INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 23rd day of September, 1993, by and between
BULL & BEAR FUNDS I, INC., a Maryland corporation (the "Corporation"),
with respect to its series designated BULL & BEAR U.S. AND
OVERSEAS FUND, (the "Fund") and BULL & BEAR ADVISERS, INC., a Delaware
corporation (the "Investment Manager").
WITNESSETH:
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 the Fund, including the regular
furnishing of advice with respect to the Fund's portfolio transactions subject
at all times to the control and final direction of the Board of Directors of the
Corporation, 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 the Fund in any way, or otherwise be deemed an agent of the
Corporation or the Fund.
2. The Fund assumes and shall pay all the expenses, or its 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 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
Corporation or the Fund and the legal obligation which the Corporation or the
Fund 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
the Fund's 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 Fund, 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 Fund such as office rent and equipment, employee salaries,
employee bonuses and other overhead expenses. Such payments may be
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for the Investment Manager's own account or may be made on behalf of the Fund
pursuant to a written agreement relating to any plan of distribution of the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as from time to
time amended (the " 1940 Act").
4. If requested by the Corporation's Board of Directors, the Investment Manager
may provide other services to the Corporation or 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 Corporation or the Fund
and the costs of the Investment Manager in rendering such services shall be
reimbursed by the Corporation or the Fund, as appropriate, 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 the Fund 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 3 1 (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 3 1 a-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
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. As compensation for its services provided pursuant to this Agreement, the
Investment Manager will be paid by the Corporation a fee payable monthly and
computed at the annual rate of 1 % of the first $ 10 million of average daily
net assets of the Fund, 7/8 of 1 % of such net assets over $ 10 million up to
$30 million, 3/4 of 1 % of such net assets over $30 million up to $150 million,
5/8 of 1 % of such net assets over $150 million up to $500 million, and 1/2 of 1
% of such net assets over $500 million. The aggregate net assets for each day
shall be computed by subtracting the liabilities of the Fund 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.
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
Fund shares 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 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
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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 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 Corporation, it is authorized by this Agreement. The Investment Manager
may place Fund brokerage 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 Corporation.
9. 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.
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 and the Fund are
or may be interested in the Corporation and the Fund as directors, officers,
shareholders or otherwise, that the Investment Manager is or may be interested
in the Corporation and 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 Bylaws.
11. This Agreement shall become effective upon the date hereinabove written and,
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 (a) by the Board of Directors of the Corporation or by the holders of a
majority of the outstanding voting securities of the Fund as defined in the 1940
Act and (b) 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. This
Agreement may be terminated without penalty at any time either by vote of the
Board of Directors of the Corporation or by vote of the holders of a majority of
the outstanding voting securities of the Fund on 60 days' written notice to the
Investment Manager, or by the Investment Manager on 60 days' written notice to
the Corporation. This Agreement shall immediately terminate in the event of its
assignment.
12. The Investment Manager shall not be liable to the Corporation or the Fund or
any shareholder of the Corporation or the Fund for any error of judgment or
mistake of law or for any loss suffered by the Corporation or 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 Corporation or the Fund or the
Fund's shareholders by reason of willful
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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
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
BULL & BEAR ADVISERS, INC.
By:
BULL & BEAR FUNDS I, INC.
By:
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