MUTUAL FUND
ACCOUNTING SERVICES AND ADMINISTRATION AGREEMENT
RECITALS
WHEREAS, Empirical Investment Funds, (the "Fund") is a
business trust organized and operated under the laws of the State of
Delaware and which is commonly referred to as a mutual funds; and
WHEREAS, Maxus Information Systems, Inc., dba Mutual
Shareholder Services ("MSS") is a corporation organized and operated
under the laws of the State of Ohio; and
WHEREAS, MSS provides accounting services to entities
providing retail securities and investment services acting as
Accounting Services Agent to maintain and keep current the books,
accounts, records, journals or other records of original entry relating
to the business of the Fund as set forth in this Agreement (the
"Accounts and Records") and to perform in other such capacities as are
agreed herein; and
WHEREAS, MSS provides transfer agent services and is acting as
Transfer Agent, Dividend and/or Capital Gain Disbursing Agent,
Redemption Agent and Administrator pursuant to a separate agreement
between the parties; and
WHEREAS, the Fund desires the services offered by MSS and MSS
desires to provide such services to the Fund:
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, the parties intend to
be legally bound and it is, therefore, agreed as follows:
Section I. Appointment
The Fund hereby appoints MSS as its Accounting Services Agent.
MSS agrees to such appointment and agrees to perform in such a
capacity.
Section II. Accounting Services Agent
A. The Fund shall promptly turn over to MSS such of the
Accounts and Records previously maintained by or for it as are
necessary for MSS to perform its functions under this Agreement. The
Fund authorized MSS to rely on such Accounts and Records turned over to
it and hereby indemnifies and hold harmless MSS in that regard and as
further contemplated in this Agreement.
B. To the extent the MSS receives the necessary information
from the Fund or its agent by Written or Oral Instructions (and MSS
will make reasonable efforts in accord with reasonable standards to
immediately notify the Fund if such information is not received), MSS
shall maintain and keep current the following Accounts and Records
relating to the business of the Fund, in such form as may be mutually
agreed to between the Fund and MSS:
(1) Cash Receipts Journal;
(2) Cash Disbursements Journal;
(3) Dividends Paid Record;
(4) Purchase and Sales Journals - Portfolio
Securities;
(5) Subscription and Redemption Journals;
(6) Security Ledgers;
(7) Broker Ledger;
(8) General Ledger;
(9) Daily Expense Accruals;
(10) Daily Interest Accruals;
(11) Securities and Monies Borrowed or Loaned and
Collateral therefor;
(12) Daily Trial Balance;
(13) Investment Income Journal;
MSS will make all reasonable efforts per industry standard to
obtain the necessary information to perform the above functions and the
calculation of the Fund's net asset value, as provided below. MSS shall
incur no liability, and the Fund shall indemnify and hold harmless MSS
from and against any liability arising from the failure to provide
complete information or from any discrepancy between the information
received by MSS and used in such calculations and any subsequent
information received from the Fund or any of its designated agents.
C. MSS shall perform certain administrative functions for the
Fund, including without limitation, assisting with the preparation and
filing with the Securities and Exchange Commission and state securities
regulators of registration statements, notices, reports and other
material required to be filed under applicable laws; preparing
compliance reports; providing routine accounting services; and
providing office facilities and clerical support as well as providing
general oversight of other service providers.
D. MSS shall perform the ministerial calculations necessary to
calculate the Fund's net asset value daily, in accordance with the
Fund's current prospectus, as amended from time to time and utilizing
the information described in this Section.
(1) MSS may, in its discretion, use an automated financial
information service to obtain market quotations. In such
event, portfolio items for which market quotations are
available by MSS's use of such service shall be based on the
closing prices quoted on such service, except where the Fund
has given or caused to be given specific Written or Oral
Instructions to utilize a different Value.
(2) All other portfolio securities shall be given such values
as the Fund provides by Written or Oral Instructions,
including all foreign securities, restricted securities and
other securities requiring valuation not readily ascertainable
solely by use of an automated financial information service.
(3) MSS shall have no responsibility or liability for the
accuracy of prices quoted by the automated financial
information service; for the accuracy of the information
supplied by the fund; or for any loss, liability, damage or
costs arising out of any inaccuracy of such data.
(4) MSS shall have no responsibility or duty to include
information or valuations to be provided by the Fund in any
computation unless and until it is timely supplied to MSS in
useable form.
(5) Unless the necessary information to calculate the net
asset value daily is reasonably available per industry
standards and/or furnished by Written or Oral Instructions
from the Fund, MSS shall incur no liability and the Fund shall
indemnify and hold harmless MSS from and against any liability
arising from any failure to provide complete information or
from any discrepancy between the information received by MSS
and used in such calculation and any subsequent information
received from the Fund or any of its designated agents.
E. For all purposes under this Agreement, MSS is authorized to
act upon receipt of the first of any Written or Oral Instruction it
receives from the fund or its agents on behalf of the Fund. In cases
where the first Instruction is an Oral Instruction that is not in the
form of a document or written record, a confirmatory written
Instruction or Oral Instruction in the form of a document or written
record shall be delivered, and in cases where MSS receives any
Instruction, whether Written or Oral, to enter a portfolio transaction
on the records, the Fund shall cause the broker/dealer to send a
written confirmation to MSS. MSS shall be entitled to rely on the first
Instruction received, and for any act or omission undertaken in
compliance therewith shall be free of liability and fully indemnified
and held harmless by the Fund, provided, however that in the event a
Written or Oral Instruction received by MSS is countermanded by a
timely letter Written or Oral Instruction received by MSS prior to
acting upon such countermanded Instruction, MSS shall act upon such
letter Written or Oral Instruction. The sole obligation of MSS with
respect to any follow-up or confirmatory Written Instruction, Oral
Instruction, documentary or written form, or broker/dealer written
confirmation shall be to make reasonable efforts to detect any
discrepancy between the original Instruction and such confirmation and
to report such discrepancy to the Fund. The Fund shall be responsible,
at the Fund's expense, for taking any action, including any
reprocessing necessary to correct any discrepancy or error, and, to the
extent such action required MSS to act, the Fund shall give MSS
specific Written Instruction as to the action required.
F. At the end of each month, the Fund shall cause its
Custodian to forward to MSS a monthly statement of cash and portfolio
transactions, which will be reconciled by MSS with MSS's Accounts and
Records maintained for the Fund. MSS will report any discrepancies to
the Custodian and report any unreconciled items to the Fund.
G. MSS shall promptly supply daily and periodic reports of the
Fund as requested by the Fund and agreed to upon by MSS.
H. To the extent that such information is not available to MSS
the Fund shall require each of its agents (including without limitation
its Transfer Agent and its Custodian) to provide MSS as of the close of
each business day, or on such other schedule as the Fund determines is
necessary, with Written or Oral Instructions (to be delivered to MSS by
10:00 a.m. the next following business day) containing all data and
information necessary for MSS to maintain the Fund's accounts and
Records, and MSS may conclusively assume that the information its
received by Written or Oral Instructions is complete and current.
I. The Accounts and Records, in the agreed upon format,
maintained by MSS shall be the property of the Fund, and shall be made
available to the Fund promptly upon request and shall be maintained for
the periods prescribed in Rule 31a-2 of the Investment company Act of
1940, as amended.
(1) MSS shall assist the fund's independent auditors, or upon
approval of the Fund, or upon demand, any regulatory body, in
any requested review of the Fund's Accounts and Records.
(2) MSS shall be reimbursed for all expenses and employee time
invested in any such review of the Fund's Accounts and Records
other than as specified above.
MSS shall supply the necessary data for the Fund for
accountant's completion of any necessary tax returns, questionnaires,
periodic reports to shareholders and such other reports and information
requests as the Fund and MSS shall agree upon from time to time.
J. MSS and the Fund may, from time to time, adopt such
procedures as they agree upon in writing, and MSS may conclusively
assume that any procedure approved by the Fund or directed by the Fund,
(1) Does not conflict with or violate any requirements of its
Prospectus, Declaration of Trust, by-laws, or any rule or
regulation of any regulatory body or governmental agency.
(2) The Fund shall be responsible for notifying MSS of any
changes in regulation or rules, which might necessitate
changes in MSS's procedures, and for working out with MSS such
changes.
K. All financial data provided to, processed by, and reported
by MSS under this Agreement shall be stated in United States Dollars or
currency
(1) MSS shall have no obligation to convert to, equate, or
deal in foreign currencies or values;
(2) MSS expressly assumes no liability for any currency
conversion or equation computations relating to the affairs of
the Fund.
L. It is expressly agreed that the obligation of the Fund
hereunder shall not be binding upon nor resort be had to the private
property of any of the trustees, Shareholders, nominees, officers,
agents or employees of the Fund, personally, but bind only the trust
property of the Fund, as provided in the Declaration of Trust of the
Fund.
M. The execution and delivery of this Agreement have been
authorized by the trustees of the Fund and signed by the officers of
the Fund, acting as such, and neither such authorization by such
trustees nor such execution and delivery by such officers shall be
deemed to have been made by any of them individually, or to impose any
liability on any of them personally, but shall bind only the trust
property of the Fund as provided in the Declaration of Trust.
SECTION III. GENERAL PROVISIONS
A. This Agreement shall not cause MSS to incur obligations to
perform on any legal Holiday, on any day that the New York Stock
Exchange is closed or on any day MSS is closed for a designated Holiday
or other similar reason. Obligations under this Agreement, which cannot
be fulfilled on any particular day(s) for the reasons in the preceding
sentence, shall be performed on the next business day that MSS is
operating.
B. The Fund agrees to compensate MSS for its services and to
reimburse MSS for expenses, as set forth in Schedule A attached hereto,
or as shall be set forth in amendments to this Agreement or to Schedule
A and as approved by both the Fund and by MSS.
SECTION IV. INDEMNIFICATION
A. The Fund shall indemnify MSS and save it harmless from and
against any and all actions, suits, and claims, whether groundless or
otherwise, arising directly or indirectly out of or in connection with
MSS's performance under this Agreement and from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities incurred by MSS in connection with any such action, suit or
claim except that nothing herein shall be understood to provide
indemnity for negligence, negligent performance, gross negligence,
willful misconduct or fraud. MSS shall not be under any obligation to
prosecute or to defend any action, suit or claim arising out of or in
connection with its performance under this Agreement and subject to the
foregoing indemnity, which, in the opinion of counsel, may involve it
in expense or liability, and the Fund shall, so often as reasonably
requested, furnish MSS with satisfactory indemnity against such expense
or liability, and upon request of MSS the Fund shall assume the entire
defense of any action, suit or claim subject to the foregoing
indemnity. Provided, however, that MSS shall give the Fund notice of,
and reasonable opportunity to defend any such action, suit or claim in
the name of the Fund or MSS or both; Without limitation of the
foregoing:
(1) MSS may rely upon the advice of the Fund, or of counsel,
and upon statement of accountants, brokers and other persons
believed by it in good faith to be expert in the matters upon
which they are consulted, and, for any actions taken in good
faith upon such statements, MSS shall not be liable to anyone.
(2) MSS shall not be liable for any action taken in good faith
reliance upon any Written Instruction from the Fund or
certified copy of any resolution of the Board of Trustees of
the Fund, and MSS may rely upon the genuineness of any such
document or copy thereof believed in good faith by MSS to have
been validly executed.
(3) MSS may rely and shall be protected in acting upon any
signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument,
report, notice, consent, order, or other paper or document
believed by it to be genuine and to have been signed or
presented by the purchaser, Fund or other proper party or
parties.
(4) MSS will be responsible for errors and omissions resulting
from download, keypunch, calculation and other similar acts
to, and only to, the extent that such errors and omissions are
covered under a policy held by MSS for such purposes. MSS does
not, however, make any guarantee or representation that it
does or will have such a policy in effect or that such a
policy is current. MSS will, however, accept responsibility
for actual losses to clients resulting from its own such error
and/or omissions but only upon (a) Written notification of an
error and/or omission given and provided that (b) MSS may
first take corrective measures of its own choosing, that (c)
MSS is given sufficient time to take such corrective measures
and that (d) Damages or loss are incurred and are actual
damages or losses.
B. MSS shall indemnify the Fund and save it harmless from and
against any and all actions, suits, or claims, whether groundless or
otherwise, and any losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities, which are actual, incurred by the
Fund in connection with any such action, suit or claim to the extent
that any such claim results from MSS's negligence, negligent
performance, gross negligence willful misconduct or fraud related to
MSS's performance under this Agreement.
SECTION V. TAXES AND REGULATORY MATTERS
Except as contemplated in this agreement, all liabilities and
procedures necessary for the maintenance of the Fund in good standing
with
(1) Both Federal and State agencies, including, but not
limited to taxes, charters, fees, applications, forms,
permits, licenses and documents shall be the responsibility of
the Fund.
(2) MSS shall not be liable for any taxes, assessments or
governmental charges which may be levied or assessed on any
basis whatsoever in connection with this Agreement, excepting
only for taxes assessed against its corporate capacity arising
out of its compensation hereunder.
SECTION VI. NOTICES
All notices required or permitted to be given hereunder shall
be in writing and may be delivered personally or through the public or
private mails (postage paid). Receipt of notice shall be deemed to have
been given upon receipt if personally delivered or within ten (10) days
after being deposited in the mail. Notice shall be addressed:
(1) If to the Fund: Empricial Investment Funds
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
(2) If to MSS: Mutual Shareholder Services
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
SECTION VII. WRITTEN INSTRUCTIONS
AND ORAL INSTRUCTIONS
The Fund shall file with MSS a certified copy of each
resolution of its Board of Trustees authorizing the execution of
Written Instruction or the transmittal of Oral Instruction. The
following terms, for the purposes of this Agreement or any amendment or
supplement thereto, shall have the meaning herein specified unless the
context otherwise requires:
(1) Plan. The term Plan shall include such investment plan,
dividends or capital gains reinvestment plans, systematic withdrawal
plans or other types of plans set forth in the Prospectus of the Fund,
in form acceptable to MSS, which the Fund may from time to time adopt
and make available to its Shareholders, including plans or accounts by
self-employed individuals or partnerships.
(2) Planholder. The term Planholder shall mean a Shareholder
who, at the time of reference, is participating in a Plan, and shall
include any underwriter, representative or broker/dealer.
(3) Oral Instructions. The term Oral Instructions shall mean
an authorization, instruction, approval, item or set of data, or
information of any kind transmitted to MSS in person or by telephone,
telegram, telecopy or other mechanical or documentary means lacking
original signature, by a person or persons believed in good faith by
the Custodian to be a person or persons authorized by a resolution of
the Board of Trustees of the Fund to give Oral Instructions on behalf
of the Fund.
(4) Written Instructions. The Term Written Instructions shall
mean an authorization, instruction, approval, item or set of data, or
information of any kind transmitted to MSS in original writing
containing original signatures or a copy of such document transferred
by telecopy including transmission of such signature, believed in good
faith by MSS to be the signature of a person or persons authorized by a
resolution of the Board of Trustees of the Fund to give Written
Instructions on behalf of the Fund.
SECTION VIII. WARRANTIES
A. The Fund represents and warrants MSS that the execution and
delivery of this Agreement by the undersigned officer of the Fund has
been duly and validly authorized by resolution of the Board of Trustees
of the Fund.
B. MSS represents and warrants that the execution and delivery
of this Agreement by the undersigned officer has been duly and validly
authorized.
SECTION IX. CANCELLATION, RESCISSION, AND TERMINATION
A. Cancellation - Within five (5) business days of the signing
of this Agreement the Fund may, by written notice, cancel this
agreement for any reason. Written notice, postmarked not later than the
last day of the cancellation period, shall be sent to MSS by registered
or certified mail, return receipt requested. Cancellation shall
terminate this agreement and neither party will have any further
obligation or liability to the other. This clause shall have no effect
upon other agreements between the parties which must be separately
canceled, rescinded or terminated.
B. Rescission - This Agreement may be rescinded on the grounds
of mutual mistake, fraud or impossibility by either party; however,
such rescission must be granted in accord with the provisions for
dispute resolution enumerated in this agreement or by mutual written
agreement.
C. Termination - Either the Fund or MSS may give 60 days
written notice to the other for termination of this Agreement:
(1) Termination to take effect at the time specified in the
notice.
(2) Such notice shall be evidenced by and be delivered via a
secured delivery requiring signature.
SECTION X. DISPUTE RESOLUTION
A. Mediation - any controversies, disputes or claims arising
out of or relating to this agreement shall be subject to mediation. The
parties stipulate that the procedures for mediation enumerated by the
National Association of Securities Dealer, Inc. (NASD) shall apply. The
NASD shall designate the mediator(s).
(1) Mediation may take place in any mutually agreed upon
location or within Cuyahoga County, Ohio.
(2) In the event that no resolution is found, the parties
shall be subject to arbitration as prescribed by section (B)
of this clause.
B. Arbitration - Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the arbitration rules of the NASD. In
addition, the parties stipulate:
(1) The number of arbitrators shall be three; and
(2) The place of arbitration shall be within Cuyahoga County,
Ohio.
SECTION XI. JURISDICTION
This Agreement and any Schedules and/or Amendments hereto, shall be
construed and understood under the laws of the State of Ohio at
Cuyahoga County.
SECTION XII. FORCE MAJEURE
A party shall not be considered to be in default in the
performance of its obligations to the extent that it proves that such
performance has been prevented by force Majeure.
SECTION XIII. ASSIGNMENT
This Agreement and any rights granted hereunder shall not be
assigned by either party hereto to any person, firm or corporation
without the prior written consent of the other.
SECTION XIV. COUNTERPARTS
This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but
such counterparts shall together constitute but one and the same
instrument.
SECTION XV. ALTERATIONS/ENTIRE AGREEMENT
A. It is agreed between the parties hereto that there are no
other agreements or understandings between them relating to the subject
matter of this Agreement. This Agreement supersedes all prior
agreements, oral or written, between the parties and is intended as a
complete and exclusive statement of the Agreement between the parties.
Neither this Agreement, nor its execution has been induced by any
reliance, representation, stipulation, warranty, agreement or
understanding of any kind other than those herein expressed.
B. No change or modification of this Agreement shall be valid
unless the same be in writing and signed by the parties. Any and all
addenda to this Agreement must and shall be endorsed by both parties
and must make direct and specific mention to their status as addenda
and to their incorporation hereto.
DATED, this 27th day of April, 1998
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
SIGNED BY THEIR DULY AUTHORIZED OFFICERS:
Maxus Information Systems, Inc. Empirical Investment Funds
By: /s/ By: /s/
Xxxxxxx X. Xxxxx Xxxx Xxxxxxxx-Xxxx
Its: President Its: President
EXHIBIT A
COMBINED FEE SCHEDULE
Current Mutual Shareholder Services billing system:
Accounting Fees
If average value of fund is Yearly Monthly
between the following Fee Fee
25,000,000 21,000 1,750
25,000,000 50,000,000 30,500 2,542
50,000,000 75,000,000 36,250 3,021
75,000,000 100,000,000 42,000 3,500
100,000,000 125,000,000 47,750 3,979
125,000,000 150,000,000 53,500 4,458
150,000,000 59,250 4,938
Shareholder Servicing Fees
9.25 annual fee per shareholder with a min of
$775.00 charge per month
Blue Sky Servicing Fees
12.00 per state per month
Calculated monthly charges for Empirical Investment Funds
Approx.
Value Monthly Fee
Approximate Fund Size: 1,000,000 1,750
No. of Shareholders: 100 775
Blue Sky States 5 60
------
2,585
Less 50% discount* 1,293
Discounted fee 1,293
Annual Fee 15,510
*Discount calculated as follows:
DiscountNet assets of Fund
50% 100,000 2,000,000
45% 2,000,000 3,000,000
40% 3,000,000 4,000,000
35% 4,000,000 5,000,000
30% 5,000,000 6,000,000
25% 6,000,000 7,000,000
20% 7,000,000 8,000,000
15% 8,000,000 9,000,000
10% 9,000,000 10,000,000
5% 10,000,000 11,000,000
0% 11,000,000
