EXHIBIT (h)(3)
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this fifth day of February,
1999, by and between Kinetics Asset Management, Inc., a New York Corporation
consisting of The Internet Fund, (hereinafter referred to as the "Fund") and
Firstar Mutual Fund Services, LLC, a corporation organized under the laws of the
State of Wisconsin (hereinafter referred to as the "Agent").
WHEREAS, the Fund is an open-ended management investment company which
is registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a LLC and, among other things, is in the business
of administering transfer and dividend disbursing agent functions for the
benefit of its customers;
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the
Fund hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent.
The Fund is authorized to issue separate Series of shares of beneficial
interest representing interests in separate investment portfolios. The parties
intend that each portfolio established by the Corporation, now or in the future,
be covered by the terms and conditions of this agreement.
The Agent shall perform all of the customary services of a transfer
agent and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares, with prompt delivery,
where appropriate, of payment and supporting documentation to the
Fund's custodian;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated
shares being held in the appropriate shareholder account;
C. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Fund's
custodian;
D. Pay monies (upon receipt from the Fund's custodian, where
relevant) in accordance with the instructions of redeeming
shareholders;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds
if applicable;
G. Issue and/or cancel certificates as instructed; replace lost,
stolen or destroyed certificates upon receipt of satisfactory
indemnification or surety bond;
H. Prepare and transmit payments for dividends and distributions
declared by the Funds;
I. Make changes to shareholder records, including, but not limited
to, address changes in plans (i.e., systematic withdrawal,
automatic investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant
to Securities Exchange Act of 1934 Rule 17Ad-10(e), a record of
the total number of shares of the Funds which are authorized,
issued and outstanding and such other records as are required to
be maintained by a transfer agent for open-end registered
investment companies by the rules under the Securities Exchange
Act of 1934, as amended;
K. Prepare shareholder meeting lists and, if applicable, mail,
receive and tabulate proxies;
L. Mail shareholder reports and prospectuses to current
shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to
dividends and distributions for all shareholders;
N. 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 Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor
the total number of shares sold in each state. In addition, the
Fund shall identify to the Agent in writing those transactions
and assets to be treated as exempt from the Blue Sky reporting to
the Fund for each state. The responsibility of the Agent for the
Fund's Blue Sky state registration status is solely limited to
the initial compliance by the Fund and the reporting of such
transactions to the Fund.
The foregoing services shall be provided in a manner consistent
with the policies of the Fund as communicated to the Agent.
2. COMPENSATION
The Fund agrees to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Fund agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice. Conversion fees
are considered reimbursable and need to be quoted on a per client basis and
therefore are not part of Firstar's fee schedules.
3. REPRESENTATIONS OF AGENT
The Agent represents and warrants to the Fund that:
A. It is a corporation company duly organized, existing and in good
standing under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities Exchange
Act of 1934, as amended.
C. It is duly qualified to carry on its business in the state of
Wisconsin;
D. It is empowered under applicable laws and by its charter and
bylaws to enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to
authorize it to enter and perform this Agreement;
F. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement; and
G. It will comply with all applicable requirements of the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended, and any
laws, rules, and regulations of governmental authorities having
jurisdiction.
4. REPRESENTATIONS OF THE FUND
The Fund represent and warrants to the Agent that:
A. The Fund is an open-ended management investment company under the
Investment Company Act of 1940;
B. The Fund is a New York Corporation organized, existing, and in
good standing under the laws of New York;
C. The Fund is empowered under applicable laws and by its
Declaration of Corporation and bylaws to enter into and perform
this Agreement;
D. All necessary proceedings required by the Declaration of
Corporation have been taken to authorize the Fund to enter into
and perform this Agreement;
E. The Fund will comply with all applicable requirements of the
Securities Act of 1933, as amended, Securities Exchange Act of
1934, as amended, the Investment Company Act of 1940, as amended,
and any laws, rules and regulations of governmental authorities
having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate
state securities law filings have been made and will continue to
be made, with respect to all shares of the Funds being offered
for sale.
5. COVENANTS OF THE FUND AND AGENT
The Fund shall furnish the Agent a certified copy of the resolution of
the Board of Directors of the Fund authorizing the appointment of the Agent and
the execution of this Agreement. The Fund shall provide to the Agent a copy of
the Declaration of Corporation, bylaws of the Fund, and all amendments.
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with its request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent shall exercise reasonable care and act in good faith in the
performance of its duties under this Agreement. The Agent 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 the Agent's control, except a loss resulting from the Agent'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 the Agent 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 the Agent may sustain or incur or which may be asserted against the
Agent 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 for a proper
corporate purpose provided to the Agent by any duly authorized officer of the
Fund, such duly authorized officer to be included in a list of authorized
officers furnished to the Agent and as amended from time to time in writing by
resolution of the Board Of Directors of the Fund.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Fund (unless contributed to by the Agent's
breach of this Agreement or other Agreements between the Fund and the Agent, or
the Agent's own negligence or bad faith); or as a result of the Agent acting
upon telephone instructions relating to the exchange or redemption of shares
received by the Agent and reasonably believed by the Agent under a standard of
care customarily used in the industry to have originated from the record owner
of the subject shares; or as a result of acting in reliance upon any genuine
instrument or stock certificate signed, countersigned, or executed by any person
or persons authorized to sign, countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent 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 the Agent. The Agent 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 the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
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 the Agent harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent 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 the Agent against any claim which may
be the subject of this indemnification. In the event that the Fund so elect, the
Fund will so notify the Agent and thereupon the Fund shall take over complete
defense of the claim, and the Agent shall in such situation initiate no further
legal or other expenses for which it shall seek indemnification under this
section. The Agent shall in no case confess any claim or make any compromise in
any case in which the Fund will be asked to indemnify the Agent except with the
Fund's prior written consent.
The Agent shall indemnify and hold the Fund harmless from and against
any and all claims, demands, losses, expenses, and liabilities 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 the
Agent as a result of the Agent's refusal or failure to comply with the terms of
this Agreement, its bad faith, negligence, or willful misconduct.
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees and agents to
treat confidentially all records and other information relative to the Fund and
its shareholders and shall not disclose to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Agent may be exposed to
civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
8. RECORDS
The Agent 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. The Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
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. WISCONSIN LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
10. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of
the parties.
B. This Agreement may be terminated upon ninety (90) day's written
notice given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of
the other party.
D. Any notice required to be given by the parties to each other
under the terms of this Agreement shall be in writing, addressed
and delivered, or mailed to the principal place of business of
the other party. If to the agent, such notice should be sent
to Firstar Corporation Company/Mutual Fund Services located at
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000. If to the
Fund, such notice should be sent to Kinetics Asset Management
Inc. located at 000 Xxx Xxxxx Xxxxxx, Xxxxx Xxxxxxx, XX 00000.
E. In the event that the Fund give to the Agent its written
intention to terminate and appoint a successor transfer agent,
the Agent agrees to cooperate in the transfer of its duties and
responsibilities to the successor, including any and all relevant
books, records and other data established or maintained by the
Agent under this Agreement.
F. Should the Fund exercise its right to terminate, except where
such termination follows a breach of this Agreement by the Agent,
all out-of-pocket expenses associated with the movement of
records and material will be paid by the Fund. Trustees and
shareholders shall not be personally liable for obligations of
the Fund in connection with any matter arising from or in
connection with this agreement.
G. Firstar Mutual Fund Services, LLC assumes no responsibilities for
any prior work performed by other vendors prior to Firstar
assuming responsibilities for transfer agency, custody, fund
accounting, administration and fulfillment.
Kinetics Asset Management Inc. Firstar Mutual Fund Services, LLC
By: /S/ XXXXXXXX X. XXXXX By: /S/ XXX X.
XXXXXXX
Print: XXXXXXXX X. XXXXX Print: XXX X.
XXXXXXX
Title: PRESIDENT Title: President
Date: 2/17/99 Date:
2/26/99
Attest: /S/ XXXXXXX X. XXXXXXXXX Attest: /S/ XXXX
ROCK
