Firstar's control. Firstar will make every reasonable
effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of
Firstar. Firstar agrees that it shall, at all times, have
contingency plans, that are comparable to those employed
within the financial services industry, with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Company shall
be entitled to inspect Firstar's premises and operating
capabilities at any time during regular business hours of
Firstar, upon reasonable notice to Firstar.
Regardless of the above, Firstar reserves the right to
reprocess and correct administrative errors at its own
expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
Company may be asked to indemnify or hold Firstar harmless,
the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it
is further understood that Firstar will use all reasonable
care to notify the Company promptly concerning any situation
which presents or appears likely to present the probability of
such a claim for indemnification against the Company. The
Company shall have the option to defend Firstar against any
claim which may be the subject of this indemnification. In the
event that the Company so elects, it will so notify Firstar
and thereupon the Company shall take over complete defense of
the claim, and Firstar shall in such situation initiate no
further legal or other expenses for which it shall seek
indemnification under this section. Firstar shall in no case
confess any claim or make any compromise in any case in which
the Company will be asked to indemnify Firstar except with the
Company's prior written consent.
C. Firstar shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of
any and every nature (including reasonable attorneys' fees)
which may be asserted against the Company by any person
arising out of any action taken or omitted to be taken by
Firstar as a result of Firstar's refusal or failure to comply
with the terms of this Agreement, its bad faith, negligence,
or willful misconduct.
VI. Confidentiality
Firstar shall handle, in confidence, all information relating to the
Company's business which is received by Firstar during the course of
rendering any service hereunder.
VII. Data Necessary to Perform Service
The Company or its agent, which may be Firstar, shall furnish to
Firstar the data necessary to perform the services described herein
at times and in such form as mutually agreed upon.
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VIII. Terms of Agreement
This Agreement shall become effective on and, unless sooner
terminated as provided herein, shall continue automatically in effect
for successive two year periods, provided that the continuance of the
Agreement is approved by a majority of the Directors of the Company.
The Agreement may also be terminated by either party upon giving
ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties and will
terminate automatically on its assignment unless the parties hereto
consent in writing.
IX. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any
of Firstar's duties or responsibilities hereunder is designated by
the Company by written notice to Firstar, Firstar will promptly, upon
such termination and at the expense of the Company, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by Firstar under this Agreement in a form
reasonably acceptable to the Company (if such form differs from the
form in which Firstar has maintained, the Company shall pay any
expenses associated with transferring the data to such form), and
will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from Firstar's personnel in the
establishment of books, records, and other data by such successor.
X. Choice of Law
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin.
XI. 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 Firstar shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Jacob Internet Fund
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XII. Records
Firstar shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Company and as required by the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder.
Firstar agrees that all such records prepared or maintained by
Firstar relating to the services to be performed by Firstar hereunder
are the property of the Company and will be preserved, maintained,
and made available with such
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section and rules of the 1940 Act and will be promptly surrendered to
the Company on and in accordance with its request.
JACOB INTERNET FUND FIRSTAR MUTUAL FUND SERVICES, LLC
By: By:
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Print: Print:
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Title: Title:
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Date: Date:
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Attest: Attest:
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Schedule A
Fund Administration and Compliance
Annual Fee Schedule
o Minimum annual fee per Fund: $35,000
o 7 basis points (.0007) on the first $200,000,000 of average daily net assets
o 5 basis points (.0005) on the next $500,000,000 of average daily net assets
o 4 basis points (.0004) on the balance
o Out-of-Pocket expenses, including, but not limited to:
o Postage
o Stationary
o Programming
o Proxies
o Retention of Records
o Special reports
o Federal and state regulatory filing fees
o Certain insurance premiums
o All other out-of-pocket expenses
o Expenses from Board of Companyees meetings
o Auditing & legal expenses
o Fees are billed monthly
130274v.02
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