EXHIBIT 23 (h)(1)(B)
FIRST PACIFIC MUTUAL FUND, INC.
ADMINISTRATIVE AGREEMENT
ADMINISTRATIVE AGREEMENT made this 16th day of May, 2011, by and
between First Pacific Mutual Fund, Inc., a Maryland corporation, (the
"Corporation") for the First Pacific Low Volatility Fund series, and Xxx
Financial Group Inc., a Hawaii corporation (the "Administrator"). All
references to any series of the Corporation will be called the "Fund" unless
expressly noted otherwise.
BACKGROUND
The Fund, a series of the Corporation, is organized and operated as
an open-end, non-diversified management investment company, registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The
Corporation desires to retain the Administrator to render administrative
services to the Fund, and the Administrator is willing to render such
services on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Corporation hereby appoints the Administrator to act as
administrator to the Fund, subject to the supervision and direction of the
Board of Directors of the Fund, for the period and on the terms set forth in
this Agreement. The Administrator accepts such appointment and agrees to
render the services herein described, for the compensation herein provided.
2. The Administrator shall furnish the Fund administrative
services. Administrative services shall include the compliance matters of
the Fund. Compliance for the Fund includes, but is not limited to: filings
with the Securities and Exchange Commission, the Financial Industry Regulatory
Authority, and state and other regulatory organizations (updating, amending
and filing prospectus, annual and semi-annual reports, proxy material and
blue sky requirements); establishing and maintaining written supervisory
procedures and compliance manuals; researching and communicating changes in
applicable rules and regulations; preserving all books and records.
(a) The Administrator shall use its best judgment in the
performance of its duties under this Agreement.
(b) The Administrator, in the performance of its duties
and obligations under this Agreement, shall act in conformity with the
Corporation's Articles of Incorporation and By-Laws, and the Prospectus of
the Fund and the instructions and directions of the Board of Directors of the
Corporation, and will conform to and comply with the requirements of the 1940
Act and all other applicable federal and state laws and regulations.
(c) The Administrator shall maintain all books and records
and shall render to the Corporation's Board of Directors such periodic and
special reports as the Board may reasonably request.
(d) The services provided by the Administrator hereunder
are not to be deemed exclusive, and the Administrator shall be free to render
similar services to others. While information and recommendations supplied
to the Fund shall, in the Administrator's judgment, be appropriate under the
circumstances, they may be different from the information supplied to other
investment companies and customers. The Fund shall be entitled to equitable
treatment under the circumstances in receiving information, and any other
services, but the Fund shall not be entitled to receive preferential
treatment as compared with the treatment given to any other investment
company or customer.
(e) The Administrator shall perform such other services as
are reasonably incidental to the foregoing duties.
3. The Administrator agrees that no officer or director of the
Administrator, or of any affiliate of the Administrator, will deal for or on
behalf of the Fund with himself as principal or agent, or with any
corporation, partnership or other person in which he may have a financial
interest, except that this shall not prohibit:
(a) Officers and directors of the Administrator, or of any
affiliate of the Administrator, from having a financial interest in the Fund,
in the Administrator or any affiliate of the Administrator.
(b) Officers and directors of the Administrator, or of any
affiliate of the Administrator, from providing services to the Fund of a type
usually and customarily provided to an investment company, pursuant to a
written agreement approved by the Board of Directors of the Fund, including a
majority of the disinterested directors of the Fund (as defined in the 1940
Act).
4. If any occasion should arise in which the Administrator or any
of its officers or directors advises persons concerning the shares of the Fund,
the Administrator or such officer or director will act solely on its, her or
his own behalf and not in any way on behalf of the Fund.
5. The Administrator agrees that, except as herein otherwise
expressly provided, neither it nor any of its officers or directors shall at
any time during the period of this Agreement make, accept or receive,
directly or indirectly, any fees, profits or emoluments of any character in
connection with the purchase or sale of securities (except securities issued
by the Fund) or other assets by or for the Fund.
6. The Administrator shall keep the Fund's books and records
required to be maintained by it pursuant to paragraph 3 hereof. The
Administrator agrees that all records which it maintains for the Fund are the
property of the Fund and it will surrender promptly to the Fund any of such
records upon the Fund's request. The Administrator further agrees to
preserve for the periods prescribed by Rule 31a-2 of the Commission under the
1940 Act any such records as are required to be maintained by the
Administrator pursuant to paragraph 2 hereof.
7. For the services provided and the expenses assumed pursuant
to this Agreement, the Fund will pay to the Administrator as full
compensation therefore a fee at an annualized rate of up to .05% of the
Fund's average daily net assets. This fee will be compounded daily as of the
close of business and will be paid to the Administrator monthly within ten (10)
business days after the last day of each month and such management fee shall
be adjusted, if necessary, at the time of the payment due in the last month
in the fiscal year of the Fund. The Administrator fee shall be prorated for
any fraction of a month at the commencement or termination of this Agreement.
8. In the event the expenses of the Fund for any fiscal year
(including the fees payable to the Administrator but excluding interest,
taxes, brokerage commissions, distribution fees, amortization of organization
expenses and litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business) exceed
the limit set by applicable regulation of state securities commissions, if
any, the compensation due to the Administrator hereunder will be reduced by
the amount of such excess or postponed so that at no time will there be any
accrued but unpaid liability under this expense limitation. Any such
reductions or payments are subject to readjustment during the year, and the
Administrator's obligation hereunder will be limited to the amount of its fee
paid or accrued with respect to such fiscal year.
9. The Administrator shall give the Fund the benefit of its best
judgment and effort in rendering service hereunder. The Administrator shall
not be liable for any error of judgment or mistake of law for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the 0000 Xxx) of a loss resulting from willful misfeasance, bad
faith or negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Any person employed by the Administrator, who may be or become an employee of
and paid by any other entity affiliated with the Fund, such as the manager,
distributor, or custodian to the Fund, shall be deemed, when acting within
the scope of his employment by such other affiliated entity, to be acting in
such employment solely for such other affiliated entity and not as the
Administrator's employee or agent.
10. This Agreement shall continue in effect for a period of more
than two (2) years from the date hereof only so long as such continuance is
specifically approved at least annually in conformity with the requirements
of the 1940 Act; provided, however, that this Agreement may be terminated
by the Fund at any time, without the payment of any penalty, by the Board of
Directors of the Fund or by vote of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of the Fund, or by the Administrator
at any time, without the payment of any penalty, on not more than sixty (60)
days nor less than thirty (30) days written notice to the other party. This
Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
11. Nothing in this Agreement shall limit or restrict the right of
any of the Administrator's directors, officers, or employees who may also be
a director, officer or employee of the Fund to engage in any other business
or to devote his time and attention in part to the administration or other
aspects of any business, whether of a similar or dissimilar nature, nor limit
nor restrict the Administrator's right to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association. Nothing in this Agreement shall prevent the Administrator or
any affiliated person (as defined in the 0000 Xxx) of the Administrator from
acting as administrator for any other person, firm or corporation and
expressly represents that it will undertake no activities which, in its
judgment, will adversely affect the performance of its obligations to the
Fund under the Agreement.
12. Neither this Agreement nor any transaction made pursuant hereto
shall be invalidated or in any way affected by the fact that directors,
officers, agents and/or shareholders of the Fund are or may be interested in
the Administrator, or any successor or assignee thereof, as directors,
officers, shareholders or otherwise; that directors, officers, shareholders
or agents of the Administrator are or may be interested in the Fund as
directors, officers, shareholders or otherwise; or that the Administrator or
any successor or assignee, is or may be interested in the Fund as
shareholders or otherwise; provided, however, that neither the Administrator
nor any officer or director of the Administrator or of the Corporation shall
sell to or buy from the Fund any property or security other than a security
issued by the Fund, except in accordance with an applicable order or
exemptive rule of the Commission.
13. Except as otherwise provided herein or authorized by the Board
of Directors of the Corporation from time to time, the Administrator shall for
all purposes herein deemed to be an independent contractor, and, except as
expressly provided or authorized in this Agreement, shall have no authority
to act for or represent the Fund in any way or otherwise be deemed an agent
of the Fund. The Fund and the Administrator are not partners or joint
venturers with each other and nothing herein shall be construed so as to make
them such partners or joint venturers or impose any liability as such on
either of them.
14. During the term of this Agreement, the Corporation agrees to
furnish the Administrator at its principal office with all prospectuses,
proxy statements, reports to stockholders, sales literature, or other
material prepared for distribution to stockholders of the Fund or the public,
which refer to the Administrator in any way, prior to use thereof and not to
use such material if the Administrator reasonably objects in writing within
five (5) business days (or such other time as may be mutually agreed) after
receipt thereof. In the event of termination of this Agreement, the
Corporation will continue to furnish to the Administrator copies of any of
the above mentioned materials which refer in any way to the Administrator.
The Corporation shall furnish or otherwise make available to the
Administrator such other information relating to the business affairs of the
Corporation or of the Fund as the Administrator at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
15. This Agreement may be amended by mutual consent, but the
consent of the Fund must be obtained in conformity with the requirements of
the 1940 Act.
16. This Agreement shall be subject to all applicable provisions
of law, including, without limitation, the applicable provisions of the 1940
Act.
17. This Agreement shall be governed by and construed in
accordance with the laws of the State of Hawaii.
18. Compensation to be paid to the Administrator hereunder shall
be separate and distinct from organizational expenses, if any, to be reimbursed
to the Administrator.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
FIRST PACIFIC MUTUAL FUND, INC.
By: /s/ Xxxxxxxx X.X. Xxx
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Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest: /s/ Xxxxxx Xxxx Xxx
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Xxxxxx Xxxx Xxx, Secretary
XXX FINANCIAL GROUP INC.
By: /s/ Xxxxxxxx X.X. Xxx
===========================
Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest: /s/ Xxxxxx Xxxx Xxx
========================
Xxxxxx Xxxx Xxx, Secretary
