FUND ACCOUNTING SERVICING AGREEMENT
This Agreement between Kinetics Portfolios Trust, a Delaware business trust,
(the "Fund"), and Firstar Mutual Fund Services, LLC, a Wisconsin limited
liability company, ("FMFS") is amended and restated this 1st day of May, 2000.
WHEREAS, the Fund, is an open-ended management investment company
registered under the Investment Company Act of 1940; and
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT. The Fund hereby appoints FMFS as Fund
Accountant on the terms and conditions set forth in this Agreement and FMFS
hereby accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration provided for herein.
2. SERVICES. FMFS agrees to provide the following mutual fund
accounting services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis
using security trade information communicated from the investment
manager on a timely basis.
(2) For each valuation date, obtain prices from a pricing
source approved by the Board of Directors and apply those prices
to the portfolio positions. For those securities where market
quotations are not readily available, the Board of Directors
shall approve, in good faith, the method for determining the fair
value for such securities.
(3) Identify interest and dividend accrual balances as of
each valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify
them as to short-short, short- or long-term status; account for
periodic distributions of gains or losses to shareholders and
maintain undistributed gain or loss balances as of each valuation
date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of
written authorization from the Fund.
(3) Account for fund expenditures and maintain expense
accrual balances at the level of accounting detail, as agreed
upon by FMFS and the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other fund share activity
as reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the
Fund.
(3) Determine net investment income (earnings) for the
Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger for the Fund in the form as
agreed upon.
(5) For each day the Fund is open as defined in the
prospectus, determine the net asset value of the according to the
accounting policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net
earnings, and other per share amounts reflective of fund
operation at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share
price for each valuation date to parties as agreed upon from time
to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of the Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using
the tax lot relief method designated by the Fund.
(4) Provide the necessary financial information to support
the taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the fund accounting
records available to the Fund, the Securities and Exchange
Commission, and the outside auditors.
(2) Maintain accounting records according to the
Investment Company Act of 1940 and regulations provided
thereunder.
F. FMFS will perform the following accounting functions on a
daily basis:
(1) Reconcile cash and investment balances of each
portfolio with the Custodian, and provide the Advisor with the
beginning cash balance available for investment purposes;
(2) Update the cash availability throughout the day as
required by the Advisor;
(3) Transmit or mail a copy of the portfolio valuation to
the Advisor;
(4) Review the impact of current day's activity on a per
share basis, review changes in market value of securities, and
review yields for reasonableness.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Fund, portfolio and class statistical
data as requested on an ongoing basis.
3. PRICING OF SECURITIES. For each valuation date, obtain prices from a
pricing source selected by FMFS but approved by the Fund's Board and apply those
prices to the portfolio positions. For those securities where market quotations
are not readily available, the Fund's Board shall approve, in good faith, the
method for determining the fair value for such securities.
If the Fund desires to provide a price which varies from the
pricing source, the Fund shall promptly notify and supply FMFS with the
valuation of any such security on each valuation date. All pricing changes made
by the Fund will be in writing and must specifically identify the securities to
be changed by CUSIP, name of security, new price or rate to be applied, and, if
applicable, the time period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the
Board of Directors that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FMFS reserves the right
to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Fund under
this Agreement.
6. COMPENSATION. FMFS shall be compensated for providing the
services set forth in this Agreement in accordance with the Fee Schedule
attached hereto as Exhibit A and as mutually agreed upon and amended from time
to time.
7. PERFORMANCE OF SERVICE.
A. FMFS shall exercise reasonable care in the performance
of its duties under this Agreement. FMFS shall not be liable for
any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with matters to which this Agreement
relates, including losses resulting from mechanical breakdowns or
the failure of communication or power supplies beyond FMFS's
control, except a loss resulting from FMFS's refusal or failure
to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance
of its duties under this Agreement. Notwithstanding any other
provision of this Agreement, the Fund shall indemnify and hold
harmless FMFS from and against any and all claims, demands,
losses, expenses, and liabilities (whether with or without basis
in fact or law) of any and every nature (including reasonable
attorneys' fees) which FMFS may sustain or incur or which may be
asserted against FMFS 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 FMFS
by any duly authorized officer of the Fund, such duly authorized
officer to be included in a list of authorized officers furnished
to FMFS and as amended from time to time in writing by resolution
of the Board of Directors of the Fund.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond FMFS's
control. FMFS 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 FMFS. FMFS 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 Fund shall be
entitled to inspect FMFS's premises and operating capabilities at
any time during regular business hours of FMFS, upon reasonable
notice to FMFS.
Regardless of the above, FMFS reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained
in this section shall apply, it is understood that if in any case
the Fund may be asked to indemnify or hold FMFS harmless, the
Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further
understood that FMFS will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears
likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option
to defend FMFS against any claim which may be the subject of this
indemnification. In the event that the Fund so elects, it will so
notify FMFS and thereupon the Fund shall take over complete
defense of the claim, and FMFS shall in such situation initiate
no further legal or other expenses for which it shall seek
indemnification under this section. FMFS shall in no case confess
any claim or make any compromise in any case in which the Fund
will be asked to indemnify FMFS except with the Fund's prior
written consent.
C. FMFS shall indemnify and hold the Fund harmless from
and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any
and every nature (including reasonable attorneys' fees) which may
be asserted against the Fund by any person arising out of any
action taken or omitted to be taken by FMFS as a result of FMFS's
refusal or failure to comply with the terms of this Agreement,
its bad faith, negligence, or willful misconduct.
8. RECORDS. FMFS 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 Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Fund and will be preserved, maintained, and made
available with such section and rules of the Investment Company Act and will be
promptly surrendered to the Fund on and in accordance with its request.
9. CONFIDENTIALITY. FMFS shall handle in confidence all information
relating to the Fund's business, which is received by FMFS during the course of
rendering any service hereunder.
10. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which
may be FMFS, shall furnish to FMFS the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
11. NOTIFICATION OF ERROR. The Fund will notify FMFS of any balancing or
control error caused by FMFS within three business days after receipt of any
reports rendered by FMFS to the Fund, or within three business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three business days of receiving notice from any
shareholder.
12. ADDITIONAL SERIES. In the event that the Fund establishes one or
more series of shares with respect to which it desires to have FMFS render
accounting services, under the terms hereof, it shall so notify FMFS in writing,
and if FMFS agrees in writing to provide such services, such series will be
subject to the terms and conditions of this Agreement.
13. TERM OF AGREEMENT. This Agreement shall become effective as of the
day and year first written above and shall continue in full force and effect
automatically for successive annual periods unless otherwise terminated as
provided herein. This Agreement may be terminated by either party at any time
upon giving 90 days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. This Agreement may be replaced
or modified by a subsequent agreement between the parties.
14. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FMFS's duties or responsibilities
hereunder is designated by Fund, by written notice to FMFS, FMFS will promptly,
upon such termination and at the expense of Fund, transfer to such Successor all
relevant books, records, correspondence and other data established or maintained
by FMFS under this Agreement in a form reasonably acceptable to Fund, (if such
form differs from the form in which FMFS has maintained the same, Fund, shall
pay any expenses associated with transferring the same to such form), and will
cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FMFS's personnel in the establishment of books,
records and other data by such successor.
15. NOTICES. Notices of any kind to be given by either party to the
other party shall be in writing and shall be duly given if mailed or delivered
as follows: Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to Fund shall be sent to:
Kinetics Portfolios Trust
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
16. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin. However nothing herein shall be construed
in a manner inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the SEC thereunder.
17. MERGER OF AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer or one or more counterparts as of the day
and year first written above.
Kinetics Portfolios Trust Firstar Mutual Fund Services, LLC
By: ________________________________ By:________________________________
Print Name: _________________________ Print Name: _________________________
Title: ____________________________ Title: ____________________________
