FUND ACCOUNTING AND SERVICES AGREEMENT
THIS
AGREEMENT is made as of September 14, 2009, between Guinness ▇▇▇▇▇▇▇▇ Funds, a
Delaware statutory trust, (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,
diversified management investment company, presently consisting of the
portfolios listed in Appendix A (the
“Portfolios”);
WHEREAS, Guinness ▇▇▇▇▇▇▇▇ Asset
Management, (“GAAM” or the “Adviser”) 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 fund
accounting services to investment companies; and
WHEREAS, the Fund desires to appoint
ALPS to perform certain fund accounting and other specified 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.
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1.
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ALPS Appointment and
Duties.
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(a)
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The
Fund hereby appoints ALPS to provide the fund accounting, and other
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 shall be
responsible for all acts of any such person or persons or organizations
taken in furtherance of this Agreement to the same extent it would be for
its own acts.
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(c)
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ALPS
shall promptly notify the Fund and its counsel if ALPS, in the performance
of its duties under this Agreement, determines that a violation of
applicable law has occurred, may have occurred, or, with the passage of
time, would occur.
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1
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2.
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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. During each year of the Term, unless the parties
shall otherwise agree and provided that the service mix and volumes remain
consistent with those provided in the previous year of this Agreement, the
total fee that would be charged for the same services would be the base
fee rate (as reflected in Appendix C) increased by 5% per
annum.
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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 Funds’ 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.
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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) and at its own
expense.
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2
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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 service provider and the advice ALPS
receives from counsel, ALPS may in its sole discretion rely upon and
follow the advice of counsel. ALPS will provide the Fund with prior
written notice of its intent to follow advice of counsel that is
materially inconsistent with directions, advice or instructions from the
Fund. Upon request, ALPS will provide the Fund with a copy of such
advice of counsel.
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4.
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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. Nothing herein
shall be construed to protect ALPS against liability to the Fund or its
shareholders to which ALPS would otherwise be subject by reason of
material breach of this Agreement, violation of applicable law, willful
misfeasance, bad faith, negligence or reckless disregard, with the
performance of its duties.
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(b)
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In the absence of willful
misfeasance, bad faith, gross 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 or the Fund’s investment
adviser, custodian or other service providers and on which ALPS actually
relies;
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(ii)
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any 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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losses, delays, failure, errors,
interruption or loss
of data occurring directly or indirectly by reason of circumstances beyond
its 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;
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(iv)
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ALPS’ reliance on any instruction,
direction, notice, instrument or other information that ALPS reasonably
believes to be genuine;
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(v)
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loss of data or service
interruptions caused by equipment failure;
or
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(vi)
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any other action or omission to
act which ALPS takes in connection with the provision of services to the
Fund.
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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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(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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5.
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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 accounting and services
agreements or other agreements with such other corporations and
businesses.
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6.
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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 or upon termination of the
Agreement. 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.
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7.
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Confidential
and Proprietary Information. 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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8.
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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 ▇▇▇▇
▇▇▇) 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. ALPS shall notify the Fund of any “material compliance matter”
as defined by Rule 38a-1 promptly if such matter relates to the
Fund.
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9.
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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 By-laws 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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10.
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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 and is
registered with the SEC as an open-end diversified management investment
company.
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(b)
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It is empowered under applicable
laws and by its Articles of Incorporation and By-laws 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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11.
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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; and “prospectus” shall mean the statutory long form prospectus and
summary prospectus.
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12.
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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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13.
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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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14.
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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 two (2) 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
15(c) hereof.
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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 15(c) hereof; so long as such continuation is
approved by the Funds’ Board of
Trustees.
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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 15, “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 (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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(e)
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Fees and Expenses Upon
Termination. Should either
party exercise its right to terminate, all reasonable out-of-pocket
expenses or costs associated with the movement of records and material
will be borne by the Fund. Additionally, ALPS reserves the right to
charge a reasonable fee for its de-conversion
services.
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15.
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Unless otherwise required by
context, right, obligations or remedies of ALPS run severally and not
jointly to each series with respect to any particular action. The
rights, obligations or remedies with respect to one series may not be
asserted with respect to any other series. The use of a single
document is for convenience
only.
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16.
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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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17.
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18.
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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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19.
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Amendments
to this Agreement. This Agreement may only be
amended by the parties in
writing.
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20.
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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.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: General
Counsel
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
8
To the
Fund:
Guinness
▇▇▇▇▇▇▇▇ Funds
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇
▇▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
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21.
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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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22.
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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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23.
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No Waiver. No waiver by
either party of any breach or default shall be construed as a waiver of
any succeeding breach or
default.
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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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GUINESS ▇▇▇▇▇▇▇▇
FUNDS
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By:
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/s/
▇▇▇ ▇▇▇▇▇▇▇▇
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Name:
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▇▇▇
▇▇▇▇▇▇▇▇
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Title:
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President
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ALPS FUND SERVICES,
INC.
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By:
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/s/
▇▇▇▇▇▇ ▇. May
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Name:
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▇▇▇▇▇▇ ▇.
May
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Title:
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President
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9
APPENDIX A
LIST OF
PORTFOLIOS*
Guinness ▇▇▇▇▇▇▇▇ Alternative Energy
Fund (GAAEX)
Guinness ▇▇▇▇▇▇▇▇ Asia Focus Fund
(IASMX)
Guinness ▇▇▇▇▇▇▇▇ Asia Pacific Dividend
Fund (GAADX)
Guinness ▇▇▇▇▇▇▇▇ China & Hong Kong
Fund (ICHKX)
Guinness ▇▇▇▇▇▇▇▇ Global Energy Fund
(GAGEX)
Guinness ▇▇▇▇▇▇▇▇ Global Innovators Fund
(IWIRX)
* Stock symbol provided for ease of
identification only.
APPENDIX B
SERVICES
Fund
Accounting
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Calculate
daily NAVs
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Transmit
daily NAVs to NASDAQ, Transfer Agent and other third
parties
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–
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Provide
data for income and capital gain
distributions
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Reconcile
cash and investment balances daily with the
custodian.
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Support
preparation of financial statements
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Calculate
monthly performance figures
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Prepare
required Fund Accounting records in accordance with the 1940
Act
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APPENDIX C
COMPENSATION
Fees paid
to ALPS shall be calculated and accrued daily and payable monthly by the Fund at
the annual rate of:
The fees
will be the greater of the base fee of $209,000 or:
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·
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3.0
basis points of Fund’s annual net assets between $0 -
$1B
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·
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2.0
basis points of Fund’s annual net assets in excess of $1B
-$3B
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·
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1.0
basis points of the Fund’s annual net assets above
$3B
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All
out-of-pocket expenses are passed through to the client at cost, including but
not limited to: third party security pricing fees, Bloomberg fees, SAS70 control
review reports, travel expenses to Board meetings and on-site supervisory
reviews, customized programming/enhancements and other out-of-pocket expenses
incurred by ALPS in connection with the performance of its duties under this
Agreement.
LATE CHARGES: All
invoices are due and payable upon receipt. Any invoices not paid
within thirty (30) days of the invoice date are subject to a one percent (1%)
per month financing charge on any unpaid balance but only to the extent
permitted by law.