Exhibit (g)
LCM INTERNET GROWTH FUND, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is entered into as of the 15th day
of October, 1999, between LCM Internet Growth Fund,
Inc., a Maryland corporation (the "Corporation") and
LCM Capital Management, Inc., an Illinois corporation
(the "Adviser").
W I T N E S S E T H
WHEREAS, the Corporation is a closed-end
investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
WHEREAS, the Adviser is a registered investment
adviser, formed to render investment advisory services.
WHEREAS, in managing the Corporation's assets, as
well as in the conduct of certain of its affairs, the
Corporation seeks the benefit of the Adviser's services
and its assistance in performing certain managerial
functions. The Adviser desires to furnish such
services and to perform the functions assigned to it
under this Agreement for the consideration provided for
herein.
NOW THEREFORE, the parties mutually agree as
follows:
1. Appointment of the Adviser. The Corporation
hereby appoints the Adviser as its investment adviser,
and the Adviser accepts the appointment. Subject to
the direction of the Board of Directors (the
"Directors") of the Corporation, the Adviser shall
manage the investment and reinvestment of the
Corporation's assets in accordance with the
Corporation's investment objective and policies and
limitations, for the period and upon the terms herein
set forth. The investment of funds shall also be
subject to all applicable restrictions of the Articles
of Incorporation and By-Laws of the Corporation as may
from time to time be in force.
2. Expenses Paid by the Adviser. In addition to the
expenses which the Adviser may incur in the performance
of its responsibilities under this Agreement, and the
expenses which it may expressly undertake to incur and
pay, the Adviser shall incur and pay the following
expenses:
(a) All reasonable compensation, fees and related
expenses of the Corporation's officers and its
Directors, except for such Directors who are not
interested persons (as that term is defined in Section
2(a)(19) of the ▇▇▇▇ ▇▇▇) of the Adviser (except as
provided in subsection (c), below);
(b) All expenses related to the rental and
maintenance of the principal offices of the
Corporation; and
(c) All organizational expenses of the
Corporation (including all reasonable compensation,
fees and related expenses of the Corporation's
interested and disinterested Directors incurred in
connection with the Corporation's organizational
meeting) and all expenses incurred in connection with
the Corporation's initial public offering of common
stock.
3. Investment Advisory Functions. In its capacity as
investment adviser, the Adviser shall have the
following responsibilities:
(a) To furnish continuous advice and recommendations
to the Corporation, as to the acquisition, holding or
disposition of any or all of the securities or other
assets which the Corporation may own or contemplate
acquiring from time to time;
(b) To cause its officers to attend meetings and
furnish oral or written reports, as the Corporation may
reasonably require, in order to keep the Directors and
appropriate officers of the Corporation fully informed
as to the condition of the investments of the
Corporation, the investment recommendations of the
Adviser and the investment considerations which have
given rise to those recommendations; and
(c) To supervise the purchase and sale of securities
or other assets as directed by the appropriate officers
of the Corporation.
The services of the Adviser are not to be deemed
exclusive and the Adviser shall be free to render
similar services to others as long as its services for
others does not in any way hinder, preclude or prevent
the Adviser from performing its duties and obligations
under this Agreement. In the absence of willful
misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the
part of the Adviser, the Adviser shall not be subject
to liability to the Corporation or to any shareholder
for any act or omission in the course of, or in
connection with, rendering services hereunder or for
any losses that may be sustained in the purchase,
holding or sale of any security.
4. Obligations of the Corporation. The Corporation
shall have the following obligations under this
Agreement:
(a) To keep the Adviser continuously and fully
informed as to the composition of the Corporation's
investments and the nature of all of its assets and
liabilities;
(b) To furnish the Adviser with a copy of any
financial statement or report prepared for it by
certified or independent public accountants, and with
copies of any financial statements or reports made to
the Corporation's shareholders or to any governmental
body or securities exchange;
(c) To furnish the Adviser with any further materials
or information which the Adviser may reasonably request
to enable it to perform its functions under this
Agreement; and
(d) To compensate the Adviser for its services in
accordance with the provisions of paragraph 5 hereof.
5. Compensation. The Corporation will pay the
Adviser a fee for its services (the "Advisory Fee") at
the annual rate of 1.00% of the Corporation'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 Corporation
as determined in accordance with the Corporation'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 Corporation's
shares are principally traded) was open for business,
or in such other manner as the parties agree. The
Adviser may from time to time and for such periods as
it deems appropriate reduce its compensation and/or
assume expenses of the Corporation.
6. Expenses Paid by Corporation.
(a) Except as provided in this paragraph, nothing in
this Agreement shall be construed to impose upon the
Adviser the obligation to incur, pay or reimburse the
Corporation for any expenses not specifically assumed
by the Adviser under paragraph 2 above. Except as
noted in paragraph 2 above, the Corporation shall pay
or cause to be paid all of its expenses, including, but
not limited to, investment adviser fees; direct charges
relating to the purchase and sale of portfolio
securities; interest charges; fees and expenses of
attorneys and auditors; taxes and governmental fees;
costs of stock certificates and any other expenses
(including clerical expenses) of issuance, sale or
repurchase of the Corporation's shares of common stock;
expenses in connection with the Corporation's
Distribution Reinvestment Plan; membership fees in
trade associations; expenses of maintaining any stock
exchange listings of the Corporation's shares of common
stock; expenses of printing and distributing reports,
prospectuses, notices and proxy materials; expenses of
corporate data processing and related services;
shareholder record keeping and shareholder account
services (including salaries of shareholder relations
personnel); expenses of printing and filing reports and
other documents filed with governmental agencies;
expenses of shareholders' meetings; fees and
disbursements of the Corporation's administrator, fund
accountant, transfer agent and custodian; expenses of
disbursing dividends and distributions; fees, expenses
and out-of-pocket costs of Directors who are not
interested persons (as that phrase is defined in
Section 2(a)(19) of the ▇▇▇▇ ▇▇▇) of the Adviser;
insurance premiums and litigation costs; and
indemnification.
(b) If expenses borne by the Corporation in any fiscal
year (including the Adviser's fee, but excluding taxes,
interest, brokerage commissions and similar fees)
exceed those set forth in any statutory or regulatory
formula applicable to the Corporation, the Adviser will
reimburse the Corporation for any excess.
7. Brokerage Commissions. For purposes of this
Agreement, brokerage commissions paid by the
Corporation upon the purchase or sale of securities
shall be considered a cost of the securities of the
Corporation and shall be paid by the Corporation. The
Adviser is authorized and directed to place such
transactions only with brokers and dealers who render
satisfactory service in the execution of orders at the
most favorable prices and at reasonable commission
rates; provided, however, that the Adviser may pay a
broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of
commission another broker or dealer would have charged
for effecting that transaction, if the Adviser
determines in good faith that such amount of commission
was reasonable in relation to the value of the
brokerage and research services provided by such broker
or dealer viewed in terms of either that particular
transaction or the overall responsibilities of the
Adviser. In placing portfolio business with such
broker or dealers, the Adviser shall seek the best
execution of each transaction, and all such brokerage
placement shall be made in compliance with Section
28(e) of the Securities Exchange Act of 1934, as
amended, and other applicable state and federal laws.
Notwithstanding the foregoing, the Corporation shall
retain the right to direct the placement of all such
transactions, and the Directors may establish policies
or guidelines to be followed by the Adviser in placing
such transactions pursuant to the foregoing provisions.
8. Proprietary Rights. The Adviser has proprietary
rights in the Corporation's name. The Corporation
acknowledges and agrees that the Adviser may withdraw
the use of such name should it cease to act as the
investment adviser to the Corporation.
9. Termination. This Agreement may be terminated at
any time, without penalty, by the Directors or the
shareholders of the Corporation acting by the vote of
at least a majority of its outstanding voting
securities (as that phrase is defined in Section
2(a)(42) of the 1940 Act), provided in either case that
60 days' written notice of termination be given to the
Adviser at its principal place of business. This
Agreement may also be terminated by the Adviser at any
time by giving 60 days' written notice of termination
to the Corporation, addressed to its principal place of
business.
10. Assignment. This Agreement shall terminate
automatically in the event of any assignment (within
the meaning of Section 2(a)(4) of the ▇▇▇▇ ▇▇▇) of this
Agreement.
11. Term. This Agreement shall begin as of the date
hereof and shall continue in effect for two years from
the date hereof and thereafter for successive periods
of one year, subject to the provisions for termination
and all of the other terms and conditions hereof if
such continuation shall be specifically approved at
least annually (i) by the vote of a majority of the
Directors of the Corporation, including a majority of
the Directors who are not parties to this Agreement or
"interested persons" of any such party (as defined in
the 1940 Act), cast in person at a meeting called for
that purpose or (ii) by the vote of a majority of the
outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the ▇▇▇▇ ▇▇▇) of the
Corporation.
12. Amendments. This Agreement may be amended by the
mutual consent of the parties, provided that the terms
of each such amendment shall be approved by the
Directors or by the affirmative vote of a majority of
the outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the ▇▇▇▇ ▇▇▇) of the
Corporation.
13. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws
of the State of Illinois, provided, however that
nothing herein shall be construed in a manner that is
inconsistent with the 1940 Act, the Investment Advisers
Act of 1940, as amended, or the rules and regulations
promulgated with respect to such respective Acts.
The Adviser:
LCM CAPITAL MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Investment Officer
The Corporation:
LCM INTERNET GROWTH FUND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President