Exhibit No. EX-99.h.1
FUND ADMINISTRATION SERVICING AGREEMENT
This Agreement is made and entered into as of this 27th day of August,
1999, by and between 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.
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 Directors 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 requirements 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 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
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.
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 Directors of the Company.
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.
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 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
Sign: /s/ Xxxx Xxxxx Sign: /s/ Xxxx Rock
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Print: Xxxx Xxxxx Print: Xxxx Rock
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Title: Chairman Title: Sr. V.P.
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Date: 7-13-99 Date: 7-13-99
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Attest: /s/ Xxxxxxx Xxxxxx Attest:
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