KINETICS MUTUAL FUNDS, INC. TRANSFER AGENT SERVICING AGREEMENT
KINETICS
MUTUAL FUNDS, INC.
THIS AGREEMENT is made and
entered into as of this 18th day
of December, 2009, by and between KINETICS MUTUAL FUNDS, INC., a
Maryland corporation (the “Corporation”), and U.S. BANCORP FUND SERVICES,
LLC, a Wisconsin limited liability company (“USBFS”).
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 beneficial interest in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;
WHEREAS,
USBFS is, among other things, in the business of administering transfer and
dividend disbursing agent functions for the benefit of its customers;
and
WHEREAS,
the Corporation desires to retain USBFS to provide transfer and dividend
disbursing agent services to each series of the Corporation listed on Exhibit A hereto
(as amended from time to time) (each a “Fund” and collectively, the
“Funds”).
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.
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Appointment
of USBFS as Transfer Agent
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The
Corporation hereby appoints USBFS as transfer agent of the Corporation on the
terms and conditions set forth in this Agreement, and USBFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement. The services and duties of USBFS shall be confined to
those matters expressly set forth herein, and no implied duties are assumed by
or may be asserted against USBFS hereunder.
2.
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Services
and Duties of USBFS
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USBFS
shall provide the following transfer agent and dividend disbursing agent
services to the Fund:
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A.
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Receive
and process all orders for the purchase, exchange, and/or redemption of
shares in accordance with Rule 22c-1 under the 1940
Act.
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B.
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Process
purchase orders with prompt delivery, where appropriate, of payment and
supporting documentation to the Corporation’s custodian, and issue the
appropriate number of uncertificated shares with such uncertificated
shares being held in the appropriate shareholder
account.
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C.
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Arrange
for the issuance of shares obtained through transfers of funds from Fund
shareholders’ accounts at financial institutions and arrange for the
exchange of shares for shares of other eligible investment companies, when
permitted by the Fund’s prospectus (the
“Prospectus”).
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D.
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Process
redemption requests received in good order and, where relevant, deliver
appropriate documentation to the Corporation’s
custodian.
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E.
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Pay
monies upon receipt from the Corporation’s custodian, where relevant, in
accordance with the instructions of redeeming
shareholders.
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F.
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Process
transfers of shares in accordance with the shareholder’s instructions,
after receipt of appropriate documentation from the shareholder as
specified in the Prospectus.
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G.
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Process
exchanges between Funds and/or classes of shares of Funds both within the
same family of funds and with a First American Money Market Fund, if
applicable.
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H.
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Prepare
and transmit payments for dividends and distributions declared by the
Corporation with respect to the Fund, after deducting any amount required
to be withheld by any applicable laws, rules and regulations and in
accordance with shareholder
instructions.
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I.
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Serve
as the Fund’s agent in connection with accumulation, open account or
similar plans (e.g., periodic investment plans and periodic withdrawal
plans).
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J.
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Make
changes to shareholder records, including, but not limited to, address
changes in plans (e.g., systematic withdrawal, automatic investment,
dividend reinvestment).
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K.
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Handle
load and multi-class processing, including rights of accumulation and
purchases by letters of intent.
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L.
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Record
the issuance of shares of the Fund and maintain, pursuant to Rule
17Ad-10(e) promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), a record of the total number of shares of
the Fund which are authorized, issued and
outstanding.
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M.
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Prepare
shareholder meeting lists and, as necessary, mail, receive and tabulate
proxies.
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N.
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Mail
shareholder reports and Prospectuses to current
shareholders.
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2
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O.
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Prepare
and file U.S. Treasury Department Forms 1099 and other appropriate
information returns required with respect to dividends and distributions
for all shareholders.
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P.
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Provide
shareholder account information upon request and prepare and mail
confirmations and statements of account to shareholders for all purchases,
redemptions and other confirmable transactions as agreed upon with the
Corporation.
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Q.
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Mail
requests for shareholders’ certifications under penalties of perjury and
pay on a timely basis to the appropriate federal authorities any taxes to
be withheld on dividends and distributions paid by the Corporation, all as
required by applicable federal tax laws and
regulations.
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R.
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Answer
correspondence from shareholders, securities brokers and others relating
to USBFS’s duties hereunder.
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S.
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Reimburse
the Fund each month for all material losses resulting from “as of”
processing errors for which USBFS is responsible in accordance with the
“as of” processing guidelines set forth on Exhibit B
hereto.
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3.
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Additional
Services to be Provided by USBFS
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A.
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If
the Corporation so elects, by including the service it wishes to receive
in its fee schedule, USBFS shall provide the following services that are
further described and that may be subject to additional terms and
conditions specified in their respective exhibits, as such may be amended
from time to time:
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Internet
Access, Fan Web, Vision Mutual Fund Gateway (Exhibit
C)
MARS TM (Exhibit D)
The
Corporation hereby acknowledges that exhibits are an integral part of this
Agreement and, to the extent services included in Exhibit C and/or
Exhibit D are
selected by the Corporation, such services shall also be subject to the terms
and conditions of this Agreement. To the extent the terms and
conditions of this Agreement conflict with the terms and conditions included in
Exhibit C
and/or Exhibit
D, as applicable, the exhibits shall control. The provisions
of Exhibit C
and/or Exhibit
D, as applicable, shall continue in effect for as long as this Agreement
remains in effect, unless sooner terminated pursuant to Section 13
hereof.
The
indemnity and defense provisions set forth in Section 8 of the Agreement and in
Exhibit D, if
applicable, shall indefinitely survive the termination and/or assignment of the
Agreement.
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B.
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USBFS
shall allow the Corporation access to various fund data, systems, industry
information and processes as the parties may agree to from time to time,
through Mutual Fund eXchange (“MFx”), subject to the terms of this
Agreement and the additional terms and conditions contained in the on-line
MFx access agreement to be entered into upon accessing MFx for the first
time. USBFS shall enable the Corporation to access MFx services
by supplying the Corporation with necessary software, training,
information and connectivity support as mutually agreed upon, all of which
shall constitute confidential knowledge and information of USBFS and shall
be used by the Corporation only as necessary to access MFx services
pursuant to this Agreement. The Corporation shall provide for
the security of all codes and system access mechanisms relating to MFx
provided to it by USBFS and implement such security procedures and/or
devices to ensure the integrity of MFx. The Corporation hereby
understands that USBFS will perform periodic maintenance to the MFx
hardware and software being accessed, which may cause temporary service
interruptions. USBFS shall notify the Corporation of all
planned outages and, to the extent possible, will perform any necessary
maintenance during non-business
hours.
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The
Corporation hereby acknowledges that all programs, software, manuals and
other written information relating to MFx access provided by USBFS
pursuant to this Agreement shall remain the exclusive property of USBFS at
all times.
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The
Corporation acknowledges that it is
responsible for determining the suitability and accuracy of the information
obtained through its access to MFx. USBFS MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESSED OR IMPLIED, WITH RESPECT TO THE SUITABILITY AND
ACCURACY OF FUND DATA, SYSTEMS, INDUSTRY INFORMATION AND PROCESSES ACCESSED
THROUGH MFx. However, USBFS will assist the Corporation in verifying the
accuracy of any of the information made available to the Corporation through MFx and covered
by this Agreement.
In the
event of termination of this Agreement, in addition to the requirements set
forth in Section 14 hereof, the Corporation shall immediately end its access to
MFx and return all codes, system access mechanisms, programs, manuals and other
written information to USBFS, and shall destroy or erase all such information on
any diskettes or other storage medium, unless such access continues to be
permitted pursuant to a separate agreement.
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4.
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Lost
Shareholder Due Diligence Searches and
Servicing
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The
Corporation hereby acknowledges that USBFS has an arrangement with an outside
vendor to conduct lost shareholder searches required by Rule 17Ad-17 under the
Securities Exchange Act of 1934, as amended. Costs associated with
such searches will be passed through to the Corporation as an out-of-pocket
expense in accordance with the fee schedule set forth in Exhibit E
hereto. If a shareholder remains lost and the shareholder’s account
unresolved after completion of the mandatory Rule 17Ad-17 search, the
Corporation hereby authorizes vendor to enter, at its discretion, into fee
sharing arrangements with the lost shareholder (or such lost shareholder’s
representative or executor) to conduct a more in-depth search in order to locate
the lost shareholder before the shareholder’s assets escheat to the applicable
state. The Corporation hereby acknowledges that USBFS is not a party
to these arrangements and does not receive any revenue sharing or other fees
relating to these arrangements. Furthermore, the Corporation hereby
acknowledges that vendor may receive up to 35% of the lost shareholder’s assets
as compensation for its efforts in locating the lost shareholder.
5.
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Anti-Money
Laundering and Red Flag Identity Theft
Programs
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The
Corporation acknowledges that it has had an opportunity to review, consider and
comment upon the written procedures provided by USBFS describing various tools
used by USBFS which are designed to promote the detection and reporting of
potential money laundering activity by monitoring certain aspects of shareholder
activity as well as written procedures for verifying a customer’s identity
(collectively, the “Procedures”). Further, the Corporation has
determined that the Procedures, as part of the Corporation’s overall anti-money
laundering program and Red Flag Identity Theft Prevention program, are
reasonably designed to prevent the Fund from being used for money laundering or
the financing of terrorist activities and to achieve compliance with the
applicable provisions of the Fair and Accurate Credit Transactions Act of 2003
and the USA Patriot Act of 2001 and the implementing regulations
thereunder.
Based on
this determination, the Corporation hereby instructs and directs USBFS to
implement the Procedures on the Corporation’s behalf, as such may be amended or
revised from time to time. It is contemplated that these Procedures
will be amended from time to time by the parties as additional regulations are
adopted and/or regulatory guidance is provided relating to the Corporation’s
anti-money laundering and identity theft responsibilities.
USBFS
agrees to provide to the Corporation:
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A.
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Prompt
written notification of any transaction or combination of transactions
that USBFS believes, based on the Procedures, evidence money laundering or
identity theft activities in connection with the Corporation or any
shareholder of the Fund;
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5
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B.
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Prompt
written notification of any customer(s) that USBFS reasonably believes,
based upon the Procedures, to be engaged in money laundering or identity
theft activities, provided that the Corporation agrees not to communicate
this information to the customer;
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C.
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Any
reports received by USBFS from any government agency or applicable
industry self-regulatory organization pertaining to USBFS’s anti-money
laundering monitoring or the Red Flag Identity Theft Prevention Program on
behalf of the Corporation;
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D.
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Prompt
written notification of any action taken in response to anti-money
laundering violations or identity theft activity as described in (a), (b)
or (c); and
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E.
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Certified
annual and quarterly reports of its monitoring and customer identification
activities on behalf of the
Corporation.
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The
Corporation hereby directs, and USBFS acknowledges, that USBFS shall (i) permit
federal regulators access to such information and records maintained by USBFS
and relating to USBFS’s implementation of the Procedures, on behalf of the
Corporation, as they may request, and (ii) permit such federal regulators to
inspect USBFS’s implementation of the Procedures on behalf of the
Corporation..
6.
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Compensation
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Other
than for services, if any, to be provided pursuant to Section 3(A) of this
Agreement, USBFS shall be compensated for providing the services set forth in
this Agreement in accordance with the fee schedule set forth on Exhibit E hereto (as
amended from time to time). For services to be provided pursuant to
Section 3(A) of this Agreement, if applicable, USBFS shall be compensated in
accordance with the fee schedule set forth in the appendix to the exhibit that
relates to the services selected by the Corporation. USBFS shall also
be compensated for such out-of-pocket expenses (e.g., telecommunication charges,
postage and delivery charges, and reproduction charges) as are reasonably
incurred by USBFS in performing its duties hereunder. The Corporation
shall pay all such fees and reimbursable expenses within 30 calendar days
following receipt of the billing notice, except for any fee or expense subject
to a good faith dispute. The Corporation shall notify USBFS in
writing within 30 calendar days following receipt of each invoice if the
Corporation is disputing any amounts in good faith. The Corporation
shall pay such disputed amounts within 10 calendar days of the day on which the
parties agree to the amount to be paid. With the exception of any fee
or expense the Corporation is disputing in good faith as set forth above, unpaid
invoices shall accrue a finance charge of 1½% per month after the due
date. Notwithstanding anything to the contrary, amounts owed by the
Corporation to USBFS shall only be paid out of assets and property of the
particular Fund involved.
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7.
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Representations
and Warranties
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A.
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The
Corporation hereby represents and warrants to USBFS, which representations
and warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
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(1)
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It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(2)
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This
Agreement has been duly authorized, executed and delivered by the
Corporation in accordance with all requisite action and constitutes a
valid and legally binding obligation of the Corporation, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the rights and remedies of creditors and secured
parties;
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(3)
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It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement; and
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(4)
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A
registration statement under the 1940 Act and the Securities Act of 1933,
as amended, will be made effective prior to the effective date of this
Agreement and will remain effective during the term of this Agreement, and
appropriate state securities law filings will be made prior to the
effective date of this Agreement and will continue to be made during the
term of this Agreement as necessary to enable the Corporation to make a
continuous public offering of its
shares.
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B.
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USBFS
hereby represents and warrants to the Corporation, which representations
and warranties shall be deemed to be continuing throughout the term of
this Agreement, that:
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(1)
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It
is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted,
to enter into this Agreement and to perform its obligations
hereunder;
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(2)
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This
Agreement has been duly authorized, executed and delivered by USBFS in
accordance with all requisite action and constitutes a valid and legally
binding obligation of USBFS, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors
and secured parties;
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7
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(3)
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It
is conducting its business in compliance in all material respects with all
applicable laws and regulations, both state and federal, and has obtained
all regulatory approvals necessary to carry on its business as now
conducted; there is no statute, rule, regulation, order or judgment
binding on it and no provision of its charter, bylaws or any contract
binding it or affecting its property which would prohibit its execution or
performance of this Agreement; and
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(4)
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It
is a registered transfer agent under the Exchange
Act.
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8.
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Standard
of Care; Indemnification; Limitation of
Liability
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A.
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USBFS
shall exercise reasonable care in the performance of its duties under this
Agreement. USBFS shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Corporation in
connection with its duties under this Agreement, including losses
resulting from mechanical breakdowns or the failure of communication or
power supplies beyond USBFS’s control, except a loss arising out of or
relating to USBFS’s refusal or failure to comply with the terms of this
Agreement or from its bad faith, negligence, or willful misconduct in the
performance of its duties under this Agreement. Notwithstanding
any other provision of this Agreement, if USBFS has exercised reasonable
care in the performance of its duties under this Agreement, the
Corporation shall indemnify and hold harmless USBFS from and against any
and all claims, demands, losses, expenses, and liabilities of any and
every nature (including reasonable attorneys’ fees) that USBFS may sustain
or incur or that may be asserted against USBFS 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 USBFS by any
duly authorized officer of the Corporation, as approved by the Board
of Directors of the Corporation (the “Board of
Directors”), except for any and all claims, demands, losses, expenses, and
liabilities arising out of or relating to USBFS’s refusal or failure to
comply with the terms of this Agreement or from its bad faith, negligence
or willful misconduct in the performance of its duties under this
Agreement. This indemnity shall be a continuing obligation of
the Corporation, its successors and assigns, notwithstanding the
termination of this Agreement. As used in this paragraph, the
term “USBFS” shall include USBFS’s directors, officers and
employees.
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USBFS
shall indemnify and hold the Corporation harmless from and against any and all
claims, demands, losses, expenses, and liabilities of any and every nature
(including reasonable attorneys’ fees) that the Corporation may sustain or incur
or that may be asserted against the Corporation by any person arising out of any
action taken or omitted to be taken by USBFS as a result of USBFS’s refusal or
failure to comply with the terms of this Agreement, or from its bad faith,
negligence, or willful misconduct in the performance of its duties under this
Agreement. This indemnity shall be a continuing obligation of USBFS,
its successors and assigns, notwithstanding the termination of this
Agreement. As used in this paragraph, the term “Corporation” shall
include the Corporation’s directors, officers and employees.
8
Neither
party to this Agreement shall be liable to the other party for consequential,
special or punitive damages under any provision of this Agreement.
In the
event of a mechanical breakdown or failure of communication or power supplies
beyond its control, USBFS shall take all reasonable steps to minimize service
interruptions for any period that such interruption continues. USBFS
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
USBFS. USBFS agrees that it shall, at all times, have reasonable
contingency plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Corporation shall be
entitled to inspect USBFS’s premises and operating capabilities at any time
during regular business hours of USBFS, upon reasonable notice to
USBFS. Moreover, USBFS shall provide the Corporation, at such times
as the Corporation may reasonably require, copies of reports rendered by
independent accountants on the internal controls and procedures of USBFS
relating to the services provided by USBFS under this Agreement.
Notwithstanding
the above, USBFS reserves the right to reprocess and correct administrative
errors at its own expense.
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B.
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In
order that the indemnification provisions contained in this Section shall
apply, it is understood that if in any case the indemnitor may be asked to
indemnify or hold the indemnitee harmless, the indemnitor shall be fully
and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the indemnitee will use all
reasonable care to notify the indemnitor promptly concerning any situation
that presents or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend
the indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it
will so notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this Section. The indemnitee shall in no
case confess any claim or make any compromise in any case in which the
indemnitor will be asked to indemnify the indemnitee except with the
indemnitor’s prior written consent.
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9
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C.
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The
indemnity and defense provisions set forth in this Section 8, and in Exhibit C,
Exhibit D
and Exhibit
E, if applicable, shall indefinitely survive the termination and/or
assignment of this Agreement.
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D.
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If
USBFS is acting in another capacity for the Corporation pursuant to a
separate agreement, nothing herein shall be deemed to relieve USBFS of any
of its obligations in such other
capacity.
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9.
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Data
Necessary to Perform Services
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The
Corporation or its agent shall furnish to USBFS the data necessary to perform
the services described herein at such times and in such form as mutually agreed
upon.
10.
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Proprietary
and Confidential Information
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USBFS
agrees on behalf of itself and its directors, officers, and employees to treat
confidentially and as proprietary information of the Corporation, all records
and other information relative to the Corporation and prior, present, or
potential shareholders of the Corporation (and clients of said shareholders),
and not to use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder, except (i) after prior
notification to and approval in writing by the Corporation, which approval shall
not be unreasonably withheld and may not be withheld where USBFS may be exposed
to civil or criminal contempt proceedings for failure to comply, (ii) when
requested to divulge such information by duly constituted authorities, or (iii)
when so requested by the Corporation. Records and other information
which have become known to the public through no wrongful act of USBFS or any of
its employees, agents or representatives, and information that was already in
the possession of USBFS prior to receipt thereof from the Corporation or its
agent, shall not be subject to this paragraph.
Further,
USBFS will adhere to the privacy policies adopted by the Corporation pursuant to
Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from time to
time. In this regard, USBFS shall have in place and maintain
physical, electronic and procedural safeguards reasonably designed to protect
the security, confidentiality and integrity of, and to prevent unauthorized
access to or use of, records and information relating to the Corporation and its
shareholders.
11.
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Records
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USBFS 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 Corporation, but not inconsistent with the rules and regulations of appropriate
government authorities, in particular, Section 31 of the 1940 Act and the rules
thereunder. USBFS agrees that all such records prepared or maintained
by USBFS relating to the services to be performed by USBFS hereunder are the
property of the Corporation and will be preserved, maintained, and made
available in accordance with such applicable sections and rules of the 1940 Act
and will be promptly surrendered to the Corporation or its designee on and in
accordance with its request.
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12.
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Compliance
with Laws
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The
Corporation has and retains primary responsibility for all compliance matters
relating to the Fund, including but not limited to compliance with the 1940 Act,
the Internal Revenue Code of 1986, the Xxxxxxxx-Xxxxx Act of 2002, the USA
Patriot Act of 2001 and the policies and limitations of the Fund relating to its
portfolio investments as set forth in its Prospectus and statement of additional
information. USBFS’s services hereunder shall not relieve the
Corporation of its responsibilities for assuring such compliance or the Board of
Directors oversight responsibility with respect thereto.
13.
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Term
of Agreement; Amendment
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This
Agreement shall become effective as of the date first written
above. This Agreement may be terminated by either party upon giving
90 days prior written notice to the other party or such shorter period as is
mutually agreed upon by the parties. Notwithstanding the foregoing,
this Agreement may be terminated by any party upon the breach of the other party
of any material term of this Agreement if such breach is not cured within 15
days of notice of such breach to the breaching party. This Agreement
may not be amended or modified in any manner except by written agreement
executed by USBFS and the Corporation and authorized or approved by the Board of
Directors. The provisions of this Section 13 shall also apply to
Exhibit C,
Exhibit D and
Exhibit
E.
14.
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Duties
in the Event of Termination
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In the
event that, in connection with termination, a successor to any of USBFS’s duties
or responsibilities hereunder is designated by the Corporation by written notice
to USBFS, USBFS will promptly, upon such termination and at the expense of the
Corporation, transfer to such successor all relevant books, records,
correspondence, and other data established or maintained by USBFS under this
Agreement in a form reasonably acceptable to the Corporation (if such form
differs from the form in which USBFS has maintained the same, the Corporation
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 USBFS’s personnel in the establishment of books,
records, and other data by such successor. If no such successor is
designated, then such books, records and other data shall be returned to the
Corporation.
16.
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Assignment
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This
Agreement shall extend to and be binding upon the parties hereto and their
respective successors and assigns; provided, however, that this Agreement shall
not be assignable by the Corporation without the written consent of USBFS, or by
USBFS without the written consent of the Corporation, accompanied by the
authorization or approval of the Corporation’s Board
of Directors.
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17.
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Governing
Law
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This
Agreement shall be construed in accordance with the laws of the State of
Wisconsin, without regard to conflicts of law principles. To the
extent that the applicable laws of the State of Wisconsin, 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 Securities and
Exchange Commission thereunder.
18.
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No
Agency Relationship
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Nothing
herein contained shall be deemed to authorize or empower either party to act as
agent for the other party to this Agreement, or to conduct business in the name,
or for the account, of the other party to this Agreement.
19.
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Services
Not Exclusive
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Nothing
in this Agreement shall limit or restrict USBFS from providing services to other
parties that are similar or identical to some or all of the services provided
hereunder.
20.
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Invalidity
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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. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties.
21.
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Notices
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Any notice required or permitted to be given by either
party to the other shall be in writing and shall be deemed to have been given on
the date delivered personally or by courier service, or three 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 party’s address set forth
below:
Notice to
USBFS shall be sent to:
U.S.
Bancorp Fund Services, LLC
000 Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
12
and
notice to the Corporation shall be sent to:
Kinetics
Mutual Funds, Inc.
000
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
22.
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Multiple
Originals
|
This
Agreement may be executed on two or more counterparts, each of which when so
executed shall be deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
23.
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Entire
Agreement
|
This
Agreement, together with any exhibits, attachments, appendices or schedules
expressly referenced herein, sets forth the sole and complete understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements relating thereto, whether written or oral, between the
parties.
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.
KINETICS
MUTUAL FUNDS, INC.
|
U.S.
BANCORP FUND SERVICES, LLC
|
|
By: /s/ Xxx
Xxxxxxx
|
By:
/s/ Xxxxxxx
XxXxx
|
|
Name:
Xxx Xxxxxxx
|
Name:
Xxxxxxx X. XxXxx
|
|
Title:
Vice President
|
Title:
Executive Vice President
|
13
Exhibit
A
to
the
Kinetics Mutual Funds, Inc.
at December,
2009
Name of
Series
The
Internet Fund – No Load Class
The
Internet Fund – Advisor Class A
The
Internet Fund – Advisor Class C
The
Internet Fund – Institutional Class
The
Internet Emerging Growth Fund – No Load Class
The
Internet Emerging Growth Fund – Advisor Class A
The
Internet Emerging Growth Fund – Advisor Class C
The
Internet Emerging Growth Fund – Institutional Class
The
Paradigm Fund – No Load Class
The
Paradigm Fund – Advisor Class A
The
Paradigm Fund – Advisor Class C
The
Paradigm Fund – Institutional Class
The
Tactical Paradigm Fund – No Load Class
The
Tactical Paradigm Fund – Advisor Class A
The
Tactical Paradigm Fund – Advisor Class C
The
Tactical Paradigm Fund – Institutional Class
The
Medical Fund – No Load Class
The
Medical Fund – Advisor Class A
The
Medical Fund – Advisor Class C
The
Medical Fund – Institutional Class
The Small
Cap Opportunities Fund – No Load Class
The Small
Cap Opportunities Fund – Advisor Class A
The Small
Cap Opportunities Fund – Advisor Class C
The Small
Cap Opportunities Fund – Institutional Class
The
Kinetics Government Money Market Fund – No Load Class
The
Market Opportunities Fund – No Load Class
The
Market Opportunities Fund – Advisor Class A
The
Market Opportunities Fund – Advisor Class C
The
Market Opportunities Fund – Institutional Class
The Water
Infrastructure Fund -- No Load Class
The Water
Infrastructure Fund – Advisor Class A
The Water
Infrastructure Fund – Advisor Class C
The Water
Infrastructure Fund – Institutional Class
The
Multi-Disciplinary Fund – No Load Class
The
Multi-Disciplinary Fund – Advisor Class A
The
Multi-Disciplinary Fund – Advisor Class C
The
Multi-Disciplinary Fund – Institutional Class
14
Exhibit
B
to
the
As
Of Processing Policy
USBFS
will reimburse each Fund for any Net Material Loss that may exist on the Fund’s
books and for which USBFS is responsible, at the end of each calendar
month. “Net Material Loss” shall be defined as any remaining loss,
after netting losses against any gains, which impacts a Fund’s net asset value
per share by more than ½ cent. Gains and losses will be reflected on
the Fund’s daily share sheet, and the Fund
will be reimbursed for any net material loss on a monthly
basis. USBFS will reset the as of ledger each calendar month so that
any losses which do not exceed the materiality threshold of ½ cent will not be
carried forward to the next succeeding month. USBFS will notify the
advisor to the Fund on the daily share sheet of any losses for which the advisor
may be held accountable.
15
Exhibit
C
to
the
INTERNET
ACCESS SERVICES
1.
|
Services
Covered
|
USBFS
shall make the following electronic, interactive and processing services
(“Electronic Services”) available to the Corporation in accordance with the
terms of this Exhibit
C:
|
A.
|
Fan Web –
Provides for internet access by shareholders to their account information
and investment transaction capabilities. Internet service is
connected directly to the Corporation’s website(s) through a transparent
hyperlink. Shareholders can access, among other information,
account information and portfolio listings within the Corporation’s funds,
view their transaction history, and purchase additional shares through the
Automated Clearing House (“ACH”).
|
|
B.
|
Vision Mutual Fund
Gateway – Permits broker/dealers, financial planners, and
registered investment advisors to use a web-based system to perform order
and account inquiry, execute trades, print applications, review
prospectuses, and establish new
accounts.
|
2.
|
Duties
and Responsibilities of USBFS
|
|
USBFS
shall:
|
|
A.
|
Make
Electronic Services available 24 hours a day, 7 days a week, subject to
scheduled maintenance and events outside of USBFS’s reasonable
control. Unless an emergency is encountered, no routine
maintenance will occur during the hours of 8:00 a.m. to 3:00 p.m. Central
Time.
|
|
B.
|
Provide
installation services, which shall include review and approval of the
Corporation’s network requirements, recommending method of establishing
(and, as applicable, cooperate with the Corporation to implement and
maintain) a hypertext link between the Electronic Services site and the
Corporation’s web site(s) and testing the network connectivity and
performance.
|
|
C.
|
Maintain
and support the Electronic Services, which shall include providing error
corrections, minor enhancements and interim upgrades to the Electronic
Services that are made generally available to the Electronic Services
customers and providing help desk support to provide assistance to the
Corporation’s employees and agents with their use of the Electronic
Services. Maintenance and support, as used herein, shall not
include (i) access to or use of any substantial added functionality, new
interfaces, new architecture, new platforms, new versions or major
development efforts, unless made generally available by USBFS to the
Electronic Services customers, as determined solely by USBFS or (ii)
maintenance of customized features.
|
|
D.
|
Establish
systems to guide, assist and permit End Users (as defined below) who
access the Electronic Services site from the Corporation’s web site(s) to
electronically perform inquiries and create and transmit transaction
requests to USBFS.
|
|
E.
|
Address
and mail, at the Corporation’s expense, notification and promotional
mailings and other communications provided by the Corporation to
shareholders regarding the availability of the Electronic
Services.
|
|
F.
|
Issue
to each shareholder, financial adviser or other person or entity who
desires to make inquiries concerning the Corporation or perform
transactions in accounts with the Corporation using any of the Electronic
Services (the “End User”) a unique personal identification number (“PIN”)
for authentication purposes, which may be changed upon an End User’s
reasonable request in accordance with policies to be determined by USBFS
and the Corporation. USBFS will require the End User to provide
his/her PIN in order to access the Electronic
Services.
|
|
G.
|
Prepare
and process new account applications received through the Electronic
Services from shareholders determined by the Corporation to be eligible
for such services and in connection with such, the Corporation agrees as
follows:
|
|
(1)
|
to
permit the establishment of shareholder bank account information over the
Internet in order to facilitate purchase activity through ACH;
and
|
|
(2)
|
the
Corporation shall be responsible for any resulting gain/loss liability
associated with the ACH process.
|
|
H.
|
Provide
the End User with a transaction confirmation number for each completed
purchase, redemption, or exchange of the Corporation’s shares upon
completion of the transaction.
|
|
I.
|
Utilize
encryption and secure transport protocols intended to prevent fraud and
ensure confidentiality of End User accounts and
transactions. In no event shall USBFS use encryption weaker
than 128 – bit. USBFS will take reasonable actions, including
periodic scans of Internet interfaces and the Electronic Services, to
protect the Internet web site that provides the Electronic Services and
related network, against viruses, worms and other data corruption or
disabling devices, and unauthorized, fraudulent or illegal use, by using
appropriate anti-virus and intrusion detection software and by adopting
such other security procedures as may be
necessary.
|
|
J.
|
Inform
the Corporation promptly of any malfunctions, problems, errors or service
interruptions with respect to the Electronic Services of which USBFS
becomes aware.
|
2
|
K.
|
Exercise
reasonable efforts to maintain all on-screen disclaimers and copyright,
trademark and service xxxx notifications, if any, provided by the
Corporation to USBFS in writing from time to time, and all “point and
click” features of the Electronic Services relating to shareholder
acknowledgment and acceptance of such disclaimers and
notifications.
|
|
L.
|
Establish
and provide to the Corporation written procedures, which may be amended
from time to time by USBFS with the written consent of the Corporation,
regarding End User access to the Electronic Services. Such
written procedures shall establish security standards for the Electronic
Services, including, without
limitation:
|
|
(1)
|
Encryption/secure
transport protocols.
|
|
(2)
|
End
User lockout standards (e.g., lockout after three unsuccessful attempts to
gain access to the Electronic
Services).
|
|
(3)
|
PIN
issuance and reissuance standards.
|
|
(4)
|
Access
standards, including limits on access to End Users whose accounts are
coded for privilege.
|
|
(5)
|
Automatic
logoff standards (e.g., if the session is inactive for longer than 15
minutes).
|
|
M.
|
Provide
the Corporation with daily reports of transactions listing all purchases
or transfers made by each End User separately. USBFS shall also
furnish the Corporation with monthly reports summarizing shareholder
inquiry and transaction activity without listing all
transactions.
|
|
N.
|
Annually
engage a third party to audit its internal controls for the Electronic
Services and compliance with all guidelines for the Electronic Services
included herein and provide the Corporation with a copy of the auditor’s
report promptly.
|
3.
|
Duties
and Responsibilities of the
Corporation
|
The
Corporation assumes exclusive responsibility for the consequences of any
instructions it may give to USBFS, for the Corporation’s or End Users’ failure
to properly access the Electronic Services in the manner prescribed by USBFS,
and for the Corporation’s failure to supply accurate information to
USBFS.
|
Also,
the Corporation shall:
|
|
A.
|
Revise
and update the applicable prospectus(es) and other pertinent materials,
such as user agreements with End Users, to include the appropriate
consents, notices and disclosures for Electronic Services, including
disclaimers and information reasonably requested by
USBFS.
|
3
|
B.
|
Be
responsible for designing, developing and maintaining one or more web
sites for the Corporation through which End Users may access the
Electronic Services, including provision of software necessary for access
to the Internet, which must be acquired from a third-party
vendor. Such web sites shall have the functionality necessary
to facilitate, implement and maintain the hypertext links to the
Electronic Services and the various inquiry and transaction web
pages. The Corporation shall provide USBFS with the name of the
host of the Corporation’s web site server and shall notify USBFS of any
change to the Corporation’s web site server
host.
|
|
C.
|
Provide
USBFS with such information and/or access to the Corporation’s web site(s)
as is necessary for USBFS to provide the Electronic Services to End
Users.
|
|
D.
|
Promptly
notify USBFS of any problems or errors with the applicable Electronic
Services of which the Corporation becomes aware or any changes in policies
or procedures of the Corporation requiring changes to the Electronic
Services.
|
4.
|
Additional
Representation and Warranty
|
The
parties hereby warrant that no party shall knowingly insert into any interface,
other software, or other program provided by a party to any other party any
“back door,” “time bomb,” “Trojan Horse,” “worm,” “drop dead device,” “virus” or
other computer software code or routines or hardware components designed to
disable, damage or impair the operation of any system, program or operation
hereunder. For failure to comply with this warranty, the
non-complying party shall immediately replace all copies of the affected work
product, system or software. All costs incurred with replacement
including, but not limited to, cost of media, shipping, deliveries and
installation, shall be borne by such non-complying party.
5.
|
Proprietary
Rights
|
|
A.
|
Each
party acknowledges and agrees that it obtains no rights in or to any of
the software, hardware, processes, trade secrets, proprietary information
or distribution and communication networks of the other
hereunder. Any software, interfaces or other programs a party
provides to the other hereunder shall be used by such receiving party only
in accordance with the provisions of this Exhibit
C. Any interfaces, other software or other programs
developed by one party shall not be used directly or indirectly by or for
the other party or any of its affiliates to connect such receiving party
or any affiliate to any other person, without the first party’s prior
written approval, which it may give or withhold in its sole
discretion. Except in the normal course of business and in
conformity with Federal copyright law or with the other party’s consent,
neither party nor any of its affiliates shall disclose, use, copy,
decompile or reverse engineer any software or other programs provided to
such party by the other in connection
herewith.
|
4
|
B.
|
The
Corporation’s web site(s) and the Electronic Services site may contain
certain intellectual property, including, but not limited to, rights in
copyrighted works, trademarks and trade dress that is the property of the
other party. Each party retains all rights in such intellectual
property that may reside on the other party’s web site, not including any
intellectual property provided by or otherwise obtained from such other
party. To the extent the intellectual property of one party is
cached to expedite communication, such party grants to the other a
limited, non-exclusive, non-transferable license to such intellectual
property for a period of time no longer than that reasonably necessary for
the communication. To the extent that the intellectual property
of one party is duplicated within the other party’s web site to replicate
the “look and feel,” “trade dress” or other aspect of the appearance or
functionality of the first site, that party grants to the other a limited,
non-exclusive, non-transferable license to such intellectual property for
the period during which this Exhibit C is in
effect. This license is limited to the intellectual property
needed to replicate the appearance of the first site and does not extend
to any other intellectual property owned by the owner of the first
site. Each party warrants that it has sufficient right, title
and interest in and to its web site and its intellectual property to enter
into these obligations, and that to its knowledge, the license hereby
granted to the other party does not and will not infringe on any U.S.
patent, copyright or other proprietary right of a third
party.
|
|
C.
|
Each
party agrees that the nonbreaching party would not have an adequate remedy
at law in the event of the other party’s breach or threatened breach of
its obligations under this Section 5 of this Exhibit C and
that the nonbreaching party would suffer irreparable injury and damage as
a result of any such breach. Accordingly, in the event either
party breaches or threatens to breach the obligations set forth in this
Section 5 of this Exhibit C, in
addition to and not in lieu of any legal or other remedies a party may
pursue hereunder or under applicable law, each party hereby consents to
the granting of equitable relief (including the issuance of a temporary
restraining order, preliminary injunction or permanent injunction) against
it by a court of competent jurisdiction, without the necessity of proving
actual damages or posting any bond or other security therefor, prohibiting
any such breach or threatened breach. In any proceeding upon a
motion for such equitable relief, a party’s ability to answer in damages
shall not be interposed as a defense to the granting of such equitable
relief. The provisions of this Section relating to equitable
relief shall survive termination of the provision of services set forth in
this Exhibit
C.
|
6.
|
Compensation
|
The
Corporation shall compensate USBFS for providing the Electronic Services to the
Corporation in accordance with the fee schedule set forth in Appendix 1 to this
Exhibit C (as
the same may be amended in writing from time to time).
5
7.
|
Additional
Indemnification; Limitation of
Liability
|
|
A.
|
Subject
to Section 2(A), USBFS CANNOT AND DOES NOT GUARANTEE AVAILABILITY OF THE
ELECTRONIC SERVICES. Accordingly, USBFS’s sole liability to the
Corporation or any third party (including End Users) for any claims,
notwithstanding the form of such claims (e.g., contract, negligence, or
otherwise), arising out of the delay of or interruption in the Electronic
Services to be provided by USBFS hereunder shall be to use its best
efforts to commence or resume the Electronic Services as promptly as is
reasonably possible.
|
|
B.
|
USBFS
shall, at its sole cost and expense, defend, indemnify, and hold harmless
the Corporation and its directors, officers and employees from and against
any and all claims, demands, losses, expenses and liabilities of any and
every nature (including reasonable attorneys’ fees) arising out of or
relating to (a) any infringement, or claim of infringement, of any United
States patent, trademark, copyright, trade secret, or other proprietary
rights based on the use or potential use of the Electronic Services and
(b) the provision of the Corporation Files (as defined below) or
Confidential Information (as defined below) to a person other than a
person to whom such information may be properly disclosed
hereunder.
|
|
C.
|
If
an injunction is issued against the Corporation’s use of the Electronic
Services by reason of infringement of a patent, copyright, trademark, or
other proprietary rights of a third party, USBFS shall, at its own option
and expense, either (i) procure for the Corporation the right to continue
to use the Electronic Services on substantially the same terms and
conditions as specified hereunder, or (ii) after notification to the
Corporation, replace or modify the Electronic Services so that they become
non-infringing, provided that, in the Corporation’s judgment, such
replacement or modification does not materially and adversely affect the
performance of the Electronic Services or significantly lessen their
utility to the Corporation. If in the Corporation’s judgment,
such replacement or modification does materially adversely affect the
performance of the Electronic Services or significantly lessen their
utility to the Corporation, the Corporation may terminate all rights and
responsibilities under this Exhibit C
immediately on written notice to
USBFS.
|
|
D.
|
Because
the ability of USBFS to deliver Electronic Services is dependent upon the
Internet and equipment, software, systems, data and services provided by
various telecommunications carriers, equipment manufacturers, firewall
providers and encryption system developers and other vendors and third
parties, USBFS shall not be liable for delays or failures to perform its
obligations hereunder to the extent that such delays or failures are
attributable to circumstances beyond its reasonable control which
interfere with the delivery of the Electronic Services by means of the
Internet or any of the equipment, software and services which support the
Internet provided by such third parties. USBFS shall also not
be liable for the actions or omissions of any third party wrongdoers
(i.e., hackers not employed by USBFS or its affiliates) or of any third
parties involved in the Electronic Services and shall not be liable for
the selection of any such third party, unless USBFS selected the third
party in bad faith or in a grossly negligent
manner.
|
6
|
E.
|
USBFS
shall not be responsible for the accuracy of input material from End Users
nor the resultant output derived from inaccurate input. The
accuracy of input and output shall be judged as received at USBFS’s data
center as determined by the records maintained by
USBFS.
|
|
F.
|
Notwithstanding
anything to the contrary contained herein, USBFS shall not be obligated to
ensure or verify the accuracy or actual receipt, or the transmission, of
any data or information contained in any transaction via the Electronic
Services or the consummation of any inquiry or transaction request not
actually reviewed by USBFS.
|
8.
|
File
Security and Retention;
Confidentiality
|
|
A.
|
USBFS
and its agents will provide reasonable security provisions to ensure that
unauthorized third parties do not have access to the Corporation’s data
bases, files, and other information provided by the Corporation to USBFS
for use with the Electronic Services, the names of End Users or End User
transaction or account data (collectively, “Corporation
Files”). USBFS’s security provisions with respect to the
Electronic Services, the Corporation’s web site(s) and the Corporation
Files will be no less protected than USBFS’s security provisions with
respect to its own proprietary information. USBFS agrees that
any and all Corporation Files maintained by USBFS for the Corporation
hereunder shall be available for inspection by the Corporation’s
regulatory authorities during regular business hours, upon reasonable
prior written notice to USBFS, and will be maintained and retained in
accordance with applicable requirements of the 1940 Act. USBFS
will take such actions as are necessary to protect the intellectual
property contained within the Corporation’s web site(s) or any software,
written materials, or pictorial materials describing or creating the
Corporation’s web site(s), including all interface designs or
specifications. USBFS will take such actions as are reasonably
necessary to protect all rights to the source code and interface of the
Corporation’s web site(s). In addition, USBFS will not use, or
permit the use of, names of End Users for the purpose of soliciting any
business, product, or service whatsoever except where the communication is
necessary and appropriate for USBFS’s delivery of the Electronic
Services.
|
|
B.
|
USBFS
shall treat as confidential and not disclose or otherwise make available
any of the Corporation’s lists, information, trade secrets, processes,
proprietary data, information or documentation (collectively, the
“Confidential Information”), in any form, to any person other than agents,
employees or consultants of USBFS. USBFS will instruct its
agents, employees and consultants who have access to the Confidential
Information to keep such information confidential by using the same care
and discretion that USBFS uses with respect to its own confidential
property and trade secrets. Upon termination of the rights and
responsibilities described in this Exhibit C for
any reason and upon the Corporation’s request, USBFS shall return to the
Corporation, or destroy and certify that it has destroyed, any and all
copies of the Confidential Information which are in its
possession.
|
7
|
C.
|
Notwithstanding
the above, USBFS will not have an obligation of confidentiality under this
Section with regard to information that (1) was known to it prior to
disclosure hereunder, (2) is or becomes publicly available other than as a
result of a breach hereof, (3) is disclosed to it by a third party not
subject to a duty of confidentiality, or (4) is required to be disclosed
under law or by order of court or governmental
agency.
|
9.
|
Warranties
|
EXCEPT AS
OTHERWISE PROVIDED IN THIS EXHIBIT, THE ELECTRONIC SERVICES ARE PROVIDED BY
USBFS “AS IS” ON AN “AS-AVAILABLE” BASIS WITHOUT WARRANTY OF ANY KIND, AND USBFS
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
ELECTRONIC SERVICES INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE AND WARRANTIES ARISING FROM COURSE OF
DEALING OR COURSE OF PERFORMANCE.
10.
|
Termination
of Electronic Services
|
Except as
otherwise specifically noted in this Exhibit C, the Electronic Services may be
terminated by either party upon giving 90 days prior written notice to the other
party. The Electronic Services will not be interrupted during the 90
day period and USBFS will cooperate in the reasonable transfer of duties to
another provider.
10.
|
Duties
in the Event of Termination
|
In the
event of termination of the services provided pursuant to this Exhibit C, (i) End
Users will no longer be able to access the Electronic Services and (ii) the
Corporation will return all codes, system access mechanisms, programs, manuals
and other written information provided to it by USBFS in connection with the
Electronic Services provided hereunder, and shall destroy or erase all such
information on any diskettes or other storage medium.
8
Appendix
1 to Exhibit C
See
Electronic Services Fees on Exhibit E
9
Exhibit
D
to
the
DATA
WAREHOUSE SERVICES
1.
|
Certain
Definitions
|
Whenever
used in this Exhibit
D, the following words and phrases shall have the meanings set forth
below:
|
A.
|
“MARSTM”
means the system made available through Sales Focus Solutions, a
subsidiary of Phoenix American Incorporated, which allows for analysis of
sales data from the transfer agent or intermediaries by providing details
with respect to omnibus account trades, identifying or reporting
suspicious trading activity and managing compliance related activities and
reporting.
|
|
B.
|
“Data Warehouse
Services” means the services which are made available to consenting
end-users (“User,” as defined below) whereby certain Electronic Reports
(as defined below) may be searched, viewed, downloaded and
printed.
|
|
C.
|
“User(s)” means
the Corporation and its authorized
agents.
|
|
D.
|
“Electronic
Reports” means an Electronic Report created with investor
transaction data housed by DST (USBFS’s record keeping system) and
includes but is not limited to: 22c-2 Compliance Reports, Omnibus Account
Reconciliation, Sales Reporting, Platform Reporting and Campaign
Management and Tracking.
|
2.
|
Services
Covered
|
USBFS shall allow access to “MARSTM” and
Data Warehouse Services by authorized Users in
accordance with the terms of this Exhibit D.
3.
|
Duties
and Responsibilities of USBFS
|
USBFS
will provide the following implementation support:
(1) Project
Management Assistance
(2) Setup
and Testing of System Interfaces
(3) Conversion
of Historical Data from the Corporation
(4) Assist
with Sales Channel and Sales Territory Setup
(5) Assist
with Clearing/Executing Firm Relationships
(6) Assist
with Compliance Rule Setup
(7) Database
Setup (User Defined Fields)
(8) Training
(additional fee)
10
USBFS
provide the following support services after implementation:
(1) Assistance
with Project Management
(2) Dedicated
Client Service team
(3) Weekly
status calls (if needed)
(4) Setup
and testing of requests from the Corporation
(5) Duplicate
Data Identification
(6) Assistance
with System File Imports
(7) Custom
Report Programming (at Programming rates)
(8)
Enhanced support at a designated fee (such as database query reports, compliance
report review and analysis, compliance workflow assistance)
4.
|
Duties
and Responsibilities of the
Corporation
|
|
The
Corporation shall:
|
|
A.
|
Assume
exclusive responsibility for the Corporation’s or the Users’ failure to
properly access the Data Warehouse Services in the manner prescribed by
USBFS, and for the Corporation’s failure to supply accurate information to
USBFS.
|
|
B.
|
Comply
and instruct Users to comply with all the User enrollment instructions and
authorization procedures.
|
5.
|
System
Maintenance
|
The Corporation understands that USBFS will have to
perform periodic maintenance to the hardware and software used to provide
“MARSTM”
and Data Warehouse Services, which may cause
temporary service interruptions. USBFS shall notify the Corporation
of all planned outages of its own hardware and software and, to the extent
possible, will perform any necessary maintenance during non-business
hours.
6.
|
Additional
Representation and Warranty
|
The
parties hereby warrant that neither party shall knowingly insert into any
interface, software, or other program provided by a party to any other party,
any “back door,” “time bomb,” “Trojan Horse,” “worm,” “drop dead device,”
“virus” or other computer software code or routines or hardware components
designed to disable, damage or impair the operation of any system, program or
operation hereunder. For failure to comply with this warranty, the
non-complying party shall immediately replace all copies of the affected work
product, system or software. All costs incurred with replacement
including, but not limited to, cost of media, shipping, deliveries and
installation, shall be borne by such non-complying party.
7.
|
Proprietary
Rights
|
|
A.
|
The Corporation acknowledges and agrees that by
virtue of subscribing to “MARSTM”
and Data Warehouse Services through USBFS,
it shall not obtain any rights in or to any of the software,
templates, screen and file formats, interface protocols, formats and
development tools and instructions, hardware, processes, trade secrets,
instruction manuals, enrollment authorization, authentication and other
business processes, proprietary information or distribution and
communication networks used to provide MARSTM and
Data Warehouse Services owned by Sales Focus Solutions and licensed to
USBFS. Any interfaces and
software provided to the Corporation in order to provide connectivity to
MARSTM
and Data Warehouse Services through USBFS
shall be used by the Corporation and Users only for the period during
which this Exhibit D is in effect and only in accordance with the
terms of this Exhibit D, and shall not be used by the Corporation to
provide connectivity to or through any other system or person without
USBFS’s prior written approval. The Corporation shall not copy,
decompile or reverse engineer any software or programs provided to the
Corporation hereunder. The Corporation also agrees not to take
any action which would mask, delete or otherwise alter any on-screen
disclaimers and copyright, trademark and service xxxx notifications, or
any “point and click” features relating to User acknowledgment and
acceptance of such disclaimers and
notifications.
|
11
|
B.
|
The
MARSTM
or DATA WAREHOUSE Services site may contain certain intellectual
property, including, but not limited to, rights in copyrighted works,
trademarks and trade dress that is the property of the
Corporation. The Corporation retains all rights in such
intellectual property that may reside on the MARSTM
or Data Warehouse Services site, not including any intellectual
property provided by USBFS. To the extent the intellectual
property of the Corporation is cached to expedite communication, the
Corporation grants to USBFS a limited, non-exclusive, non-transferable
license to such intellectual property for a period of time no longer than
that reasonably necessary for the communication. To the extent
that the intellectual property of the Corporation is duplicated within the
MARSTM
or Data Warehouse Services site to replicate the “look and feel,”
“trade dress” or other aspect of the appearance or functionality of the
Corporation’s web site(s), the Corporation grants to USBFS a limited,
non-exclusive, non-transferable license to such intellectual property for
the period during which this Exhibit D is in
effect. This license is limited to the intellectual property
needed to replicate the appearance of the Corporation’s web site(s) and
does not extend to any other intellectual property owned by the
Corporation. The Corporation warrants that it has sufficient
right, title and interest in and to its web site(s) and its intellectual
property to enter into these obligations, and that to its knowledge, the
license hereby granted to USBFS does not and will not infringe on any U.S.
patent, copyright or other proprietary right of a third
party.
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C.
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Each
party agrees that the nonbreaching party would not have an adequate remedy
at law in the event of the other party’s breach or threatened breach of
its obligations under this Section 7 of this Exhibit D and
that the nonbreaching party would suffer irreparable injury and damage as
a result of any such breach. Accordingly, in the event either
party breaches or threatens to breach the obligations set forth in this
Section of this Exhibit D, in
addition to and not in lieu of any legal or other remedies a party may
pursue hereunder or under applicable law, each party hereby consents to
the granting of equitable relief (including the issuance of a temporary
restraining order, preliminary injunction or permanent injunction) against
it by a court of competent jurisdiction, without the necessity of proving
actual damages or posting any bond or other security therefor, prohibiting
any such breach or threatened breach. In any proceeding upon a
motion for such equitable relief, a party’s ability to answer in damages
shall not be interposed as a defense to the granting of such equitable
relief. The provisions of this Section 7 relating to equitable
relief shall survive termination of the provision of services set forth in
this Exhibit
D.
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8.
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Compensation
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The
Corporation shall compensate USBFS for providing MARSTM or
Data Warehouse Services to the Corporation and their authorized
agents in accordance with the fee schedule set forth in Appendix I to this
Exhibit D (as
the same may be amended from time to time).
9.
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Additional
Indemnification; Limitation of
Liability
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A.
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USBFS
CANNOT AND DOES NOT GUARANTEE AVAILABILITY OF MARSTM
AND DATA WAREHOUSE SERVICES. Accordingly, USBFS’s sole
liability to the Corporation or any third party (including Users) for any
claims, notwithstanding the form of such claims (e.g., contract,
negligence, or otherwise), arising out of the delay of or interruption in
MARSTM
or Data Warehouse Services to be provided by USBFS hereunder shall
be to use its best efforts to commence or resume MARSTM
or Data Warehouse Services as promptly as is reasonably
possible.
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B.
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USBFS
shall, at its sole cost and expense, defend, indemnify, and hold harmless
the Corporation and its directors, officers and employees from and against
any and all claims, demands, losses, expenses, damages or liabilities of
any and every nature, including reasonable attorneys’ fees, arising out of
or relating to (a) any infringement, or claim of infringement, of any
United States patent, trademark, copyright, trade secret, or other
proprietary rights based on the use or potential use of MARSTM
or Data Warehouse Services and (b) the provision of the Corporation
Files (as defined below) or Confidential Information (as defined below) to
a person other than a person to whom such information may be properly
disclosed hereunder.
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C.
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If
an injunction is issued against the Corporation’s and Users’ use of
MARSTM
or Data Warehouse Services by reason of infringement of a patent,
copyright, trademark, or other proprietary rights of a third party, USBFS
shall, at its own option and expense, either (i) procure for the
Corporation and Users the right to continue to use MARSTM
or Data Warehouse Services on substantially the same terms and
conditions as specified hereunder, or (ii) after notification to the
Corporation, replace or modify MARSTM
or Data Warehouse Services so that they become non-infringing,
provided that, in the Corporation’s judgment, such replacement or
modification does not materially and adversely affect the performance of
MARSTM
or Data Warehouse Services or significantly lessen their utility to
the Corporation and Users. If in the Corporation’s judgment,
such replacement or modification does materially adversely affect the
performance of MARSTM
or Data Warehouse Services or significantly lessen their utility to
the Corporation and/or Users, the Corporation may terminate all rights and
responsibilities under this Exhibit D
immediately on written notice to
USBFS.
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D.
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Because
the ability of USBFS to deliver MARSTM
and Data Warehouse Services is dependent upon the
Internet and equipment, software, systems, data and services provided by
various telecommunications carriers, equipment manufacturers, firewall
providers and encryption system developers and other vendors and third
parties, including Sales Focus Solutions, USBFS shall not be liable for
delays or failures to perform its obligations hereunder to the extent such
delays or failures are attributable to circumstances beyond its reasonable
control which interfere with the delivery of MARSTM
and Data Warehouse Services by means of the Internet or any of the
equipment, software and services which support the Internet provided by
such third parties. USBFS shall also not be liable for the
actions or omissions of any third party wrongdoers (i.e., hackers not
employed by USBFS or its affiliates) or of any third parties involved with
MARSTM
and Data Warehouse Services as long as USBFS and its agents comply
with the data security policy described in Section 10 A. of this Exhibit
D. This Exhibit D may be terminated by any party of any
material term of this Exhibit D if such breach is not cured within 15 days
of notice of such breach to the breaching
party.
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E.
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The
Corporation and Users are responsible for verifying the accuracy and
receipt of all data or information made available via MARSTM
and Data Warehouse Services. The Corporation is
responsible for advising Users of their responsibilities to promptly
notify USBFS of any errors or inaccuracies relating to data or other
information made available via MARSTM
and Data Warehouse Services with respect to the Corporation’s
shareholders.
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F.
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USBFS
shall not be responsible for the accuracy of input material from Users and
the Corporation’s record-keeping systems maintained by third parties nor
the resultant output derived from inaccurate input. The
accuracy of input and output shall be judged as received at USBFS’s data
center as determined by the records maintained by
USBFS.
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10.
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File
Security and Retention;
Confidentiality
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A.
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USBFS
and its agents will provide reasonable security provisions to ensure that
unauthorized third parties do not have access to the Corporation’s data
bases, files, and other information provided by the Corporation to USBFS
for use with MARS and Data Warehouse Services, (collectively, “Corporation
Files”). USBFS’s security provisions with respect to MARSTM
and Data Warehouse Services and the Corporation Files will be no
less protected than USBFS’s security provisions with respect to its own
proprietary information. USBFS agrees that any and all
Corporation Files maintained by USBFS for the Corporation hereunder shall
be available for inspection by the Corporation’s regulatory authorities
during regular business hours, upon reasonable prior written notice to
USBFS, and will be maintained and retained in accordance with applicable
requirements of the 1940 Act. In addition, USBFS will not use,
or permit the use of, names of Users for the purpose of soliciting any
business, product, or service whatsoever except where the communication is
necessary and appropriate for USBFS’s delivery of MARSTM
and Data Warehouse Services.
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B.
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USBFS
shall treat as confidential and not disclose or otherwise make available
any of the Corporation’s lists, information, trade secrets, processes,
proprietary data, information or documentation (collectively, the
“Confidential Information”), in any form, to any person other than agents,
employees or consultants of USBFS. USBFS will instruct its
agents, employees and consultants who have access to the Confidential
Information to keep such information confidential by using the same care
and discretion that USBFS uses with respect to its own confidential
property and trade secrets. Upon termination of the rights and
responsibilities described in this Exhibit D for
any reason and upon the Corporation’s request, USBFS shall return to the
Corporation, or destroy and certify that it has destroyed, any and all
copies of the Confidential Information which are in its
possession.
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C.
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Notwithstanding
the above, USBFS will not have an obligation of confidentiality under this
Section with regard to information that (1) was known to it prior to
disclosure hereunder, (2) is or becomes publicly available other than as a
result of a breach hereof, (3) is disclosed to it by a third party not
subject to a duty of confidentiality, or (4) is required to be disclosed
under law or by order of court or governmental
agency.
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11.
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Warranties
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EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS EXHIBIT, MARSTM AND
DATA WAREHOUSE SERVICES AND ALL EQUIPMENT, SOFTWARE AND SYSTEMS DESCRIBED IN
THIS EXHIBIT ARE PROVIDED “AS IS” ON AN “AS AVAILABLE” BASIS, AND USBFS
HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING MARS OR DATA WAREHOUSE SERVICES PROVIDED HEREUNDER,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF
PERFORMANCE.
12.
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Termination of MARSTM
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Except as
otherwise specifically noted in this Exhibit D, the MARSTM
System may be terminated by either party upon giving 90 days prior written
notice to the other party. The MARSTM
System will not be interrupted during the 90 day period and USBFS will cooperate
in the reasonable transfer of duties to another provider.
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13.
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Duties
in the Event of Termination
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In the
event of termination of the services provided pursuant to this Exhibit D, (i) the
Corporation and Users will immediately end their access to MARSTM and
Data Warehouse Services and (ii) the Corporation will return all codes, system
access mechanisms, programs, manuals, confidential or proprietary information
and other written information provided to it by USBFS in connection with the
services provided hereunder, and shall destroy or erase all such information on
any diskettes or other storage medium.
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Appendix
I
to
Exhibit D of the
Transfer
Agent Agreement – Kinetics Mutual Funds, Inc.
Pricing
Schedule at December, 2009 for MARSTM
Modules
are priced ala carte
17
Exhibit
E to the
Transfer
Agent Servicing Agreement – Kinetics Mutual Funds, Inc.
Fee
Schedule at December, 2009
Extraordinary
Services
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New
Fund Programming
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Fund
Group Setup
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$_____
per fund group
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Fund
Addition to Existing Group
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$____ per
fund
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Additional
Classes of Existing Fund
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$_____
per class
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Plus
Out-of-Pocket Expenses, including but not limited to:
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Telephone
– tollfree lines
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Retention
of records
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Postage
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Microfilm/fiche
of records
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Programming
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Special
reports
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Stationary/envelopes
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ACH
fees
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Mailing
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NSCC
charges
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Insurance
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All
other out-of-pocket expenses
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Proxies
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ACH
Shareholder Services
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$_____
per month per fund group
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$_____
per account setup and/or change
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$_____
per item for AIP purchases
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$_____
per item for EFT payments and purchases
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$_____
per correction, reversal, return item
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File
Transfer - $160/month and $.01/record
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Service Charges to
Investors
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Qualified
Plan Fees (Billed to Investors) *
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Annual
maintenance fee per account
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$_____
/ acct. (Cap at $25.00 per SSN)
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Education
XXX
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$_____
/ acct. (Cap at $25.00 / per SSN)
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Transfer
to successor trustee
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$_____
/ trans.
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Distribution
to participant
|
$_____ /
trans. (Exclusive of SWP)
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Refund
of excess contribution
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$_____
/ trans.
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Additional
Shareholder Fees (Billed to Investors)
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Any
outgoing wire transfer
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$_____
/ wire
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Telephone
exchange
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$_____
/ exch.
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Return
check fee
|
$_____
/ item
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Stop
payment
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$_____
/ stop
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Additional
Programming
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$_____
/ hour
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(Liquidation,
dividend, draft check)
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Research
fee
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$_____/
item
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(For
requested items of the second calendar year [or previous] to the
request)(Cap at $____)
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Exhibit
E (continued) to the
Transfer
Agent Servicing Agreement – Kinetics Mutual Funds, Inc.
Fee
Schedule at December, 2009
Literature
Fulfillment Services
State
registration compliance edits
Literature
database
Record
prospect request and profile
Prospect
servicing 8:00 am to 7:00 pm CT
Recording
and transcription of requests received off-hours
Periodic
reporting of leads to client
Service
Fee: $_____ / minute
$____/Month Minimum
$____ one-time set-up
Assembly
and Distribution of Literature Requests
Generate
customized prospect letters
Assembly
and insertion of literature items
Inventory
tracking
Inventory
storage, reporting
Periodic
reporting of leads by state, items requested, market source
Service
Fee: $____/
lead - insertion of up to 4 items/lead
$___/ additional inserts
Lead
Conversion Reporting
Accounting
Management
$_____ / month (waived)
Database
Installation
$_____ / Fund group
Closed Loop Reporting – Telephone
Leads $____
/ Record
Closed Loop Reporting –Internet
Leads No
Charge
Customized
Reporting $___/
hour
Follow-Up
Services
Fees to be determined when service is
requested.
Fees
and out-of-pocket expenses are billed to the fund monthly, include, but are not
limited to:
Postage, stationery
Programming, special
reports
Retention of records
File transmission charges
Legal expenses and other
expenses
Fees and
out-of-pocket expenses are billed to the fund monthly
19