KINETICS MUTUAL FUNDS, INC. AND KINETICS PORTFOLIOS TRUST ADDENDUM TO TRANSFER AGENT SERVICING AGREEMENT
KINETICS
MUTUAL FUNDS, INC. AND
KINETICS
PORTFOLIOS TRUST
ADDENDUM
TO TRANSFER AGENT SERVICING AGREEMENT
THIS
ADDENDUM dated as of this 6th day of
June, 2007
(“Addendum”) to the Transfer Agent Servicing Agreement, dated as of January 1,
2002, as amended, is entered by and among KINETICS MUTUAL FUNDS,
INC., a Maryland corporation (the “Fund”), KINETICS PORTFOLIOS
TRUST, a Delaware business trust (the “Portfolio”), and U.S.
BANCORP FUND SERVICES, LLC, a Wisconsin limited liability company
(“USBFS”).
WHEREAS,
the parties have entered into a Transfer Agent Servicing Agreement dated as
of
January 1, 2002, as previously amended (the “Agreement”); and
WHEREAS,
the parties desire to modify the Agreement; and
WHEREAS,
Section 12 of the Agreement allows for its amendment by mutual written consent
of the parties;
NOW
THEREFORE, the parties agree to add and/or amend the following
provisions:
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A.
A new Section 14 shall be added to the Agreement to read as
follows:
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14.
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Additional
Services to be Provided by
USBFS
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USBFS
shall provide the MARSTM and
data warehouse services set forth in Exhibit C to this Agreement in
the form set forth below, subject to the terms and conditions specified
in
Exhibit C, as the same may be amended from time to
time.
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The
Fund
and the Portfolio hereby acknowledge that Exhibit C is an integral part
of this Agreement and, to the extent services included in Exhibit C are
selected by the Fund and the Portfolio, such services shall also be subject
to
the terms and conditions of the Agreement. The provisions of
Exhibit C shall continue in effect for as long as the Agreement remains
in effect, unless sooner terminated pursuant to Section 12 hereof.
The
indemnity and defense provisions set forth in Section 6 of the
Agreement and in Exhibit C, if applicable, shall
indefinitely survive the termination and/or assignment of the
Agreement.
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Exhibit
C
to
the
Transfer
Agent Servicing Agreement among Kinetics Mutual Funds, Inc., Kinetics Portfolios
Trust and U.S. Bancorp Fund Services, LLC
DATA
WAREHOUSE SERVICES
1. Certain
Definitions
Whenever
used in this Exhibit C, the following words and phrases shall have the
meanings set forth below:
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A.
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“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.
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B.
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“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.
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C.
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“User(s)”
means the Fund, the Portfolio and their authorized
agents.
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D.
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“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.
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2. Services
Covered
USBFS
shall allow access to MARSTM and Data
Warehouse
Services by authorized Users in accordance with the terms of this Exhibit
C.
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 Fund and/or the Portfolio
(4) Assist
with Sales Channel and Sales Territory Setup
(5) Assist
with Clearing/Executing Firm Relationships
(6) Assist
with Compliance Rule Setup
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(7) Database
Setup (User Defined Fields)
(8) Training
(additional fee)
USBFS
will provide the following
support services after implementation:
(1) Assist
with Project Management
(2) Dedicated
Client Service team
(3) Weekly
status calls (if needed)
(4) Setup
and testing of requests from the Fund and the Portfolio
(5) Duplicate
Data Identification
(6) Assistance
with System File Imports
(7) Custom
Report Programming (at Programming rates)
(8) Enhanced
support available at a designated fee (such as database query reports,
compliance report review and analysis, compliance workflow
assistance)
4. Duties
and Responsibilities of the Fund and the Portfolio
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The
Fund and the Portfolio shall:
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A.
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Assume
exclusive responsibility for the Fund’s, the Portfolio’s or the User’s
failure to properly access the Data Warehouse Services in the manner
prescribed by USBFS, and for the Fund’s or the Portfolio’s failure to
supply accurate information to
USBFS.
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B.
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Comply,
and instruct Users to comply, with all the User enrollment instructions
and authorization procedures.
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5. System
Maintenance
The
Fund
and the Portfolio understand 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 Fund and the Portfolio 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 no party shall knowingly insert into any interface,
software, or 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.
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7. Proprietary
Rights
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A.
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The
Fund and the Portfolio acknowledge and agree 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 Fund and the
Portfolio in order to provide connectivity to MARSTM
and Data
Warehouse Services through USBFS shall be used by the Fund, the Portfolio
and the Users only for the period during which this Exhibit C is in
effect and only in accordance with the terms of this Exhibit C, and
shall not be used by the Fund or the Portfolio to provide connectivity
to
or through any other system or person without USBFS’ prior written
approval. The Fund and the Portfolio shall not copy, decompile
or reverse engineer any software or programs provided to the Fund
or the
Portfolio hereunder. The Fund and the Portfolio also agree 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.
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B.
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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 Fund and the
Portfolio. The Fund and the Portfolio retain all rights in such
intellectual property that may reside on the MARSTM
or Data
Warehouse Services site, not including any software and processes
provided
by USBFS. To the extent the intellectual property of the Fund
or the Portfolio is cached to expedite communication, the Fund and
the
Portfolio grant 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 Fund or the Portfolio 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 Fund’s web site(s),
the Fund and the Portfolio grant to USBFS 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 Fund’s web site(s) and does not extend to any other intellectual
property owned by the Fund or the Portfolio. The Fund and the
Portfolio warrant that they have sufficient right, title and interest
in
and to their web site(s) and their intellectual property to enter
into
these obligations, and that to their 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 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
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 7 C. relating to equitable relief shall
survive
termination of the provision of services set forth in this Exhibit
C.
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8. Compensation
The
Fund
and the Portfolio shall compensate USBFS for providing MARSTM or Data
Warehouse
Services to the Fund and the Portfolio, respectively, and their authorized
agents in accordance with the fee schedule set forth in Appendix I to
this Exhibit C (as the same may be amended in writing from time to
time).
9. 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
Fund and the Portfolio 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 Fund and the Portfolio and their respective trustees, 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 Fund 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 Fund, the Portfolio and/or User
with
respect to: 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 Fund and the
Portfolio 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 Fund or the
Portfolio, replace or modify MARSTM
or Data
Warehouse Services so that they become non-infringing, provided that,
in
the Fund’s and the Portfolio’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 Fund,
the
Portfolio and/or Users. If in the Fund’s or Portfolio’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 Fund,
the
Portfolio and/or Users, the Fund or the Portfolio may terminate all
rights
and responsibilities under this Exhibit C 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
C. This Exhibit C may be terminated by any party
upon the breach of the other party of any material term of this Exhibit
C 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
Fund, the Portfolio and Users are responsible for verifying the accuracy
and receipt of all data or information made available via MARSTM
and Data
Warehouse Services. The Fund and the Portfolio are 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 Fund’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 Fund’s or the Portfolio’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. 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 Fund’s or the
Portfolio’s data bases, files, and other information provided by the Fund
or the Portfolio to USBFS for use with MARSTM
and Data
Warehouse Services, (collectively, “Fund Files”). USBFS’s
security provisions with respect to MARSTM
and Data
Warehouse Services and the Fund Files will be no less than USBFS’s
security provisions with respect to its own proprietary
information. USBFS agrees that any and all Fund Files
maintained by USBFS hereunder shall be available for inspection by
the
Fund’s, the Portfolio’s or User’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
Investment Company Act of 1940, as amended. 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.
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B.
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USBFS
shall treat as confidential and not disclose or otherwise make available
any of the Fund’s or the Portfolio’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 Fund’s or the Portfolio’s request, USBFS shall return to the Fund
or the Portfolio, 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 through
legal
means 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. Warranties
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 MARSTM 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. Termination
of MARSTM
Except
as
otherwise specifically noted in this Exhibit C, 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.
13. Duties
in the Event of Termination
In
the
event of termination of the services provided pursuant to this Exhibit C,
(i) the Fund, the Portfolio and Users will immediately end their access to
MARSTM and Data
Warehouse Services and (ii) the Fund and the Portfolio 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 C
Fee
Schedule
Kinetics
Mutual Funds, Inc. and Kinetics Portfolios Trust
Pricing
Schedule
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Except
to
the extent supplemented hereby, the Agreement shall remain in full force and
effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
by
a duly authorized officer on one or more counterparts as of the date and year
first written above.
| KINETICS MUTUAL FUNDS, INC. | U.S BANCORP FUND SERVICES, LLC | |
| By: /s/ Xxxxxx Xxxxxxxx | By: /s/ Xxxxxxx X. XxXxx | |
| Name: Xxxxxx Xxxxxxxx | Name: Xxxxxxx X. XxXxx | |
| Title: CFO & Co-founder | Title: Senior Vice President | |
| KINETICS PORTFOLIOS TRUST | ||
| By: /s/ Xxxxxx Xxxxxxxx | ||
| Name: Xxxxxx Xxxxxxxx | ||
| Title: CFO & Co-founder |
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