INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made on November 8, 1996, by and between
BULL & BEAR MUNICIPAL INCOME FUND, INC., a Maryland
corporation (the "Fund") and BULL & BEAR ADVISERS, INC., a
Delaware corporation (the "Investment Manager").
WHEREAS the Fund intends to register under the
Investment Company Act of 1940, as amended (the "1940 Act"),
as a closed-end management investment company; and
WHEREAS, the Fund desires to retain the Investment
Manager to furnish certain investment advisory and portfolio
management services to the Fund, and the Investment Manager
desires to furnish such services;
NOW THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good and
valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed between the parties hereto
as follows:
1. The Fund hereby employs the Investment Manager
to manage the investment and reinvestment of its assets,
including the regular furnishing of advice with respect to
the Fund's portfolio transactions subject at all times to the
control and oversight of the Fund's Board of Directors, for
the period and on the terms set forth in this Agreement. The
Investment Manager hereby accepts such employment and agrees
during such period to render the services and to assume the
obligations herein set forth, for the compensation herein
provided. The Investment Manager shall for all purposes
herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way, or
otherwise be deemed an agent of the Fund.
2. The Fund assumes and shall pay all the expenses
required for the conduct of its business including, but not
limited to, salaries of administrative and clerical
personnel, brokerage commissions, taxes, insurance, fees of
the transfer agent, custodian, legal counsel and auditors,
association fees, costs of filing, printing and mailing
proxies, reports and notices to shareholders, preparing,
filing and printing the prospectus and statement of
additional information, payment of dividends, costs of stock
certificates, costs of shareholders meetings, fees of the
independent directors, necessary office space rental, all
expenses relating to the registration or qualification of
shares of the Fund under applicable Blue Sky laws and
reasonable fees and expenses of counsel in connection with
such registration and qualification and such non-recurring
expenses as may arise, including, without limitation,
actions, suits or proceedings affecting the Fund and the
legal obligation which the Fund may have to indemnify its
officers and directors with respect thereto.
3. If requested by the Fund's Board of Directors,
the Investment Manager may provide other services to the Fund
such as, without limitation, the functions of billing,
accounting, certain shareholder communications and services,
administering state and Federal registrations, filings and
controls and other administrative services. Any services so
requested and performed will be for the account of the Fund
and the costs of the Investment Manager in rendering such
services shall be reimbursed by the Fund, subject to
examination by those directors of the Fund who are not
interested persons of the Investment Manager or any affiliate
thereof.
4. The services of the Investment Manager are not
to be deemed exclusive, and the Investment Manager shall be
free to render similar services to others in addition to the
Fund so long as its services hereunder are not impaired
thereby.
5. The Investment Manager shall create and
maintain all necessary books and records in accordance with
all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the 1940 Act
and the rules thereunder, as the same may be amended from
time to time, pertaining to the investment management
services performed by it hereunder and not otherwise created
and maintained by another party pursuant to a written
contract with the Fund. Where applicable, such records shall
be maintained by the Investment Manager for the periods and
in the places required by Rule 31a-2 under the 1940 Act. The
books and records pertaining to the Fund which are in the
possession of the Investment Manager shall be the property of
the Fund. The Fund, or the Fund's authorized
representatives, shall have access to such books and records
at all times during the Investment Manager's normal business
hours. Upon the reasonable request of the Fund, copies of
any such books and records shall be provided by the
Investment Manager to the Fund or the Fund's authorized
representatives.
6. As compensation for its services provided
pursuant to this Agreement, the Fund will pay to the
Investment Manager a fee from its assets, such fee to be
computed weekly and paid monthly in arrears at the annual
rate of 0.60% of the first $500 million and 0.50% over $500
million of the Fund's net assets. If this Agreement becomes
effective or terminates before the end of any month, the fee
for the period from the effective date to the end of the
month or from the beginning of such month to the date of
termination, as the case may be, shall be protected according
to the proportion which such period bears to the full month
in which such effectiveness or termination occurs.
7. The Investment Manager shall direct portfolio
transactions to broker/dealers for execution on terms and at
rates which it believes, in good faith, to be reasonable in
view of the overall nature and quality of services provided
by a particular broker/dealer, including brokerage and
research services and sales of shares of the Fund and shares
of the other funds in the Bull & Bear fund complex. The
Investment Manager may also allocate portfolio transactions
to broker/dealers that remit a portion of their commissions
as a credit against Fund expenses. With respect to brokerage
and research services, the Investment Manager may consider in
the selection of broker/dealers brokerage or research
provided and payment may be made of a fee higher than that
charged by another broker/dealer which does not furnish
brokerage or research services or which furnishes brokerage
or research services deemed to be of lesser value, so long as
the criteria of Section 28(e) of the Securities Exchange Act
of 1934, as amended, or other applicable laws are met.
Although the Investment Manager may direct portfolio
transactions without necessarily obtaining the lowest price
at which such broker/dealer, or another, may be willing to do
business, the Investment Manager shall seek the best value
for the Fund on each trade that circumstances in the market
place permit, including the value inherent in on-going
relationships with quality brokers. To the extent any such
brokerage or research services may be deemed to be additional
compensation to the Investment Manager from the Fund, it is
authorized by this Agreement. The Investment Manager may
place brokerage for the Fund through an affiliate of the
Investment Manager, provided that: the Fund not deal with
such affiliate in any transaction in which such affiliate
acts as principal; the commissions, fees or other
remuneration received by such affiliate be reasonable and
fair compared to the commissions, fees or other remuneration
paid to other brokers in connection with comparable
transactions involving similar securities being purchased or
sold on a securities exchange during a comparable period of
time; and such brokerage be undertaken in compliance with
applicable law. The Investment Manager's fees under this
Agreement shall not be reduced by reason of any commissions,
fees or other remuneration received by such affiliate from
the Fund.
8. The Investment Manager shall waive all or part
of its fee or reimburse the Fund monthly if and to the extent
the aggregate operating expenses of the Fund exceed the most
restrictive limit imposed by any state in which shares of the
Fund are qualified for sale. In calculating the limit of
operating expenses, all expenses excludable under state
regulation or otherwise shall be excluded. If this Agreement
is in effect for less than all of a fiscal year, any such
limit will be applied proportionately.
9. Subject to and in accordance with the Articles
of Incorporation and By-laws of the Fund and of the
Investment Manager, it is understood that directors,
officers, agents and shareholders of the Fund are or may be
interested in the Fund as directors, officers, shareholders
and otherwise, that the Investment Manager is or may be
interested in the Fund as a shareholder or otherwise and that
the effect and nature of any such interests shall be governed
by law and by the provisions, if any, of said Articles of
Incorporation or By-laws.
10. A. This Agreement shall become effective upon
the date hereinabove written provided that this Agreement
shall not take effect unless it has first been approved (i)
by a vote of a majority of the Directors of the Fund who are
not parties to this Agreement, or interested persons of any
such party and (ii) by vote of the holders of a majority of
the Fund's outstanding voting securities.
B. Unless sooner terminated as provided herein,
this Agreement shall continue in effect for two years from
the above written date. Thereafter, if not terminated, this
Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a
majority of the Directors of the Fund who are not parties to
this Agreement, or interested persons of any such party and
(ii) by the Board of Directors of the Fund by the vote of the
holders of a majority of the outstanding voting securities of
the Fund.
C. This Agreement may be terminated without
penalty at any time either by vote of the Board of Directors
of the Fund or by vote of the holders of a majority of the
Fund's outstanding voting securities on 60 days' written
notice to the Investment Manager, or by the Investment
Manager on 60 days' written notice to the Fund. This
Agreement shall immediately terminate in the event of its
assignment.
11. The Investment Manager shall not be liable to
the Fund or any shareholder of the Fund for any error of
judgment or mistake of law or for any loss suffered by the
Fund or the Fund's shareholders in connection with the
matters to which this Agreement relates, but nothing herein
contained shall be construed to protect the Investment
Manager against any liability to the Fund or the Fund's
shareholders by reason of willful misfeasance, bad faith, or
gross negligence in the performance of its duties or by
reason of its reckless disregard of obligations and duties
under this Agreement.
12. As used in this Agreement, the terms
"interested person," "assignment," and "majority of the
outstanding voting securities" shall have the meanings
provided therefor in the 1940 Act, and the rules and
regulations thereunder.
13. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior
agreement, with respect to the subject hereof whether oral or
written. If any provision of this Agreement shall be held or
made invalid by a court or regulatory agency, decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
14. This Agreement shall be construed in
accordance with and governed by the laws of the State of New
York, provided, however, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any
rule or regulation promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year first above
written.
ATTEST: BULL & BEAR MUNCIPAL INCOME
FUND, INC.
________________________
By:_________________________
ATTEST: BULL & BEAR ADVISERS, INC.
_________________________
By:_________________________
