DISTRIBUTION AGREEMENT
AGREEMENT made as of September 17, 1993, between BULL & BEAR SPECIAL
EQUITIES FUND, INC. ("Corporation") , a corporation organized and existing under
the laws of the State of Maryland, and Bull & Bear Service Center , Inc.
("Distributor") , a corporation organized and existing under the laws of the
State of Delaware.
WHEREAS the Corporation is registered under the Investment Company Act
of 1940, as amended (1940 Act") , as an open-end management investment company
and
WHEREAS the Corporation desires to retain the Distributor as principal
distributor in connection with the offering and sale of the shares of common
stock ("Shares") and
WHEREAS the Distributor is willing to act as principal distributor for
each such Series on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Corporation hereby appoints the Distributor as its exclusive
agent to be the principal distributor to sell and arrange for the sale of the
Shares on the terms and for the period set forth in this Agreement. The
Distributor hereby accepts such appointment and agrees to act hereunder.
2. Services and Duties of the Distributor.
(a) The Distributor agrees to sell the Shares on a best efforts basis from time
to time during the term of this Agreement as agent for the Corporation and upon
the terms described in the Registration Statement. As used in this Agreement,
the term "Registration Statement" shall mean the currently effective
registration statement of the Corporation, and any supplements thereto, under
the Securities Act of 1933, as amended (1933 Act") and the 0000 Xxx.
(b) Upon the date of this Agreement, the Distributor will hold itself available
to receive purchase orders, satisfactory to the Distributor for Shares and will
accept such orders on behalf of the Corporation as of the time of receipt of
such orders and promptly transmit such orders as are accepted to the
Corporation's transfer agent. Purchase orders shall be deemed effective at the
time and in the manner set forth in the Registration Statement.
(c) The Distributor in its discretion may enter into agreements to sell Shares
to such registered and qualified retail dealers, as it may select. In making
agreements with such dealers, the Distributor shall act only as principal and
not as agent for the Corporation.
(d) The offering price of the Shares of each Series shall be the net asset value
per Share as next determined by the Corporation following receipt of an order at
the Distributor's principal office. The Corporation shall promptly furnish the
Distributor with a statement of each computation of net asset value.
(e) The Distributor shall not be obligated to sell any certain number of Shares.
(f) The Distributor shall provide ongoing shareholder services, which include
responding to shareholder -inquiries, providing shareholders with information on
their investments in the Corporation and any other services now or hereafter
deemed to be appropriate subjects for the payments of "service fees" under
Section 26(d) of the National Association of Securities Dealers, Inc. ("NASD")
Rules of Fair Practice (collectively, "service activities").
(g) The Distributor shall have the right to use any lists of shareholders of the
Corporation or any other lists of investors that it obtains in connection with
its provision of services under this Agreement; provided, however, that the
Distributor shall not sell or knowingly provide such lists of shareholders to
any unaffiliated person unless reasonable payment is made to the Corporation.
3. Authorization to Enter into Dealer--Agreements and to Delegate Duties as
Distributor. The distributor may enter into a dealer agreement with respect to
sales of the Shares or the provision of service activities with any registered
and qualified dealer. In a separate contract or as part of any such dealer
agreement, the Distributor may also delegate to another registered and qualified
dealer ("sub-distributor") any or all of its duties specified in this Agreement,
provided that such separate contract or dealer agreement imposes on the sub-
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distributor bound thereby all applicable duties and conditions to which the
Distributor is subject under this Agreement, and further provided that such
separate contract meets all requirements of the 1940 Act and rules thereunder.
4. Services Not Exclusive. The services furnished by the Distributor hereunder
are not to be deemed exclusive and the Distributor shall be free to furnish
similar services to others so long as its services under this Agreement are not
impaired thereby. Nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Distributor, who may also be a
director, officer or employee of the Corporation, to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar or a dissimilar
nature.
5. Compensation for Distribution and Service Activities.
(a) As compensation for its activities under this Agreement with respect to the
distribution of Shares, the Distributor shall receive from the Corporation a fee
at the rate and under the terms and conditions of the Plan of Distribution
pursuant to Rule 00x-0 xxxxx xxx 0000 Xxx ("Xxxx") adopted by the Corporation ,
as such Plan is amended from time to time, and subject to any further
limitations on such fee as the Board may impose.
(b) As compensation for its service activities under this Agreement the
Distributor shall receive from the Corporation a fee at the rate and under the
terms and conditions of the Plan adopted by the Corporation, as such Plan is
amended from time to time, and subject to any further limitations on such fee as
the Board may impose.
(c) The Distributor may re allow any or all of the fees it is paid to such
dealers as the Distributor may from time to time determine.
6. Duties of the Corporation.
(a) The Corporation reserves the right at any time to withdraw offering Shares
of any or all Series by written notice to the Distributor at its principal
office.
(b) The Corporation shall determine in its sole discretion whether certificates
shall be issued with respect to the Shares. If the Corporation has determined
that certificates shall be issued, the Corporation will not cause certificates
representing Shares to be issued unless so requested by shareholders. If such
request is transmitted by the Distributor, the Corporation will
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cause certificates evidencing Shares to be issued in such names and
denominations as the Distributor shall from time to time direct.
(c) The Corporation shall keep the Distributor fully informed of its affairs and
shall make available to the Distributor copies of all information, financial
statements, and other papers that the Distributor may reasonably request for use
in connection with the distribution of Shares, including, without limitation,
certified copies of any financial statements prepared for the Corporation by its
independent public accountant and such reasonable number of copies of the most
current prospectus, statement of additional information, and annual and interim
reports of any Series as the Distributor may request, and the Corporation shall
fully cooperate in the efforts of the Distributor to sell and arrange for the
sale of the Shares and in the performance of the Distributor's duties under this
Agreement.
(d) The Corporation shall take, from time to time, all necessary action,
including payment of the related filing fee, as may be necessary to register
Shares under the 1933 Act to the end that there will be available for sale such
number of Shares as the Distributor may be expected to sell. The Corporation
agrees to file, from time to time, such amendments, reports, and other documents
as may be necessary in order that there will be no untrue statement of a
material fact in the Registration Statement, nor any omission of a material fact
that would make the statements therein misleading.
(e) The Corporation shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Shares for sale under the securities
laws of such states or other jurisdictions as the Distributor and the
Corporation may approve, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Corporation as a
broker or dealer in such jurisdictions; provided that the Corporation shall not
be required to amend its Articles of Incorporation or By-Laws to comply with the
laws of any jurisdiction, to maintain an office in any jurisdiction, to change
the terms of the offering of the Shares in any jurisdiction from the terms set
forth in its Registration Statement, to qualify as a foreign corporation in any
jurisdiction, or to consent to service of process in any jurisdiction other than
with respect to claims arising out of the offering of the Shares. The
Distributor shall furnish such information and other material relating to its
affairs and activities as maybe required by the Corporation in connection with
such qualifications.
7. Expenses of the Corporation. The Corporation shall bear all costs and
expenses of registering the Shares with the Securities and Exchange Commission
and state and other regulatory bodies, and shall assume expenses related to
communications with shareholders of each Series, including (i) fees and
disbursements
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of its counsel and independent public accountant; (ii) the preparation, filing,
and printing of registration statements and/or prospectuses or statements of
additional information required under the federal securities laws; (iii) the
preparation and mailing of annual and interim reports, prospectuses, statements
of additional information, and proxy materials to shareholders; and (iv) the
qualifications of Shares for sale and of the Corporation as a broker or dealer
under the securities laws of such jurisdictions as shall be selected by the
Corporation and the Distributor pursuant to Paragraph 6 (e) hereof, and the
costs and expenses payable to each such jurisdiction for continuing
qualification therein.
8. Expenses of the Distributor. Distributor shall bear all costs and expenses of
(i) preparing, printing and distributing any materials not prepared by the
Corporation and other materials used by the Distributor in connection with the
sale of Shares under this Agreement, including the additional cost of printing
copies of prospectuses, statements of additional information, and annual and
interim shareholder reports other than copies thereof required for distribution
to existing shareholders or for filing with any Federal or state securities
authorities; (ii) any expenses of advertising incurred by the Distributor in
connection with such offering; (iii) the expenses of registration or
qualification of the Distributor as a broker or dealer under federal or state
laws and the expenses of continuing such registration or qualification; and (iv)
all compensation paid to the Distributor's employees and others for selling
Shares, and all expenses of the Distributor, its employees, and others who
engage in or support the sale of Shares as may be incurred in connection with
their sales efforts.
9. Indemnification.
(a) The Corporation agrees to indemnify, defend, and hold the Distributor, its
officers and directors, and any person who controls the Distributor within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities, and expenses (including the cost of
investigating or defending such claims, demands, or liabilities and any counsel
fees incurred in connection therewith) that the Distributor, its officers,
directors, or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or arising
out of or based upon any alleged omission to state a material fact required to
be stated in the Registration Statement or necessary to make the statements
therein not misleading, except insofar as such claims, demands, liabilities, or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Corporation for
use in the Registration Statement; provided, however, that this indemnity
agreement shall not inure to the
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benefit of any person who is also an officer or director of the Corporation or
who controls the Corporation within the meaning of Section 15 of the 1933 Act,
unless a court of competent jurisdiction shall determine, or it shall have been
determined by controlling precedent ' that such result would not be against
public policy as expressed in the 1933 Act; and further provided, that in no
event shall anything contained herein be so construed as to protect the
Distributor against any liability to the Corporation or to the shareholders of
any Series to which the Distributor 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 obligations under this
Agreement. The Corporation shall not be liable to the Distributor under this
Agreement with respect to any claim made against the Distributor or any person
indemnified unless the Distributor or other such person shall have notified the
Corporation in writing of the claim within a reasonable time after the summons
or other first written notification giving information of the nature of the
claim shall have been served upon the Distributor or such other person (or after
the Distributor or the person shall have received notice of service on any
designated agent). However, failure to notify the Corporation of any claim shall
not relieve the Corporation from any liability that it may have to the
Distributor or any person against whom such action is brought otherwise than on
account of this Agreement. The Corporation shall be entitled to participate at
its own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any claims subject to this Agreement. If the Corporation
elects to assume the defense of any such claim, the defense shall be conducted
by counsel chosen by the Corporation and satisfactory to indemnified defendants
in the suit whose approval shall not be unreasonably withheld. In the event that
the Corporation elects to assume the defense of any suit and retain counsel, the
indemnified defendants shall bear the fees and expenses of any additional
counsel retained by them. If the Corporation does not elect to assume the
defense of a suit, it will reimburse the indemnified defendants for the
reasonable fees and expenses of any counsel retained by the indemnified
defendants. The Corporation agrees to promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of any of its Shares.
(b) The Distributor shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Corporation in connection with the matters
to which this Agreement relates (including any loss arising out of the receipt
by the Distributor of inadequate consideration in connection with an order to
purchase Shares whether in the form of fraudulent check, draft, or wire; a check
returned for insufficient funds; or any other inadequate consideration
(hereinafter "Check Loss") ) , except a loss resulting from the willful
misfeasance, bad faith, or gross negligence on its part in the performance of
its duties or from
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reckless disregard by it of its obligations and duties under this Agreement;
provided, -however, that the Corporation shall not be liable for Check Loss
resulting from willful misfeasance, bad faith, or gross negligence on the part
of the Distributor.
(c) The Distributor agrees to indemnify, defend, and hold the Corporation, its
officers and directors, and any person who controls the Corporation within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities, and expenses (including the cost of
investigating or defending against such claims, demands, or liabilities and any
counsel fees incurred in connection therewith) that the Corporation, its
directors or officers, or any such controlling person may incur under the 1933
Act or under common law or otherwise arising out of or based upon any alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor to the Corporation for use in the Registration
Statement, arising out of or based upon any alleged omission to state a material
fact in connection with such information required to be stated in the
Registration Statement necessary to make such information not misleading, or
arising out of any agreement between the Distributor and any retail dealer, or
arising out of any supplemental sales literature or advertising used by the
Distributor in connection with its duties under this Agreement. The Distributor
shall be entitled to participate, at its own expense, in the defense or, if it
so elects, to assume the defense of any suit brought to enforce the claim, but
if the Distributor elects to assume the defense, the defense shall be conducted
by counsel chosen by the Distributor and satisfactory to the indemnified
defendants whose approval shall not be unreasonably withheld. In the event that
the Distributor elects to assume the defense of any suit and retain counsel, the
defendants in the suit shall bear the fees and expenses of any additional
counsel retained by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the indemnified defendants in the suit
for the reasonable fees and expenses of any counsel retained by them.
10. Services Provided to the Corporation by Employees of the Distributor. Any
person, even though also an officer, director, employee, or agent of the
Distributor who may be or become an officer, director, employee, or agent of the
Corporation, shall be deemed, when rendering services to the Corporation or
acting in any business of the Corporation, to be rendering such services to or
acting for solely the Corporation and not as an officer, director, employee, or
agent or one under the control or direction of the Distributor even though paid
by the Distributor.
11. Duration and Termination.
(a) This Agreement shall become effective upon the date hereabove written,
provided that, with respect to any Series, this
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Agreement shall not take effect unless such action has first been approved by
vote of a majority of the Board and by vote of a majority of those directors of
the Corporation who are not interested persons of the Corporation, and have no
direct or indirect financial interest in the operation of the Plan relating to
the Series or in any agreements related thereto (all such directors collectively
being referred to herein as the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on such action.
(b) Unless sooner terminated as provided herein, this Agreement shall continue
in effect for one year from the above written date. Thereafter, if not
terminated, this Agreement shall automatically continue 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 Independent Directors, cast
in person at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting securities
of the Corporation.
(c) Notwithstanding the foregoing, this Agreement may be terminated at any time,
without the payment of any penalty, by vote of the Board, by vote of a majority
of the Independent Directors, or by vote of a majority of the outstanding voting
securities of the Corporation on sixty days, written notice to the Distributor
or by the Distributor at any time, without the payment of any penalty, on sixty
days' written notice to the Corporation. This Agreement will automatically
terminate in the event of its assignment.
12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought. 13. Governing Law. This Agreement shall be construed
in accordance with the laws of the State of New York and the 1940 Act. To the
extent that the applicable laws of the State of New York conflict with the
applicable provisions of the 1940 Act, the latter shall control.
14. Notice. Any notice required or permitted to be given by either party to the
other shall be deemed sufficient upon receipt in writing at the other party's
principal offices.
15. Miscellaneous. 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. 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. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person," and
"assignment" shall have the same meaning as such terms have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first above
written.
ATTEST: BULL & BEAR SPECIAL EQUITIES FUND, INC.
By:
ATTEST: BULL & BEAR SERVICE CENTER, INC.
BY:
