EXHIBIT 15(e)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT, dated as of the 1st day of June, 1994, amended January 29,
1996, made by and between First Pacific Mutual Fund, Inc., (the Fund) a
corporation operating as an open-end management company, duly organized and
existing under the laws of the State of Maryland, and First Pacific
Recordkeeping, Inc. (the "Company") a corporation duly organized and existing
under the laws of the State of Deleware.
WITNESSETH THAT:
WHEREAS, the Fund consists of a series of Funds, at present namely: First
Hawaii Municipal Bond Fund, First Hawaii Intermediate Municipal Fund and First
Idaho Tax-Free Fund.
WHEREAS, the Fund desires to appoint the Company as its 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 Section 2 of this Agreement (the "Accounts and Records") and to perform
certain other functions in connection with such accounts and records; and
WHEREAS, the Company is willing to perform such functions upon the terms
and conditions set forth below; and
WHEREAS, the Fund will cause to be provided certain information to the
Company as set forth below; and
WHEREAS, the Company shall perform the duties of transfer agent and
dividend disbursing agent pursuant to a separate agreement ("Shareholder
Services Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
Section 1. The Fund shall promptly turn over to the Company such of the
Accounts and Records previously maintained by or for it as are necessary for the
Company to perform its functions under this Agreement. The Fund authorizes the
Company to rely on such Accounts and Records turned over to it and hereby
indemnifies and holds the Company, its successors and assigns, harmless of and
from any and all expenses, damages, claims, suits liabilities, actions, demands
and losses whatsoever arising out of or in connection with any error, omission,
inaccuracy or other deficiency of such Accounts and Records or in the failure of
the Fund to provide any portion of such or to provide any information needed by
the Company to knowledgeably perform its functions.
Section 2. To the extent it receives the necessary information from the
Fund or its agents by Written or Oral Instructions, the Company shall maintain
and keep current the following
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Accounts and Records relating to the business of the Fund, in such form as may
be mutually agreed to between the Fund and the Company:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid Record
(d) Subscription and Redemption Journals
(e) Daily Expense Accruals
(f) Daily Interest Accruals
Unless necessary information to perform the above functions is furnished by
Written or Oral Instructions to the Company daily, prior to 4:00 pm Eastern
Standard Time (the close of trading on the New York Stock Exchange), and the
calculation of the Fund's net asset value as provided below, the Company shall
incur no liability, and the Fund shall indemnify and hold harmless the Company
from and against any liability arising from any failure to provide complete
information or from any discrepancy between the information received by the
Company and used in such calculations and any subsequent information received
from the Fund or any of its designated Agents.
Section 3. The Company shall perform the ministerial calculations necessary
to calculate the Fund's net asset value daily, in accordance with the Fund's
current prospectus and utilizing the information described in this Section.
Portfolio items for which market quotations are available by the Company's use
of automated financial information ("Service") shall be based on the closing
prices of such Service except where the Fund has given or caused to be given
specific Written or Oral Instructions to utilize a different value. All of the
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 such
Service. The Company shall have no responsibility or liability for the accuracy
of prices quoted by such Services; for the accuracy of the information supplied
by the Fund; or for any loss, liability, damage, or cost arising out of any
inaccuracy of such data. The Company 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 the Company in usable form. Unless the
necessary information to calculate the net asset value daily is furnished by
Written or Oral Instructions from the Fund, the Company shall incur no
liability, and the Fund shall indemnify and hold harmless the Company from and
against any liability arising from any failure to provide complete information
or from any discrepancy between the information received by the Company and used
in such calculation and any subsequent information received from the Fund or any
of its designated agents.
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Section 4. For all purposes under this Agreement, the Company 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, a confirmatory Written Instruction or Oral
Instruction in the form of a document or written record shall be delivered, and
in cases where the Company receives an 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 the Company. The Company 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 the Company is countermanded by a timely
later Written or Oral Instruction received by the Company prior to acting upon
such countermanded Instruction, the Company shall act upon such later Written or
Oral Instruction. The sole obligation of the Company with respect to any
follow-up or confirmatory Written Instruction, Oral Instruction in 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 requires the Company to act, the Fund shall give the Company
specific Written Instruction as to the action required.
Section 5. At the end of each month, the Fund shall cause the Custodian to
forward to the Company a monthly statement of cash and portfolio transactions,
which will be reconciled with the Company's Accounts and Records maintained for
the Fund. The Company will report any discrepancies to the Custodian, and report
any unreconciled items to the Fund.
Section 6. The Company shall promptly supply daily and periodic reports of
the Fund as requested by the Fund and agreed upon by the Company.
Section 7. The Fund shall and shall require each of its agents (including
without limitation its Transfer Agent and its Custodian) to provide the Company
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
the Company by 10:00 am the next following business day) containing all data and
information necessary for the Company to maintain the Fund's Accounts and
Records and the Company may conclusively assume that the information it receives
by Written or Oral Instructions is complete and accurate. The Fund is
responsible to provide or cause to be provided to the Company reports of share
purchases, redemptions, and total shares outstanding on the next business day
after each net asset valuation.
Section 8. The Accounts and Records, in the agreed upon format, maintained
by the Company 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 31(a)-2 of the Investment Company Act of 1940, as amended.
The Company shall assist the Fund's independent auditors, or
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upon approval of the Fund, or upon demand, any regulatory body, in any requested
review of the Fund's Accounts and Records but shall be reimbursed for all
expenses and employee time invested in any such review of the Fund's Accounts
and Records outside of routine and normal periodic reviews. Upon receipt from
the Fund of the necessary information, the Company shall supply the necessary
data for the Fund or accountant's completion of any necessary tax returns,
questionnaires, periodic reports to shareholders and such other reports and
information requests as the Fund and the Company shall agree upon from time to
time.
Section 9. The Company and the Fund may from time to time adopt such
procedures as they agree upon in writing, and the Company may conclusively
assume that any procedure approved by the Fund or directed by the Fund, does not
conflict with or violate any requirements of its Prospectus, Articles of
Incorporation, By-Laws, or any rule or regulation of any regulatory body or
governmental agency. The Fund shall be responsible for notifying the Company of
any changes in regulations or rules which might necessitate changes in the
Company's procedures, and for working out with the Company such changes.
Section 10. (a) The Company, its directors, officers, employees,
shareholders and agents shall not be liable for any error of judgement or
mistake of law or for any loss suffered by the Fund in connection with the
performance of this Agreement, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Company in the performance of
its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of the Company, who may be or become an officer, trustee,
employee or agent of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund (other than services or business in
connection with the Company's duties hereunder), to be rendering such services
to or acting solely for the Fund and not as a director, officer, employee,
shareholder or agent of, or one under the control or direction of the Company
even though paid by it.
(c) Notwithstanding any other provision of this Agreement, the Fund
shall indemnify and hold harmless the Company, its directors, officers,
employees, shareholders and agents from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in fact or law) of any
and every nature which the Company may sustain or incur or which may be asserted
against the Company by any person by reason of, or as a result of: (i) any
action taken or omitted to be taken by the Company in good faith hereunder; (ii)
in reliance upon any certificate, instrument, order or stock certificate or
other document reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Fund or upon
the opinion of legal counsel for the Fund or its own counsel; or (iii) any
action taken or omitted to be taken by the Company in connection with its
appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of the Company or its
directors, officers, employees , shareholders or agents in cases
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of its or their own negligence, willful misconduct, bad faith, or reckless
disregard of its or their own duties hereunder.
(d) The Company shall give written notice to the Fund within twenty
(20) business days of receipt by the Company of a written assertion or claim of
any threatened or pending legal proceeding which may be subject to this
indemnification. However, the failure to notify the Fund of such written
assertion or claim shall not operate in any manner whatsoever to relieve the
Fund of any liability arising from this Section or otherwise.
(e) For any legal proceeding giving rise to this indemnification, the
Fund shall be entitled to defend or prosecute any claim in the name of the
Company at its own expense and through counsel of its own choosing if it gives
written notice to the Company within twenty (20) business days of receiving
notice of such claim. Notwithstanding the foregoing, the Company may participate
in the litigation at its own expense through counsel of its own choosing. If the
Fund does choose to defend or prosecute such claim, then the parties shall
cooperate in the defense or prosecution thereof and shall furnish such records
and other information as are reasonably necessary.
(f) The Fund shall not settle any claim without the Company's express
written consent which shall not be unreasonably withheld. The Company shall not
settle any claim without the Fund's express written consent which shall not be
unreasonably withheld.
Section 11. All financial data provided to, processed by, and reported by
the Company under this Agreement shall be stated in United States dollars or
currency. The Company shall have no obligation to convert to, equate, or deal in
foreign currencies or values, and expressly assumes no liability for any
currency conversion or equation computations relating to the affairs of the
Fund.
Section 12. The Fund agrees to pay the Company, within 15 days from the
execution date of this Agreement, an amount equal to reasonable costs and
expenses (including counsel fees), incurred by the Company in connection with
the transfer of the services subject to this Agreement to the Company from the
Fund.
Section 13. The Fund agrees to pay the Company compensation for its
services and to reimburse it for expenses, as set forth in Schedule A attached
hereto, or as shall be set forth in amendments to such Schedule approved by the
Fund and Company. The Fund authorizes the Company to debit the Fund's custody
account for invoices which are rendered for the services performed for the
accounting agent function. The invoices for the service will be sent to the Fund
after the debiting with the indication the payment has been made.
Section 14. Nothing contained in this Agreement is intended to or shall
require the Company, in any capacity hereunder, to perform any functions or
duties on any holiday, day of special observance or any other day on which the
Custodian or the New York Stock Exchange is closed. Functions or duties normally
scheduled to be performed on such days shall be performed on, and as of, the
next succeeding business day on which both the New York Stock Exchange and
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the Custodian are open. Notwithstanding the foregoing, the Company shall compute
the net asset value of the Fund on each day required pursuant to Rule 22c-1
promulgated under the Investment Act of 1940.
Section 15. 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 16. The terms defined in Section 1 of the Shareholder Services
Agreement shall have the same meanings wherever used in this Agreement.
The Fund shall file with the Company a certified copy of each resolution of
its Board of Directors authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided in Section 1 of the Shareholder
Services Agreement.
Section 17. The Fund or the Company may give written notice to the other of
the termination of this Agreement, such termination to take effect at the time
specified in the notice not less than 120 days after the giving of the notice.
Upon the effective termination date, subject to payment to the Company by the
Fund of all amounts due to the Company as of said date, the Company shall make
available to the Fund or its designated recordkeeping successor, all of the
records of the Fund maintained under this Agreement then in the Company's
possession.
Section 18. Any notice or other communication required by or permitted to
be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first class mail, postage prepaid to the
respective parties as follows:
If to the Fund:
First Pacific Mutual Fund, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx #0-000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X.X. Xxx
If to the Company:
First Pacific Recordkeeping, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx #0-000
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx X.X. Xxx
Section 19. This Agreement may be amended from time to time by supplemental
agreements executed by the Fund and the Company.
Section 20. This Agreement shall be governed by the laws of the State of
Hawaii.
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SCHEDULE A
ACCOUNTING AND PORTFOLIO VALUATION SERVICES AND FEES
First Hawaii Municipal Bond Fund
First Hawaii Intermediate Municipal Fund
First Idaho Tax-Free Fund
Accounting Services:
1.) Compute net asset value (and offering price) per share, daily.
2.) Maintain security ledger.
3.) Maintain general ledger.
4.) Prepare and submit to client:
Daily: Trial Balance.
Portfolio Pricing Report or interest evaluation
(money market funds).
Cash Availability.
Monthly: Statement of Assets and Liabilities.
Statement of Operations.
Statement of Changes in Net Assets.
Summary of Purchases.
Summary of Sales.
Schedule of Brokerage Commissions.
Schedule of Principal Trade Transactions.
Semi- In addition to monthly reports, Statement of
Annually: Investments and a draft of footnotes.
Annually: Schedules supporting securities and shareholder
transactions, income and expense accrual during the
year.
Portfolio Pricing Services:
1.) Update the daily market value of securities held by Fund.
The following pricing is included in the fee quoted:
Listed Securities:
Traded: Closing price.
Untraded: Mean, bid or ask.
NASDAQ National Market Issues:
Traded: Closing price.
Untraded: Mean, bid or ask.
Other Over-the-Counter Securities:
Traded: Mean, bid or ask.
Untraded: Mean bid or ask.
2.) Monitor securities held for stock splits, stock dividends,
mergers, spin-offs. (Domestic securities only).
3.) Determine gain or loss on security trades.
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SCHEDULE A (continued)
NSAR Reporting Services:
Prepare answers to the following items (if applicable):
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 38, 40, 41, 42,
43, 53, 55, 62, 63, 00X, 00, 00, 00, 00, 00, 00.
Yield Calculation:
Provide up to 12 reports per year to reflect the yield calculation changes
to Rule 482 required by the SEC effective July 1, 1988.
$1,000.00 per year per portfolio.
Bond Quotation Fee (If Applicable):
Corporate Bonds: $ .50 Per Quote Per Bond
Municipal Bonds: $ .75 Per Quote Per Bond
Cost of copying and sending material to auditors for off-site audits will be an
additional expense.
Annual Fee Schedule: (1/12th payable monthly)
$21,500 Minimum to $20 Million of Average Net Assets
.000325 On Next $30 Million of Average Net Assets
.00026 On Next $50 Million of Average Net Assets
.000195 On Next $100 Million of Average Net Assets
.0001625 Over $200 Million of Average Net Assets
A.) Securities Transaction Charge: (Payable Monthly)
Book Entry DTC or
Federal Book Entry $12.00
Physical (Mutual Fund Trades) $22.50
GNMA $23.00
Options $17.50
(Should an option expire, our
transaction fee will be only $12.00.)
Mortgage Backed Securities -
Principal Pay Down Per Pool $10.00
Security Lending $17.00
Now Account $12.00
B.) When Issued, Securities Lending, Index Futures: Should each of
these investment vehicles require seperate segregated custody
accounts, there will be a fee of $250.00 per account per month.
C.) Out-of Pocket Expenses: The Fund will reimburse the custodian
monthly for all out-of- pocket expenses, i.e. postage,
stationary, insurance, retention of records, conversion, etc. and
expenses in the development of agreements between the Company and
the Custodian.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized officers and their Corporate seals hereunto duly affixed
and attested, as of the day and year first above written.
FIRST PACIFIC MUTUAL FUND, INC.
By:____(sig. on orig.)__________________
Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest:__(sig. on orig.)________________
Xxxx Xxxx, Secretary
FIRST PACIFIC RECORDKEEPING, INC.
By:____(sig. on orig.)__________________
Xxxxxxxx X.X. Xxx, President
[Corporate Seal]
Attest:__(sig. on orig.)________________
Xxxx Xxxx, Secretary
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