ADMINISTRATION, BOOKKEEPING AND PRICING SERVICES AGREEMENT
E xhibit
(h.10)
ADMINISTRATION,
BOOKKEEPING AND
PRICING
SERVICES AGREEMENT
THIS
AGREEMENT is made as of August 13, 2008, between Heartland Group, Inc.,
organized as a corporation under the laws of the State of Maryland (the “Fund”),
and ALPS Fund Services, Inc., a Colorado corporation (“ALPS”).
WHEREAS,
the Fund is registered under the Investment Company Act of 1940, as amended
(“1940 Act”), as an open-end, registered investment company, presently
consisting of the portfolios listed in Appendix A (the
“Portfolios”);
WHEREAS, is
the Fund’s investment adviser and is responsible for managing the Fund’s
business affairs and providing certain clerical, bookkeeping and other
administrative and management services;
WHEREAS,
ALPS provides certain administrative, bookkeeping and pricing services to
investment companies; and
WHEREAS,
the Fund desires to appoint ALPS to perform certain administrative, bookkeeping
and pricing services for the Fund, and ALPS has indicated its willingness to so
act, subject to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual covenants hereinafter
contained, the parties hereto agree as follows.
1. ALPS Appointment and
Duties.
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(a)
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The
Fund hereby appoints ALPS to provide the administrative, bookkeeping and
pricing services set forth in Appendix B
hereto, as amended from time to time, upon the terms and conditions
hereinafter set forth. ALPS hereby accepts such appointment and
agrees to furnish such specified services. ALPS shall for all
purposes be deemed to be an independent contractor and shall, except as
otherwise expressly authorized in this Agreement, have no authority to act
for or represent the Fund in any way or otherwise be deemed an agent of
the Fund.
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(b)
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ALPS
may employ or associate itself with a person or persons or organizations
as ALPS believes to be desirable in the performance of its duties
hereunder; provided that, in such event, the compensation of such person
or persons or organizations shall be paid by and be the sole
responsibility of ALPS, and the Fund shall bear no cost or obligation with
respect thereto; and provided further that ALPS shall not be relieved of
any of its obligations under this Agreement in such event and ALPS shall
be responsible for all acts of any such person or persons or organizations
taken in furtherance of this Agreement to the same extent ALPS would be
for its own acts.
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(c)
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ALPS
agrees to provide services described herein in accordance with the
Performance Standards set forth in Exhibit 1 of Appendix B and
incorporated herein (the "Performance Standards"). Such Performance
Standards may be amended from time to time upon written agreement by the
parties. The Performance Standards are subject to all terms and
conditions of this Agreement, including without limitation, provisions
relating to force majeure and standard of care, and ALPS shall not be
subject to the Performance Standards when (i) ALPS has declared a
disaster and must operate pursuant to its business interruption plan;
and/or (ii) in the case of events beyond ALPS’ reasonable control,
including without limitation, force majeure events as set forth in Section
5 herein. In addition, it is understood and agreed that the
Performance Standards are dependent upon timely cooperation and timely
authorization by the Fund, its investment adviser or custodian or other
authorized third parties.
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2. ALPS Compensation;
Expenses.
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(a)
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In
consideration for the services to be performed hereunder by ALPS, the Fund
shall pay ALPS the fees listed in Appendix C
hereto. Notwithstanding anything to the contrary in this
Agreement, fees billed for the services to be performed by ALPS under this
Agreement are based on information provided by the Fund and such fees are
subject to renegotiation between the parties to the extent such
information is determined to be materially different from what the Fund
originally provided to ALPS.
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(b)
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ALPS
will bear all expenses in connection with the performance of its services
under this Agreement, except as otherwise provided herein. ALPS will not
bear any of the costs of Fund personnel. Other Fund expenses incurred
shall be borne by the Fund or the Fund’s investment adviser, including,
but not limited to, initial organization and offering expenses; litigation
expenses; taxes; costs of preferred shares; expenses of conducting
repurchase offers for the purpose of repurchasing Fund shares; transfer
agency and custodial expenses; interest; Fund directors’ fees; brokerage
fees and commissions; state and federal registration fees; advisory fees;
insurance premiums; fidelity bond premiums; Fund and investment advisory
related legal expenses; costs of maintenance of Fund existence; printing
and delivery of materials in connection with meetings of the Fund’s
directors; printing and mailing of shareholder reports, prospectuses,
statements of additional information other offering documents,
supplements, proxy materials and other communications to shareholders;
securities pricing data and expenses in connection with electronic filings
with the U.S. Securities and Exchange Commission (the
“SEC”).
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3. Right to Receive
Advice.
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(a)
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Advice of the Fund and
Service Providers. If ALPS is in doubt as to any action it should
or should not take, ALPS may request directions, advice or instructions
from the Fund or, as applicable, the Fund’s investment adviser, custodian
or other service providers.
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(b)
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Advice of
Counsel. If ALPS is in doubt as to any question of law pertaining
to any action it should or should not take, ALPS may request advice from
counsel of its own choosing (who may be counsel for the Fund, the Fund’s
investment adviser or ALPS, at the option of
ALPS).
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(c)
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Conflicting
Advice. In the event of a conflict between directions, advice or
instructions ALPS receives from the Fund or any authorized service
provider on behalf of the Fund and the advice ALPS receives from counsel,
the Fund and ALPS shall mutually agree upon the directions, advice or
instructions to follow. Upon request,
ALPS will provide the Fund with a copy of the advice of counsel received
pursuant to Section 3(b).
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4. Standard of Care; Limitation
of Liability; Indemnification
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(a)
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ALPS
shall be obligated to act in good faith and to exercise commercially
reasonable care and diligence in the performance of its duties under this
Agreement.
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(b)
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In
the absence of willful misfeasance, bad faith, negligence or reckless
disregard by ALPS in the performance of its duties, obligations or
responsibilities set forth in this Agreement, ALPS and its affiliates,
including their respective officers, directors, agents and employees,
shall not be liable for, and the Fund agrees to indemnify, defend and hold
harmless such persons from, all taxes, charges, expenses, disbursements,
assessments, claims, losses, damages, penalties, actions, suits, judgments
and liabilities (including, without limitation, attorneys’ fees and
disbursements and liabilities arising under applicable federal and state
laws) arising directly or indirectly from the
following:
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(i)
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the
inaccuracy of factual information furnished to ALPS by the Fund, the
Fund’s investment adviser or custodian or any authorized third party on
behalf of the Fund;
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(ii)
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any
reasonable error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement
relates;
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(iii)
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ALPS’
reliance on any instruction, direction, notice, instrument or other
information provided by the Fund, the Fund’s investment adviser or
custodian or any authorized third party on behalf of the Fund that ALPS
reasonably believes to be genuine;
or
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(iv)
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any
other action or omission to act which ALPS properly takes in connection
with the provision of services to the Fund pursuant to this
Agreement.
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(c)
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ALPS
shall indemnify and hold harmless the Fund, the Fund’s investment adviser
and their respective officers, directors, agents, and employees from and
against any and all taxes, charges, expenses, disbursements, assessments,
claims, losses, damages, penalties, actions, suits, judgments and
liabilities (including, without limitation, attorneys’ fees and
disbursements and liabilities arising under applicable federal and state
laws) arising directly or indirectly from ALPS’ willful misfeasance, bad
faith, negligence or reckless disregard in the performance of its duties,
obligations or responsibilities set forth in this
Agreement.
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3
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(d)
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Notwithstanding
anything in this Agreement to the contrary, neither party shall be liable
under this Agreement to the other party hereto for any punitive,
consequential, special or indirect losses or damages. Any indemnification
payable by a party to this Agreement shall be net of insurance maintained
by the indemnified party as of the time the claim giving rise to indemnity
hereunder is alleged to have arisen to the extent it covers such
claim.
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(e)
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In
any case in which either party (the “Indemnifying Party”) may be asked to
indemnify or hold the other party (the “Indemnified Party”) harmless, the
Indemnified Party will notify the Indemnifying Party promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Indemnifying Party
although the failure to do so shall not prevent recovery by the
Indemnified Party and shall keep the Indemnifying Party advised with
respect to all developments concerning such situation. The
Indemnifying Party shall have the option to defend the Indemnified Party
against any claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party
so elects, such defense shall be conducted by counsel chosen by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party,
and thereupon the Indemnifying Party shall take over complete defense of
the claim and the Indemnified Party shall sustain no further legal or
other expenses in respect of such claim. The Indemnified Party
will not confess any claim or make any compromise in any case in which the
Indemnifying Party will be asked to provide indemnification, except with
the Indemnifying Party's prior written
consent.
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5.
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Force Majeure.
No party shall be liable for losses, delays, failures, errors,
interruptions or losses of data in its performance of its obligations
under this Agreement if and to the extent it is caused, directly or
indirectly, by reason of circumstances beyond their reasonable control,
including without limitation, acts of God, action or inaction of civil or
military authority, war, terrorism, riot, fire, flood, sabotage, labor
disputes, elements of nature or non-performance by a third party. In any
such event, the non-performing party shall be excused from any further
performance and observance of obligations so affected only for so long as
such circumstances prevail and such party continues to use commercially
reasonable efforts to recommence performance or observance as soon as
practicable
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6.
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Activities of
ALPS. The services of ALPS under this Agreement are not to be
deemed exclusive, and ALPS shall be free to render similar services to
others. The Fund recognizes that from time to time directors, officers and
employees of ALPS may serve as directors, officers and employees of other
corporations or businesses (including other investment companies) and that
such other corporations and businesses may include ALPS as part of their
name and that ALPS or its affiliates may enter into administrative,
bookkeeping, pricing agreements or other agreements with such other
corporations and businesses.
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7.
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Accounts and
Records. The accounts and records maintained by ALPS shall be the
property of the Fund. ALPS shall prepare, maintain and preserve such
accounts and records as required by the 1940 Act and other applicable
securities laws, rules and regulations. ALPS shall surrender such accounts
and records to the Fund, in the form in which such accounts and records
have been maintained or preserved, promptly upon receipt of instructions
from the Fund. The Fund shall have access to such accounts and records at
all times during ALPS’ normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records shall be provided by
ALPS to the Fund at the Fund’s expense. ALPS shall assist the Fund, the
Fund’s independent auditors, or, upon approval of the Fund, any regulatory
body, in any requested review of the Fund’s accounts and records and
reports by ALPS or its independent accountants concerning its accounting
system and internal auditing controls will be open to such entities for
audit or inspection upon reasonable request. In the event ALPS
receives a request or demand for the inspection of records related
specifically to the Fund, ALPS will promptly notify the Fund of such
request in writing and obtain instructions from the Fund as to the
handling of such request.
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8.
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Confidential and
Proprietary Information. In accordance with Regulation S-P and
other relevant rules and regulations, ALPS agrees that it will, on behalf
of itself and its officers and employees, treat all transactions
contemplated by this Agreement, and all records and information relative
to the Fund and its current and former shareholders and other information
germane thereto, as confidential and as proprietary information of the
Fund and not to use, sell, transfer or divulge such information or records
to any person for any purpose other than performance of its duties
hereunder, except after prior notification to and approval in writing from
the Fund, which approval shall not be unreasonably withheld. Approval may
not be withheld where ALPS may be exposed to civil, regulatory, or
criminal proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when requested by the
Fund. When requested to divulge such information by duly constituted
authorities, ALPS shall use reasonable commercial efforts to request
confidential treatment of such information. ALPS shall have in place and
maintain physical, electronic, and procedural safeguards reasonably
designed to protect the security, confidentiality and integrity of, and to
prevent unauthorized access to or use of records and information relating
to the Fund and its current and former
shareholders.
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9.
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Compliance with Rules
and Regulations. ALPS shall comply (and to the extent ALPS takes or
is required to take action on behalf of the Fund hereunder shall cause the
Fund to comply) with all applicable requirements of the 1940 Act and other
applicable laws, rules, regulations, orders and code of ethics, as well as
all investment restrictions, policies and procedures adopted by the Fund
of which ALPS has knowledge (it being understood that ALPS is deemed to
have knowledge of all investment restrictions, policies or procedures set
out in the Fund’s public filings or otherwise provided to ALPS). Except as
set out in this Agreement, ALPS assumes no responsibility for such
compliance by the Fund. ALPS shall maintain at all times a program
reasonably designed to prevent violations of the federal securities laws
(as defined in Rule 38a-1 under the 0000 Xxx) with respect to the services
provided, and shall provide to the Fund a certification to such effect no
less than annually or as otherwise reasonably requested by the Fund. ALPS
shall make available its compliance personnel and shall provide at its own
expense summaries and other relevant materials relating to such program as
reasonably requested by the Fund.
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10. Representations and
Warranties of ALPS. ALPS represents and warrants to the Fund
that:
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(a)
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It
is duly organized and existing as a corporation and in good standing under
the laws of the State of Colorado.
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(b)
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It
is empowered under applicable laws and by its Articles of Incorporation
and Bylaws to enter into and perform this
Agreement.
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(c)
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All
requisite corporate proceedings have been taken to authorize it to enter
into and perform this Agreement.
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(d)
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It
has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement in accordance with industry
standards.
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(e)
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In
the event of the termination of this Agreement, ALPS shall, at the Fund’s
expense, provide reasonable cooperation to the Fund in the movement of all
records (in all media) and materials of the Fund to a successor
administrative agent.
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11.
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Representations and
Warranties of the Fund. The Fund represents and warrants to ALPS
that:
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(a)
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It
is a corporation duly organized and existing and in good standing under
the laws of the state of Maryland and is registered with the SEC as an
open-end registered investment
company.
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(b)
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It
is empowered under applicable laws and by its Articles of Incorporation
and Bylaws to enter into and perform this
Agreement.
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(c)
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The
Board of Directors of the Fund has duly authorized it to enter into and
perform this Agreement.
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(d)
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Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to make
any modifications to its registration statement or adopt any policies
which would affect materially the obligations or responsibilities of ALPS
hereunder without the prior written approval or ALPS, which approval shall
not be unreasonably withheld or
delayed.
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12.
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Documents. The
Fund has furnished or will furnish, upon request, ALPS with copies of the
Fund’s Articles of Incorporation, advisory agreement, custodian agreement,
transfer agency agreement, administration agreement, current prospectus,
statement of additional information, periodic Fund reports and all forms
relating to any plan, program or service offered by the Fund. The Fund
shall furnish, within a reasonable time period, to ALPS a copy of any
amendment or supplement to any of the above-mentioned documents. Upon
request, the Fund shall furnish promptly to ALPS any additional documents
necessary or advisable to perform its functions hereunder. As used in this
Agreement the terms “registration statement,” “prospectus” and “statement
of additional information” shall mean any registration statement,
prospectus and statement of additional information filed by the Fund with
the SEC and any amendments and supplements thereto that are filed with the
SEC.
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13.
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Consultation Between
the Parties. ALPS and the Fund shall regularly consult with each
other regarding ALPS’ performance of its obligations under this Agreement.
In connection therewith, the Fund shall submit to ALPS at a reasonable
time in advance of filing with the SEC reasonably final copies of any
amended or supplemented registration statement (including exhibits) under
the Securities Act of 1933, as amended, and the 1940 Act; provided,
however, that nothing contained in this Agreement shall in any way limit
the Fund’s right to file at any time such amendments to any registration
statement and/or supplements to any prospectus or statement of additional
information, of whatever character, as the Fund may deem advisable, such
right being in all respects absolute and
unconditional.
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14.
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Liaison with
Accountants. ALPS shall act as a liaison with the Fund’s
independent public accountants and shall provide account analysis, fiscal
year summaries, and other audit-related schedules with respect to the
services provided to the Fund. ALPS shall take all reasonable action in
the performance of its duties under this Agreement to assure that the
necessary information is made available to such accountants as reasonably
requested or required by the Fund.
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15.
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Business Interruption
Plan. ALPS shall maintain in effect a business interruption plan,
and enter into any agreements necessary with appropriate parties making
reasonable provisions for emergency use of electronic data processing
equipment customary in the industry. In the event of equipment failures,
ALPS shall, at no additional expense to the Fund, take commercially
reasonable steps to minimize service
interruptions.
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16. Duration and Termination of
this Agreement.
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(a)
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Initial Term.
This Agreement shall become effective as of the date first written above
(the “Start Date”) and shall continue thereafter throughout the period
that ends three (3) years after the Start Date (the “Initial Term”). Until
the end of the Initial Term, this Agreement may be terminated without
penalty only by agreement of the parties or for cause pursuant to Section
16(c) hereof. If the Fund terminates this Agreement unilaterally without
cause prior to the end of the Initial Term it will cause substantial
damages to ALPS. Because of the difficulty of estimating the damages that
will result, the Fund agrees to pay ALPS, as liquidated damages for such
termination, an amount equal to twenty-five percent (25%) of the annual
fee in effect at the time of termination (the “Termination Payment”). The
parties agree that the Termination Payment is a reasonable forecast of
probable actual loss to ALPS and that this sum is agreed to as liquidated
damages and not as a penalty.
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(b)
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Renewal
Term.
If not sooner terminated, this Agreement shall renew at the end of the
Initial Term and shall thereafter continue for successive annual
periods until terminated by either party upon not less than sixty (60)
days’ written notice prior to the expiration of the then current renewal
term or for cause pursuant to Section 16(c)
hereof.
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(c)
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Cause.
Notwithstanding anything to the contrary elsewhere in this Agreement, the
Fund may terminate this Agreement for cause immediately at any time,
without penalty, without default and without the payment of any Termination
Payment or other liquidated damages. For purposes of this Section 16,
“cause” shall mean:
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(i)
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willful
misfeasance, bad faith, negligence or reckless disregard on the part of
ALPS in the performance of its duties, obligations and responsibilities
set forth in this Agreement;
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(ii)
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in
the event ALPS is no longer permitted to perform its duties, obligations,
or responsibilities hereunder pursuant to applicable law, or regulatory,
administrative or judicial proceedings against ALPS which result in a
determination that ALPS has violated, or has caused the Fund to violate,
in any material respect any applicable law, rule, regulation, order or
code of ethics, or any material investment restriction, policy or
procedure adopted by the Fund of which ALPS had knowledge (it being
understood that ALPS is deemed to have knowledge of all investment
restrictions, policies or procedures set out in the Fund’s public filings
or otherwise provided to ALPS); or
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(iii)
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financial
difficulties on the part of ALPS which are evidenced by the authorization
or commencement of, or involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title 11 of the
United States Code, as from time to time in effect, or any applicable law
other than said Title 11, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of the
rights of creditors.
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(d)
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Deliveries Upon
Termination. Upon termination of this Agreement, ALPS agrees to
cooperate in the orderly transfer of administrative duties and shall
deliver to the Fund or as otherwise directed by the Fund (in the case of
termination by the Fund, at the expense of the Fund) all records and other
documents made or accumulated in the performance of its duties for the
Fund hereunder. In the event ALPS gives notice of termination under this
Agreement, it will continue to provide the services contemplated hereunder
after such termination at the contractual rate for up to 120 days,
provided that the Fund uses all reasonable commercial efforts to appoint
such replacement on a timely basis.
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17.
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Assignment.
This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and permitted assigns; provided,
however, that this Agreement shall not be assignable by the Fund without
the prior written consent of ALPS, or by ALPS without the prior written
consent of the Fund.
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18.
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19.
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Names. The
obligations of the Fund entered into in the name or on behalf thereof by
any director, shareholder, representative, or agent thereof are made not
individually, but in such capacities, and are not binding upon any of the
directors, shareholders, representatives or agents of the Fund personally,
but bind only the property of the Fund, and all persons dealing with the
Fund must look solely to the property of the Fund for the enforcement of
any claims against the Fund.
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20.
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Amendments to this
Agreement. This Agreement may only be amended by the parties in
writing.
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21.
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Notices. All
notices and other communications hereunder shall be in writing, shall be
deemed to have been given when received or when sent by telex or
facsimile, and shall be given to the following addresses (or such other
addresses as to which notice is
given):
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To
ALPS:
ALPS Fund
Services, Inc.
0000
Xxxxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attn:
General Counsel
Fax:
(000) 000-0000
To the
Fund:
Heartland
Group, Inc.
000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Attn:
Secretary
Fax:
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22.
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Counterparts.
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same
instrument.
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23.
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Entire
Agreement. This Agreement embodies the entire agreement and
understanding among the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof; provided, however,
that ALPS may embody in one or more separate documents its agreement, if
any, with respect to delegated duties and oral
instructions.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
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HEARTLAND
GROUP, INC.
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By:
/s/ Xxxx X.
Xxxxx
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Name: Xxxx
X. Xxxxx
Title: Vice
President and Secretary
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ALPS
FUND SERVICES, INC.
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By:
/s/ Xxxxxx X.
May
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Name:
Xxxxxx X. May
Title:
Managing
Director
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11
APPENDIX
A
LIST OF
PORTFOLIOS
Heartland
Value Fund
Heartland
Value Plus Fund
Heartland
Select Value Fund
00
XXXXXXXX
X
SERVICES
Administrative
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Coordinate,
prepare and review semi-annual and annual financial statements in
accordance with generally accepted accounting principles
including:
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(i) Schedule
of Investments
(ii) Statement
of Assets and Liabilities
(iii) Statement
of Operations
(iv) Statement
of Changes in Net Assets
(v) Financial
Highlights
(vi) Statement
of Cash Flows, as necessary
(vii) Notes
to Financial Statements.
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Coordinate
the preparation and review of the Fund’s SEC filings,
including:
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(i)
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Form
N-SAR
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(ii)
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Form
N-CSR
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(iii)
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Form
N-Q
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(iv)
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Form
N-PX
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(v)
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Form
24f-2
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ALPS
shall not be responsible for the accuracy or adequacy of any information
contained in the documents listed in subsections (i) through (v) above, to the
extent such information is provided to ALPS by the Fund, other service providers
to the Fund, or any other third party (other than affiliates of
ALPS).
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Provide
facilities, information and personnel, as necessary, to accommodate annual
audits with the Fund’s independent accountants, or examinations conducted
by the Securities and Exchange Commission or other regulatory
authorities.
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On
a monthly basis, based on information provided to ALPS, monitor the Fund’s
compliance with:
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(i)
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SEC
diversification requirements, as
applicable
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(ii)
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Status
as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended
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(iii)
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Investment
restrictions described in the Fund’s registration
statement
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Calculate
monthly total return performance calculations for each Fund Portfolio and
class of shares.
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Provide
assistance to the Fund related to quarterly meetings by preparing board
reports regarding services provided by ALPS, as requested by the
Fund.
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Monitor
monthly expense ratios for each Fund Portfolio and class of
shares.
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Monitor
the Fund’s expense accruals by establishing expense budgets and comparing
expense accruals on a periodic basis to actual expenses paid for each Fund
Portfolio and class of shares.
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Manage
fund invoice approval and xxxx payment
process.
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Maintain
and coordinate Blue Sky registration for each Fund Portfolio and class of
shares.
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Report
performance and other Fund information to outside reporting agencies as
directed by the Fund, including Morningstar,
etc.
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Bookkeeping and
Pricing
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Compute,
on a daily basis, net asset value for each class of shares of each
Portfolio of the Fund in accordance with the Fund’s
prospectus.
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Transmit
daily NAVs to NASDAQ, transfer agent, adviser and other third
parties.
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Compute
yields, expense ratios, portfolio turnover rates,
etc.
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Reconcile
cash and investment balances with the
custodian.
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Maintain
and keep current all books and records of the Fund as required by the 1940
Act, and the rules thereunder, in connection with ALPS’ duties hereunder.
Without limiting the generality of the foregoing, ALPS will prepare and
maintain the following records upon receipt of information in proper form
from the Fund:
|
|
|
(i)
|
Cash
receipts journal
|
|
|
(ii)
|
Cash
disbursements journal
|
|
|
(iii)
|
Dividend
records
|
|
|
(iv)
|
Security
purchases, sales and loans - portfolio securities
journals
|
|
|
(v)
|
Subscription
and redemption journals
|
|
|
(vi)
|
Security
ledgers
|
|
|
(vii)
|
Broker
ledger
|
|
|
(viii)
|
General
ledger
|
|
|
(ix)
|
Daily
expense accruals
|
|
|
(x)
|
Daily
income accruals
|
|
|
(xi)
|
Foreign
currency journals
|
|
|
(xii)
|
Trial
balances
|
|
|
(xiii)
|
Historical
tax lots for each security.
|
Tax
|
·
|
Perform
monthly, quarterly or annual distribution calculations, as appropriate,
including distributions necessary to avoid excise
tax.
|
|
·
|
Prepare
provision for income tax and tax disclosure information (ROCSOP) for the
audited financial statements.
|
|
·
|
Perform
wash sale deferral and tax straddle deferral activity
analysis.
|
|
|
EXHIBT
1 TO APPENDIX B
|
|
|
PERFORMANCE
STANDARDS
|
In the
event that ALPS fails to meet a Performance Standard in any particular month,
ALPS agrees to take appropriate corrective measures during the following month
in order to be in compliance with such standard at the end of such following
month. In the event that ALPS fails to meet the same Performance
Standard in three months (the third of such three months being referred to as
the “Trigger Month”) in any six-month period, the fees payable to ALPS for the
month following the Trigger Month shall be reduced as set forth in the table
below. Measurements and reporting of the Performance Standards will
occur at the ALPS services team level.
|
Item
|
Standard
|
Fee Reduction
|
|
Delivery
of Financial Services Files:
· Fund
· Price
· Position
· Security
· Tax Lot
· Issuer
· Rate
· BSFile
|
100%
of files delivered by 6:00 p.m. CT each business day
|
$500
|
|
Daily
Cash File
|
Delivery
by 9:30 a.m. CT
|
$250
|
|
Custody
Reconciliation
|
Delivered
daily by 10:00 a.m. CT
|
$250
|
|
Monthly
Performance File
|
5th
business day following each month end.
|
$200
|
|
Monthly
Expense Invoices and Payment Request Submitted to the Fund
|
7th
and 20th
day calendar day of each month end.
|
$200
|
|
Quarterly
Accrual Analysis
|
20th
calendar day of April, June, September and December for each fiscal
quarter (exception for 1st
quarter which will be 25th
calendar day following fiscal quarter end)
|
$200
|
|
Board
Reporting Files/Data As Agreed Upon for Quarter End
|
10th
calendar day for reports identified as Pricing Committee reports and
25th
calendar day following each fiscal quarter end
|
$200
|
|
Monthly
Tax Summary – Book Basis
|
20th
calendar day following each month end, except for quarter
end.
|
$100
|
|
Quarterly
Tax Summary – Tax Basis
|
25th
calendar day following each fiscal quarter end.
|
$100
|
APPENDIX
C
COMPENSATION
Annual
Fee: Greater of $550,000 annual minimum or:
|
|
(i)
|
4.0
basis points of the Portfolios’ average net assets between $0 - $500M;
and
|
|
|
(ii)
|
3.0
basis points of the Portfolios’ average net assets between $500M
- $1B; and
|
|
|
(iii)
|
1.5
basis points of the Portfolios’ average net assets over
$1B.
|
Pass-through
at cost of out-of-pocket expenses, including: third-party security pricing
and/or data fees; Bloomberg fees; Gainskeeper fees; Blue Sky fees; control
review reports; travel expenses; customized programming/enhancements; and other
expenses which may occur at the direction of the Fund.
