INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of November, 1993, by and between BULL &
BEAR INCORPORATED, a Maryland corporation (the "Corporation") and BULL & BEAR
ADVISERS, INC., a Delaware corporation (the "Investment Manager").
WHEREAS the Corporation is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company and offers for public sale distinct series of shares of common stock
("Series"), each corresponding to a distinct portfolio; and
WHEREAS the Corporation desires to retain the Investment Manager to
furnish certain investment advisory and portfolio management services to the
Corporation and each Series as now exists and as hereafter may be established,
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 Corporation hereby employs the Investment Manager to manage the
investment and reinvestment of the assets of each Series, including the regular
furnishing of advice with respect to the Series' portfolio transactions subject
at all times to the control and final direction of the Corporation'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
Corporation or any Series in any way, or otherwise be deemed an agent of the
Corporation or any Series.
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2. Each Series assumes and shall pay all the expenses (or such Series'
proportionate share of such 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 Series
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 Corporation or the Series and the legal obligation
which the Corporation may have to indemnify its officers and directors with
respect thereto.
3. The Investment Manager may, but shall not be obligated to, pay or
provide for the payment of expenses which are primarily intended to result in
the sale of a Series' shares or the servicing and maintenance of shareholder
accounts, including, without limitation, payments for: advertising, direct mail
and promotional expenses; compensation to and expenses, including overhead and
telephone and other communication expenses, of the Investment Manager and its
affiliates, the Corporation, and selected dealers and their affiliates who
engage in or support the distribution of shares or who service shareholder
accounts; fulfillment expenses including the costs of printing and distributing
prospectuses, statements of additional information, and reports for other than
existing shareholders; the costs of preparing, printing and distributing sales
literature and advertising materials; and, internal costs incurred by the
Investment Manager and its affiliates and allocated to efforts to distribute
shares of the Series such as office rent and equipment, employee salaries,
employee bonuses and other overhead expenses. Such payments may be for the
Investment Manager's own account or may be made on behalf of the Series pursuant
to a written plan of distribution adopted pursuant to Rule 12b-1 under the 1940
Act.
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4. If requested by the Corporation's Board of Directors, the Investment
Manager may provide other services to a Series 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 Series and the costs of the Investment Manager in
rendering such services shall be reimbursed by the Series, subject to
examination by those directors of the Corporation who are not interested persons
of the Investment Manager or any affiliate thereof.
5. 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 Corporation and its Series so long as its services
hereunder are not impaired thereby.
6. 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 Corporation. 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 a Series
which are in the possession of the Investment Manager shall be the property of
the Corporation. The Corporation, or the Corporation'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 Corporation, copies of any such books and records shall be provided by the
Investment Manager to the Corporation or the Corporation's authorized
representatives.
7. A. As compensation for its services provided pursuant to this
Agreement, with respect to the Series identified below, the Corporation will pay
to the Investment Manager a fee from the assets of the appropriate Series, such
fee to be computed daily and paid monthly at the annual rate of such Series' net
assets as set forth below:
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(i) Bull & Bear Dollar Reserves:
Up to $250 million of average daily net assets .............0.50%
From $250 million to $500 million ..........................0.45%
Over $500 million ..........................................0.40%
(ii) Bull & Bear U.S. Government Securities Fund:
Up to $250 million of average daily net assets .............0.70%
From $250 million to $500 million .........................0.625%
Over $500 million ..........................................0.50%
(iii) Bull & Bear Global Income Fund:
Up to $250 million of average daily net assets .............0.70%
From $250 million to $500 million .........................0.625%
Over $500 million ..........................................0.50%
B. As compensation for its services provided pursuant to this
Agreement, with respect to any Series hereafter established, the Corporation
will pay to the Investment Manager from the assets of such Series a fee in an
amount to be agreed upon in a written fee agreement ("Fee Agreement") executed
by the Corporation on behalf of the Series and by the Investment Manager. All
such Fee Agreements shall provide that they are subject to all terms and
conditions of this Agreement.
C. The aggregate net assets for a Series each day shall be computed
by subtracting the liabilities of the Series from the value of its assets, such
amount to be computed as of the calculation of the net asset value per share on
each business day.
D. If this Agreement becomes effective or terminates with respect to
a Series 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 prorated according to the proportion
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which such period bears to the full month in which such effectiveness or
termination occurs.
8. 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 a Series and shares of the other Bull & Bear
Funds. The Investment Manager may also allocate portfolio transactions to
broker/dealers that remit a portion of their commissions as a credit against
Series 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 law 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 a Series 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 Series, it is authorized by this Agreement. The Investment
Manager may place brokerage for a Series through an affiliate of the Investment
Manager, provided that: the Series 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
Series.
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9. The Investment Manager shall waive all or part of its fee or
reimburse a Series monthly if and to the extent the aggregate operating expenses
of the Series exceed the most restrictive limit imposed by any state in which
shares of the Series 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.
10. Subject to and in accordance with the Articles of Incorporation and
By-laws of the Corporation and of the Investment Manager, it is understood that
directors, officers, agents and shareholders of the Corporation are or may be
interested in the Corporation as directors, officers, shareholders or otherwise,
that the Investment Manager is or may be interested in the Corporation 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.
11. A. This Agreement shall become effective upon the date hereinabove
written provided that, with respect to any Series, this Agreement shall not take
effect unless it has first been approved (i) by a vote of a majority of the
Directors of the Corporation 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 that Series' 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
Corporation who are not parties to this Agreement, or interested persons of any
such party and (ii) by the Board of Directors of the Corporation or with respect
to any given Series by the vote of the holders of a majority of the outstanding
voting securities of such Series.
C. This Agreement may be terminated without penalty at any time
either by vote of the Board of Directors of the
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Corporation or by vote of the holders of a majority of the out standing voting
securities of such Series on 60 days' written notice to the Investment Manager,
or by the Investment Manager on 60 days' written notice to the Corporation.
Termination of this Agreement with respect to any given Series shall in no way
affect the continued validity of this Agreement or the performance thereunder
with respect to any other Series. This Agreement shall immediately terminate in
the event of its assignment.
12. The Investment Manager shall not be liable to the Corporation or
any Series or any shareholder of the Corporation for any error of judgment or
mistake of law or for any loss suffered by the Corporation or any Series or the
Corporation's shareholders in connection with the matters to which this Agree
ment relates, but nothing herein contained shall be construed to protect the
Investment Manager against any liability to the Corporation or a Series or the
Corporation'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.
13. 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.
14. 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.
15. 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 promul gated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
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[signatures omitted]
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