Exhibit (5)(b)
ADMINISTRATION AGREEMENT
THE BEAR XXXXXXX FUNDS
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
February 22, 1995
As Revised April 11, 1995
Bear Xxxxxxx Funds Management Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Bear Xxxxxxx Funds, a Massachusetts business trust (the "Fund")
consisting of the series named on Schedule 1 hereto, as such Schedule may be
revised from time to time (each, a "Series"), herewith confirms its agreement
with you ("BSFM") as follows:
The Fund desires to employ its capital by investing in investments of
the type and in accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional Information as from
time to time in effect, copies of which have been or will be submitted to BSFM,
and in such manner and to such extent as from time to time may be approved by
the Fund's Board. The Fund desires to employ BSFM to act as its administrator.
In this connection it is understood that from time to time BSFM will
employ or associate with itself such person or persons as BSFM may believe to be
particularly fitted to assist it in the performance of this Agreement. Such
person or persons may be officers or employees who are employed by both BSFM and
the Fund. The compensation of such person or persons shall be paid by BSFM and
no obligation may be incurred on the Fund's behalf in any such respect.
Subject to the supervision and control of the Fund's Board, BSFM will
assist in supervising all aspects of each Series' operations. BSFM will supply
office facilities (which may be in BSFM's own offices), data processing
services, clerical, accounting and bookkeeping services, internal auditing and
legal services, internal executive and administrative services, and stationery
and office supplies; prepare reports to each Series' stockholders, tax returns,
reports to and filings with the Securities and Exchange Commission and state
Blue Sky authorities; and calculate the net asset value of each Series' shares.
BSFM shall exercise its best judgment in rendering the services to be
provided to the Fund hereunder, and the Fund agrees as an inducement to BSFM's
undertaking the same that BSFM shall not be liable hereunder for any error of
judgment or mistake of law or for any loss suffered by one or more Series,
provided that nothing herein shall be deemed to protect or purport to protect
BSFM against any liability to the Fund or a Series or to its security holders to
which BSFM would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence in the performance of its duties hereunder or by reason
of BSFM's reckless disregard of its obligations or duties hereunder (hereinafter
"Disabling Conduct").
In consideration of services rendered pursuant to this Agreement, the
Fund will pay you on the first business day of each month a fee at the rate set
forth opposite each Series' name on Schedule 1 hereto. Net asset value shall be
computed on such days and at such time or times as described in the Fund's then-
current Prospectus and Statement of Additional Information. The fee for the
period from the date of the commencement of sales of a Series' shares to the end
of the month during which such sales shall have been commenced shall be pro-
rated according to the proportion which such period bears to the full monthly
period, and upon any termination of this Agreement before the end of any month,
the fee for such part of a month shall be pro-rated according to the proportion
which such period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of each
Series' net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of each Series' net assets.
BSFM will bear all expenses in connection with the performance of its
services under this Agreement. All other expenses to be incurred in the
operation of the Fund will be borne by the Fund, except to the extent
specifically assumed by BSFM. The expenses to be borne by the Fund include,
without limitation, the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory,
administration and fund accounting fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Series' existence, costs attributable
to investor services (including, without limitation, telephone and personnel
expenses), costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
stockholders, costs of stockholders' reports and meetings, and any extraordinary
expenses.
The Fund understands that BSFM now acts and will continue to act as
administrator of various investment companies and fiduciary or other managed
accounts, and the Fund has no objection to BSFM's so acting. In addition, it is
understood that the persons employed by BSFM to assist in the performance of its
duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of BSFM or the
right of any affiliate of BSFM to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
Any person, even though also an officer, director, partner, employee or
agent of BSFM, who may be or become an officer, Board member, employee or agent
of the Fund, shall be deemed, when rendering services to the Fund or acting on
any business of the Fund, to be rendering such services to or acting solely for
the Fund and not as an officer, director, partner, employee, or agent or one
under the control or direction of BSFM even though paid by it.
The Fund will indemnify you against, and hold you harmless from, any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) not resulting from Disabling Conduct by you.
Indemnification shall be made only following: (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that you
were not liable by reason of Disabling Conduct or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that you
were not liable by reason of Disabling Conduct by (a) the vote of a majority of
a quorum of Board members of the Fund who are neither "interested persons" of
the Fund nor parties to the proceeding ("disinterested non-party Board members")
or (b) an independent legal counsel in a written opinion. You shall be entitled
to advances from the Fund for payment of the reasonable expenses incurred by you
in connection with the matter as to which you are seeking indemnification in the
manner and to the fullest extent permissible under the New York Business
Corporation Law. You shall provide to the Fund a written affirmation of your
good faith belief that the standard of conduct necessary for indemnification by
the Fund has been met and a written undertaking to repay any such advance if it
should ultimately be determined that the standard of conduct has not been met.
In addition, at least one of the following additional conditions shall be met:
(a) you shall provide security in form and amount acceptable to the Fund for its
undertaking; (b) the Fund is insured against losses arising by reason of the
advance; or (c) a majority of a quorum of disinterested non-party Board members,
or independent legal counsel, in a written opinion, shall
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have determined, based on a review of facts readily available to the Fund at the
time the advance is proposed to be made, that there is reason to believe that
you will ultimately be found to be entitled to indemnification. No provision of
this Agreement shall be construed to protect any Board member or officer of the
Fund, or you, from liability in violation of Sections 17(h) and (i) of the
Investment Company Act of 1940, as amended (the "1940 Act").
As to each Series, this Agreement shall continue until the date set
forth opposite such Series' name on Schedule 1 hereto (the "Reapproval Date")
and thereafter shall continue automatically for successive annual periods ending
on the day of each year set forth opposite the Series' name on Schedule 1 hereto
(the "Reapproval Day"), provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a majority (as defined in
the 0000 Xxx) of such Series' outstanding voting securities, provided that in
either event its continuance also is approved by a majority of the Fund's Board
members who are not "interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by vote
of holders of a majority of such Series' shares or, upon not less than 90 days'
notice, by you. This Agreement also will terminate automatically, as to the
relevant Series, in the event of its assignment (as defined in the 1940 Act).
The Fund recognizes that from time to time your directors, officers and
employees may serve as trustees, directors, partners, officers and employees of
other business trusts, corporations, partnerships or other entities (including
other investment companies) and that such other entities may include the name
"Bear Xxxxxxx" as part of their name, and that your corporation or its
affiliates may enter into investment advisory, administration or other
agreements with such other entities. If you cease to act as the Fund's
administrator, the Fund agrees that, at your request, the Fund will take all
necessary action to change the name of the Fund to a name not including "Bear
Xxxxxxx" in any form or combination of words.
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall only be binding upon the assets and property
of the relevant Series, and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
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If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE BEAR XXXXXXX FUNDS
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Accepted:
BEAR XXXXXXX FUNDS MANAGEMENT INC.
By: /s/ Xxxxxx X. Xxxxxxx
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SCHEDULE 1
Annual Fees as
a Percentage of
Average Daily
Name of Series Net Assets Reapproval Date Reapproval Day
-------------- ---------- --------------- --------------
S&P STARS Portfolio .15 of 1% February 22, 1998 February 22nd
Large Cap Value
Portfolio .15 of 1% February 22, 1998 February 22nd
Small Cap Value
Portfolio .15 of 1% February 22, 1998 February 22nd
Total Return Bond
Portfolio .15 of 1% February 22, 1998 February 22nd
The Insiders Select
Portfolio .15 of 1% February 22, 1998 February 22nd
