AMENDMENT TO TRANSFER AGENT SERVICING AGREEMENT
AMENDMENT
TO TRANSFER AGENT SERVICING AGREEMENT
THIS
AMENDMENT, dated as of July 24, 2002, modifies the Transfer Agent Servicing
Agreement by and between U.S. Bancorp Fund Services, LLC (the “Transfer Agent”)
and Kinetics Mutual Funds, Inc. (the “Fund”) and Kinetics Portfolio Trust (the
“Portfolio”), such Agreement being hereinafter referred to as the
“Agreement.”
WHEREAS,
Section 352 of the USA Patriot Act (the “ACT”) and the Interim Final Rule
(Section 103.130) adopted by the Department of the Treasury’s Financial Crimes
Enforcement Network (the “Rule”) requires the Fund and Portfolio to develop and
implement an anti-money laundering program and monitor the operation of the
program and assess the effectiveness; and
WHEREAS,
Section 326 of the Act, as proposed, requires the Fund and Portfolio to develop
and implement a Customer Identification Program (“CIP”) as part of the Fund and
Portfolio’s overall anti-money laundering program to ensure, among other things,
that the Fund and Portfolio obtains certain information from each of its
customers and to be reasonably sure it knows each of its customers;
and
WHEREAS,
in order to assist its transfer agent clients with their anti-money laundering
compliance responsibilities under the Act and the Rule, the transfer Agent
has
provided to the Fund and Portfolio for their consideration and approval written
procedures describing various tools designed to promote the detection and
reporting of potential money laundering activity by monitoring certain aspects
of shareholder activity (the “Monitoring Procedures”) as well as written
procedures for verifying a customer’s identity (the Customer Identification
Procedures”), together referred to as the “Procedures”; and
WHEREAS,
the Fund and Portfolio desire to implement the Procedures as par of their
overall anti-money laundering program and, subject to the terms of the Act
and
the Rule, delegate to the Transfer Agent the day-to-day operation of the
Procedures on behalf of the Fund and Portfolio.
NOW
THEREFORE, the parties agree, and the Agreement is hereby modified, as
follows:
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1.
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The
Fund and Portfolio acknowledge that they have had an opportunity
to
review, consider and comment upon the Procedures provided by the
Transfer
Agent and the Fund and Portfolio have determined that the Procedures,
as
part of the Fund and Portfolio’s overall anti-money laundering program,
are reasonably designed to prevent the Fund and Portfolio from being
used
for money laundering or the financing of terrorist activities and
to
achieve compliance with the applicable provision of the Bank Security
Act
and the implementing regulations
thereunder.
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2.
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Based
on this determination, the Fund and Portfolio hereby instruct and
direct
the Transfer Agent to implement the Procedures on the Fund and Portfolio’s
behalf, as such may be amended or revised from time to
time.
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3.
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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 Fund and Portfolio’s anti-money
laundering responsibilities.
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4.
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The
Transfer Agent agrees to provide to the Fund and Portfolio (a) prompt
written notification of any transaction or combination of transactions
that the Transfer Agent believes, based on the Procedures, evidence
money
laundering activity in connection with the Fund and Portfolio or
any
shareholder of the Fund and Portfolio, (b) prompt written notification
of
any customer(s) that the Transfer Agent reasonably believes, based
upon
the Procedures, to be engaged in money laundering activity, provided
that
the Fund and Portfolio agrees not to communicate this information
to the
customer, (c) any reports received by the Transfer Agent from any
government agency or applicable industry self-regulatory organization
pertaining to the Transfer Agent’s anti-money laundering monitoring on
behalf of the Fund and Portfolio as provided in this Amendment, (d)
prompt
written notification of any action taken in response to anti-money
laundering violations as described in (a), (b) or (c), and (e) an
annual
report of its monitoring and customer identification activities on
behalf
of the Fund and Portfolio. The Transfer Agent shall provide
such other reports on the monitoring and customer identification
activities conducted at the direction of the Fund and Portfolio as
may be
agreed to from time to time by the Transfer Agent, the Fund and the
Portfolio.
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5.
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The
Fund and Portfolio hereby directs, and the Transfer Agent acknowledges,
that the Transfer Agent shall (a) permit federal regulators access
to such
information and records maintained by the Transfer Agent and relating
to
the Transfer Agent’s implementation of the Procedures on behalf of the
Fund and Portfolio, as they may request, and (b) permit such federal
regulators to inspect the Transfer Agent’s implementation of the
Procedures on behalf of the Fund and
Portfolio.
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6.
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Fees
and Expenses (other than those already set forth in the Agreement)
for
services to be provided by the Transfer Agent hereunder shall be
set forth
in a fee schedule agreed upon by the Fund, the Portfolio and the
Transfer
Agent form time to time. A copy of the initial fee schedule is
attached hereto as Exhibit A.
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7.
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This
Amendment constitutes the written instructions of the Fund and Portfolio
pursuant to the terms of the Agreement. Except to the extent
supplemented hereby, the Agreement shall remain in full force and
effect.
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IN
WITNESS HEREOF, the undersigned have executed this Agreement as of the date
and
year first above written.
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Kinetics
Mutual Funds, Inc./Kinetics Portfolio Trust
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U.S.
Bancorp Fund Services, LLC
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By: /s/
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By: /s/
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Authorized
Officer
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Authorized
Officer
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