SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
BULL & BEAR U. S. GOVERNMENT SECURITIES FUND, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
120 17 N 105
(CUSIP Number)
INVESTOR SERVICE CENTER, INC.
11 Hanover Square, 12th Floor
New York, NY 10005
Attn: Deborah A. Sullivan, Esq.
212-785-0900
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 2, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box. [ ]
<PAGE>
- --------------
|Number of |
|Shares |
|Beneficially |
|Owned by |
|Each |
|Reporting |
|Person with |
- --------------
1 Names of Reporting Persons / I.R.S. Identification Nos. of Above Persons
(Entities Only)
Investor Service Center, Inc. / 13-3321855
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds WC
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
7 Sole Voting Power 106,625 Shares
- --------------------------------------------------------------------------------
8 Shared Voting Power
- --------------------------------------------------------------------------------
9 Sole Dispositive Power 106,625 Shares
- --------------------------------------------------------------------------------
10 Shared Dispositive Power
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person 106,625 Shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares / X /
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 13.99%
- --------------------------------------------------------------------------------
14 Type of Reporting Person BD
- --------------------------------------------------------------------------------
<PAGE>
- --------------
|Number of |
|Shares |
|Beneficially |
|Owned by |
|Each |
|Reporting |
|Person with |
- --------------
1 Names of Reporting Persons / I.R.S. Identification Nos. of Above Persons
(Entities Only)
Bassett S. Winmill
- --------------------------------------------------------------------------------
2 Check the Appropriate Box If a Member of a Group (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds PF
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization USA
- --------------------------------------------------------------------------------
7 Sole Voting Power 5,000 Shares
- --------------------------------------------------------------------------------
8 Shared Voting Power 0
- --------------------------------------------------------------------------------
9 Sole Dispositive Power 5,000 Shares
- --------------------------------------------------------------------------------
10 Shared Dispositive Power 0
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
5,000 Shares
- --------------------------------------------------------------------------------
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
/x /
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11) 0.66%
- --------------------------------------------------------------------------------
14 Type of Reporting Person IN
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1 SECURITY AND ISSUER
This Schedule 13D relates to the shares of Common Stock of Bull &
Bear U.S. Government Securities Fund, Inc (the "Issuer"). The principal
executive offices of the Issuer are located at 11 Hanover Square, New York, NY
10005.
Principal Executive Officers of Issuer Title
- -------------------------------------- ----------------------------------------
Steven A. Landis Senior Vice President
Joseph Leung Treasurer
Deborah Ann Sullivan Secretary
Thomas B. Winmill President
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This Schedule 13D is being filed by Investor Service
Center, Inc. (a Delaware corporation), a registered broker/dealer ("ISC"), and
Bassett S. Winmill (the "Reporting Persons"). The address of each is 11 Hanover
Square, New York, NY 10005. Further information is attached in Exhibit A.
(d) None
(e) None
(f) ISC is a Delaware corporation. Bassett S. Winmill is a citizen
of the U.S.A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
ISC used working capital. Bassett S. Winmill used personal funds.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Persons acquired the Shares for investment purposes.
Notwithstanding any of the foregoing, the Reporting Persons may at
any time modify, change, abandon, or replace, some or all of the foregoing
purposes and plans and discussions relating thereto or discontinue or
re-continue such modifications, changes, abandonments, or replacements at any
time.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(A) As of July 22, 1999, the Reporting Persons believe there are 761,953.550
shares of Common Stock outstanding. ISC is the beneficial owner of 106,625
shares of Common Stock, which constitutes approximately 13.99% of the
outstanding shares of Common Stock. Bassett S. Winmill is the beneficial owner
of 5,000 shares of Common Stock, which constitute approximately 0.66% of the
outstanding shares of Common Stock. ISC disclaims beneficial ownership of shares
held by Bassett S. Winmill. Bassett S. Winmill disclaims beneficial ownership of
shares held by ISC.
<PAGE>
(B) Power to vote and to dispose of the securities resides with the Reporting
Persons.
(C) During the last sixty days, the following transactions were effected
in the common stock of the Issuer:
<TABLE>
<CAPTION>
Where and How
Number of Transaction
Reporting Person Date Buy/Sell Shares Price Per Share Effected
- ------------------ ------------------ -------------- ----------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
ISC July 30, 1999 Bought 73,325 12.875 Private NY
ISC August 2, 1999 Bought 7,000 12.875 Private NY
</TABLE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
ISC is a wholly owned subsidiary of Winmill & Co. Incorporated
("WCI") (formerly Bull & Bear Group, Inc.). WCI, a publicly owned company whose
securities are listed on Nasdaq and traded in the over-the-counter market, is a
New York based manager of investment companies, whose name was changed from Bull
& Bear Group, Inc. on April 1, 1999. Bassett S. Winmill may be deemed a
controlling person of WCI and, therefore, may be deemed a controlling person of
ISC. Another wholly owned subsidiary of WCI is CEF Advisers, Inc. ("CEF"), the
investment manager of the Issuer.
Pursuant to an investment management agreement, CEF acts as general
manager of the Issuer, being responsible for the various functions assumed by
it, including the regular furnishing of advice with respect to portfolio
transactions. CEF manages the investment and reinvestment of the assets of the
Issuer, subject to the control and oversight of the Issuer's directors. For its
services, CEF receives an investment management fee, payable monthly, based on
the average weekly net assets of the Issuer, at the annual rate of 0.70% of the
first $250 million, 0.625% from $250 million to $500 million, and 0.50% over
$500 million. From time to time, CEF may reimburse all or part of this fee to
improve the Issuer's yield and total return. CEF provides certain administrative
services to the Issuer at cost. During the fiscal year ended June 30, 1998, the
investment management fees payable by the Issuer to CEF were $77,098,
representing 0.70% of its average daily net assets, of which $6,264 were waived.
During the six months ended December 31, 1998, the investment management fees
payable by the Issuer to CEF were $38,890, representing 0.70% of its average
daily net assets, of which $38,890 were waived.
Bassett S. Winmill, a Reporting Person and who may be deemed a
controlling person of WCI, ISC and CEF, is chairman of the board of directors of
the Issuer. Robert D. Anderson and Thomas B. Winmill are directors and officers
of WCI, ISC, CEF, and the Issuer. Each of Steven A. Landis, Joseph Leung, and
Deborah A. Sullivan are officers of WCI, ISC, CEF, and the Issuer. The Issuer
has an audit committee comprised of directors Douglas Wu, Frederick A. Parker,
Jr., and Thomas B. Winmill, the function of which is routinely to review
financial statements and other audit-related matters as they arise throughout
the year. The Issuer has an executive committee comprised of Thomas B. Winmill.
Article XIV of the Issuer's charter provides that the name "Bull &
Bear" included in the name of the Issuer shall be used pursuant to a
royalty-free nonexclusive license from WCI or a subsidiary of
<PAGE>
WCI. The license may be withdrawn by WCI or its subsidiary at any time in their
sole discretion, in which case the Issuer shall have no further right to use the
name "Bull & Bear" in its corporate name or otherwise and the Issuer, the
holders of its capital stock and its officers and directors, shall promptly take
whatever action may be necessary to change its name accordingly. WCI withdrew
the license to "Bull & Bear" on March 3, 1999, effective upon Closing, as
described below.
Pursuant to an agreement dated December 17, 1998, on March 31, 1999
(the "Closing"), WCI assigned to a subsidiary of Royal Bank of Canada, an
unaffiliated third party, all its right, title and interest in and to the name
"Bull & Bear" ("Name"). WCI further agreed that it shall (i) use its reasonable
best efforts to, (ii) cause its subsidiaries to use their reasonable best
efforts to and (iii) use its reasonable best efforts to cause the Issuer and the
other funds in the investment company complex ("Complex") to use their
reasonable best efforts to, within 90 days following the Closing, to remove or
obliterate the Name or any name, mark or logo similar thereto from any materials
or property of WCI, its subsidiaries and the Complex, and neither WCI, its
subsidiaries nor the Complex shall, after the date that is 90 days after the
Closing Time, in any way use materials or property, whether or not in existence
at the Closing Time, that bear the Name or any name, mark or logo similar
thereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A: Certain information concerning the Issuer's and ISC's
directors and executive officers.
Exhibit B: The investment management agreement
between the Issuer and CEF Advisers, Inc.
Exhibit C: Agreement to file Schedule 13D jointly.
Exhibit D: Stock Purchase Agreement
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: August 2, 1999
INVESTOR SERVICE CENTER, INC.
By: /s/ Deborah A. Sullivan
Name: Deborah A. Sullivan
Title: Secretary
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: August 2, 1999
By: /s/ Bassett S. Winmill
Name: Bassett S. Winmill
<PAGE>
EXHIBIT A
The business address for all entities and individuals listed in this
Exhibit A is 11 Hanover Square, 12th Floor, New York, NY 10005.
Investor Service Center, Inc. ("ISC") and CEF Advisers, Inc. ("CEF") are
wholly-owned subsidiaries of Winmill & Co. Incorporated ("WCI"), a
publicly-owned company whose securities are listed on The Nasdaq Stock Market.
Bassett S. Winmill, a director of the Issuer, may be deemed a controlling person
of WCI on the basis of his ownership of 100% of WCI's voting stock and,
therefore, of ISC and CEF.
The directors of ISC and CEF are Thomas B. Winmill and Robert D. Anderson.
The directors of WCI are Robert D. Anderson, Charles A. Carroll, Mark C. Jones,
Edward G. Webb, Bassett S. Winmill, and Thomas B. Winmill. The directors of the
Issuer are Bassett S. Winmill, Robert D. Anderson, Thomas B. Winmill, Douglas
Wu, and Frederick A. Parker, Jr.
Information relevant to each director of the Issuer deemed to be an
"interested person" of the Issuer by virtue of their relationship with CEF, as
defined in the 1940 Act is set forth below:
Issuer Year
Name of Certain Issuer Director, Principal Occupation and Director Term
Business Experience for Past Five Years Since Expires
- --------------------------------------------------------------------------------
THOMAS B. WINMILL -- He is President, Chief Executive 1996 2001
Officer, and General Counsel of the Issuer, as well as the
other investment companies in the Investment Company
Complex, and of WCI and certain of its affiliates. He also
is President and a Director of ISC and CEF. He is a member
of the New York State Bar and the SEC Rules Committee of the
Investment Company Institute. He is a son of Bassett S.
Winmill. He was born June 25, 1959.
BASSETT S. WINMILL -- He is Chairman of the Board of the 1996 2002
Issuer, as well as other investment companies in the
Investment Company Complex, and of WCI. He is a member of
the New York Society of Security Analysts, the Association
for Investment Management and Research, and the
International Society of Financial Analysts. He is the
father of Thomas B. Winmill. His address is 11 Hanover
Square, New York, New York 10005. He was born February 10,
1930.
<PAGE>
Issuer Year
Name of Certain Issuer Director, Principal Occupation and Director Term
Business Experience for Past Five Years Since Expires
- --------------------------------------------------------------------------------
ROBERT D. ANDERSON -- He is Vice Chairman of the Issuer, as 1999 2000
well as the other investment companies in the Investment
Company Complex, and of WCI and certain of its affiliates.
He was a member of the Board of Governors of the Mutual Fund
Education Alliance, and of its predecessor, the No-Load
Mutual Fund Association. He has also been a member of the
District #12, District Business Conduct and Investment
Companies Committees of the NASD. He is 69 years old.
The non-director executive officers of the Issuer and/or
director/officers of CEF and/or WCI, and their relevant biographical information
are set forth below:
STEVEN A. LANDIS - Senior Vice President of the Issuer. He also is
Senior Vice President of the other investment companies in the Investment
Company Complex, and CEF and WCI. From 1993 to 1995, he was Associate Director -
Proprietary Trading at Barclays de Zoete Wedd Securities Inc. and, from 1992 to
1993, he was Director, Bond Arbitrage at WG Trading Company. He was born March
1, 1955.
JOSEPH LEUNG, CPA - Treasurer and Chief Accounting Officer of the
Issuer. He also is Treasurer and Chief Accounting Officer of the other
investment companies in the Investment Company Complex, and CEF and WCI. From
1992 to 1995, he held various positions with Coopers & Lybrand LLP, a public
accounting firm. He is a member of the American Institute of Certified Public
Accountants.
He was born September 15, 1965.
DEBORAH ANN SULLIVAN - Vice President, Secretary and Chief
Compliance Officer of the Issuer. She also is Vice President, Secretary and
Chief Compliance Officer of the other investment companies in the Investment
Company Complex, and CEF and WCI. From 1993 to 1994, she was the Blue Sky
Paralegal for SunAmerica Asset Management Corporation and, from 1992 to 1993,
she was Compliance Administrator and Blue Sky Administrator with Prudential
Securities, Inc. and Prudential Mutual Fund Management, Inc. She is a member of
the New York State Bar. She was born June 13, 1969.
The following table presents certain information regarding the
beneficial ownership of the Issuer's shares as of August 2, 1999 by each
foregoing officer and/or director of the Issuer.
Name of Officer or Director Number of Shares
-----------------------------------------------------
Robert D. Anderson 0.000
Steven A. Landis 50.000
Joseph Leung 0.000
Deborah Ann Sullivan 0.000
Bassett S. Winmill 5,000.000
Thomas B. Winmill 22.243
<PAGE>
EXHIBIT B
[CEF Advisers, Inc. changed its name from Bull & Bear Advisers, Inc. on April 1,
1999.]
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made on September 12, 1996, by and between BULL & BEAR
U.S. GOVERNMENT SECURITIES 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
<PAGE>
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
0.70% of the first $250 million, 0.625% from $250 million to $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
<PAGE>
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.
<PAGE>
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 U.S.
GOVERNMENT SECURITIES FUND, INC.
_/s/_______________________ By:/s/________________________
ATTEST: BULL & BEAR ADVISERS, INC.
_/s/________________________
By:/s/_________________________
<PAGE>
EXHIBIT C
AGREEMENT
AGREEMENT dated as of July 28, 1999 between Investor Service Center,
Inc., a Delaware corporation ("ISC"), and Bassett S. Winmill.
WHEREAS, pursuant to paragraph (k) of Rule 13d-1 promulgated under
Subsection 13(d)(1) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the parties hereto have decided to satisfy their filing obligations
under the 1934 Act by a single joint filing:
NOW, THEREFORE, the undersigned hereby agree as follows:
1. The Schedule 13D with respect to Bull & Bear U.S. Government
Securities Fund, Inc. to which this is attached as Exhibit C
is filed on behalf of ISC and Mr. Winmill.
2. Each of ISC and Mr. Winmill is responsible for the
completeness and accuracy of the information concerning such
person contained therein; provided that each person is not
responsible for the completeness or accuracy of the
information concerning any other person making such filing,
unless such person knows or has reason to believe that such
information is accurate.
IN WITNESS WHEREOF, the undersigned hereunto set their hands as of
the date first above written.
INVESTOR SERVICE CENTER, INC.
/s/___________________________
By: President
BASSETT S. WINMILL
/s/___________________________
<PAGE>
EXHIBIT D
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of June 25, 1999, by and among
Karpus Management, Inc. ("Seller") and Investor Service Center, Inc. ("Buyer").
WHEREAS, Seller and Bull & Bear U.S. Government Securities Fund, Inc.
("BBG") have entered into an Amended and Restated Stipulation of Settlement
dated June 25, 1999 (the "Stipulation"); and
WHEREAS, Seller has discretionary trading authority authorizing it in its
sole discretion to sell 95,175 shares of BBG Common Stock, par value $.01 per
share; and
WHEREAS, Seller manages an account for ___________________ which contains
an additional 1,375 shares of BBG Common Stock, par value $.01 per share (the
"Additional Shares"); and
WHEREAS, Seller and Buyer have agreed to the purchase and sale of 95,175
shares of BBG Common Stock for $12 7/8 per share (the "Sale");
NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF SHARES.
----------------------------
1.1 SHARES. Subject to the terms and conditions of this Agreement,
Buyer agrees to purchase and Seller agrees to sell to Buyer NINETY-FIVE THOUSAND
ONE HUNDRED SEVENTY FIVE (95,175) shares of Common Stock, $.01 par value, of
BBG, a Maryland corporation, (the "Stock"), at the purchase price of One
Million, Two Hundred Twenty Five Thousand Three Hundred Seventy Five Dollars and
Thirteen Cents ($1,225,378.13)(the "Purchase Price").
1.2 CLOSING.
1.2.1 TIME. The purchase of the Stock (the "Closing") shall take
place on or before the fifth (5) business day after all conditions set forth in
Sections 5 and 6 hereof have been satisfied. At the Closing, the Shares shall be
delivered to Buyer, through the Depository Trust Company, versus payment to
Seller.
1.2.2 PLACE. The Closing shall take place at Hecht & Steckman,
P.C. ("H&S"), 60 East 42nd St., Suite 5101, New York, NY 10165.
2. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
----------------------------------------
warrants to Buyer, as of the date of this Agreement and as of the Closing, that:
2.1 AUTHORITY. Seller has full, unlimited,
written discretionary authority with respect to the sale of all of the Stock.
2.2 AUTHORIZATION. Seller has full power and authority to enter into
this Agreement, which constitutes a valid and legally binding obligation,
enforceable in accordance with its terms, against Seller and its clients.
2.3 SHARES. The Stock is unencumbered and unrestricted.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
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warrants that:
3.1 AUTHORIZATION. Buyer has full power and authority to enter into
this Agreement. The Agreement constitutes a valid and legally binding
obligation, enforceable in accordance with its terms.
4. INDEMNIFICATION.
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4.1 INDEMNITY. Seller, in consideration of the transfer of the Stock
held by Seller to Buyer on the terms and conditions set forth in this Agreement,
hereby agrees to hold harmless and indemnify Buyer Covenatees (as defined
herein) and BBG, from and against any and all damages and costs, reasonable
including attorneys' fees, arising from any "Claim" (as hereinafter defined).
4.2 DEFINITION OF CLAIM. "Claim" shall mean any cause of action,
suit, judgment, litigation or shareholder demand, in law or equity, or in an
arbitration, brought by Seller or any client of
<PAGE>
Seller, against Buyer Covenantees or BBG, arising out of Buyer's purchase of the
Stock.
4.3 NOTICE. In connection with a request by a Buyer Covenantee or BBG
(Buyer Covenatee and BBG collectively "Indemnitee") for indemnification under
this Section 4, Indemnitee shall notify Seller in writing, by Certified or
Registered mail or international equivalent, of any Claim against Indemnitee
covered by this Section 4 within five (5) business days after it has received
notice of such Claim, or earlier so as not to cause Seller to be prejudiced by a
loss of rights. Failure to notify Seller within such period shall result solely
in Indemnitee receiving no indemnity under the terms of this Agreement only if
such failure materially prejudices Seller, and in no event shall preclude
Indemnitee from seeking indemnity without reference to the terms of this
Agreement. The address on the signature page shall be used for the purpose of
giving notice to Seller. Seller may change the place of giving notice by
notifying Indemnitee in writing at least ten (10) days prior to the date when
said new address shall become effective.
5. CONDITIONS OF SELLER'S OBLIGATIONS AT CLOSING. The obligations of
-----------------------------------------------
Seller under Section 1 of this Agreement are subject to the fulfillment on or
before the Closing of the following:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
6. CONDITIONS OF BUYER'S OBLIGATIONS AT CLOSING. The obligations of Buyer
--------------------------------------------
under Section 1 of this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2 BOARD APPROVAL. The BBG Board of Directors has approved the
settlement pursuant to Section E of the Stipulation.
7. COVENANT NOT TO SUE KIM
-----------------------
In consideration of the sale of the Stock hereunder, Buyer and its
Affiliated Companies, as defined below, covenant and agree, for themselves, and
for their legal representatives, successors, assigns, agents, officers,
directors and employees ("Buyer Covenantors"):
7.1 to refrain from making, directly or indirectly, any claim or
demand, or to commence, facilitate commencement or cause to be prosecuted any
action in law or equity against Seller, or its officers, directors, employees,
successors or assigns, on account of any damages, real or imagined, known or
unknown, which the Buyer Covenantors ever had, have or which may hereafter
arise. The term of this Covenant Not to Sue shall be forty (40) years.
INVESTOR SERVICE CENTER, INC.
By:/s/_________________________
, President
7.2 "Affiliated Companies" shall include all entities listed on
Exhibit 1 hereto. The Affiliated Companies shall use their commercially
reasonable best efforts to prevent the following investment companies from
making, directly or indirectly, any claim or demand, or to commence, facilitate
commencement or cause to be prosecuted any action in law or equity against
Seller, or its officers, directors, employees, successors or assigns: Bull &
Bear Funds I, Inc., whose sole series is Bull & Bear U.S. and Overseas Fund,
Bull & Bear Funds II, Inc., whose sole series is Bull & Bear Dollar Reserves,
Bull & Bear Gold Investors Ltd., Bull & Bear Special Equities Fund, Inc., Global
Income Fund, Inc., Midas Fund, Inc., Rockwood Fund, Inc., Tuxis Corporation,
Midas U.S. and Overseas Fund Ltd., Dollar Reserves, Inc., Midas Investors Ltd.,
Midas Special Equities Fund, Inc. and Midas Magic, Inc.
<PAGE>
8. SELLER'S UNDERTAKINGS AND REPRESENTATIONS
-----------------------------------------
In consideration of the sale of the Stock hereunder, Seller agrees to
undertake the following obligations and makes the following representations:
8.1 DIVESTMENT. Seller shall divest itself of any and all securities
of any Buyer Company, as defined herein, (1) that it owns for its own account;
(2) that is owned in the accounts of any and all of its clients over which it
has or exercises discretionary authority; or (3) that it controls or holds on
any client's behalf. Seller represents and warrants the number of all such
securities of Buyer Companies is 96,550 shares of BBG Common Stock as of the
date of this Agreement which shall be sold pursuant to this Agreement.
8.2 NO FUTURE INVESTMENT. Seller shall not, for the next forty (40)
years, (i) purchase, directly or indirectly, or otherwise acquire for its own
account, or for the account of a client for whom it acts as advisor,
administrator, subadvisor, broker, dealer, or in or under any similar fiduciary
or contractual capacity, direct or indirect ownership of, voting control over,
or dispositive power over any security in any "Buyer Company," as defined herein
or (ii) exercise discretionary authority over any client account containing any
security of any "Buyer Company." A "Buyer Company" is hereby defined to include
(1) Buyer, (2) any direct or indirect affiliate, parent, subsidiary of Buyer,
(3) any investment company managed by any of the entities in (1) or (2) or their
direct or indirect affiliates, parents, or subsidiaries, (4) any entity in which
an officer or director of the foregoing entities is an officer or director
and/or (5) any entity in which any of the foregoing entities or persons owns
more than 5% of the outstanding common stock (collectively referred to herein as
"Buyer Companies"). A current list of the Buyer Companies is annexed hereto as
Exhibit 2, which may be updated at any time by any of the Buyer Companies by
delivery of a revised list to Seller. In the event that Seller is in violation
of this Agreement as the result of establishment of a new client relationship,
Seller shall divest that security causing the violation within five (5) business
days of establishment of the client relationship. In the event that Exhibit 2 is
updated by Buyer to add new Buyer Companies, and an account held by Seller, for
itself or for a client, contains a security in one of the new Buyer Companies,
Seller shall divest that security within five (5) business days of receipt of
the update to Exhibit 2.
8.3 COVENANT NOT TO SUE THE BUYER COMPANIES. In consideration of the
sale of the Stock hereunder, Seller covenants and agrees, for itself, and for
its affiliates as defined under the Investment Company Act of 1940, as amended,
legal representatives, successors, assigns, agents, officers, directors and
employees (collectively "Seller Covenantors") to refrain from making, directly
or indirectly, any claim or demand, or to commence, facilitate commencement or
cause to be prosecuted any action in law or equity against any Buyer Company, or
its directors, officers, employees, successors, assigns or affiliates (all such
Buyer Companies and their directors, officers, employees, successors, assigns or
affiliates, collectively referred to herein as the "Buyer Covenantees") on
account of any damages, real or imagined, known or unknown, which the Seller
Covenantors ever had, have or which may hereafter arise. The term of this
Covenant Not to Sue shall be forty (40) years.
KARPUS MANAGEMENT, INC.
By:/s/______________________
George Karpus
President
8.3.1 COVENANT A DEFENSE TO ANY ACTION. The above Covenant Not
to Sue shall be a complete defense to any action or proceeding that may be
brought or instituted by the Seller Covenantors, and shall forever be a complete
bar to the commencement or prosecution of any action or proceeding whatsoever
against any Buyer Covenantee.
<PAGE>
8.3.2 EXCEPTIONS TO COVENANT NOT TO SUE.
8.3.2.1 Any claim arising from the failure of the Buyer to
perform any terms or obligations under this Agreement is excepted from and not
subject to the Covenant Not to Sue set forth above.
8.3.2.2 The Seller Covenantors, including George Karpus,
agree and covenant not to participate in, assist, encourage, or become involved
in, directly or indirectly, any claims, causes of action or cases in the future
against any of the Buyer Covenantees, except to the extent required by judicial
or administrative process in an action or proceeding instituted by another
unaffiliated party, for forty (40) years from the date of this Agreement.
8.4 NON-PARTICIPATION IN PROXY OR TAKEOVER ACTIVITY. The Seller
Covenantors, including George Karpus, agree and covenant not to participate in,
assist, encourage, or become involved in, directly or indirectly, any proxy
solicitation or takeover activity, of any kind, of or concerning any Buyer
Covenantee, including but not limited to, tender offers and shareholder
communications, for forty (40) years from the date of this Agreement.
8.5 PROXY MATERIALS. The Seller Covenantors agree that they shall
not, with respect to any Buyer Covenantee, submit, or otherwise create or
circulate preliminary or definitive proxy materials for forty (40) years from
the date of this Stipulation.
8.6 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
8.6.1 NON-DISCLOSURE. Seller acknowledges that through its
inquiry and investigation of the matters at issue in the following actions, BULL
& BEAR U.S. GOVERNMENT SECURITIES FUND, INC. V. KARPUS MANAGEMENT, INC., 98 Civ.
1818 (LMM), S.D.N.Y. (the "SDNY Action") and KARPUS MANAGEMENT, INC. V. BULL &
BEAR U.S. GOVERNMENT SECURITIES FUND, INC., 98-4161 (WMN), D.Md (the "Maryland
Action"), it has obtained or developed certain confidential information
including confidential documents ("Confidential Information") regarding the
Buyer Covenantees. The Seller Covenantors and any investigatory person, or law
firm, or other entity retained by Seller or its counsel in connection with the
SDNY or Maryland Actions shall not disclose any Confidential Information to any
person or entity, subject to applicable law. Confidential Information shall not
include documents in the possession of Seller, its counsel or agents prior to
said the SDNY Action or Maryland Action and investigations thereof.
8.6.2 NO STATEMENTS. Seller shall not make or disseminate,
orally, in writing, over the Internet or otherwise, any statements to any person
or entity, including any federal, state or regulatory governmental agency or
representatives of the media or press, concerning or relating to any Buyer
Covenantee except (i) as required by applicable law and (ii) to the extent
provided in the Stipulation. Seller shall not take any action intended, or which
may reasonably be expected, directly or indirectly, to impair the goodwill,
business reputation or good name of any Buyer Covenantee.
RELEASES
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9. SELLER'S RELEASE OF CLAIMS. In consideration of the sale of the Stock,
Seller and its successors, subsidiaries, affiliates, owners, partners,
predecessors, assigns, agents, representatives, officers, directors, and
employees forever mutually release and discharge Buyer, BBG and their
successors, subsidiaries, affiliates, owners, partners, predecessors, assigns,
agents, representatives, officers, directors and employees from any and all
causes of action, actions, judgments, liens, damages, losses, claims,
liabilities, and demands whatsoever, whether known or unknown, which each other
had, now has, or hereafter can, shall, or may have, however arising, including
by reason of any duty, breach, act, omission, condition or occurrence through
and including the Closing and/or by reason of any fact, act, matter, cause or
thing of any kind whatsoever.
10. BUYER'S RELEASE OF CLAIMS. In consideration of the sale of the Stock,
<PAGE>
Buyer and its successors, subsidiaries, affiliates, owners, partners,
predecessors, assigns, agents, representatives, officers, directors and
employees forever mutually release and discharge Seller and its successors,
subsidiaries, affiliates, owners, partners, predecessors, assigns, agents,
representatives, officers, directors, and employees from any and all causes of
action, actions, judgments, liens, damages, losses, claims, liabilities, and
demands whatsoever, whether known or unknown, which each other had, now has, or
hereafter can, shall, or may have, however arising, including by reason of any
duty, breach, act, omission, condition or occurrence through and including the
Closing and/or by reason of any fact, act, matter, cause or thing of any kind
whatsoever.
11. THE ADDITIONAL SHARES. On the first date that Seller has the power to
----------------------
do so, Seller shall sell the Additional Shares in the open market or transfer
ownership of the Additional Shares to an unaffiliated person or entity. Prior to
the date of such sale or transfer, Seller agrees that it shall not directly or
indirectly engage in any shareholder action with respect to the Additional
Shares including, but not limited to, proxy filings, causing proxy filings,
voting the Additional Shares, filings with the SEC or causing filings with the
SEC.
12. MISCELLANEOUS.
--------------
12.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of Seller and Buyer contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing.
12.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding on the respective successors and assigns of the parties (including any
transferee of any Stock). Nothing in this Agreement, express or implied, is
intended to confer on any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. This Agreement shall not be assignable by either party
without the written consent of the other party.
12.3 GOVERNING LAW. This Agreement and its enforcement shall be
governed by and construed under the laws of the State of New York.
12.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
12.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or
forty-eight (48) hours after deposit with the United States Post Office, by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other party.
12.7 EXPENSES. Except as otherwise provided herein, whether or not
the Closing occurs, each party shall pay all costs and expenses that they incur
with respect to the negotiation, execution, delivery and performance of this
Agreement.
12.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the parties.
12.9 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
<PAGE>
12.10 ENTIRE AGREEMENT. This Agreement and the documents referred
to herein constitute the entire agreement among the parties and supersedes and
replaces the Stock Purchase Agreement between the parties dated May 24, 1999
which is hereby declared null and void. No party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
Seller: Buyer:
/s/__________________________ /s/________________________
Investor Service Center, Inc.
By: George M. Karpus, Personally By: , President
and as President of 11 Hanover Square
Karpus Management, Inc. New York, New York 10005
14A Tobey Village Office Park
Pittsford, New York 14534
