INVESTMENT MANAGEMENT AGREEMENT
COWEN LARGE CAP VALUE FUND
A SERIES OF COWEN SERIES FUNDS, INC.
November __, 1997
Cowen Asset Management
Xxxxx & Company
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Cowen Series Funds, Inc. (the "Fund"), a corporation organized under
the laws of the State of Maryland, herewith confirms its agreement with Cowen
Asset Management, a division of Xxxxx & Company ("Cowen"), as follows:
1. Investment Description; Appointment
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The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Articles of Incorporation, as amended, and in its Prospectuses and Statements of
Additional Information as from time to time in effect, and in such manner and to
such extent as may from time to time be approved by the Board of Directors of
the Fund. Copies of the Fund's Prospectuses, Statements of Additional
Information and Articles of Incorporation, as amended, have been or will be
submitted to Cowen. The Fund desires to employ and hereby appoints Cowen to act
as investment manager to its Cowen Large Cap Value Fund (the "Portfolio"). Cowen
accepts the appointment and agrees to furnish the services set forth below for
the compensation set forth below.
2. Services as Investment Manager
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Subject to the supervision and direction of the Board of Directors of
the Fund, Cowen will (a) act in strict conformity with the Fund's Articles of
Incorporation and by-laws, the Investment Company Act of 1940 (the "Act") and
the Investment Advisers Act of 1940, as the same may from time to time be
amended, (b) manage the Portfolio in accordance with the Portfolio's investment
objective and policies as stated in the Portfolio's Prospectus and Statement of
Additional Information as from time to time in effect, (c) make general
investment decisions for the Portfolio including decisions concerning (i) the
specific types of securities to be held by the Portfolio and the proportion of
the Portfolio's assets that should be allocated to such investments during
particular market cycles and (ii) the specific issuers whose securities will be
purchased or sold by the Portfolio, and (d) supply office facilities (which may
be in Xxxxx'x own offices); statistical and research data; data processing
services; clerical services; internal auditing and legal services; internal
executive and administrative services; stationery and office supplies;
preparation of reports to
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shareholders of the Portfolio; preparation of tax returns, reports to and
filings with the Securities and Exchange Commission and state Blue Sky
authorities; calculation of the net asset value of shares of the Portfolio; and
general assistance in all aspects of the Portfolio's operations. In providing
those services, Cowen will supervise the Portfolio's investments generally and
conduct a continual program of evaluation of the Portfolio's assets.
In connection with the performance of its duties under this Agreement,
it is understood that Cowen will from time to time employ or associate with
itself such person or persons as Cowen may believe to be particularly fitted to
assist it in the performance of this Agreement, it being understood that the
compensation of such person or persons shall be paid by Cowen and that no
obligation may be incurred on the Portfolio's behalf in any such respect. Cowen,
a limited partnership formed under the laws of the State of New York, will
notify the Fund of any change in its membership within a reasonable time after
such change.
3. Information Provided to the Fund; Books and Records
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(a) Cowen will keep the Fund informed of developments materially
affecting the Portfolio, and will, on its own initiative, furnish the Fund from
time to time with whatever information Cowen believes is appropriate for this
purpose.
(b) In compliance with the requirements of Rule 31a-3 under the Act,
Cowen hereby agrees that all records which it maintains for the Fund are the
property of the Fund and further agrees to surrender promptly to the Fund any of
such records upon the Fund's request.
4. Standard of Care
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Cowen shall exercise its best judgment in rendering the services
listed in paragraph 2 above. Cowen shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the
matters to which this Agreement relates, provided that nothing herein shall be
deemed to protect or purport to protect Cowen against any liability to the Fund
or to its shareholders to which Cowen could otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Xxxxx'x reckless disregard of its
obligations and duties under this Agreement.
Any person, even though also a partner, officer, employee, or agent of
Cowen, who may be or become a Director, officer, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting on any business
of the Fund, to be rendering such services to or acting solely for the Fund and
not as a Director, officer, employee, or agent or one under the control or
direction of Cowen even though paid by it.
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5. Compensation
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In consideration of the services rendered pursuant to this Agreement,
the Fund will pay Cowen on the first business day of each month a fee for the
previous month, calculated daily, at the annual rate of ___ of 1.00% of the
Portfolio's average daily net assets. The fee for the period from the date the
Portfolio commences investment operations to the end of the month during which
the Portfolio commences investment operations shall be prorated according to the
proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees payable to
Cowen, the value of the Portfolio's net assets shall be computed at the times
and in the manner specified in the Portfolio's Prospectus and the Statement of
Additional Information as from time to time in effect.
6. Expenses
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Cowen will bear all expenses in connection with the performance of its
services under this Agreement. The Portfolio will bear certain other expenses to
be incurred in its operation, including: taxes, interest, brokerage fees and
commissions, if any; fees of directors of the Fund who are not officers or
employees of Cowen; Securities and Exchange Commission fees and state Blue Sky
qualification fees; management, advisory and administration fees; charges of
custodians and transfer and dividend disbursing agents; outside accounting and
bookkeeping expenses; certain insurance premiums; outside auditing and legal
expenses; costs of maintenance of corporate existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders,
officers or Board of Directors of the Fund; and any extraordinary expenses.
7. Reimbursement to the Fund
-------------------------
From time to time Cowen, in its sole discretion and as it deems
appropriate, may assume certain expenses of the Portfolio while retaining the
ability to be reimbursed by the Portfolio for such amounts.
8. Services to Other Companies or Accounts
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The Fund understands that Cowen now acts and will continue to act as
investment adviser to fiduciary and other managed accounts and now acts and will
continue to act as investment manager, investment adviser, sub-investment
adviser and/or administrator to
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one or more other investment companies, and the Fund has no objection to Xxxxx'x
so acting, provided that whenever the Portfolio and one or more other accounts
or investment companies advised by Cowen have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
believed to be equitable to each entity. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position obtainable for the
Portfolio. In addition, the Fund understands that the persons employed by Cowen
to assist in the performance of Xxxxx'x duties hereunder will not devote their
full time to such service and nothing contained herein shall be deemed to limit
or restrict the right of Cowen or any affiliate of Cowen to engage in and devote
time and attention to other businesses or to render services of whatever kind or
nature.
9. Term of Agreement
-----------------
This Agreement shall become effective on the date the Portfolio
commences investment operations and shall continue for an initial two year term
and thereafter shall continue automatically, provided such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or (b) a vote of a majority of the Portfolio's outstanding voting
securities (as defined in the Act), provided that in either event the
continuance is also approved by a majority of the Board of Directors who are not
"interested persons" (as defined in that Act) of the Fund, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on 60 days' written notice, by the
Board of Directors of the Fund or by vote of holders of a majority of the
Portfolio's shares, or upon 90 days' written notice, by Cowen. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the Act and the Rules thereunder).
10. 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, and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolio.
11. Miscellaneous
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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 court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be invalidated or rendered
unenforceable thereby. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by New
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York law without giving effect to the conflict of law provisions thereof.
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If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning the enclosed copy
hereof.
Very truly yours,
COWEN SERIES FUNDS, INC.
By:_____________________
Name:
Title:
Accepted and Agreed:
COWEN ASSET MANAGEMENT,
A DIVISION OF XXXXX & COMPANY
By:____________________________
Name:
Title:
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