EXHIBIT (g)
CUSTODIAN AGREEMENT
THIS AGREEMENT made on this fifth day of February, 1999, between
Kinetics Asset Management, Inc., a New York Corporation consisting of the
Internet Fund (hereinafter called the "Fund"), and Firstar Bank Milwaukee, N.A.
a corporation organized under the laws of the State of Wisconsin (hereinafter
called "Custodian"),
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Funds and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares,
bonds, debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the Fund by any two
of the President, a Vice President, the Secretary and the Treasurer of the Fund,
or any other persons duly authorized to sign by the Board of Directors.
The word "Board" shall mean Board of Directors of The Internet
Fund.
2. NAMES, TITLES, AND SIGNATURES OF THE FUNDS' OFFICERS
An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board Of
Directors, together with any changes which may occur from time to time.
ADDITIONAL SERIES. The Internet 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 Trust, now or in the future, be covered by the terms and
conditions of this agreement.
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or
accounts in the name of the Fund, subject only to draft or order by Custodian
acting pursuant to the terms of this Agreement. Custodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Fund. Custodian shall make payments of cash to,
or for the account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the
Fund upon the delivery of such securities to Custodian,
registered in the name of the Fund or of the nominee of
Custodian referred to in Section 7 or in proper form for
transfer;
(b) for the purchase or redemption of shares of beneficial
interest of the Fund upon delivery thereof to Custodian,
or upon proper instructions from The Internet Fund, Inc.;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing
and custodian services and expenses for printing and
postage);
(d) for payments in connection with the conversion, exchange
or surrender of securities owned or subscribed to by the
Fund held by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by
resolution of the Board Of Directors of the Fund.
Before making any such payment, Custodian shall receive (and may
rely upon) an officers' certificate requesting such payment and stating that it
is for a purpose permitted under the terms of items (a), (b), (c), or (d) of
this Subsection A, and also, in respect of item (e), upon receipt of an
officers' certificate and a certified copy of a resolution of the Board
specifying the amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom such payment is to be made, provided,
however, that an officers' certificate and a certified copy of a resolution of
the Board need not precede the disbursement of cash for the purpose of
purchasing a money market instrument, or any other security with same or
next-day settlement, if the President, a Vice President, the Secretary or the
Treasurer of the Fund issues appropriate oral or facsimile instructions to
Custodian and an appropriate officers' certificate and a certified copy of a
resolution of the Board is received by Custodian within two business days
thereafter.
B. Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by Custodian
for the account of the Fund.
C. Custodian shall, upon receipt of proper instructions, make
federal funds available to the Fund as of specified times agreed upon from time
to time by the Fund and the custodian in the amount of checks received in
payment for shares of the Fund which are deposited into the Fund's account.
4. SEGREGATED ACCOUNTS
Custodian shall hold in a separate account, and physically
segregate at all times from those of any other persons, firms or corporations,
pursuant to the provisions hereof, all securities and other investments other
than cash and cash equivalents received by it for, or for the account of, the
Fund. All such securities and other investments are to be held or disposed of by
Custodian for, and subject at all times to the instructions of, the Fund
pursuant to the terms of this Agreement. Custodian shall have no power or
authority to assign, hypothecate, pledge or otherwise dispose of any such
securities or other investments, except pursuant to the directive of the Fund
and only for the account of the Fund as set forth in Section 5 of this
Agreement.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any
securities of the Fund held by it pursuant to this Agreement. Custodian agrees
to transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund
upon receipt by Custodian of payment therefor;
(b) when such securities are called, redeemed or retired or
otherwise become payable;
(c) for examination by any broker selling any such securities
in accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities
alone or other securities and cash whether pursuant to any
plan or merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms
into other securities;
(f) upon exercise of subscription, purchase or other similar
rights represented by such securities;
(g) for the purpose of exchanging interim receipts or
temporary securities for definitive securities;
(h) for the purpose of redeeming in kind shares of beneficial
interest of the Fund upon delivery thereof to Custodian;
or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a),
(b), (d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian
shall receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose permitted
under the terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this
Section 5 and also, in respect of item (i), upon receipt of an officers'
certificate and a certified copy of a resolution of the Board specifying the
securities to be delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities shall be made,
provided, however, that an officers' certificate and a certified copy of a
resolution of the Board need not precede any such transfer, exchange or delivery
of a money market instrument, or any other security with same or next-day
settlement, if the President, a Vice President, the Secretary or the Treasurer
of the Fund issues appropriate oral or facsimile instructions to Custodian and
an appropriate officers' certificate and a certified copy of a resolution of the
Board is received by Custodian within two business days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to
the contrary, Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it thereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate,
Custodian shall register all securities, except such as are in bearer form, in
the name of a registered nominee of Custodian as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued hereunder or in any
provision of any subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. Custodian shall use its best efforts
to the end that the specific securities held by it hereunder shall be at all
times identifiable in its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall promptly deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Fund all written
information (including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith) received by
Custodian from issuers of the securities being held for the Fund. With respect
to tender or exchange offers, Custodian shall transmit promptly to the Fund all
written information received by Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or his agent) making the tender
or exchange offer.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as may
be required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws of
any state, to exempt from taxation any exemptable transfers and/or deliveries of
any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
Custodian shall use reasonable care in providing services to the
Fund pursuant to this Agreement. The Fund agrees to indemnify and hold harmless
Custodian and its nominee from all taxes, charges, expenses, assessments, claims
and liabilities (including counsel fees) incurred or assessed against it or by
its nominee in connection with the performance of this Agreement, except such as
may arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct. Custodian is authorized to charge any account of the
Fund for such items.
In the event of any advance of cash for any purpose made by
Custodian resulting from orders or instructions of the Fund, or in the event
that Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefore.
Custodian agrees to indemnify and hold harmless the Fund or their nominees from
all charges, expenses, assessments, claims and liabilities (including counsel
fees) incurred or assessed against the fund or their nominees in connection with
the performance of this agreement, except such as may arise from the Fund's, or
their nominees own negligent action, negligent failure to act, or willful
misconduct.
11. FOREIGN SUBCUSTODIANS
Custodian is hereby authorized to assign as subcustodians for the
Fund's securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated on
Schedule B hereto ("Foreign Subcustodians"), provided that, if the Custodian
utilizes the services of a Foreign Subcustodian, the Custodian shall remain
fully liable and responsible for any losses caused to the Fund by the Foreign
Subcustodian as fully as if the Custodian was directly responsible for any such
losses under the terms of this Agreement. Upon receipt of proper instructions
from the Fund, together with a certified resolution of the Board, Custodian and
the Fund may agree to amend Schedule B hereto from time to time to designate
additional foreign banking institutions and foreign securities depositories to
act as Foreign Subcustodians. Upon receipt of proper instructions from
Custodian, the Fund may instruct Custodian to cease the employment of any one or
more Foreign Subcustodians for maintaining custody of the Fund's assets.
Custodian shall limit the securities and other assets maintained
in the custody of Foreign Subcustodians to the following: (a) "foreign
securities," as defined in paragraph (c)(1) of Rule 17f-5 under the Investment
Company Act of 1940, as amended (the "1940 Act"); and (b) cash and cash
equivalents in such amounts as custodian or the Fund may determine to be
reasonably necessary to effect the Fund's foreign securities transactions.
Custodian shall identify on its books and records as belonging to the Fund, the
foreign securities of the Fund held by each Foreign Subcustodian.
Notwithstanding anything contained herein, if the Fund requires
the Custodian to engage specific Foreign Subcustodians for the safekeeping
and/or clearing of assets, the Fund agrees to indemnify and hold harmless
Custodian from all claims, expenses and liabilities incurred or assessed against
it in connection with the use of such Foreign Subcustodian in regard to the
Fund's assets, except as may arise from the Custodian's or the Foreign
Subcustodian's negligent action, negligent failure to act or willful misconduct.
12. REPORTS BY CUSTODIAN
Custodian shall furnish the Fund daily with a statement
summarizing all transactions and entries for the account of Fund. Custodian
shall furnish to the Fund, at the end of every month, a list of the portfolio
securities showing the adjusted average cost of each issue and the market value
at the end of such month. Custodian shall furnish the Fund, at the close of each
quarter of the Fund's fiscal year, with a list showing cost and market values of
the securities held by it for the Fund hereunder, adjusted for all commitments
confirmed by the Fund as of such close, certified by a duly authorized officer
of Custodian. The books and records of Custodian pertaining to its actions under
this Agreement shall be open to inspection and audit at reasonable times by
officers of, and of auditors employed by, the Fund.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Fund, or by Custodian, on
sixty (60) days notice, given in writing and sent by registered mail to
Custodian at X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, or to the Fund at The
Internet Fund/Kinetics Asset Management, Inc., 000 Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000 as the case may be. Upon any termination of this Agreement,
pending appointment of a successor to Custodian or a vote of the shareholders of
the Fund to dissolve or to function without a custodian of its cash, securities
and other property, Custodian shall not deliver cash, securities or other
property of the Fund to the Fund, but may deliver them to a bank or trust
company of its own selection, having an aggregate capital, surplus and undivided
profits, as shown by its last published report of not less than Two Million
Dollars ($2,000,000) as a Custodian for the Fund to be held under terms similar
to those of this Agreement; provided, however, that Custodian shall not be
required to make any such delivery or payment until full payment shall have been
made by the Fund of all liabilities constituting a charge on or against the
properties then held by Custodian or on or against Custodian, and until full
payment shall have been made to Custodian of all its fees, compensation, costs
and expenses, subject to the provisions of Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the
consent of the Fund, authorized or approved by a resolution of its Board Of
Directors.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use
by Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board Of Directors of the Fund approves by resolution the
use of such central securities clearing agency or securities depository.
15. RECORDS
To the extent that Custodian in any capacity prepares or
maintains any records required to be maintained and preserved by the Fund
pursuant to the provisions of the Investment Company Act of 1940, as amended, or
the rules and regulations promulgated thereunder, Custodian agrees to make any
such records available to the Fund upon request and to preserve such records for
the periods prescribed in Rule 31a-2 under the Investment Company Act of 1940,
as amended.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and their respective corporate seals to be affixed hereto as of
the date first above-written by their respective officers thereunto duly
authorized.
Executed in several counterparts, each of which is an original.
16. Firstar Bank Milwaukee, LLC, assumes no responsibilities for work on the
Internet Fund that was performed prior to our servicing begun.
Kinetics Asset Management Firstar Bank Milwaukee, N.A.
Sign: /s/ Xxxxxxxx X. Xxxxx Sign: /s/ Xxx X. Xxxxxxx
Print: Xxxxxxxx X. Xxxxx Print: Xxx X. Xxxxxxx
Title: President Title: Senior Vice President
Date: 2/17/99 Date: 2/26/99
Attest: /s/ Xxxxxxx X. Xxxxxxxxx Attest: /s/ Xxxx Rock
