FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of _______,
1999, by and between The Catholic Alliance Funds, Inc., a Maryland Corporation
(hereinafter referred to as the "Fund Company") and Firstar Mutual Fund
Services, LLC, a limited liability company organized under the laws of the State
of Wisconsin (hereinafter referred to as "FMFS").
WHEREAS, the Fund Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Fund Company is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things, mutual
fund accounting services to investment companies; and
WHEREAS, the Fund Company desires to retain FMFS to provide accounting
services to each series of the Fund Company listed on EXHIBIT A attached hereto,
as it may be amended from time to time each such series (referred to herein
individually as a "Fund" and collectively as the "Fund").
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Fund Company (on behalf of the Funds) and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Fund Company hereby appoints FMFS as fund accountant for each of
the Funds on the terms and conditions set forth in this Agreement, and FMFS
hereby accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation provided for
herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
FMFS shall provide the following services for each of the Funds;
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis using
security trade information communicated from the investment
manager.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Directors of the Fund Company and
apply those prices to the portfolio positions. For those
securities where market quotations are not readily
available, the Board of Directors of the Fund Company shall
approve, in good faith, the method for determining the fair
value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments
for the accounting period.
(4) Determine gain/loss on security sales and identify them as,
short-term or long-term; account for periodic distributions
of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation
date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund Company as to methodology,
rate or dollar amount.
(2) Record payments for expenses of each Fund upon receipt of
written authorization from the Fund Company.
(3) Account for expenditures of each Fund and maintain expense
accrual balances at the level of accounting detail, as
agreed upon by FMFS and the Fund Company.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share
activity as reported by the transfer agent on a timely
basis.
(2) Apply equalization accounting as directed by the Fund
Company.
(3) Determine net investment income (earnings) for each Fund as
of each valuation date. Account for periodic distributions
of earnings to shareholders and maintain undistributed net
investment income balances as of each valuation date.
(4) Maintain a general ledger and other accounts, books, and
financial records for each Fund in the form as agreed upon.
(5) Determine the net asset value of each Fund according to the
accounting policies and procedures set forth in such Fund's
Prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of Fund operations at
such time as required by the nature and characteristics of
the relevant Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to
time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of
each Fund to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Fund Company.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions
to the transfer agent to support tax reporting to the
shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making each Fund's accounting
records available to the Fund Company, the Securities and
Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
F. FMFS will perform the following accounting functions on a daily
basis:
(1) Reconcile cash and investment balances of each Fund with the
Fund's custodian, and provide the Fund's investment adviser
and, if any, the Fund's sub-adviser(s), with the beginning
cash balance available for investment purposes;
(2) Update the cash availability throughout the day as required
by each Fund's investment adviser and, if any, the Fund's
sub-adviser(s);
(3) Transmit or mail a copy of the portfolio valuation to the
Fund's investment adviser and, if any, the Fund's
sub-adviser(s);
(4) Review the impact of current day's activity on a per share
basis, review changes in market value of securities, and
review yields for reasonableness.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
(2) Supply various Fund Company, Fund and class (if any)
statistical data as requested on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected
by FMFS but approved by the Company's Board of Directors and apply those prices
to the portfolio positions of each Fund. For those securities where market
quotations are not readily available, the Company's Board of Directors shall
approve, in good faith, the method for determining the fair value for such
securities.
If the Fund Company desires to provide a price which varies from the
pricing source, the Fund Company shall promptly notify and supply FMFS with the
valuation of any such security on each valuation date. All pricing changes made
by the Fund Company will be in writing and must specifically identify the
securities to be changed by CUSIP, name of security, new price or rate to be
applied, and, if applicable, the time period for which the new price(s) is/are
effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Directors of the Fund Company
that affects accounting practices and procedures under this Agreement shall be
effective upon written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect the
service provided to the Fund Company under this Agreement.
6. COMPENSATION
FMFS shall be compensated for providing the services set forth in this
Agreement in accordance with the Fee Schedule attached hereto as EXHIBIT A and
as mutually agreed upon and amended from time to time. The Fund Company agrees
to pay all fees and reimbursable expenses within ten (10) business days
following the receipt of the billing notice. Notwithstanding anything to the
contrary, amounts owed by the Fund Company to FMFS shall only be paid out of the
assets and property of the particular Fund involved.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any
error of judgment or mistake of law or for any loss suffered by
the Fund Company or any Fund in connection with matters to which
this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power
supplies beyond FMFS's control, except a loss arising out of or
relating to a breach of a representation or warranty made by FMFS
under this Agreement or FMFS's refusal or failure to comply with
the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this
Agreement, if FMFS has exercised reasonable care in the
performance of its duties under this Agreement, the Fund Company
shall indemnify and hold harmless FMFS from and against any and
all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which FMFS may sustain or
incur or which may be asserted against FMFS by any person arising
out of any action taken or omitted to be taken by it in
performing the services hereunder, except for any and all claims,
demands, losses, expenses, and liabilities arising out of or
relating to a breach of a
representation or warranty made by FMFS under this Agreement or
FMFS's refusal or failure to comply with the terms of this
Agreement or FMFS's refusal or failure to comply with the terms
of this Agreement or from bad faith, negligence or from willful
misconduct on its part in performance of its duties under this
Agreement, (i) in accordance with the foregoing standards, or
(ii) in reliance upon any written or oral instruction provided to
FMFS by any duly authorized officer of the Fund Company, such
duly authorized officer to be included in a list of authorized
officers furnished to FMFS and as amended from time to time in
writing by resolution of the Board of Directors of the Fund
Company.
FMFS shall indemnify and hold the Fund Company harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any
and every nature (including reasonable attorneys' fees) which the
Fund Company may sustain or incur or which may be asserted
against the Fund Company by any person arising out of a breach of
a representation or warranty made by FMFS under this Agreement or
FMFS's refusal or failure to comply with the terms of this
Agreement or any action taken or omitted to be taken by FMFS as a
result of FMFS's refusal or failure to comply with the terms of
this Agreement, its bad faith, negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond FMFS's
control. FMFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a
breakdown at the expense of FMFS. FMFS agrees that it shall, at
all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund Company shall
be entitled to inspect FMFS's premises and operating capabilities
at any time during regular business hours of FMFS, upon
reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of
all pertinent facts concerning the situation in question, and it
is further understood that the indemnitee will use all reasonable
care to notify the indemnitor promptly concerning any situation
which presents or appears likely to present the probability of a
claim for indemnification. The indemnitor shall have the option
to defend the indemnitee against any claim which may be the
subject of this indemnification. In the event that the indemnitor
so elects, it will so notify the indemnitee and thereupon the
indemnitor shall take over complete defense of the claim, and the
indemnitee shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
section. Indemnitee shall in no case confess any claim or make
any compromise in any case in which the indemnitor will be asked
to indemnify the indemnitee except with the indemnitor's prior
written consent.
C. FMFS agrees that obligations assumed by the Fund Company pursuant
to this Agreement shall be limited in all cases to the respective
assets of the Fund(s) to which the obligation relates. FMFS
further agrees that it shall not seek satisfaction of any such
obligation from the shareholder or any individual shareholder of
any Fund or any other series of the Fund Company, nor from the
Directors or any individual Director of the Fund Company.
8. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS
to act as agent for the other party to this Agreement, or to conduct business in
the name of, or for the account of the other party to this Agreement.
9. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund Company but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the 1940 Act, and the rules thereunder. FMFS agrees that all such records
prepared or maintained by FMFS relating to the services to be performed by FMFS
hereunder are the property of the Fund Company and will be preserved,
maintained, and made available in accordance with such section and rules of the
1940 Act and will be promptly surrendered to the Fund Company on and in
accordance with its request.
10. DATA NECESSARY TO PERFORM SERVICES
The Fund Company or its agent, which may be FMFS, shall furnish to
FMFS the data necessary to perform the services described herein at such times
and in such form as mutually agreed upon. If FMFS is also acting in another
capacity for the Fund Company, nothing herein shall be deemed to relieve FMFS of
any of its obligations in such capacity.
11. NOTIFICATION OF ERROR
The Fund Company will notify FMFS of any balancing or control error
caused by FMFS the later of: within three (3) business days after receipt of any
reports rendered by FMFS to the Fund Company; within three (3) business days
after discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
12. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the Fund
Company all records and other information relative to the Fund Company and
prior, present, or potential shareholders of the Fund Company (and clients of
said shareholders), and not to use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Fund Company, which
approval shall not be unreasonably withheld and may not be withheld where FMFS
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Fund Company.
13. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and,
unless sooner terminated as provided herein, shall continue automatically in
effect for successive annual periods. This Agreement may be terminated by either
party (in the case of the Fund Company, either in its entirety or with respect
to any particular Fund(s)) upon giving ninety (90) days prior written notice to
the other party or such shorter period as is mutually agreed upon by the
parties. However, this Agreement may be replaced or modified by a subsequent
agreement between the parties.
14. NOTICES
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Relationship Manager
and notice to the Fund Company shall be sent to:
The Catholic Alliance Funds, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
15. YEAR 2000 COMPLIANCE
FMFS represents and warrants to the Fund Company that the computer
software, computer firmware, computer hardware (whether general or special
purpose) and other similar related items of automated, computerized and/or
software systems that are owned or licensed by FMFS and are utilized by FMFS or
its agents in connection with the provision of services described in this
Agreement are "Year 2000 Compliant" (as defined below). As used in this Section
15 of this Agreement, the term "Year 2000 Compliant" shall mean the ability of
the relevant system to provide all of the following functions:
A. Process date information before, during and after January 1,
2000, including but not limited to accepting date specific input
data, providing date specific output data, and performing
calculations on dates or portions of dates;
B. Function accurately and without interruption or malfunction
before, during and after January 1, 2000, without any change in
operations associated with the advent of the new millennium and
assuming no other defects, bugs, viruses or other problems
unrelated to Year 2000 compliance issues which disrupt
functionality;
C. Respond to two-digit, year-date input in a way that resolves the
ambiguity as to century and in a disclosed, defined and
predetermined manner; and
D. Store and provide output data of date specific information in
ways that are unambiguous as to century.
16. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the Fund Company
by written notice to FMFS, FMFS will promptly, upon such termination and at the
expense of the Fund Company transfer to such successor all relevant books,
records, correspondence and other data established or maintained by FMFS under
this Agreement in a form reasonably acceptable to the Fund Company (if such form
differs from the form in which FMFS has maintained the same, the Fund Company
shall pay any expenses associated with transferring the same to such form), and
will cooperate in the transfer of such duties and responsibilities, including
provision for assistance from FMFS's personnel in the establishment of books,
records and other data by such successor.
17. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin. However, nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated by the SEC
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
--------------------------------------------------------------------------------
THE CATHOLIC ALLIANCE FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By: By:
Attest: Attest:
--------------------------------------------------------------------------------
EXHIBIT A
FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
Separate Series of The Catholic Alliance Funds, Inc.
--------------------------------------------------------------------------------
NAME OF SERIES DATE ADDED
--------------------------------------------------------------------------------
Equity Income Fund ____________, 1999
--------------------------------------------------------------------------------
Large-Cap Growth Fund ____________, 1999
--------------------------------------------------------------------------------
Disciplined Capital Appreciation Fund ____________, 1999
--------------------------------------------------------------------------------
Domestic Equity Funds
$22,000 for the first $40 million
1 basis point on the next $200 million
.5 basis point on average net assets exceeding $240 million
Domestic Balanced Funds
$23,500 for the first $40 million
1.5 basis points on the next $200 million
1 basis points on average net assets exceeding $240 million
Domestic Fixed Income, International Equity Funds
$25,000 for the first $40 million
2 basis points on the next $200 million
1 basis point on average net assets exceeding $240 million
Plus reasonable and customary out-of-pocket expenses, including pricing service:
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Fees and out-of-pocket expenses are billed to the fund monthly
