FIRST PACIFIC MUTUAL FUND, INC.
FIRST HAWAII MUNICIPAL BOND FUND
FIRST HAWAII INTERMEDIATE MUNICIPAL FUND
ADMINISTRATIVE AGREEMENT
ADMINISTRATIVE AGREEMENT made this 14th day of October, 1999, by and
between First Pacific Mutual Fund, Inc., a Maryland corporation, (the
"Corporation") for the First Hawaii Municipal Bond Fund series, the First
Hawaii Intermediate Municipal Fund series, and First Pacific Management
Corporation, a Hawaii corporation (the "Administrator"). All references
to any series of the Corporation will be called the "Fund" unless expressly
noted otherwise.
BACKGROUND
Each 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 each 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 each Fund, subject to the supervision and direction of the
Board of Directors of each 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 each Fund administrative services.
Administrative services shall include the compliance matters of each Fund.
Compliance for each Fund includes, but is not limited to: filings with the
Securities and Exchange Commission, the National Association of Securities
Dealers, 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 judgement 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
each 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 each Fund shall, in the Administrator's judgement, be appropriate
under the circumstances, they may be different from the information supplied
to other investment companies and customers. Each Fund shall be entitled to
equitable treatment under the circumstances in receiving information, and
any other services, but each 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 each 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 each
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 each Fund of a
type usually and customarily provided to an investment company, pursuant to
a written agreement approved by the Board of Directors of each Fund,
including a majority of the disinterested directors of each 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 each
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 each 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 each
Fund) or other assets by or for each Fund.
6. The Administrator shall keep each Funds books and records required
to be maintained by it pursuant to paragraph 3 hereof. The Administrator
agrees that all records which it maintains for each Fund are the property of
each Fund and it will surrender promptly to each Fund any of such records
upon each Funds' 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, each Fund will pay to the Administrator as full compensation
therefor a fee at an annualized rate of up to .05% of each Funds' 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 each 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 each 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 each funds' 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 of 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 each Fund the benefit of its best
judgement and effort in rendering service hereunder. The Administrator shall
not be liable for any error of judgement or mistake of law for any loss
suffered by each 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 each
Fund, such as the manager, distributor, or custodian to each 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 each Fund at any time, without the payment of any penalty,
by the Board of Directors of each Fund or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of each 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 each 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
judgement, will adversely affect the performance of its obligations to each
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 each 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 each Fund as
directors, officers, shareholders or otherwise; or that the Administrator
or any successor or assignee, is or may be interested in each 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 each 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 each Fund in any way or otherwise be deemed an agent
of each Fund. Each 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, report to stockholders, sales literature, or other
material prepared for distribution to stockholders of each 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 each 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
each Fund must be obtained in conformity with the requirement 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 an 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 K.H. Lee_______________________
Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest:__/s/ Xxxx Chun_____________________________
Xxxx Xxxx, Secretary
FIRST PACIFIC MANAGEMENT CORPORATION
By:____/s/ Xxxxxxxx K.H. Lee_______________________
Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest:__/s/ Xxxx Chun_____________________________
Xxxx Xxxx, Secretary
