FORM OF
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made as of the _______ day of , 1996 between
The FBR Family of Funds, a Delaware business trust (the "Fund"), and Bear
Xxxxxxx Funds Management Inc., a New York corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Fund, consisting of the series named on Schedule I,
hereto, as such Schedule may be revised from time to time (each a "Series"), is
a open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund has retained an investment adviser for the purpose of
investing its assets in securities and desires to retain the Administrator for
certain administrative services, and the Administrator is willing to furnish
such administrative services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Appointment. The Fund hereby appoints the Administrator to provide
the services set forth below, subject to the overall supervision of the Board of
Trustees of the Fund (the "Board") for the period and on the terms set forth in
this Agreement. The Administrator hereby accepts such appointment and agrees
during such period to render the services herein described and to assume the
obligations herein set forth; for the compensation herein provided.
2. Description of Services. Subject to the supervision of the Board and
the officers of the Fund, the Administrator shall provide office facilities and
personnel to assist the officers of the Fund in the performance of the following
services:
(a) Review of all materials filed with the Securities and Exchange
Commission ("SEC") on behalf of the Fund (e.g., N-SAR, amendments to
registration statements on Form N- 1A, periodic reports to shareholders, proxy
statements, etc.) and monitor XXXXX filing of the same;
(b) Assist in the negotiation of fees for services rendered to the
Series;
(c) Assist both the Adviser and the Series in the preparation of
materials for periodic Board meetings and committees thereof;
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(d) Oversee the determination and publication of each Series' net asset
value in accordance with each Series' policy as adopted from time to time by the
Board;
(e) Oversee the maintenance by PFPC Inc. of certain books and records
of each Series as required under the Investment Company Act, and maintain (or
oversee the maintenance by such other persons as approved by the Board) such
other books and records (other than those maintained by the Adviser) required by
law or for the proper operation of each Series;
(f) Assist in the preparation and review of each Series' federal, state
and local income tax returns and any other required tax return (other than those
filings relating to a shareholder's holdings in each Series, which will be
performed by PFPC Inc., in its capacity of transfer agent);
(g) Assist in the preparation and review of year-end shareholder tax
notifications for dividends and distributions paid by each Series during the
calendar and/or fiscal year;
(h) Assist with the preparation, review and approval by officers of the
Fund and the Adviser, the financial information for each Series' semi-annual,
annual and other periodic reports, proxy statements and other communications
with shareholders or otherwise to be sent to each Series' shareholders, and
coordinate for the printing and dissemination of such reports and communications
to shareholders;
(i) Assist with the preparation and dissemination of statistical
information and research data to outside reporting agencies;
(j) Prepare and/or assist with the preparation of reports relating to
the business and affairs of the Fund as may be mutually agreed upon and not
otherwise appropriately prepared by the Adviser, custodian, sub-administrator
and accounting agent, transfer and dividend disbursing agent, legal counsel or
independent accountants;
(k) Consult with the Fund's officers, independent accountants, legal
counsel, custodian, sub-administrator and accounting agent, and transfer and
dividend disbursing agent in establishing the accounting policies of each
Series;
(l) Review and assist with the computation of the amount of dividends
and distributions to be paid by each Series;
(m) Provide communication and coordination services with regard to the
Adviser, transfer and dividend disbursing agent, custodian and other service
providers that render recordkeeping or shareholder communication services to the
Fund; and
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(n) Develop and implement procedures to assist the Adviser in
monitoring, on a monthly basis, the Series' compliance with regulatory
requirements, specifically compliance with the Fund's prospectus,
diversification and other requirements under the Investment Company Act, and
each Series' income diversification requirements under Subchapter M of the
Internal Revenue Code of 1986, as amended.
All services are to be furnished through the medium of any directors,
officers or employees of the Administrator as the Administrator deems
appropriate in order to fulfill its obligations hereunder.
Each party shall bear all its own expenses incurred in connection with
this Agreement, except as noted below.
3. Compensation. The Fund will pay the Administrator a monthly fee at
the annual rate of 0.075 of 1% on the first $250 million of each Series' average
net assets and 0.050% of 1% of net assets in excess of $250 million; based on
the net asset value on each day the New York Stock Exchange is open for
business. Such fee will be subject to a minimum annual fee of $75,000, payable
monthly by each Series. In addition to the fee, the Fund, on behalf of each
Series, may be required to reimburse to the Administrator all out-of-pocket
expenses incurred by the Administrator for attendance at any meeting (outside of
the New York metropolitan area) of the Board, or any committees of such Board,
or at any other meetings or presentations for which the Administrator is
required to attend.
4. Responsibility of the Administrator.
(a) The Administrator shall be under no duty to take any action on
behalf of the Fund or any Series except as specifically set forth herein or as
may be specifically agreed to by the Administrator in writing. The Administrator
shall be obligated to exercise care and diligence in the performance of its
duties hereunder, to act in good faith and to use its best efforts, within
reasonable limits, in performing services provided for under this Agreement. The
Administrator shall be liable for any damages arising out of the Administrator's
failure to perform its duties under this Agreement to the extent such damages
arise out of the Administrator's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) the Agreement shall not be liable for losses
beyond its control, provided that the Administrator has acted in accordance with
the standard of care set forth above; and (ii) the Administrator shall not be
liable for (A) the validity of invalidity or authority or lack thereof of any
oral instruction or written instruction, notice or other instrument which
conforms to the applicable requirements of this Agreement, and which the
Administrator reasonably believes to be genuine; or (B) delays or errors or loss
of data occurring by reason of circumstances beyond the Administrator's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, flood, catastrophe, acts of God, insurrection, war, riots or
failure of the
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mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
the Administrator not its affiliates shall be liable to the Fund or to any
Series for any consequential, special or indirect losses or damages which the
Fund or any Series may incur or suffer by or as a consequence of the
Administrator's or any affiliates' performance of the services provided
hereunder, whether or not the likelihood of such losses or damages was known by
the Administrator or its affiliates.
5. Indemnification. The Administrator shall not be liable to the Fund
for any action taken or omitted to be taken by the Administrator in connection
with the performance of any of its duties or obligations under this Agreement,
and the Fund shall indemnify the Administrator and hold it harmless from and
against all damages, liabilities, costs and expenses (including reasonable
attorneys' fees and amounts reasonably paid in settlement) incurred by the
Administrator in or by reason of any pending, threatened or completed action,
suit, investigation or other proceeding (including an action or suit by or in
the right of the Fund or its security shareholders) arising out of or otherwise
based upon any action actually or allegedly taken or omitted to be taken by the
Administrator in connection with the performance of any of its duties or
obligations under this Agreement; provided, however, that nothing contained
herein shall protect or be deemed to protect the Administrator against or
entitle or be deemed to entitle the Administrator to indemnification in respect
of any liability to the Fund or its security holders to which the Administrator
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its duties and obligations under this Agreement.
6. Duration and Termination. This Agreement shall become effective as
of the date hereof and shall thereafter continue in effect unless terminated as
herein provided. This Agreement may be terminated by either party hereto
(without penalty) at any time by giving not less than 60 days' prior written
notice to the other party hereto.
7. Services to Others. The services of the Administrator to the Fund
hereunder are not exclusive and nothing in this Agreement shall limit or
restrict the right of the Administrator to engage in any other business or to
render services of any kind to any other corporation, firm, individual or
association. The Administrator shall be deemed to be an independent contractor,
unless otherwise expressly provided or authorized by this Agreement.
8. References to the Administrator. During the term of this Agreement,
the Fund agrees to furnish the Administrator at the principal office of the
Administrator prior to use thereof all prospectuses, proxy statements, reports
to shareholders, sales literature, or other material prepared for distribution
to shareholders of the Fund or the public that refer in any way to the
Administrator. If the Administrator reasonably objects in writing to such
references within five business days (or such other time as may be mutually
agreed) after receipt thereof, the Fund will modify such references in a manner
reasonably satisfactory to the Administrator.
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In the event of termination of this Agreement, the Fund will continue to furnish
to the Administrator copies of any of the above-mentioned materials that refer
in any way to the Administrator and, as soon as practicable after such
termination, shall eliminate all references to the Administrator in all written
materials used thereafter. The Fund shall furnish or otherwise make available to
the Administrator such other information relating to the business affairs of the
Fund as the Administrator at any time, or from time to time, reasonably requests
in order to discharge its obligations hereunder.
9. Amendments. This Agreement may be amended only by mutual written
consent.
10. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Administrator at 000 Xxxx Xxxxxx,
00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Executive
Vice President or (2) to the Fund at Potomac Tower, 0000 Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxx, [ ].
11. Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto solely with respect to the matters
covered hereby and the relationship between the Fund and Bear Xxxxxxx Funds
Management Inc. as Administrator. Nothing in this Agreement shall govern,
restrict or limit in any respect any other business dealings between the parties
hereto unless otherwise expressly provided herein.
12. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
13. Partial Invalidity. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not
be affected thereby.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law principles thereof and in accordance with the Investment Company Act. In the
case of any conflict the Investment Company Act shall control.
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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.
ATTEST: THE FBR FAMILY OF FUNDS
______________________________ By: ___________________________________
Name: Xxxx X. Xxxxx
Title:[ ]
ATTEST: BEAR XXXXXXX FUNDS MANAGEMENT INC.
______________________________ By: ___________________________________
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
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SCHEDULE 1
Name of Series Annual Fees* Reapproval Date Reapproval Day
FBR Small Cap Fund
FBR Financial Services Fund
FBR Growth/Value Fund
FBR Information Technologies Fund
*As a Percentage of Average Daily Net Assets
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