Exhibit (h)(4)
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 2nd day of January, 2002,
by and between FIRST PACIFIC MUTUAL FUND, INC. (the "Fund"), a
Maryland corporation having its principal place of business at
0000 Xxxxxxxx Xxxxx, Xxxxx #0-000, Xxxxxxxx, Xxxxxx 00000, and
ULTIMUS FUND SOLUTIONS, LLC ("Ultimus"), a limited liability
company organized under the laws of the State of Ohio and having
its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, Xxxx 00000.
WHEREAS, the Fund is an open-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund desires that Ultimus perform certain fund
accounting services for each series of the Fund, listed on
Schedule A attached hereto and made part of this Agreement, as
such Schedule A may be amended from time to time (individually
referred to herein as the "Portfolio" and collectively as the
"Portfolios"); and
WHEREAS, Ultimus is willing to perform such services on the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and
covenants herein set forth, the parties agree as follows:
1. RETENTION OF ULTIMUS.
The Fund hereby retains Ultimus to act as the fund accountant
of the Fund and to furnish the Fund with the services as set
forth below. Ultimus hereby accepts such employment to perform
such duties.
(a) MAINTENANCE OF BOOKS AND RECORDS.
Ultimus shall maintain and keep current the accounts,
books, records and other documents relating to the Fund's
financial and portfolio transactions as may be required by
the rules and regulations of the Securities and Exchange
Commission (the "SEC") adopted under Section 31(a) of
the 1940 Act. Ultimus shall cause the subject records of
the Fund to be maintained and preserved pursuant to the
requirements of the 1940 Act.
(b) PERFORMANCE OF DAILY ACCOUNTING SERVICES.
In addition to the maintenance of the books and records
specified above, Ultimus shall perform the following
accounting services daily for each Portfolio:
(i) Calculate the net asset value per share
utilizing prices obtained from the sources
described in subsection 1(b)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable,
then obtain such prices from each Portfolio's
investment adviser or its designee, as approved
by the Fund's Board of Directors (hereafter
referred to as "Directors");
(iii) Verify and reconcile with the Portfolios'
custodian all daily trade activity;
(iv) Compute, as appropriate, each Portfolio's net
income and capital gains, dividend payables,
dividend factors, yields, and weighted average
portfolio maturity;
(v) Review daily the net asset value calculation
and dividend factor (if any) for each Portfolio
prior to release to shareholders, check and
confirm the net asset values and dividend
factors for reasonableness and deviations, and
distribute net asset values and yields to
NASDAQ;
(vi) Determine unrealized appreciation and
depreciation on securities held by the
Portfolios;
(vii) Amortize premiums and accrete discounts on
securities purchased at a price other than face
value, if requested by the Fund;
(viii) Update fund accounting system to reflect rate
changes on variable interest rate instruments;
(ix) Post Portfolio transactions to appropriate
categories;
(x) Accrue expenses of each Portfolio;
(xi) Determine the outstanding receivables and
payables for all (1) security trades, (2)
Portfolio share transactions and (3) income and
expense accounts;
(xii) Provide accounting reports in connection with
the Fund's regular annual audit and other
audits and examinations by regulatory agencies;
and
(xiii) Provide such periodic reports as the parties
shall agree upon.
(c) SPECIAL REPORTS AND SERVICES.
(i) Ultimus may provide additional special reports
upon the request of the Fund or a Portfolio's
investment adviser, which may result in an
additional charge, the amount of which shall be
agreed upon between the parties.
(ii) Ultimus may provide such other similar services
with respect to a Portfolio as may be
reasonably requested by the Fund, which may
result in an additional charge, the amount of
which shall be agreed upon between the parties.
(d) ADDITIONAL ACCOUNTING SERVICES.
Ultimus shall also perform the following additional
accounting services for each Portfolio:
(i) Provide monthly (or as frequently as may
reasonably be requested by the Fund or a
Portfolio's investment adviser) a set of
financial statements for each Portfolio as
described below, upon request of the Fund:
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Security Purchases and Sales Journals
Portfolio Holdings Reports
(ii) Provide accounting information for the
following:
(A) federal and state income tax returns and
federal excise tax returns;
(B) the Fund's semi-annual reports with the SEC
on Form N-SAR;
(C) the Fund's annual, semi-annual and
quarterly (if any) shareholder reports;
(D) registration statements on Form N-1A and
other filings relating to the registration
of shares;
(E) Ultimus' monitoring of the Fund's status as
a regulated investment company under
Subchapter M of the Internal Revenue Code,
as amended;
(F) annual audit by the Fund's auditors; and
(G) examinations performed by the SEC.
2. SUBCONTRACTING.
Ultimus may, at its expense and, upon written notice to the
Fund, subcontract with any entity or person concerning the
provision of the services contemplated hereunder; provided,
however, that Ultimus shall not be relieved of any of its
obligations under this Agreement by the appointment of such
subcontractor and provided further, that Ultimus shall be
responsible, to the extent provided in Section 7 hereof, for all
acts of such subcontractor as if such acts were its own.
3. COMPENSATION.
The Fund shall pay for the services to be provided by
Ultimus under this Agreement in accordance with, and in the
manner set forth in, Schedule B attached hereto, as such Schedule
may be amended from time to time.
If this Agreement becomes effective subsequent to the first
day of a month or terminates before the last day of a month,
Ultimus' compensation for that part of the month in which the
Agreement is in effect shall be prorated in a manner consistent
with the calculation of the fees as set forth above. Payment of
Ultimus' compensation for the preceding month shall be made
promptly.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying Ultimus the fees described in
Schedule B attached hereto, the Fund agrees to reimburse Ultimus
for its reasonable out-of-pocket expenses in providing services
hereunder, including without limitation the following:
(a) All freight and other delivery and bonding charges
incurred by Ultimus in delivering materials to and
from the Fund;
(b) All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred by Ultimus in communication with the Fund,
the Fund's investment adviser or custodian, dealers
or others as required for Ultimus to perform the
services to be provided hereunder;
(c) The cost of obtaining security market quotes;
(d) All expenses incurred in connection with any custom
programming or systems modifications required to
provide any special reports or services requested by
the Fund;
(e) Any expenses Ultimus shall incur at the written
direction of an officer of the Fund thereunto duly
authorized other than an employee or other affiliated
person of Ultimus who may otherwise be named as an
authorized representative of the Fund for certain
purposes; and
(f) Any additional expenses reasonably incurred by
Ultimus in the performance of its duties and
obligations under this Agreement.
5. EFFECTIVE DATE.
This Agreement shall become effective with respect to a
Portfolio as of the date first written above (or, if a particular
Portfolio is not in existence on that date, on the date such
Portfolio commences operation) (the "Effective Date").
6. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless
earlier terminated by either party hereto as provided hereunder,
for a period of two years. Thereafter, unless otherwise
terminated as provided herein, this Agreement shall be renewed
automatically for successive one-year periods.
This Agreement may be terminated without penalty: (i) by
provision of sixty (60) days' written notice; (ii) by mutual
agreement of the parties; or (iii) for "cause" (as defined
herein) upon the provision of thirty (30) days' advance written
notice by the party alleging cause.
For purposes of this Agreement, "cause" shall mean: (i) a
material breach of this Agreement that has not been remedied
within thirty (30) days following written notice of such breach
from the non-breaching party, (ii) a series of negligent acts or
omissions or breaches of this Agreement which, in the aggregate,
constitute in the reasonable judgment of the Fund, a serious
failure to perform satisfactorily Ultimus' obligations hereunder;
(iii) a final, unappealable judicial, regulatory or
administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (iv) financial
difficulties on the part of the party to be terminated which are
evidenced by the authorization or commencement of, or involvement
by way of pleading, answer, consent or acquiescence in, a
voluntary or involuntary case under Title 11 of the United States
Code, as from time to time is in effect, or any applicable law,
other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or the modification or
alteration of the rights of creditors.
Notwithstanding the foregoing, after such termination for
so long as Ultimus, with the written consent of the Fund, in fact
continues to perform any one or more of the services contemplated
by this Agreement or any schedule or exhibit hereto, the
provisions of this Agreement, including without limitation the
provisions dealing with indemnification, shall continue in full
force and effect. Compensation due Ultimus and unpaid by the
Fund upon such termination shall be immediately due and payable
upon and notwithstanding such termination. Ultimus shall be
entitled to collect from the Fund, in addition to the
compensation described in Schedule B, the amount of all of
Ultimus' cash disbursements for services in connection with
Ultimus' activities in effecting such termination, including
without limitation, the delivery to the Fund and/or its designees
of the Fund's property, records, instruments and documents.
7. STANDARD OF CARE.
The duties of Ultimus shall be confined to those expressly
set forth herein, and no implied duties are assumed by or may be
asserted against Ultimus hereunder. Ultimus shall be obligated to
exercise care and diligence in the performance of its duties
hereunder and to act in good faith in performing the services
provided for under this Agreement. Ultimus shall be liable for
any damages arising directly or indirectly out of Ultimus'
failure to perform its duties under this Agreement to the extent
such damages arise directly or indirectly out of Ultimus' willful
misfeasance, bad faith, negligence in the performance of its
duties, or reckless disregard of it obligations and duties
hereunder. (As used in this Article 7, the term "Ultimus" shall
include directors, officers, employees and other agents of
Ultimus as well as Ultimus itself.)
Without limiting the generality of the foregoing or any
other provision of this Agreement, (i) Ultimus shall not be
liable for losses beyond its reasonable control, provided that
Ultimus has acted in accordance with the standard of care set
forth above; and (ii) Ultimus shall not be liable for the
validity or invalidity or authority or lack thereof of any
instruction, notice or other instrument that Ultimus reasonably
believes to be genuine and to have been signed or presented by a
duly authorized representative of the Fund (other than an
employee or other affiliated persons of Ultimus who may otherwise
be named as an authorized representative of the Fund for certain
purposes).
Ultimus may apply to the Fund at any time for instructions
and may consult with counsel for the Fund or its own counsel and
with accountants and other experts with respect to any matter
arising in connection with Ultimus' duties hereunder, and Ultimus
shall not be liable or accountable for any action taken or
omitted by it in good faith in accordance with such instruction
or with the reasonable opinion of such counsel, accountants or
other experts qualified to render such opinion.
8. INDEMNIFICATION.
The Fund agrees to indemnify and hold harmless Ultimus from
and against any and all actions, suits, claims, losses, damages,
costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable
investigation expenses) (collectively, "Losses") arising directly
or indirectly out of any action or omission to act which Ultimus
takes (i) at any request or on the direction of or in reliance on
the reasonable advice of the Fund, (ii) upon any instruction,
notice or other instrument that Ultimus reasonably believes to be
genuine and to have been signed or presented by a duly authorized
representative of the Fund (other than an employee or other
affiliated person of Ultimus who may otherwise be named as an
authorized representative of the Fund for certain purposes) or
(iii) on its own initiative, in good faith and in accordance with
the standard of care set forth herein, in connection with the
performance of its duties or obligations hereunder; provided,
however that the Fund shall have no obligation to indemnify or
reimburse Ultimus under this Article 8 to the extent that Ultimus
is entitled to reimbursement or indemnification for such Losses
under any liability insurance policy described in this Agreement
or otherwise.
Ultimus shall not be indemnified against or held harmless
from any Losses arising directly or indirectly out of Ultimus'
own willful misfeasance, bad faith, negligence in the performance
of its duties, or reckless disregard of its obligations and
duties hereunder. (As used in this Article 8, the term "Ultimus"
shall include directors, officers, employees and other agents of
Ultimus as well as Ultimus itself.)
9. RECORD RETENTION AND CONFIDENTIALITY.
Ultimus shall keep and maintain on behalf of the Fund
all books and records which the Fund and Ultimus is, or may be,
required to keep and maintain pursuant to any applicable
statutes, rules and regulations, including without limitation
Rules 31a-1 and 31a-2 under the 1940 Act, relating to the
maintenance of books and records in connection with the services
to be provided hereunder. Ultimus further agrees that all such
books and records shall be the property of the Fund and to make
such books and records available for inspection by the Fund or by
the SEC at reasonable times and otherwise to keep confidential
all books and records and other information relative to the Fund
and its shareholders; except when requested to divulge such
information by duly-constituted authorities or court process.
10. FORCE MAJEURE.
Ultimus assumes no responsibility hereunder, and shall not
be liable, for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control,
including acts of civil or military authority, national
emergencies, fire, flood, catastrophe, acts of God, insurrection,
war, riots or failure of the mails, transportation, communication
or power supply.
11. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data except computer programs and
procedures developed to perform services required to be provided
by Ultimus are the exclusive property of the Fund and all such
records and data will be furnished to the Fund in appropriate
form as soon as practicable after termination of this Agreement
for any reason. Ultimus may at its option at any time, and shall
promptly upon the Fund's demand, turn over to the Fund and cease
to retain Ultimus' files, records and documents created and
maintained by Ultimus pursuant to this Agreement which are no
longer needed by Ultimus in the performance of its services or
for its legal protection. If not so turned over to the Fund,
such documents and records will be (1) copied and made available
to the Fund by Ultimus as soon as reasonably practical, and (2)
retained by Ultimus for six years from the year of creation. At
the end of such six-year period, such records and documents will
be turned over to the Fund unless the Fund authorizes in writing
the destruction of such records and documents.
12. REPRESENTATIONS OF THE FUND.
The Fund certifies to Ultimus that this Agreement has
been duly authorized by the Fund and, when executed and delivered
by the Fund, will constitute a legal, valid and binding
obligation of the Fund, enforceable against the Fund in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured
parties.
13. REPRESENTATIONS OF ULTIMUS.
Ultimus represents and warrants that: (1) the various
procedures and systems which Ultimus has implemented with regard
to safeguarding from loss or damage attributable to fire, theft,
or any other cause the records, and other data of the Fund and
Ultimus's records, data, equipment facilities and other property
used in the performance of its obligations hereunder are adequate
and that it will make such changes therein from time to time as
are required for the secure performance of its obligations
hereunder, (2) this Agreement has been duly authorized by Ultimus
and, when executed and delivered by Ultimus, will constitute a
legal, valid and binding obligation of Ultimus, enforceable
against Ultimus in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of
creditors and secured parties, (3) it is duly registered with the
appropriate regulatory agency as a transfer agent and such
registration will remain in full force and effect for the
duration of this Agreement, and (4) it has and will continue to
have access to the necessary facilities, equipment and personnel
to perform its duties and obligations under this Agreement.
14. INSURANCE.
Ultimus shall furnish the Fund with pertinent
information concerning the professional liability insurance
coverage that it maintains. Such information shall include the
identity of the insurance carrier(s), coverage levels and
deductible amounts. Ultimus shall notify the Fund should any of
its insurance coverage be canceled or reduced. Such notification
shall include the date of change and the reasons therefor.
Ultimus shall notify the Fund of any material claims against it
with respect to services performed under this Agreement, whether
or not they may be covered by insurance, and shall notify the
Fund from time to time as may be appropriate of the total
outstanding claims made by Ultimus under its insurance coverage.
15. INFORMATION TO BE FURNISHED BY THE FUND.
The Fund has furnished to Ultimus the following:
(a) Copies of the Articles of Incorporation and of any
amendments thereto, certified by the proper official
of the state in which such document has been filed.
(b) Copies of the following documents:
(1) The Fund's Bylaws and any amendments thereto;
and
(2) Certified copies of resolutions of the
Directors covering the approval of this
Agreement, authorization of a specified officer
of the Fund to execute and deliver this
Agreement and authorization for specified
officers of the Fund to instruct Ultimus
thereunder.
(c) A list of all the officers of the Fund, together with
specimen signatures of those officers who are
authorized to instruct Ultimus in all matters.
(d) Copies of the Prospectus and Statement of Additional
Information for each Portfolio.
16. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or
waived only by written amendment signed by the party against whom
enforcement of such change or waiver is sought.
For special cases, the parties hereto may amend such
procedures set forth herein as may be appropriate or practical
under the circumstances, and Ultimus may conclusively assume that
any special procedure which has been approved by the Fund does
not conflict with or violate any requirements of its Articles of
Incorporation or then current prospectuses, or any rule,
regulation or requirement of any regulatory body.
17. COMPLIANCE WITH LAW.
Except for the obligations of Ultimus otherwise set forth
herein, the Fund assumes full responsibility for the preparation,
contents and distribution of each prospectus of the Fund as to
compliance with all applicable requirements of the Securities Act
of 1933, as amended (the "Securities Act"), the 1940 Act and any
other laws, rules and regulations of governmental authorities
having jurisdiction. The Fund represents and warrants that no
shares of the Fund will be offered to the public until the Fund's
registration statement under the Securities Act and the 1940 Act
has been declared or becomes effective.
18. NOTICES.
Any notice provided hereunder shall be sufficiently
given when sent by registered or certified mail to the party
required to be served with such notice, at the following address:
if to the Fund, at 0000 Xxxxxxxx Xxxxx, Xxxxx #0-000, Xxxxxxxx,
Xxxxxx 00000, Attn: Xxxxxxxx Xxx; and if to Ultimus, at 000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, Attn: Xxxxxx
X. Xxxxxx; or at such other address as such party may from time
to time specify in writing to the other party pursuant to this
Section.
19. ASSIGNMENT.
This Agreement and the rights and duties hereunder
shall not be assignable by either of the parties hereto except by
the specific written consent of the other party. This Agreement
shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and permitted
assigns.
20. GOVERNING LAW.
This Agreement shall be construed in accordance with the
laws of the State of Ohio and the applicable provisions of the
1940 Act. To the extent that the applicable laws of the State of
Ohio, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
21. MULTIPLE ORIGINALS.
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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first
above written.
FIRST PACIFIC MUTUAL FUND, INC.
By: /s/ Xxxxxxxx X.X. Xxx
Title:President/Chief Executive Officer
ULTIMUS FUND SOLUTIONS, LLC
By: /s/ Xxx Xxxxxx __________
Title: President
SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
FIRST PACIFIC MUTUAL FUND, INC.
AND
ULTIMUS FUND SOLUTIONS, LLC
FUND PORTFOLIOS
Hawaii Municipal Fund
Hawaii Intermediate Fund
SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT BETWEEN
FIRST PACIFIC MUTUAL FUND, INC.
AND
ULTIMUS FUND SOLUTIONS, LLC
FEES AND EXPENSES
FEES:
Ultimus shall be entitled to receive a fee from the Fund on
the first business day following the end of each month, or at
such time(s) as Ultimus shall request and the parties hereto
shall agree, a fee computed as follows:
Base fee per year = $60,000, ($5,000 per
month), plus
Asset based fee of:
Average Daily Net Assets
Asset Based Fee
First $500 million
.010%
In excess of $500 million
.005%
The above base fee assumes two Portfolios, each with a
single class of shares.
The forgoing fees include 100 portfolio trades per month
(exclusive of daily cash investments). For Portfolios with more
than 100 trades in a month, Ultimus will charge $5.00 for each
trade in excess of 100.
For Performance Reporting (including After-Tax Performance
Reporting), Ultimus charges each Portfolio a fee of $250 per
month.
OUT-OF-POCKET EXPENSES:
The fees set forth above shall be in addition to the
payment of out-of-pocket expenses, as provided for in Section 4
of this Agreement.
