Exhibit h(2)
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FUND ACCOUNTING AND SERVICES AGREEMENT
BETWEEN
THE LIPPER FUNDS, INC.
AND
ALPS MUTUAL FUNDS SERVICES, INC.
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FUND ACCOUNTING AND SERVICES AGREEMENT
AGREEMENT made this 29th day of April 2002, between The Lipper Funds, Inc.,
a Maryland corporation having its principal office at 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("the "Fund") and ALPS Mutual Funds Services,
Inc., a Colorado corporation having its principal office at 000 00xx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (the "ALPS").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended, presently consisting of
the portfolios and share classes listed in Appendix A attached hereto; each of
such investment portfolios and any additional investment portfolios that may be
established by the Fund is referred to herein individually as a "Portfolio" and
collectively as the "Portfolios"; and
WHEREAS the Fund has entered into an Administration Agreement dated April
29, 2002 (the "Administration Agreement") with ALPS whereby ALPS has agreed to
perform certain administration services for the benefit of the Portfolios.
WHEREAS, ALPS provides certain fund accounting services to investment
companies; and
WHEREAS, the Fund desires to appoint ALPS to perform certain bookkeeping
and pricing services for the Portfolios on behalf of 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 Appointed Bookkeeping and Pricing Agent. The Fund hereby appoints
ALPS as bookkeeping and pricing agent for the Portfolios and ALPS agrees to
provide the fund accounting services to each of the Portfolios as set forth in
Appendix B, as may be amended from time to time, upon the terms and conditions
hereinafter set forth. ALPS accepts such appointment and agrees to furnish such
specified services.
2. Definitions. In this Agreement the terms below have the following
meanings:
(a) Authorized Person. Authorized Person means any of the persons duly
authorized to giver Proper Instructions or otherwise act on behalf of
the Fund by appropriate resolution of the Board of Directors of the
Fund. The Fund will at all times maintain on file with ALPS
certification, in such form as may be acceptable to ALPS, of (i) the
names and signatures of the Authorized Person(s) and (ii) the names of
the members of the Board of Directors of the Fund, it being understood
that upon the occurrence of any change in the information set forth in
the most recent certification on file (including without limitation
any person named in the most recent certification who is no longer an
Authorized Person as designated therein), the Fund will provide a new
or amended certification setting forth the
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change. ALPS will be entitled to rely upon any Proper Instruction
(defined below) which has been signed by person(s) named in the most
recent certification.
(b) Proper Instructions. Proper Instructions means any request,
instruction or certification actually received by ALPS and signed by
one or more Authorized Persons. Oral instructions will be considered
Proper Instructions if ALPS reasonably believes them to have been
given by an Authorized Person and they are promptly confirmed in
writing by the Fund to the address for notice, e-mail or facsimile set
forth below. If oral instructions vary from the written instructions
which purport to confirm them, ALPS shall notify the Fund of such
variance. Once the variance is resolved, and if ALPS has not yet
acted, ALPS may rely on oral instructions received from the Fund, such
oral instructions to be promptly confirmed in writing. Proper
Instructions may include communications effected directly between
electro-mechanical or electronic devices as agreed upon by the parties
hereto in writing.
3. Duties of ALPS. ALPS agrees to provide the services listed in Appendix B
attached hereto for the Fund.
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.
4. Instructions to ALPS. ALPS shall act only upon Proper Instructions,
except as otherwise provided in this Agreement. ALPS shall promptly take all
appropriate steps necessary to carry out or comply with any Proper Instructions
received from the Fund.
5. ALPS Compensation. In consideration for the services to be performed by
ALPS, ALPS shall be entitled to receive from the Fund such compensation and
reimbursement for all reasonable out-of-pocket expenses as may be agreed upon
from time to time between ALPS and the Fund in advance and in writing. The Fund
agrees to pay ALPS compensation as described in the Administration Agreement.
The fee for the period from the date of this Agreement is entered into until
December 31, 2002, shall be prorated according to the proportion that such
period bears to the full annual period.
6. Right to Receive Advice.
(a) Advice of the Fund. If ALPS is in doubt as to any action it should or
should not take, ALPS shall request directions or advice, including
Proper Instructions, from the Fund.
(b) Advice of Counsel. If ALPS shall be in doubt as to any question of law
pertaining to any action it should or should not take, ALPS shall
request advice from counsel of its own choosing and at its own
expense.
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(c) Conflicting Advice. In the event of a conflict between directions,
advice or Proper Instructions ALPS receives from the Fund and the
advice ALPS receives from counsel, ALPS shall inform the Fund and its
counsel of the conflict and seek resolution.
(d) Nothing in this subsection shall excuse ALPS when an action or
omission on the part of ALPS constitutes willful misfeasance, lack of
good faith, negligence or reckless disregard by ALPS of any duties,
obligations or responsibilities set forth in this Agreement.
7. Liability of ALPS.
(a) ALPS may rely upon the written advice of counsel for the Fund and the
Fund's independent accountants, and upon oral or written statements of
brokers and other persons reasonably believed by ALPS in good faith to
be expert in the matters upon which they are consulted and, for any
actions reasonably taken in good faith reliance upon such advice or
statements and without negligence, ALPS shall not be liable to anyone.
(b) Nothing herein contained shall be construed to protect ALPS against
any liability to the Fund or its shareholders to which ALPS would
otherwise be subject by reason of willful misfeasance, bad faith,
negligence, or reckless disregard in the performance of its duties.
(c) Except as may otherwise be provided by applicable law, neither ALPS
nor its shareholders, officers, Trustees, employees or agents shall be
subject to, and the Fund shall indemnify and hold such persons
harmless from and against, any liability for and any damages, expenses
or losses incurred by reason of the inaccuracy of factual information
furnished to ALPS by an Authorized Person of the Fund. This section
(c) shall not apply if the Authorized Person who gives the inaccurate
information is also an officer, director, employee, or agent of ALPS.
(d) ALPS shall ensure that it has and maintains Errors and Omissions
Insurance for the services rendered under this Agreement of at least
$1 million (provided the Board of Directors of the Fund may by
resolution approve some lesser amount). ALPS shall provide to the Fund
annually upon request a certificate from the appropriate errors and
omissions insurance carrier(s) certifying that such Errors and
Omissions Insurance is in full force and effect.
(e) ALPS shall be obligated to exercise commercially reasonable care and
diligence in the performance of its duties hereunder, to act in good
faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. ALPS shall be
liable for actual damages arising out of ALPS' failure to perform its
duties under this Agreement to the extent such damages arise out of
ALPS' willful misfeasance, lack of good faith, negligence or reckless
disregard of such duties.
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(f) ALPS agrees to indemnify and hold harmless the Fund from all taxes,
charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the federal securities
laws and any state or foreign securities and blue sky laws, and
amendments thereto), and expenses, including (without limitation)
reasonable attorneys' fees and disbursements arising from any action
or omission of ALPS constituting willful misfeasance, lack of good
faith, negligence or reckless disregard of its duties and obligations
under this Agreement. For any legal proceeding giving rise to this
indemnification, ALPS shall be entitled to defend or prosecute any
claim in the name of the Fund at ALPS' own expense through counsel of
its own choosing if it gives written notice to the Fund within ten
(10) business days of receiving notice of such claim unless such claim
involves criminal liability or a request for equitable relief.
8. Reports. Whenever, in the course of performing its duties under this
Agreement, ALPS determines, on the basis of information supplied to ALPS by the
Fund or its authorized agents, that a violation of applicable law has occurred
or that, to its knowledge, a possible violation of applicable law may have
occurred or, with the passage of time, would occur, ALPS shall promptly notify
the Fund and its counsel.
9. 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
so long as its services hereunder are not impaired thereby.
10. Accounts and Records. The accounts and records maintained by ALPS shall
be the property of the Fund. Such accounts and records shall be prepared,
maintained and preserved as required by the Investment Company Act and other
applicable securities laws, rules and regulations. Such accounts and records
shall be surrendered to the Fund promptly upon receipt of Proper Instructions
from the Fund in the form in which such accounts and records have been
maintained or preserved. The Fund and Authorized Persons 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 or to an Authorized Person, 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.
11. Confidentiality. ALPS agrees that it will, on behalf of itself and its
officers and employees, treat all transactions contemplated by this Agreement,
and all other information germane thereto (past, present and future), as
confidential and not to be disclosed to any person except as may be authorized
by the Fund in Proper Instructions in writing.
12. Compliance with Rules and Regulations. ALPS shall comply with all
applicable requirements of the Investment Company Act and other applicable
securities laws, and any laws, rules and regulations of governmental authorities
having jurisdiction with respect to the duties to
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be performed by ALPS hereunder. Except as specifically set forth herein, ALPS
assumes no responsibility for such compliance by the Fund or any Portfolio.
13. Representations and Warranties of ALPS. ALPS represents and warrants to
the Fund that:
(a) It is duly organized and existing as a corporation and in good
standing under the laws of the State of Colorado.
(b) It is empowered under applicable laws and by its Charter and By-laws
to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
(d) 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.
(e) It will provide the Fund with all information necessary to complete
its filing requirements in a timely fashion.
14. Liaison with Accountants. ALPS shall act as 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 each Portfolio. ALPS shall take all reasonable action in the
performance of its duties under this Agreement to assure that the necessary
information in ALPS' control is made available to such accountants for the
expression of their opinion, as required by the Fund.
15. 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. ALPS shall have no liability
with respect to the loss of data or service interruptions caused by equipment
failure provided such loss or interruption is not caused by ALPS' own willful
misfeasance, lack of good faith, negligence or reckless disregard of its duties
or obligations under this Agreement.
16. Duration and Termination of this Agreement. This Agreement shall become
effective as of April 29, 2002 and, unless sooner terminated as provided herein,
shall continue until April 30, 2004 (the "Initial Term"). During the Initial
Term, this Agreement may be terminated, without penalty, solely by agreement of
the parties on not less than sixty days written notice. After the Initial Term,
this Agreement may be terminated without cause and without penalty by the Fund
or by ALPS, on not less than ninety days written notice to the other party. The
Fund may immediately terminate this Agreement for cause as defined below.
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Termination for "cause" shall mean:
(i) willful misfeasance, bad faith, gross negligence or reckless
disregard on the part of ALPS with respect to its obligations and duties
hereunder;
(ii) regulatory, administrative, or judicial proceedings against ALPS
which result in a determination that it has violated any rule, regulation,
order, or law and which in the reasonable judgment of the Fund's Board of
Directors, including a majority of the Directors who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement, which
substantially impairs the performances of ALPS' obligations and duties
hereunder;
(iii) 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 Stated 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.
Upon termination of this Agreement, ALPS shall deliver to the Fund or as
otherwise directed in Proper Instructions (at the expense of the Fund, unless
such termination is for "cause") all records and other documents made or
accumulated in the performance of its duties for the Fund hereunder.
17. Assignment. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and 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.
18. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York, and the 1940
Act and the rules thereunder. To the extent that the laws of the State of New
York conflict with the 1940 Act or such rules, the latter shall control.
19. Names. The obligations of the "Fund" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Fund personally, but bind only
the property of the Fund, and all persons dealing with any portfolio of the Fund
must look solely to the property of the Fund belonging to such portfolio for the
enforcement of any claims against the Fund.
20. Amendments to this Agreement. This Agreement may only be amended by the
parties in writing.
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21. 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):
To ALPS:
ALPS Mutual Funds Services, Inc.
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
To the Fund:
The Lipper Funds, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
The Lipper Funds, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Block, General Counsel
Fax: (000) 000-0000
21. 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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22. 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 that ALPS may
embody in one or more separate documents its agreement, if any, with respect to
delegated duties and oral instructions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
THE LIPPER FUNDS, INC.
By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Executive Vice President
ALPS MUTUAL FUNDS SERVICES, INC.
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: President
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APPENDIX A
THE LIPPER FUNDS, INC.
Lipper High Income Bond Fund
Premier Shares
Retail Shares
Group Retirement Plan Shares
Lipper Prime Europe Equity Fund
Premier Shares
Retail Shares
Group Retirement Plan Shares
Lipper U.S. Equity Fund
Premier Shares
Retail Shares
Group Retirement Plan Shares
Lipper Mergers Fund
Premier Shares
Retail Shares
Group Retirement Plan Shares
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XXXXXXXX X
SERVICES
o Maintain separate accounts for each Portfolio, all as directed from time to
time by Proper Instructions.
o Compute net asset value for each Class of each Portfolio and, as
appropriate, compute yields, expense ratios, portfolio turnover rate and,
if required, portfolio average dollar-weighted maturity.
o Obtain security market quotes from independent pricing services, if
available, approved by the Fund, or if such quotes are unavailable, then
obtain such prices pursuant to the Fund's valuation policies and
procedures, and in either case calculate the market value of each
Portfolio's investments.
o Timely calculate and transmit to NASDAQ each Portfolio's (and each Class of
each Portfolio's) daily net asset value and public offering price (such
determinations to be made in accordance with the provisions of the Fund's
Articles of Amendment and Restatement and the then-current prospectuses and
statements of additional information relating to the Portfolios, and any
applicable resolutions and policies and procedures of the Board of
Directors of the Fund) and promptly communicate such values and prices to
the Fund and the Fund's transfer agent.
o Maintain and keep current all books and records of the Portfolios as
required by Section 31 of the Investment Company Act of 1940, as amended,
and the rules thereunder, in connection with ALPS' duties hereunder. ALPS
shall comply with all laws, rules and regulations applicable to the
performance of its obligations hereunder. Without limiting the generality
of the foregoing, ALPS will prepare and maintain the following records upon
receipt of information in proper form from Authorized Persons of the Fund:
(i) Cash receipts journal
(ii) Cash disbursements journal
(iii) Dividend records
(iv) Purchase and sales - 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
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o Reconcile cash and investment balances with the Custodian.
o Provide the Fund with daily Portfolio values, net asset values and other
statistical data for each Class of each Portfolio as requested from time to
time.
o Compute the net income and capital gains and losses of each Portfolio and
calculate dividend rates in accordance with relevant prospectus policies
and resolutions of the Board of Directors of the Fund.
o Assist in the preparation of certain reports (including annual and
semi-annual reports, Prospectuses and Statement of Additional Information),
audits of accounts, and other matters of like nature, as reasonably
requested from time to time by the Fund.
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