As filed with the Securities and Exchange Commission on MARCH 28, 1997


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K


                                   (MARK ONE)
             X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                   For the fiscal year ended DECEMBER 31, 1996
                                       OR
            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                        FOR THE TRANSITION PERIOD FROM TO

                          COMMISSION FILE NUMBER 0-9667
                             BULL & BEAR GROUP, INC.
             (Exact name of registrant as specified in its charter)

                               DELAWARE 13-1897916
         (State of incorporation) (I.R.S. Employer Identification No.)

                   11 HANOVER SQUARE, NEW YORK, NEW YORK 10005
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:              (212) 785-0900

Securities registered pursuant to Section 12(b) of the Act:

         Title of each class Name of each exchange on which registered
                                    NONE NONE

          Securities registered pursuant to Section 12(g) of the Act:

                 CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

      No voting stock was held by  non-affiliates  of the registrant as of March
15, 1997.

      The number of shares  outstanding of each of the  registrant's  classes of
common stock, as of March 15, 1997:

Class A Non-Voting  Common  Stock,  par value $.01 per share - 1,350,017  shares
Class B Voting Common Stock, par value $.01 per share - 20,000 shares







<PAGE>



                                TABLE OF CONTENTS




                                     PART I

ITEM                                                                        PAGE

1.    Business ..............................................................  2

2.    Properties ............................................................  6

3.    Legal Proceedings .....................................................  6

4.    Submission of Matters to a Vote of Security Holder ....................  7


                                     PART II

5.    Market for Company's Common Equity and Related Stockholder Matters ......7

6.    Selected Financial Data .................................................7

7.    Management's Discussion and Analysis of Financial Condition
         and Results of Operations ............................................9

8.    Financial Statements and Supplementary Data ............................12

9.    Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure ..............................28


                                    PART III

10.    Directors and Executive Officers ......................................29

11.    Executive Compensation  ...............................................31

12.    Security Ownership of Certain Beneficial Owners and Management ........38

13.    Certain Relationships and Related Transactions ........................39


                                     PART IV

14.    Exhibits, Consolidated Financial Statements and Schedules,
          and Reports on Form 8-K ............................................40

















<PAGE>



                                     PART I


ITEM 1.      BUSINESS

     Bull & Bear Group,  Inc.,  a Delaware  corporation  (the  "Company"),  is a
holding company with seven principal  subsidiaries:  Bull & Bear Advisers,  Inc.
("BBAI"), Bull & Bear Securities,  Inc. ("BBSI"),  Investor Service Center, Inc.
("ISC"), Midas Management Corporation ("MMC"),  Rockwood Advisers, Inc. ("RAI"),
Bull & Bear NJ Properties, Inc. ("NJ Properties") and Hanover Direct Advertising
Company, Inc. ("Hanover Direct").

      BBAI,  MMC and RAI act as investment  managers to open-end and  closed-end
management  investment  companies (the "Funds")  registered under the Investment
Company Act of 1940 (the  "Act").  The open-end  Funds are:  Bull & Bear Special
Equities  Fund,  Inc.;  Bull & Bear Gold  Investors  Ltd.;  Bull & Bear U.S. and
Overseas  Fund, a series of shares  issued by Bull & Bear Funds I, Inc.;  Bull &
Bear Dollar  Reserves,  a series of shares of Bull & Bear Funds II, Inc.;  Midas
Fund, Inc.; and Rockwood Fund, Inc. The closed-end funds are: Bull & Bear Global
Income Fund, Inc., Bull & Bear U.S. Government  Securities Fund, Inc. and Bull &
Bear Municipal Income Fund, Inc.

      BBSI was organized in 1984 to operate a discount brokerage  service.  BBSI
has access to every major U.S.  stock,  option and bond  exchange as well as the
over-the-counter  market.  Investors  may use the  discount  brokerage  services
provided by BBSI to trade stocks,  bonds and options at  substantial  commission
discounts from full cost rates,  access their  investment in any of the Funds to
pay for securities  purchased,  or invest proceeds of sales of securities in the
Funds. BBSI is registered with the Securities and Exchange Commission ("SEC") as
a  broker/dealer  and is a member  of the  National  Association  of  Securities
Dealers, Inc. ("NASD") and Securities Investor Protection Corporation ("SIPC").

      ISC  was  organized  in  1985  and  is  registered   with  the  SEC  as  a
broker/dealer and is a member of the NASD. ISC acts as the principal distributor
and shareholder administrator for the open-end Funds.

     NJ Properties  was organized in 1994 to invest in real estate.  Bull & Bear
Properties, Inc. ("Properties") was sold in 1996 in a stock sale.

     Hanover Directwas organized in 1988 and acts as an advertising agency,which
places advertising for ISC on behalf of the Funds and for BBSI.  Currently,  the
commission  revenue  generated by Hanover Direct from ISC and BBSI  represents a
recapture  of sums paid for  advertising  and,  rather than  additional  income,
represents a reduction in  advertising  expense of ISC and BBSI.  Hanover Direct
has not performed any work for unaffiliated clients.

      The Company owns and has granted seven of the Funds and its subsidiaries a
non-exclusive  license  to use the  service  marks  "Bull & Bear,"  "Bull & Bear
Performance Driven," and "Performance Driven" under certain terms and conditions
on a royalty free basis.  Such license may be withdrawn from a Fund in the event
the  investment  manager of the Fund is not a  subsidiary  of the  Company or in
other cases, at the discretion of the Company.
















                                                        -2-


<PAGE>






INVESTMENT MANAGEMENT BUSINESS

      The  Company is  engaged,  through its  subsidiaries,  in the  business of
managing  investment  companies  registered  under the Act.  The Funds and their
respective net assets as of December 31, 1996 were as follows:

         Bull & Bear Dollar Reserves                           $  64,214,000
         Bull & Bear Global Income Fund, Inc.                     30,373,000
         Bull & Bear Gold Investors Ltd.                          22,685,000
         Bull & Bear Municipal Income Fund, Inc.                  11,491,000
         Bull & Bear Special Equities Fund, Inc.                  49,840,000
         Bull & Bear U.S. and Overseas Fund                        9,836,000
         Bull & Bear U.S. Government Securities Fund, Inc.        10,751,000
         Midas Fund, Inc.                                        200,457,000
         Rockwood Fund, Inc.                                       1,273,000
                                                               -------------
         TOTAL NET ASSETS $400,920,000

      The fund  management  industry  along with the entire  financial  services
sector of the economy has been rapidly  changing to meet the increasing needs of
investors.  Competition  for management of financial  resources has increased as
banks,  insurance  companies and  broker/dealers  have  introduced  products and
services  traditionally offered by independent fund management companies.  There
are also many fund management groups with  substantially more resources than the
Company. While Congress,  governmental agencies and special interest groups have
been  struggling  with  regulatory  problems  created  by  consolidation  of the
financial services  industry,  the Company continues to develop products to meet
the specialized  requirements of investors.  While the Company's business is not
seasonal, it is affected by the financial markets,  which in turn, are dependent
upon current and future economic conditions.

      Drastic material declines in the securities markets can have a significant
effect on the Company's  business.  Volatile stock markets may affect management
and distribution fees earned by the Company's subsidiaries.  If the market value
of securities owned by the Funds declines,  assets under management will decline
and  shareholder  redemptions  may occur,  either by transfer  out of the equity
Funds and into the money market  Fund,  Bull & Bear Dollar  Reserves,  which has
lower  management  and  distribution  fee rates  than the  equity  Funds,  or by
redemptions out of the Funds entirely.  Lower asset levels in the Funds may also
cause  or  increase   reimbursements  to  the  Funds  pursuant  to  the  expense
limitations described below.

      In  general,  investment  management  services  are  rendered to the Funds
pursuant  to  written  contractual  agreements.  Such  agreements  relate to the
general  management of the affairs of each Fund, in addition to supervising  the
acquisition and sale of each Fund's  portfolio  investments.  As provided in the
agreements,  BBAI, MMC and RAI may receive  management fees ranging from 0.4% to
1.0% per annum of the Funds'  average  daily net assets.  The Act requires  that
such  contractual  agreements  be  initially  approved  by the  Funds'  Board of
Directors,  including a majority of all of the directors who are not "interested
persons"  (as  defined  in the  Act),  and  by the  vote  of a  majority  of the
outstanding shares of the Fund (as defined in the Act). Agreements, if approved,
may be for a term of up to two years, and thereafter  their  continuance must be
approved at least annually by a majority of the directors of the Fund, including
a majority of those directors of the Fund who are not "interested  persons",  or
by such a vote of  "disinterested"  directors  and the vote of a majority of the
outstanding shares of the Fund. In addition,  all such agreements are subject to
termination on 60 days' notice by majority vote of the Board of Directors or the
shareholders  and  are  subject  to  automatic   termination  in  the  event  of
assignment.  Depending on the assets of the Fund involved and other factors, the
termination of any of the agreements for investment  management services between
any of the Funds,  BBAI, MMC and RAI may have a serious  adverse impact upon the
Company.





                                                        -3-


<PAGE>






      Pursuant to contracts with these Funds,  BBAI, MMC and RAI are entitled to
management fees, which are received monthly and are based on annual  percentages
of the average daily net assets of the Funds. Under the contracts, BBAI, MMC and
RAI are required to reimburse the Funds for certain  expenses to the extent that
such expenses exceed limitations  prescribed by any state in which shares of the
Funds are  qualified for sale,  although  currently the Funds are not subject to
any such limits. In addition, in the case of Midas Fund, Inc., MMC has agreed to
be subject to the following  expense  limitation  for a period of two years from
the  date  of the  investment  management  agreement,  August  25,  1995,  which
limitation  is  calculated as an amount not in excess of the fee payable by the
Fund if and to the extent  that the  aggregate  operating  expenses  of the Fund
(excluding  interest  expense,  Rule 12b-1  Plan of  Distribution  fees,  taxes,
brokerage fees and  commissions)  are in excess of 2.0% of the first $10 million
of average net assets of the Fund,  plus 1.5% of the next $20 million of average
net assets,  plus 1.25% of average net assets  above $30  million.  In addition,
from time to time BBAI,  MMC and RAI may waive or reimburse  management  fees to
increase a Fund's  performance.  BBAI, MMC and RAI have a subadvisory  agreement
with respect to Bull & Bear Gold Investors  Ltd.,  Midas Fund, Inc. and Rockwood
Fund, Inc.,  respectively.  BBAI, MMC and RAI, not the respective Funds, pay the
Subadvisers, Lion Resource Management Limited and Aspen Securities and Advisory,
Inc., based upon the net fees, performance and net assets of the Funds.

      Each of the open-end Funds has adopted a plan of distribution  pursuant to
Rule 12b-1 under the Act (the "Plan"). Pursuant to the Plans, ISC may receive as
compensation  amounts ranging from one-quarter of one percent to one percent per
annum of the  Funds'  average  daily net  assets for  distribution  and  service
activities.  The service fee portion is intended to cover  services  provided to
shareholders  in the Funds and the  maintenance  of  shareholder  accounts.  The
distribution fee portion is to cover all other activities and expenses primarily
intended to result in the sale of the Funds' shares.

      In 1996, Bull & Bear Municipal Income Fund and Bull & Bear U.S. Government
Securities  Fund  converted  from  open-end  investment  companies to closed-end
investment  companies  pursuant  to the  vote of  each  Fund's  shareowners.  In
February  1997,  Bull & Bear  Global  Income  Fund  converted  from an  open-end
investment  company to a closed-end  investment  company pursuant to the vote of
the Fund's  shareowners.  Upon  conversion,  the  Distribution,  12b-1 Plan, and
Shareholder  Administration  Agreements between the respective Fund and ISC were
terminated and substantially  similar Investment  Management  Agreements between
BBAI and each Fund were approved.

      The Act requires that a plan of distribution be initially  approved by the
Fund's Board of  Directors,  including a majority of the  directors  who are not
"interested  persons" and who have no financial interest in the Plan, and by the
vote of a majority of the outstanding shares of the Fund. If approved, a plan of
distribution  may be for a term of one year,  and thereafter it must be approved
at least  annually  by the entire  Board of  Directors  and by a majority of the
"disinterested" directors. In addition, all plans of distribution are subject to
termination  at any time by  majority  vote of the  disinterested  directors  or
shareholders.

      BBAI, MMC and RAI are registered with the SEC as investment advisers under
the  Investment  Advisers  Act of  1940.  ISC is  registered  with  the SEC as a
broker/dealer  under the Securities  Exchange Act of 1934 and is a member of the
NASD.  The Funds are  registered  with the SEC under the Act. The  activities of
BBAI,  MMC and RAI and of the Funds are subject to regulation  under Federal and
state securities laws. The provisions of these laws, including those relating to
the contractual arrangements between the Funds and their investment manager, are
primarily  designed  to  protect  the  shareholders  of the  Funds  and  not the
shareholders of the Company.








                                                        -4-


<PAGE>






DISCOUNT BROKERAGE BUSINESS

      BBSI, with access to every major U.S.  stock,  option and bond exchange as
well as the  over-the-counter  market,  provides discount  brokerage services to
investors   throughout  the  United  States  and  various   foreign   countries.
Substantial  commission  savings  off  full  service  rates  as well as  prompt,
courteous service and professional order execution are available to all accounts
regardless  of how often  trades  are made.  All  accounts  are  carried by U.S.
Clearing  Corp., a New York Stock Exchange  member firm. The SIPC, of which BBSI
and U.S. Clearing Corp. are members, protects each account against broker/dealer
insolvency  (not market losses) for up to $500,000,  of which $100,000 may be in
cash. In addition,  Aetna Casualty and Surety Company  protects each account for
an additional $49,500,000 in securities value.

      BBSI  offers  investors  commission  savings  of up to 84% over  full cost
brokers (as of March 29, 1997) and guarantees  commissions 20% less than Charles
Schwab & Co. on every stock,  bond and option trade.  BBSI customers may save an
additional  10% in  commissions  with every trade entered via personal  computer
through Bull & Bear OnLine  Investment  Center(sm)  and by touch tone  telephone
using Bull & Bear TeleQuote/TeleTrade(sm). BBSI customers earn American Airlines
AAdvantage  miles  with  every  trade -- 500  AAdvantage  miles  for each of the
customer's first five trades and then 100 miles per trade thereafter (limited to
35,000 miles in any 12 month period).

      BBSI provides its customers free investment information such as:

* Standard & Poor's Market Month:  Timely investment information with customer
  statements each month.

* Standard & Poor's Stock Guide:  Information, ranking and rating changes on
  6,800 stocks each month.

* Standards & Poor's Stock Reports:  Up-to-date information on over 4,600
  companies by mail or by fax.

* Standard & Poor's Stock Screens:  Thousands of stocks screened by objective
  and investment results.

      BBSI also offers its customers a no-fee cash management  service featuring
unlimited  free  check  writing  with  no  check  writing  minimum  (Bull & Bear
Performance  Plus  Account(R)),  the Bull & Bear No-Fee IRA(R),  and Bull & Bear
Mutual Funds  Network  (including a no  transaction  fee,  no-load  mutual funds
service).

      Volatile  stock markets  could have a significant  effect on the brokerage
commissions  earned by BBSI by affecting the number of  transactions  processed.
BBSI is  responsible  for potential  losses  resulting from trade errors of BBSI
personnel and customers' bad debts,  including  under- margined  accounts.  As a
discount broker,  BBSI does not give investment advice and therefore  management
believes  it is less  likely  to be  involved  in  significant  litigation  with
customers, as may be typical in the ordinary course of business of a broker that
does give investment advice to its customers.












                                                        -5-


<PAGE>






ITEM 2.  PROPERTIES

      The principal  office of the Company is located at 11 Hanover Square,  New
York, New York 10005.  The approximate area of the office is 11,400 square feet.
The rent is  approximately  $144,000  per  annum  plus  $32,550  per  annum  for
electricity.  The lease  expires on December 31, 1998 and is  cancelable  at the
option of the Company on three months'  notice.  BBSI has a branch office at 395
East Palmetto Boulevard,  Boca Raton,  Florida consisting of approximately 1,000
square feet.  The rent is  approximately  $22,200 per annum and is cancelable at
the option of the Company on six months' notice.

      NJ Properties  purchased land and a two story office  building  located in
Red Bank,  New Jersey in 1994.  The building  consists of  approximately  13,000
square  feet.  The  building  was  purchased  for cash,  has no mortgage and was
purchased  as an  investment.  The  building is currently  being  renovated  for
possible rental.


ITEM 3.  LEGAL PROCEEDINGS

      The Company and its directors are defendants in a lawsuit brought on April
24,  1995 by  Maxus  Investment  Group,  Maxus  Capital  Partners,  Maxus  Asset
Management,  Inc., and Maxus Securities Corp.  (collectively "Maxus"), which now
claim to collectively own or control 144,000 shares,  or approximately  10.7% of
the Class A common stock of the Company.  The action,  seeking  declaratory  and
injunctive  relief,  was filed in the federal  district  court for the  Southern
District of New York and  purports to be brought on the  plaintiffs'  own behalf
and derivatively on behalf of the Company. On April 11, 1996, the district court
dismissed as a matter of law all claims brought by the  plaintiffs  except those
relating to the voiding of 1993  exercises,  the  exercise of certain 1990 stock
options and plaintiffs' request for attorneys' fees from the Company. Defendants
thereafter  filed  answers  denying  liability.  The Company  believes  that the
lawsuit is without merit and intends to continue  defending the remaining claims
vigorously.

      From time to time, the Company and/or its  subsidiaries  are threatened or
named as defendants in litigation  arising in the normal course of business.  As
of December  31,  1996,  neither the  Company  nor any of its  subsidiaries  was
involved in any other litigation that, in the opinion of management,  would have
a material adverse impact on the consolidated financial statements.
























                                                        -6-


<PAGE>



                                     PART II



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS DURING
             FOURTH QUARTER OF THE YEAR ENDED DECEMBER 31, 1996


                                                       NONE


ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The Company's Class A Common Stock trades on the Nasdaq SmallCap Market tier
of the Nasdaq Stock Market under the symbol BNBGA.  The Company's Class B Common
Stock has no public trading market. There are in excess of 300 holders of record
of Class A Common  Stock and 1 holder of Class B Common Stock as of December 31,
1996. In addition,  there are an  indeterminate  number of beneficial  owners of
Class A Common Stock that are held in "street name". No dividends have been paid
on either  class of Common Stock in the past five years and the Company does not
expect to pay any such  dividends in the  foreseeable  future.  The high and low
sales prices of the Class A Common Stock during each  quarterly  period over the
last two years were as follows:

                            1996                        1995
                    ---------------------         ----------------
                     HIGH        LOW             HIGH           LOW

First Quarter         $6-3/4      $1-5/8       $1-3/4         $1-1/4
Second Quarter        $5-3/8      $3-1/4       $2-5/8         $1-1/4
Third Quarter         $4          $2-1/2       $1-15/16       $1-37/64
Fourth Quarter        $3-1/4      $2-7/8       $2-1/8         $1-3/4


ITEM 6.  SELECTED FINANCIAL DATA

      The selected  financial data for the five years ended December 31, 1996 is
presented on the following pages.


























                                                        -7-


<PAGE>



                             BULL & BEAR GROUP, INC.

                      CONSOLIDATED SELECTED FINANCIAL DATA

                        FOR THE YEARS ENDED DECEMBER 31,


<TABLE>


                                                           1996             1995            1994         1993           1992
                                                           ----             ----            ----         ----           ----
REVENUES:
<S>                                                     <C>            <C>              <C>             <C>             <C>
   Management, distribution and administration fees     $4,922,945     $3,322,348       $3,786,066      $4,092,229      $3,386,153
   Brokerage commissions                                 2,351,983      1,821,513        1,768,527       2,047,999       1,488,856
   Dividends, interest and other                           142,084        147,169            (7,378)       227,422         602,206
                                                      ------------   ------------    --------------   ------------    ------------
                                                         7,417,012      5,291,030        5,547,215       6,367,650       5,477,215
                                                       -----------    -----------      -----------     -----------     -----------
EXPENSES:
   General and administrative                            4,040,219      3,195,115        3,225,891       3,519,704       3,072,364
   Marketing                                             1,821,297        779,026        1,361,155       1,389,204       1,356,060
   Clearing and brokerage charges                          708,535        576,096          532,832         619,673         512,968
   Subadvisory fees                                        705,248         22,496           37,728          34,629          16,655
   Professional fees                                       296,874        431,934          170,284         170,687         212,320
   Amortization and depreciation                           138,116         97,399           98,094         125,399         193,156
                                                      ------------  -------------    -------------    ------------    ------------
                                                         7,710,289      5,102,066        5,425,984       5,859,296       5,363,523
                                                       -----------    -----------      -----------     -----------     -----------

Income (loss) before provision for income taxes            (293,277)      188,964          121,231         508,354         113,692
INCOME TAXES                                                27,248         32,588           37,771          39,149          38,198
                                                      ------------  -------------    -------------   -------------   -------------
NET INCOME (LOSS)                                       $  (320,525)  $   156,376     $     83,460     $   469,205    $     75,494
                                                        ===========   ===========     ============     ===========    ============
NET INCOME (LOSS) PER SHARE OF WEIGHTED AVERAGE
   COMMON STOCK OUTSTANDING:
   Primary and fully diluted
      Net income (loss)                                      $(.22)          $.10             $.05            $.32            $.05
                                                             =====           ====             ====            ====            ====
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
   Primary                                               1,463,279      1,549,815        1,610,443       1,480,654       1,434,922
                                                       ===========    ===========      ===========     ===========     ===========
   Fully diluted                                         1,469,354      1,551,564        1,610,658       1,483,272       1,446,922
                                                       ===========    ===========      ===========     ===========     ===========

TOTAL ASSETS                                            $4,273,110     $4,963,792       $4,240,241      $4,711,438      $3,817,556
                                                        ==========     ==========       ==========      ==========      ==========
LONG-TERM OBLIGATIONS                                 $     22,093 $           -   $          -     $         -    $          -
                                                      ============ =============== ===============  ============== ============


</TABLE>


<PAGE>

































































                                                        -8-


<PAGE>






ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1996 COMPARED TO 1995

      Total revenues for the year increased $2,125,982 or 40.2%.  Management and
distribution  fees  increased   $1,429,766  or  85.5%  and  $284,319  or  22.1%,
respectively,  and shareholder  administration fees decreased $113,488 or 31.2%.
The increase in management and distribution  fees was due to an overall increase
in the net asset levels of the Funds from which these  revenues  are  generated.
Shareholder  administration  fees represent  reimbursement  for actual  expenses
incurred.  Such  fees  decreased  as the  costs  for  providing  these  services
decreased.  Net assets under  management  were  approximately  $237.4 million at
December 31, 1995,  $317.6 million at March 31, 1996, $393.2 million at June 30,
1996,  $432.1  million at September 30, 1996, and $400.9 million at December 31,
1996.  Brokerage   commissions  increased  $530,470  or  29.1%  while  brokerage
customers'  equity  increased  to $187 million or 28%. The increase in brokerage
commissions  was due to an  increase in customer  transaction  activity  and the
continued  growth in the number of discount  brokerage  accounts and  customers'
equity.  Dividends,  interest and other amounted to $142,084 in 1996 compared to
$147,169 in 1995.  Dividends and interest  decreased $5,085 or 3.5% due to lower
earnings on the Company's short term investments.

      Total  expenses  increased  $2,608,223 or 51.1% for the year.  General and
administrative   expenses   increased   $845,104  or  26.4%  because  of  higher
compensation,  higher  bonuses paid to employees of the Company  relating to the
growth in the Company's  businesses  and higher expense  reimbursements  for the
Funds.  Marketing expenses  increased  $1,042,271 or 133.8% primarily related to
the  launching  of the  Midas  Fund  during  the first  six  months of 1996.  In
addition,  the Company incurred  increased  marketing  expenses  relating to the
introduction  of Bull & Bear Online  Investment  Center and the promotion of the
American Airlines(R) AAdvantage Miles(R) program through Bull & Bear Securities,
Inc. Clearing and brokerage  charges  increased  $132,439 or 23.0% because of an
increased  level  of  discount   brokerage  customer   transactions   processed.
Professional  fees  decreased  $135,060 or 31.3% due to lower  litigation  costs
relating to the Maxus lawsuit.  Subadvisory  fees increased  $682,752 because of
the growth in assets of the Midas Fund.  Amortization and depreciation increased
$40,717 or 41.8% for the year.

      Net loss for 1996 was $320,525 or $.22 per share as compared to net income
of $156,376 or $.10 per share in 1995.


1995 COMPARED TO 1994

      Total  revenues  for the year  decreased  $256,185  or  4.6%.  Management,
distribution and shareholder administration fees decreased $192,611 or 10.3% and
$167,532  or  11.5%,  and  $103,575  or 22.2%,  respectively.  The  decrease  in
management and distribution fees was due to an overall decrease in the net asset
levels of the  Funds  from  which  these  revenues  are  generated.  Shareholder
administration fees represent  reimbursement for actual expenses incurred.  Such
fees decreased as the costs for providing these services  decreased.  Net assets
under management were approximately  $236.1 million at December 31, 1994, $235.0
million at March 31, 1995,  $236.9  million at June 30, 1995,  $245.9 million at
September  30,  1995  and  $237.4  million  at  December  31,  1995.   Brokerage
commissions increased $52,986 or 3.0% while brokerage customers' equity increase
to $145.9 million or 32.2%.  The increase in brokerage  commissions was due to a
increase in customer transaction activity, the continued growth in the number of
discount brokerage accounts and customers' equity. Dividends, interest and other
amounted  to  $147,169 in 1995  compared  to  ($7,378)  in 1994.  Dividends  and
interest  increased  $56,773 or 62.8% due to higher  earnings  on the  Company's
short term investments.






                                                        -9-


<PAGE>






      Total  expenses  decreased  $323,918  or 6.0% for the  year.  General  and
administrative  expenses decreased $30,776 or 1.0%. Marketing expenses decreased
$582,129 or 42.8%. Clearing and brokerage charges increased $43,264 or 8.1% as a
result of the previously noted increase in brokerage  commissions.  Professional
fees  increased  $223,922 or 107.6% due to the increase in legal fees  primarily
associated with the lawsuit brought by Maxus. Subadvisory fees increased $22,496
due to the new  subadvisory  agreements  with Lion Resource  Management  Limited
effective  August 25,  1995 for Midas Fund and Bull & Bear Gold  Investors  Ltd.
Amortization and depreciation decreased $695 or 0.7% for the year.

      Net income for 1995 was  $156,376 or $.10 per share as compared to $83,460
or $.05 per share in 1994.

LIQUIDITY AND CAPITAL RESOURCES
      The following table reflects the Company's  consolidated  working capital,
total assets, long-term debt and shareholders' equity as of the dates indicated.

                                                 DECEMBER 31,
                             1996                  1995                1994
                             ----                  ----                ----
Working Capital               $2,293,200          $2,792,059         $2,779,722
Total Assets                  $4,273,110          $4,963,792         $4,240,241
Long-Term Debt              $     22,093   $            -     $            -
Shareholders' Equity          $3,917,886          $4,170,095         $3,909,699

      For the year ended 1996,  working capital,  total assets and shareholders'
equity decreased $498,859, $690,682 and $252,209,  respectively.  Long-term debt
increased $22,093.

      Working  capital  decreased  as a result  of the net loss for 1996 and the
acquisition  of intangible  assets and fixed assets offset by the non-cash items
of  depreciation  and  amortization.  The decrease in  shareholders'  equity was
primarily the result of the net loss for 1996 of $320,525 offset by the issuance
of common  stock on  exercise  of stock  options of $3,750 and the  increase  in
unrealized  capital  gains on  marketable  securities  of $64,566.  Total assets
decreased  as a result of the net loss and the  decrease in current  liabilities
offset by the increase in unrealized gains on marketable  securities.  Long-term
debt increased due to the capitalized lease obligations for equipment.

      For the year 1995, working capital,  total assets and shareholders' equity
increased $12,337, $723,551 and $260,396, respectively.

      Working  capital  increased  as a result of the net income  for 1995,  the
non-cash  expense  items  of  depreciation   and  amortization   offset  by  the
acquisition of intangible assets and fixed assets. The increase in shareholders'
equity was  primarily  the result of the net  income for 1995 of  $156,376,  the
issuance  of common  stock on  exercise  of stock  options  of  $33,000  and the
unrealized  capital  gains on  marketable  securities  of $66,020.  Total assets
increased  as a  result  of net  income,  the  unrealized  gains  on  marketable
securities and the increase in current liabilities.

      For the year 1994,  shareholders'  equity  increased  $109,710 and working
capital and total assets decreased $520,846 and $471,197, respectively.











                                                       -10-


<PAGE>






      The  decrease in working  capital in 1994 was due to the  liquidation  and
dissolution on December 30, 1994 of Dover Regional Financial Shares ("Dover"), a
closed-end registered investment company,  which resulted in the distribution of
its assets to the minority shareholders and the purchase of real estate held for
investment  of  $260,088.  These  decreases  in working  capital  were offset by
working capital  generated from net income from operations of $83,460 and by the
non-cash expense items of depreciation and amortization of $98,094. The increase
in  shareholders'  equity was due  primarily to the net income for the year.  As
discussed  previously,  significant  changes in the securities market can have a
dramatic  effect  on the  Company's  results  of  operations.  Based on  current
information available, management believes that current resources are sufficient
to meet the Company's liquidity needs.

      Management knows of no contingencies  that are reasonably likely to result
in a  material  decrease  in the  Company's  liquidity  or that  are  likely  to
adversely affect the Company's capital resources. This includes the restrictions
placed on the  transfer of funds to the Company from BBSI and ISC as a result of
their  regulatory  net capital  requirements.  At December 31, 1996,  the amount
subject to these restrictions was $275,000 or 6.4% of total assets.

EFFECTS OF INFLATION AND CHANGING PRICES
      Since the Company derives revenue from investment management, distribution
and  shareholder  administration  services  from the  Funds  and  from  discount
brokerage  services,  it is not  possible  for it to  discuss  or  predict  with
accuracy  the impact of  inflation  and  changing  prices on its  revenues  from
continuing operations.





































                                                       -11-


<PAGE>






ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Financial   Statements   required  by  Regulation  S-X  and  Supplementary
Financial Information required by Regulation S-K are presented herein.


                  FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES

                                TABLE OF CONTENTS

                                                                    PAGE

Report of Independent Certified Public Accountants                   13

Consolidated Balance Sheets,
   December 31, 1996 and 1995                                        14

Consolidated Statements of Income,
   Years ended December 31, 1996, 1995 and 1994                      15

Consolidated Statements of Changes in Shareholders' Equity,
   Years ended December 31, 1996, 1995 and 1994                      16

Consolidated Statements of Cash Flows,
   Years ended December 31, 1996, 1995 and 1994                      17

Notes to Consolidated Financial Statements                           19
































                                                       -12-


<PAGE>














               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
BULL & BEAR GROUP, INC.:


We have  audited the  accompanying  consolidated  balance  sheets of Bull & Bear
Group,  Inc. and  subsidiaries as of December 31, 1996 and 1995, and the related
consolidated  statements of income,  changes in shareholders'  equity,  and cash
flows for each of the three years in the period ended  December 31, 1996.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion the financial statements referred to above present fairly, in all
material  respects,  the consolidated  financial  position of Bull & Bear Group,
Inc.  and  subsidiaries  at  December  31, 1996 and 1995,  and the  consolidated
results of their  operations and their  consolidated  cash flows for each of the
three years in the period ended December 31, 1996, in conformity  with generally
accepted accounting principles.





                                                           TAIT, WELLER & BAKER


PHILADELPHIA, PENNSYLVANIA
FEBRUARY 7, 1997













                                                       -13-


<PAGE>



                                              BULL & BEAR GROUP, INC.

                                            CONSOLIDATED BALANCE SHEETS

                                                   DECEMBER 31,

<TABLE>


                                                                                    1996                  1995
                                                                                    ----                  ----
                                                      ASSETS
CURRENT ASSETS:
<S>                                                                               <C>                  <C>
    Cash and cash equivalents                                                     $    747,444         $ 1,467,674
    Marketable securities (Note 3)                                                   1,176,547           1,257,062
    Management, distribution and shareholder
      administration fees receivable                                                   207,944             179,209
    Interest, dividends and other receivables                                          204,684             248,241
    Prepaid expenses and other current assets                                          289,712             433,570
                                                                                 -------------       -------------
       TOTAL CURRENT ASSETS                                                          2,626,331           3,585,756
                                                                                  ------------        ------------
REAL ESTATE HELD FOR INVESTMENT, NET                                                   438,187             308,799
EQUIPMENT, FURNITURE AND FIXTURES, NET                                                 237,851             207,194
EXCESS OF COST OVER NET BOOK VALUE OF SUBSIDIARIES,
   NET (Note 2)                                                                        765,665             735,368
OTHER ASSETS                                                                           205,076             126,675
                                                                                 -------------       -------------
                                                                                     1,646,779           1,378,036
                                                                                  ------------        ------------

       TOTAL ASSETS                                                                $ 4,273,110         $ 4,963,792
                                                                                   ===========         ===========



                                       LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable                                                               $    134,544        $    610,242
   Accrued professional fees                                                            81,285             111,486
   Accrued payroll and other related costs                                              53,012              43,208
    Accrued other expenses                                                              40,388              15,381
   Current portion of capitalized lease obligation (Note 4)                             12,282                -
    Other current liabilities                                                           11,620              13,380
                                                                                --------------      --------------
       TOTAL CURRENT LIABILITIES                                                       333,131             793,697
                                                                                 -------------       -------------
CAPITALIZED LEASE OBLIGATION (Note 4)                                                   22,093                 -
                                                                                -------------- -----------------
CONTINGENCIES (Note 11)                                                                    -                   -
SHAREHOLDERS'  EQUITY (Notes 3, 5, 6, and 7) Common Stock,  $.01 par value Class
    A, 10,000,000 shares authorized;
      1,350,017 and 1,348,017 shares
      issued and outstanding                                                            13,501              13,481
    Class B, 20,000 shares authorized;
      20,000 shares issued and outstanding                                                 200                 200
    Additional paid-in capital                                                       6,236,077           6,232,347
    Retained earnings (deficit)                                                      (2,462,478)         (2,141,953)
   Unrealized gains on marketable securities                                           130,586              66,020
                                                                                 -------------      --------------
        TOTAL SHAREHOLDERS' EQUITY                                                   3,917,886           4,170,095
                                                                                  ------------        ------------

        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                 $ 4,273,110         $ 4,963,792
                                                                                   ===========         ===========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                       -14-

</TABLE>

<PAGE>



                             BULL & BEAR GROUP, INC.

                        CONSOLIDATED STATEMENTS OF INCOME

                            YEARS ENDED DECEMBER 31,

<TABLE>


                                                                         1996            1995               1994
                                                                         ----            ----               ----
REVENUES:
   Management, distribution and
      shareholder administration fees                                $4,922,945       $3,322,348        $3,786,066
<S>                                                                   <C>              <C>               <C>
   Brokerage commissions and fees                                     2,351,983        1,821,513         1,768,527
   Dividends, interest and other                                        142,084          147,169             (7,378)
                                                                   ------------     ------------     --------------
                                                                      7,417,012        5,291,030         5,547,215
                                                                    -----------      -----------       -----------

EXPENSES:
   General and administrative (Note 10)                               4,040,219        3,195,115         3,225,891
   Marketing                                                          1,821,297          779,026         1,361,155
   Clearing and brokerage charges                                       708,535          576,096           532,832
   Subadvisory fees                                                     705,248           22,496            37,728
   Professional fees                                                    296,874          431,934           170,284
   Amortization and depreciation                                        138,116           97,399            98,094
                                                                   ------------    -------------     -------------
                                                                      7,710,289        5,102,066         5,425,984
                                                                    -----------      -----------       -----------

Income (loss) before income taxes                                       (293,277)        188,964           121,231
Income taxes (Note 9)                                                    27,248           32,588            37,771
                                                                  -------------    -------------     -------------

NET INCOME (LOSS)                                                    $  (320,525)    $   156,376      $     83,460
                                                                     ===========     ===========      ============


PER SHARE DATA:
    Primary and fully diluted
      Net income                                                          $(.22)            $.10              $.05
                                                                          =====             ====              ====

AVERAGE SHARES OUTSTANDING:
   Primary                                                            1,463,279        1,549,815         1,610,443
                                                                      =========        =========         =========

   Fully diluted                                                      1,469,354        1,551,564         1,610,658
                                                                      =========        =========         =========





</TABLE>














SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                       -15-


<PAGE>



                             BULL & BEAR GROUP, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994



<TABLE>

                             NUMBER OF SHARES                                AMOUNT
                                                                                     NOTES
                                                                                   RECEIVABLE
                                                                                   FOR                     UNREALIZED
                                                                       ADDITIONAL  COMMON        RETAINED   GAINS ON       TOTAL
                                    CLASS A  CLASS B  CLASS A  CLASS B PAID-IN      STOCK       EARNINGS   MARKETABLE  SHAREHOLDERS'
                                    COMMON   COMMON   COMMON   COMMON  CAPITAL      ISSUED      (DEFICIT)  SECURITIES     EQUITY
                                    ------   ------   ------   ------   -----------   ---------  ---------- -----------  ----------

<S>                                 <C>        <C>     <C>         <C>   <C>           <C>       <C>         <C>          <C>
BALANCE, DECEMBER 31, 1993        1,498,152  20,000  $14,982     $200  $6,491,596    $(325,000)$(2,381,789)$     -      $3,799,989

Issuance of Class A common stock
   on exercise of stock options       5,000     -         50      -         6,200         -           -          -            6,250
Collection of note receivable           -       -         -       -           -        20,000         -          -           20,000
Net income                              -       -         -       -           -           -         83,460       -           83,460
                                 ---------- ----------------- --------------------- -------------- ---------- ----------------------
BALANCE, DECEMBER 31, 1994        1,503,152  20,000   15,032      200   6,497,796     (305,000) (2,298,329)      -        3,909,699

Voiding of 1993 exercise of stock
   options and cancellation of
   notes receivable (Note 7)        (280,000)   -      (2,800)    -       (297,200)   300,000         -          -              -
Issuance of Class A common stock
   on exercise of stock options     274,020     -      2,740      -       291,280         -           -          -          294,020
Received in exchange for exercise
   of stock options                 (149,155)   -      (1,491)    -       (259,529)       -           -          -          261,020)
Collection of note receivable           -       -        -        -           -         5,000         -          -            5,000
Net income                              -       -        -        -           -           -       156,376        -          156,376
Unrealized gains on marketable
   securities                           -       -         -       -              -        -           -         66,020       66,020
                                 ---------- ----------------- --------------------- -------------- --------- ----------- -----------
BALANCE, DECEMBER 31, 1995        1,348,017  20,000   13,481      200   6,232,347         -    (2,141,953)      66,020    4,170,095


Issuance of Class A common stock
   on exercise of stock options       2,000     -         20      -         3,730         -           -          -            3,750
Net loss                                -       -        -        -           -           -       (320,525)      -         (320,525)
Unrealized gains on marketable
   securities                           -       -        -       -          -            -           -         64,566         64,566
                                 ---------- ----------------- --------------------- -------------- ----------- ---------- ----------

BALANCE, DECEMBER 31, 1996        1,350,017  20,000  $13,501     $200  $6,236,077 $       -    $(2,462,478)   $130,586    $3,917,886
                                  =========  ======  =======     ====  ========== ========================    ========    ==========

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.






<PAGE>

































































                                                       -16-


<PAGE>



                             BULL & BEAR GROUP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            YEARS ENDED DECEMBER 31,

<TABLE>


                                                                         1996               1995              1994
                                                                        ----               ----              ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                   <C>            <C>             <C>
   NET INCOME (LOSS)                                                  $  (320,525)   $    156,376    $      83,460
                                                                      -----------    ------------    -------------
   ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
      TO NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES:
      Depreciation and amortization                                      138,116           97,399           98,094
      Increase in cash value of life insurance                            (30,000)         (30,000)         (16,675)
      Realized/unrealized (gain) loss on investments                      (32,725)         (26,048)         97,774
      (Increase) decrease in:
         Management, distribution and shareholder
            administration fees receivable                                (28,735)         (18,642)         62,628
         Interest, dividends and other receivables                        43,557           (32,387)         (12,556)
         Prepaid expenses and other current assets                       143,858          (199,301)          (6,571)
         Other assets                                                     (48,401)         12,802            4,668
      Increase (decrease) in:
         Accounts payable                                                (475,698)        412,719          (151,530)
         Accrued expenses                                                  4,610           51,156           (64,095)
         Other current liabilities                                         (1,760)            (720)            (802)
                                                                   -------------- ---------------- ----------------
   TOTAL ADJUSTMENTS                                                     (287,178)        266,978           10,935
                                                                     ------------   -------------   --------------
      NET CASH PROVIDED BY (USED IN)
         OPERATING ACTIVITIES                                            (607,703)        423,354           94,395
                                                                     ------------   -------------   --------------
</TABLE>




























                                                       -17-


<PAGE>



                             BULL & BEAR GROUP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Continued)

                            YEARS ENDED DECEMBER 31,

<TABLE>


                                                                         1996               1995              1994
                                                                         ----               ----              ----
CASH FLOWS FROM INVESTING ACTIVITIES:
<S>                                                                   <C>           <C>                <C>
   Improvement to real estate held for investment                     $  (204,642)  $       (2,105)    $   (235,087)
   Capital expenditures                                                  (100,799)         (58,744)         (37,076)
   Proceeds from sale of Properties                                        43,763              -                -
   Proceeds from sales of investments                                     963,318          414,790        2,671,623
   Purchases of investments                                              (785,512)      (1,396,250)      (1,281,644)
   Acquisition of intangible assets                                       (66,780)        (267,411)                -
                                                                    -------------    ------------- -----------------
      NET CASH PROVIDED BY (USED IN)
         INVESTING ACTIVITIES                                            (150,652)      (1,309,720)      1,117,816
                                                                     ------------     ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Collection of note receivable                                             -              5,000           20,000
   Issuance of notes receivable                                              -                -            (80,000)
   Increase in capitalized lease obligation                               46,416              -                -
   Repayments of capitalized lease obligation                            (12,041)             -                -
   Proceeds from issuance of
      Class A Common Stock                                                 3,750           33,000            6,250
   Redemption of Minority Interest                                           -                -           (364,480)
                                                              ------------------ -------------------  -------------
      NET CASH PROVIDED BY (USED IN)
         FINANCING ACTIVITIES                                             38,125           38,000         (418,230)
                                                                   -------------   --------------     -------------

      NET INCREASE (DECREASE) IN
         CASH AND CASH EQUIVALENTS                                      (720,230)        (848,366)         793,981

CASH AND CASH EQUIVALENTS:
   Beginning of year                                                   1,467,674        2,316,040        1,522,059
                                                                     -----------     ------------     ------------

   END OF YEAR                                                       $   747,444      $ 1,467,674      $ 2,316,040
                                                                     ===========      ===========      ===========
</TABLE>


SUPPLEMENTAL DISCLOSURE:

   The Company did not pay any Federal income taxes in 1996, 1995 or 1994.

   The Company paid $1,309 in interest in 1996 and no interest in 1995 or 1994.

   Common stock  received and retired in exchange for exercise of stock  options
   was $261,020 in 1995.










SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                                       -18-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1996, 1995 AND 1994



1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF BUSINESS
         Bull  &  Bear  Group,  Inc.  ("Company")  is  a  holding  company.  Its
         subsidiaries'  business  consists of providing  investment  management,
         distribution  and  shareholder  administration  services for the Bull &
         Bear  Funds,  Midas  Fund and  Rockwood  Fund  ("Funds")  and  discount
         brokerage services.

         BASIS OF PRESENTATION
         The consolidated  financial  statements  include the accounts of Bull &
         Bear  Group,  Inc.  and  all of  its  subsidiaries.  Substantially  all
         intercompany accounts and transactions have been eliminated.

         ACCOUNTING ESTIMATES
         In preparing financial statements in conformity with generally accepted
         accounting principles,  management makes estimates and assumptions that
         affect the reported  amounts of assets and  liabilities  at the date of
         the financial  statements,  as well as the reported amounts of revenues
         and expenses  during the reported  period.  Actual results could differ
         from those estimates.

         FAIR VALUE OF FINANCIAL INSTRUMENTS
         The carrying amounts of cash and cash equivalents, accounts receivable,
         accounts   payable,   and  accrued   expenses  and  other   liabilities
         approximate  fair value  because of the short  maturity of these items.
         Marketable securities are recorded at market value which represents the
         fair value of the securities.

         CASH AND CASH EQUIVALENTS
         Investments   in  money  market  funds  are   considered   to  be  cash
         equivalents.   At  December   31,  1996  and  1995,   the  Company  and
         subsidiaries  had  invested   approximately  $657,500  and  $1,196,300,
         respectively, in an affiliated money market fund.

         MARKETABLE SECURITIES
         The  Company  and  its   non-broker/dealer   subsidiaries'   marketable
         securities  are considered to be  "available-for-sale"  and recorded at
         market   value,   with  the   unrealized   gain  or  loss  included  in
         stockholders'  equity.  Marketable  securities  for  the  broker/dealer
         subsidiaries  are  valued at market  with  unrealized  gains and losses
         included in earnings.

         FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
         In the normal  course of business,  the Company's  customer  activities
         involve the execution and  settlement of customer  transactions.  These
         activities  may  expose  the  Company  to risk of loss in the event the
         customer is unable to fulfill its contracted obligations, in which case
         the  Company  may have to purchase  or sell  financial  instruments  at
         prevailing  market  prices.  Any loss  from  such  transactions  is not
         expected  to  have  a  material  effect  on  the  Company's   financial
         statements.




                                                       -19-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



         BROKERAGE INCOME AND EXPENSES
         Brokerage commission and fee income and clearing and brokerage expenses
         are  recorded  on a  settlement  date  basis.  The  difference  between
         recording  such  income  and  expenses  on a  settlement  date basis as
         opposed to trade date,  as required by  generally  accepted  accounting
         principles, is not material to the consolidated financial statements.

         INCOME TAXES
         The Company and its wholly-owned  subsidiaries file consolidated income
         tax  returns.  The  Company's  method of  accounting  for income  taxes
         conforms  to  Statement  of  Financial  Accounting  Standards  No.  109
         "Accounting  for Income Taxes." This method requires the recognition of
         deferred  tax  assets  and  liabilities  for the  expected  future  tax
         consequences of temporary  differences  between the financial reporting
         basis and the tax basis of assets and liabilities.

         REAL ESTATE HELD FOR INVESTMENT AND EQUIPMENT
         Real estate held for  investment is recorded at cost and is depreciated
         on the straight-line  basis over its estimated useful life. At December
         31, 1996 and 1995,  accumulated  depreciation amounted to approximately
         $27,400 and $123,100,  respectively.  Equipment, furniture and fixtures
         are recorded at cost and are  depreciated  on the  straight-line  basis
         over their estimated  useful lives, 3 to 10 years. At December 31, 1996
         and 1995,  accumulated  depreciation amounted to approximately $749,300
         and $680,000, respectively.

         EXCESS OF COST OVER NET BOOK VALUE OF SUBSIDIARIES
         The excess of cost over net book value of  subsidiaries  is capitalized
         and  amortized  over  fifteen and forty  years using the  straight-line
         method.  At  December  31,  1996  and  1995,  accumulated  amortization
         amounted  to   approximately   $585,100  and  $548,700,   respectively.
         Periodically,  the Company reviews its intangible  assets for events or
         changes in circumstances that may indicate that the carrying amounts of
         the assets are not recoverable.

         EARNINGS PER SHARE
         Primary  and fully  diluted  earnings  per  share  for the years  ended
         December 31, 1996,  1995 and 1994 are determined by dividing net income
         by the  weighted  average  number of common  shares  outstanding  after
         giving effect for common stock  equivalents  arising from stock options
         assumed converted to common stock.

         RECLASSIFICATIONS
         Certain  reclassifications  of the 1995 and 1994  financial  statements
         have been made to conform to the 1996 presentation.








                                                       -20-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



2.    ACQUISITION

      During  the year  ended  December  31,  1996,  the  Company  acquired  the
      management of Rockwood Fund for approximately  $31,300.  This purchase was
      capitalized  as part of excess  of cost  over net book  value and is being
      amortized over 15 years using the straight-line method.

      During the year ended December 31, 1995, the Company  purchased the assets
      relating to the management of Midas Fund, Inc. for $182,500,  plus related
      costs  of  approximately   $84,900.  In  addition,  the  Company  expended
      approximately  $35,500 in  connection  with this  purchase  in 1996.  This
      purchase was capitalized as part of excess of cost over net book value and
      is being amortized over 15 years using the straight-line method.


3.    MARKETABLE SECURITIES
<TABLE>

      At December 31, 1996, marketable securities consisted of:
         Broker/dealer securities - at market
<S>                                                                               <C>
            U.S. Treasury Notes, due 5/15/97 - 6/30/99 (cost $956,925)       $   961,000
                                                                             -----------
         Other companies
            Available-for-sale securities - at market
               Unaffiliated mutual funds                                          37,251
               Affiliated mutual funds                                             7,662
               Equity securities                                                 170,634
                                                                            ------------
               Total available-for-sale securities (cost - $84,961)              215,547
                                                                            ------------
                                                                              $1,176,547

      At December 31, 1995, marketable securities consisted of:
         Broker/dealer securities - at market
            U.S. Treasury Note, due 7/31/97                                  $   200,876
            Affiliated mutual funds                                               62,494
                                                                            ------------
               Total broker/dealer securities (cost - $264,104)                  263,370
                                                                            ------------
         Other companies
            Available-for-sale securities - at market
               Unaffiliated mutual funds                                          29,024
               Affiliated mutual funds                                             6,220
               Equity securities                                                 181,413
               U.S. Treasury Notes, due 5/15/97 - 6/30/99                        777,035
                                                                            ------------
               Total available-for-sale securities (cost - $927,672)             993,692
                                                                            ------------
                                                                              $1,257,062

</TABLE>

      At December  31, 1996 and 1995,  the Company  had  $130,586  and  $66,020,
      respectively, of unrealized gains on "available-for-sale securities" which
      is reported as a separate component of consolidated shareholders' equity.




                                                       -21-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



4.    LEASE COMMITMENTS

      The Company  has a lease for  approximately  11,400  square feet of office
      space. The rent is approximately $144,000 per annum plus $32,550 per annum
      for electricity.  The lease expires December 31, 1998 and is cancelable at
      the option of the  Company  on three  months'  notice.  In  addition,  the
      Company's  discount  broker/dealer  has a  branch  office  in Boca  Raton,
      Florida  consisting  of  approximately  1,000  square  feet.  The  rent is
      approximately  $22,200  per annum and is  cancelable  at the option of the
      Company on six months' notice.

      The Company leases office equipment under capital leases expiring in 1999.
      The related  property is included in furniture  and equipment at a cost of
      $45,457 at December  31,  1996.  Depreciation  expense of $13,889 has been
      recognized on this property as of December 31, 1996. Future annual minimum
      lease payments under the capital leases together with the present value of
      the net minimum lease payments are as follows:

         YEAR ENDING DECEMBER 31,
            1997                                                      $13,201
            1998                                                       15,173
            1999                                                        7,586
                                                                    ---------
            Total minimum lease payments                               35,960
            Less amount representing interest and executory costs       1,585
                                                                    ---------
            Present value of minimum lease payments                   $34,375
                                                                      =======


5.    SHAREHOLDERS' EQUITY

      The Class A and Class B Common Stock are identical in all respects  except
      for voting  rights,  which are vested  solely in the Class B Common Stock.
      The Company also has 1,000,000 shares of Preferred Stock,  $.01 par value,
      authorized.  As of December 31, 1996 and 1995, none of the Preferred Stock
      was issued.


6.    NET CAPITAL REQUIREMENTS

      The Company's broker/dealer  subsidiaries are member firms of the National
      Association  of  Securities  Dealers,  Inc.  and are  registered  with the
      Securities and Exchange  Commission as  broker/dealers.  Under the Uniform
      Net Capital Rule (Rule 15c3-1 under the Securities  Exchange Act of 1934),
      a broker/dealer must maintain minimum net capital, as defined, of not less
      than (a) $250,000 or, when engaged solely in the sale of redeemable shares
      of registered  investment  companies,  $25,000, or (b) 6-2/3% of aggregate
      indebtedness,  whichever is greater; and a ratio of aggregate indebtedness
      to net  capital,  as defined,  of not more than 15 to 1. At  December  31,
      1996, these  subsidiaries  had net capital of  approximately  $566,900 and
      $605,800;  net capital  requirements  of $250,000 and $25,000;  excess net
      capital  of  approximately  $316,900  and  $580,800;  and  the  ratios  of
      aggregate  indebtedness to net capital were approximately .30 to 1 and .48
      to 1, respectively.






                                                       -22-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1995, 1994 AND 1993



7.    STOCK OPTIONS

      On December 6, 1995, the Company adopted a Long-Term  Incentive Plan which
      provides  for the  granting  of a maximum of 300,000  options to  purchase
      Class A Common  Stock to  directors,  officers  and key  employees  of the
      Company or its  subsidiaries.  The plan was  amended on  February 5, 1996.
      With respect to  non-employee  directors,  only automatic  grants of stock
      options of 10,000 are available on the date the  non-employee  director is
      elected,  except  for the  current  two  non-employee  directors  who were
      granted  10,000  options  each on December 6, 1995.  The option  price per
      share may not be less than the fair  value of such  shares on the date the
      option is granted,  and the  maximum  term of an option may not exceed ten
      years except as to  non-employee  directors  for which the maximum term is
      five years. If the recipient of any option owns 10% or more of the Class B
      shares,  the option  price must be at least 110% of the fair market  value
      and the option must be exercised  within five years of the date the option
      is  granted.   The  plan  also  provides  for  reload   options  in  which
      non-qualified  options may be granted to officers and key  employees  when
      payment of the option  price of the original  outstanding  options is with
      previously  owned shares of the Company.  These reload  options have to be
      equal to the number of shares  surrendered  in payment of the option price
      of the  original  options,  have an option  price equal to the fair market
      value of such shares on the date the reload  option is  granted,  and have
      the same expiration date as the original option.

      The 1990  Incentive  Stock  Option  Plan  provided  for the  granting of a
      maximum of 500,000  options to purchase Class A Common Stock to directors,
      officers and key employees of the Company.  The option price per share may
      not be less than the greater of 100% of the fair  market  value or the par
      value of such  shares on the date the option is  granted,  and the maximum
      term of an option may not exceed ten years. If the recipient of any option
      owns 10% or more of the total  combined  voting  power of all  classes  of
      stock, the option price must be at least 110% of the fair market value and
      the option must be  exercised  within five years of the date the option is
      granted.

      The  Company  applied  APB  Opinion  25  and  related  interpretations  in
      accounting for its stock option plans.  Accordingly,  no compensation cost
      has been recognized for its stock option plans. Proforma compensation cost
      for the Company's plans is required by Financial  Accounting Standards No.
      123  "Accounting  for  Stock-Based  Compensation  (SFAS 123)" and has been
      determined  based on the fair value at the grant  dates for  awards  under
      these  plans  consistent  with the  method of SFAS 123.  For  purposes  of
      proforma disclosure,  the estimated fair value of the options is amortized
      to expense  over the  options'  vesting  period.  The  Company's  proforma
      information follows:
                                                YEARS ENDED DECEMBER 31,
                                                    1996             1995
                                                   ----             ----
Net income (loss):                  As reported   $(320,525)       $156,376
                                   Proforma       $(463,738)       $149,218
Earnings per share
   Primary and fully diluted:       As reported      $(.22)            $.10
                                   Proforma          $(.32)            $.10

      The fair  value of each  option  grant is  estimated  on the date of grant
      using the Black-Scholes  option-pricing  model with the following weighted
      average  assumptions  used  for  grants  in 1996 and  1995,  respectively:
      expected volatility of 93.82% and 95.90%, risk-free interest rate of 5.30%
      and 5.90% and expected life of five years for all grants.


                                                       -23-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



      A summary of the status of the Company's stock option plans as of December
      31, 1996 and 1995,  and changes  during the years ending on those dates is
      presented below:

                                                                        WEIGHTED
                                                              NUMBER    AVERAGE
                                                              OF        EXERCISE
      STOCK OPTIONS                                          SHARES       PRICE

      OUTSTANDING AT DECEMBER 31, 1994                        146,000     $1.12
         Voided exercise of previously issued stock options
            (see below)                                       280,000     $1.07
         Granted                                               29,000     $1.91
         Exercised                                           (268,020)    $1.07
         Canceled                                            (137,980)    $1.05
                                                             --------
      OUTSTANDING AT DECEMBER 31, 1995                         49,000     $1.76
         Granted                                              229,000     $1.95
         Exercised                                             (2,000)    $1.88
         Canceled                                             (27,000)    $1.91
                                                            ---------
      OUTSTANDING AT DECEMBER 31, 1996                        249,000     $1.92
                                                             ========

      There were no options  exercisable  at  December  31,  1996 and 1995.  The
      weighted-average  fair value of options  granted  were $1.42 and $1.45 for
      the years ended December 31, 1996 and 1995, respectively.

      The following table summarizes information about stock options outstanding
      at December 31, 1996:

                               OPTIONS OUTSTANDING
                                      WEIGHTED-AVERAGE
           RANGE OF          NUMBER       REMAINING      WEIGHTED-AVERAGE
      EXERCISE PRICES      OUTSTANDING CONTRACTUAL LIFE  EXERCISE PRICE

      $1.50   - $1.625       20,000        3.2 years         $1.54
      $1.875 - $2.75        229,000        4.1 years         $1.95

      In  addition,  there  were  20,000  non-qualified  stock  options  with an
      exercise price of $1.75 outstanding as of December 31, 1996.

      The  Company's  Board of Directors  determined,  at a meeting of the board
      held on November 6, 1995, that the 1993 exercise of the 280,000  incentive
      stock options by certain officers be voided and the 4.86% promissory notes
      given in  consideration  ("1993 Notes") and Class A shares issued therefor
      ("1993 Shares") be canceled.  As a result, the stock options were restored
      to their  previous  outstanding  status.  Further,  on  November  6, 1995,
      241,020 of these  stock  options  were  exercised.  In December  1995,  an
      additional  7,000 of these  stock  options  were  exercised.  The  Company
      received  $7,000 in cash and  149,155  shares of Class A shares in payment
      for the exercise of these options. The shares acquired by the Company were
      canceled and retired.  The  cancellation  of the 1993 Notes  resulted in a
      reduction of interest income of $29,768 in 1995.




                                                       -24-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



8.    PENSION PLAN

      The  Company has a 401(k)  retirement  plan for  substantially  all of its
      qualified employees.  Contributions to this are based upon a percentage of
      earnings  of  eligible  employees  and are accrued and funded on a current
      basis.  Total pension  expense for the years ended December 31, 1996, 1995
      and 1994 was approximately $39,900, $31,100 and $27,500, respectively.


9.    INCOME TAXES

      The provision for income taxes charged to operations was as follows:

                                        1996          1995           1994
                                        ----          ----           ----
         Current
            State and local               $27,248       $32,588        $37,771
            Federal                           -             -              -
                                    ------------- -------------  -----------
                                          $27,248       $32,588        $37,771
                                          =======       =======        =======

      Deferred  tax assets  (liabilities)  are  comprised  of the  following  at
      December 31, 1996 and 1995:
                                                          1996           1995
                                                          ----           ----

         Unrealized appreciation on investments     $  (45,800)    $  (29,400)
         Net operating loss carryforwards             509,500        436,600
                                                   ----------     ----------
             Net deferred tax assets                  463,700        407,200
         Deferred tax asset valuation allowance       (463,700)      (407,200)
                                                    ----------     ----------
             Net deferred tax assets             $        -      $       -
                                                 ================ ============

      The full  amount  of the  deferred  tax asset  was  offset by a  valuation
      allowance due to uncertainties associated with the ultimate realization of
      the  net  operating  loss  carryforwards.  The  change  in  the  valuation
      allowance  for the year ended  December 31, 1996 was the result of the net
      operating   loss  for  the  year  and  the  increase  in  the   unrealized
      appreciation on investments.

      For the year ended  December  31,  1996,  the  provision  for income taxes
      differs  from the  amount of  income  taxes  determined  by  applying  the
      applicable U.S.  statutory federal tax rates to pre-tax income as a result
      of utilization of net operating loss carryforwards.

      At December 31, 1996, the Company had net operating loss carryforwards for
      Federal  income  tax  purposes  of  approximately   $1,498,600,  of  which
      $1,033,100,  $187,800, $62,700 and $215,000 expire in 2004, 2005, 2006 and
      2011, respectively.









                                                       -25-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



10.   RELATED PARTIES

         MANAGEMENT, DISTRIBUTION AND SHAREHOLDER ADMINISTRATION FEES
         All management and distribution fees are from providing services to the
         Funds.  All such services are provided  pursuant to agreements that set
         forth the fees to be charged for these services.  These  agreements are
         subject to annual review and approval by each Fund's Board of Directors
         and a majority  of the  Fund's  non-interested  directors.  Shareholder
         administration  fees  represent  reimbursement  of  costs  incurred  by
         subsidiaries  of the  Company  on behalf of the  open-end  Funds.  Such
         reimbursement amounted to approximately $249,700, $363,200 and $466,800
         for the years ended December 31, 1996, 1995 and 1994, respectively.

         In  connection  with  investment  management  services,  the  Company's
         investment managers waived management fees from the Funds in the amount
         of  approximately  $535,900,  $270,200 and $256,900 for the years ended
         December 31,  1996,  1995 and 1994,  respectively,  and are included in
         general and administrative expenses in the Statement of Income.

     Certain  officers of the Company also serve as officers and/or directors of
the Funds.

         Commencing August 1992, the Company has a key man life insurance policy
         on the life of the Company's Chairman which provides for the payment of
         $1,000,000 to the Company upon his death.  As of December 31, 1996, the
         policy  had a cash  surrender  value of  approximately  $76,700  and is
         included in other assets in the balance sheet.

         The Company's discount  broker/dealer received brokerage commissions of
         approximately  $179,500,  $153,200 and $108,100  from the Funds for the
         years ended December 31, 1996, 1995 and 1994, respectively.


11.   CONTINGENCIES

      The Company and its directors are defendants in a lawsuit brought on April
      24, 1995 by Maxus Investment Group,  Maxus Capital  Partners,  Maxus Asset
      Management, Inc., and Maxus Securities Corp. (collectively "Maxus"), which
      now claim to collectively own or control 144,000 shares,  or approximately
      10.7% of the Class A Common  stock of the  Company.  The  action,  seeking
      declaratory and injunctive relief, was filed in the federal district court
      for the  Southern  District of New York and  purports to be brought on the
      plaintiffs' own behalf and derivatively on behalf of the Company. On April
      11,  1996,  the  district  court  dismissed  as a matter of law all claims
      brought by the  plaintiffs  except  those  relating to the voiding of 1993
      exercises,  the  exercise of certain  1990 stock  options and  plaintiffs'
      request for attorneys' fees from the Company.  Defendants thereafter filed
      answers  denying  liability.  The  Company  believes  that the  lawsuit is
      without  merit and  intends to continue  defending  the  remaining  claims
      vigorously.








                                                       -26-


<PAGE>



                             BULL & BEAR GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

                        DECEMBER 31, 1996, 1995 AND 1994



      From time to time, the Company and/or its  subsidiaries  are threatened or
      named  as  defendants  in  litigation  arising  in the  normal  course  of
      business.  As of  December  31,  1996,  neither the Company nor any of its
      subsidiaries  was involved in any other litigation that, in the opinion of
      management,  would  have a  material  adverse  impact on the  consolidated
      financial statements.

      In  July  1994,  the  Company  entered  into  a  Death  Benefit  Agreement
      ("Agreement")  with the  Company's  Chairman.  Following  his  death,  the
      Agreement  provides for annual payments equal to 80% of his average annual
      salary for the three  year  period  prior to his death  subject to certain
      adjustments to his wife until her death. The Company's  obligations  under
      the  Agreement  are not  secured  and  will  terminate  if he  leaves  the
      Company's employ under certain conditions.









































                                                       -27-


<PAGE>






                  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)



                               THREE MONTHS ENDED
                           MARCH 31,     JUNE 30,       SEPT. 30,    DEC. 31,
   1996
REVENUES                    $1,526,469    $2,054,758    $1,904,869   $1,930,916
                            ==========    ==========    ==========   ==========
INCOME (LOSS)
   Net Income (Loss)       $  (418,274)  $  (199,710)  $   134,673  $   162,786
                           ===========   ===========   ===========  ===========

INCOME (LOSS) PER SHARE
   Net Income (Loss)             $(.30)        $(.13)         $.09         $.12
                                 =====         =====          ====         ====


   1995
REVENUES                    $1,292,575    $1,323,620    $1,362,963   $1,311,872
                            ==========    ==========    ==========   ==========

INCOME (LOSS)
   Net Income (Loss)       $   113,764   $   115,490  $     50,894  $  (123,772)
                           ===========   ===========  ============  ===========

INCOME (LOSS) PER SHARE
   Net Income (Loss)              $.07          $.07          $.03        $(.07)
                                  ====          ====          ====        =====


   1994
REVENUES                    $1,579,794    $1,375,965    $1,412,499   $1,178,957
                            ==========    ==========    ==========   ==========
INCOME (LOSS)
   Net Income (Loss)       $  (163,608) $    (12,946) $     93,642  $   166,372
                           ===========  ============  ============  ===========

INCOME (LOSS) PER SHARE
   Net Income (Loss)             $(.11)        $(.01)         $.06         $.11
                                 =====         =====          ====         ====


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

      There were no changes in or disagreements  with the Company's  accountants
on  accounting  and  financial  disclosure  matters  during the two years  ended
December 31, 1996.



















                                                       -28-


<PAGE>



                                                     PART III



ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS

      The  following  list  contains the names,  ages,  positions and lengths of
service of all directors and executive officers of the Company.

      NAME               POSITION                       YEARS OF SERVICE  AGE
                         DIRECTOR                       OFFICER

Bassett S. Winmill       Chairman of the Board           20    20         67

Robert D. Anderson       Vice Chairman of the Board,     20    20         67

Mark C. Winmill          Co-President,                    8    10         39
                         Chief Financial Officer,
                         Director

Thomas B. Winmill, Esq.  Co-President,                    8     9         37
                         General Counsel, Director

Edward G. Webb, Jr.      Director                        11*   -          57

Charles A. Carroll       Director                         5    -          66

Steven A. Landis         Senior Vice President           -      2         41

William J. Maynard       Secretary                       -      2         32

James R. Mitchell, II    Senior Vice President           -      3         35

Joseph Leung             Treasurer,                      -      2         31
                         Chief Accounting Officer

*  1985 TO 1990 AND 1992 TO PRESENT.

























                                                       -29-


<PAGE>






      Set  forth  below  is a  description  of the  business  experience  of the
directors and executive officers of the Company during the past five years.

     BASSETT  S.  WINMILL  -  Chairman  of the  Board of  Directors.  He is also
Chairman of the investment  companies managed by Company  subsidiaries.  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.

      ROBERT D. ANDERSON - Vice  Chairman of the Board of Directors.  He is also
Vice Chairman of the investment companies managed by Company subsidiaries and of
the subsidiaries of the Company. He is a member of the Board of Governors of the
Mutual Fund Educational Alliance.

     MARK C. WINMILL - Co-President, Chief Financial Officer and Director. He is
also  President  of Bull & Bear  Securities,  Inc.  and  Co-President  and Chief
Financial Officer of the investment  companies  managed by Company  subsidiaries
and certain other subsidiaries of the Company. He is a son of Bassett S. Winmill
and a brother of Thomas B. Winmill.

     THOMAS B. WINMILL, ESQ. - Co-President, General Counsel and Director. He is
also President of Bull & Bear Advisers,  Inc. and Co-President of the investment
companies managed by Company  subsidiaries and certain other subsidiaries of the
Company.  He is a member of the New York  State  Bar.  He is a son of Bassett S.
Winmill and a brother of Mark C. Winmill.

     EDWARD G. WEBB, JR. - Director.  He has been President of Webb  Associates,
Ltd since 1996. From 1990 to 1996, he was Investment Director for Home Insurance
Company. Prior to that, he served as a Senior Vice President and Director of the
Company.

     CHARLES  A.  CARROLL  -  Director.  From 1989 to the  present,  he has been
affiliated  with Kalin  Associates,  Inc.,  a member  firm of the New York Stock
Exchange.  STEVEN A.  LANDIS - Senior  Vice  President.  He is also  Senior Vice
President

of the mutual funds  managed by Company  subsidiaries.  From 1993 to 1995 he was
Associate Director of Proprietary  Trading at Barclays De Zoete Wedd Securities,
Inc., from 1992 to 1993 he was Director,  Bond Arbitrage at WG Trading  Company,
and from 1989 to 1992 he was Vice President of Wilkinson Boyd Capital Markets.

      WILLIAM J. MAYNARD - Secretary. He is also Vice President and Secretary of
the mutual funds managed by Company subsidiaries. He is a member of the New York
State Bar.  From 1991 to 1994 he was  associated  with the law firm of  Skadden,
Arps, Slate, Meagher & Flom.

     JAMES R.  MITCHELL,  II - Senior  Vice  President.  He is also  Senior Vice
President of BBSI since 1994. From 1992 to 1994 he was Vice President of BBSI.

      JOSEPH LEUNG,  CPA - Treasurer and Chief  Accounting  Officer.  He is also
Treasurer  and Chief  Accounting  Officer of the mutual funds managed by Company
subsidiaries. From 1992 to 1995 he held various positions with Coopers & Lybrand
L.L.P.,  a  public  accounting  firm.  From  1991 to 1992 he was the  accounting
supervisor at Retirement Systems Group, a mutual fund company.

      Each director is elected by the vote or written consent of the holder of a
majority of the Class B Common  Stock and holds office until the next meeting of
the Class B common stockholder and until his successor is elected and qualified,
or until his earlier death, resignation or removal.




                                                       -30-


<PAGE>






      Based  solely on the  information  from Forms 3, 4, and 5 furnished to it,
the Company  believes that the directors,  officers,  and owners of more than 10
percent of the Class A Common  Stock of the Company have not failed to file on a
timely basis reports required by Section 16(a) of the Securities Exchange Act of
1934 during the most recent fiscal year or prior fiscal years.

      Based on  information  available to the  Company,  including a December 4,
1996 letter from its counsel,  Maxus (See Note 11) owns 144,000  shares or 10.7%
of the outstanding  Class A Common Stock of the Company.  Such entities have not
furnished the Company with any form under Section 16 of the Securities  Exchange
Act of 1934.


ITEM 11.     EXECUTIVE COMPENSATION

      The following  information and tables set forth the  information  required
under the Securities and Exchange Commission's executive compensation rules. Any
information  not presented is omitted  because the item is not applicable or not
required since the Company qualifies as a small business issuer.

    SUMMARY COMPENSATION TABLE

      The  following  table sets forth,  for the three years ended  December 31,
1996,  the  compensation  paid to the  chief  executive  officers  and the other
executive  officers  whose total annual  salary and bonus  exceeded  $100,000 in
1996.
<TABLE>

                                            SUMMARY COMPENSATION TABLE

                                                             ANNUAL COMPENSATION               ALL OTHER
     NAME AND                                     SALARY        BONUS      OTHER ANNUAL        COMPENSATION
PRINCIPAL POSITION                   YEAR           ($)             ($)    COMPENSATION*       (A)            (B)
------------------                   ----        --------        --------- -------------       ---            ---

<S>                                   <C>       <C>            <C>                             <C>          <C>
Bassett S. Winmill                    1996      $170,000       $28,333            -            $5,166       $4,750
    Chairman                          1995      $160,000       $10,000            -            $4,788       $4,620
                                      1994      $160,000      $  6,667            -            $3,790       $3,000

Robert D. Anderson                    1996     $  90,000       $15,000            -            $2,142       $3,211
    Vice Chairman                     1995     $  89,000      $  5,562            -            $2,104       $3,310
                                      1994     $  89,000      $  3,708            -            $2,104       $1,844

Mark C. Winmill                       1996      $110,000       $18,115            -           $   152       $3,997
    Co-President                      1995      $100,000      $  6,250            -           $   132       $3,462
                                      1994      $100,000      $  4,167            -           $   132       $2,083

Thomas B. Winmill                     1996      $110,000       $18,115            -           $   152       $4,066
    Co-President                      1995      $100,000      $  6,250            -           $   132       $3,678
                                      1994      $100,000      $  4,167            -           $   132       $2,083

Brett B. Sneed                        1996      $112,000       $18,667            -            $1,062       $4,220
    Senior Vice President             1995      $110,000       $15,125            -           $   662       $4,091
                                      1994      $110,000  $        -              -           $   662       $2,420

Steven A. Landis                      1996      $112,000       $18,667            -           $   241       $1,750
    Senior Vice President             1995     $  86,167      $  8,250            -           $   150   $      -
                                      1994$          -    $        -              -           $   -     $      -


</TABLE>







                                                       -31-


<PAGE>






 *    Information  omitted as perquisites do not exceed the lesser of $50,000 or
      10% of the  total  annual  salary  and  bonus  for the year for the  named
      executive officers.

(a)   Represents term life insurance

(b)   Represents Company's matching contributions to 401(k) Plan.

    OPTION GRANTS TABLE

      The  following  table sets forth,  for the year ended  December  31, 1996,
information  regarding  the options  granted to each of the  executive  officers
named in the Summary Compensation Table.

<TABLE>
                                                                                      POTENTIAL REALIZABLE VALUE AT
                                                                                          ASSUMED ANNUAL RATES OF
                                                                                       STOCK PRICE APPRECIATION FOR
                                     INDIVIDUAL GRANTS                                                    OPTION TERM
                               NUMBER OF    PERCENT OF
                             SECURITIES    TOTAL OPTIONS
                              UNDERLYING    GRANTED TO
                              OPTIONS       EMPLOYEES IN     EXERCISE   EXPIRATION
      NAME                    GRANTED      FISCAL YEAR       PRICE       DATE                5%           10%
      ----                  ----------------------------   -----------------------           --           ---

<S>                             <C>            <C>            <C>          <C>               <C>          <C>
Bassett S. Winmill              50,000         21.8           $2.0625      2/5/01          $16,525      $47,875
Mark C. Winmill                 50,000         21.8           $1.8750      2/5/01          $25,900      $57,250
Thomas B. Winmill               50,000         21.8           $1.8750      2/5/01          $25,900      $57,250
Robert D. Anderson              20,000          8.7           $1.8750      2/5/01          $10,360      $22,900
Brett B. Sneed                  20,000          8.7           $1.8750      2/5/01          $10,360      $22,900
Steven A. Landis                20,000          8.7           $1.8750      2/5/01          $10,360      $22,900
</TABLE>

      Of the above options,  205,000 are  exercisable on February 5, 1998,  with
the  remaining  5,000 options of Bassett S. Winmill  exercisable  on February 5,
1999.

    AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE

      The  following  table sets forth,  for the year ended  December  31, 1996,
information regarding the outstanding options for each of the executive officers
named in the Summary Compensation Table.
<TABLE>

                                                  NUMBER OF
                                                 SECURITIES            VALUE OF
                                                 UNDERLYING         UNEXERCISED
                  NUMBER OF                     UNEXERCISED        IN-THE-MONEY
                     SHARES                     OPTIONS AT           OPTIONS AT
                   ACQUIRED      DOLLAR        12-31-96 (#)        12-31-96 ($)
                     ON           VALUE        EXERCISABLE/        EXERCISABLE/
NAME               EXERCISE     REALIZED     UNEXERCISABLE        UNEXERCISABLE

<S>                                                                 <C>                 <C>
Bassett S. Winmill                 -             -                  0/50,000            0/$46,875
Mark C. Winmill                    -             -                  0/50,000            0/$56,250
Thomas B. Winmill                  -             -                  0/50,000            0/$56,250
Brett B. Sneed                     -             -                  0/20,000            0/$22,500
Robert D. Anderson                 -             -                  0/20,000            0/$22,500
Steven A. Landis                   -             -                  0/20,000            0/$22,500
</TABLE>

    LONG-TERM INCENTIVE PLAN AWARDS TABLE

      There were no long-term  incentive  plan awards made during the year ended
December 31, 1996.





                                                       -32-


<PAGE>






    COMPENSATION OF DIRECTORS

     Edward G. Webb,  Jr. and Charles A. Carroll were the only  individuals  who
received  compensation  for their  service as  directors of the Company in 1996.
They were each paid $500 per  quarter  as a retainer  and  $2,000 per  quarterly
meeting  attended plus expenses.  For the year ended December 31, 1996, Mr. Webb
and Mr.  Carroll were each paid $10,500 for  attending  all four  meetings and a
special  telephonic  meeting.  Mr. Webb and Mr.  Carroll  each also  received an
option to purchase 10,000 shares of Class A Common Stock at an exercise price of
$1.75 per share.

    EMPLOYMENT CONTRACTS

      The Company has no employment  or  termination  contracts  with any of its
employees.


    REPRICING OF OPTIONS TABLE

      There was no repricing of options during the year ended December 31, 1996.

    1995 LONG-TERM INCENTIVE PLAN

      On December 6, 1995,  the Board of Directors of the Company  ("Board") and
the Class B voting common  stockholder  adopted the Bull & Bear Group, Inc. 1995
Long-Term  Incentive Plan ("Plan"),  under which options and stock-based  awards
(collectively, "Awards") may be made to directors, officers and employees of the
Company or its  subsidiaries.  Under the Plan, only automatic Awards are made to
non-employee directors ("Non-Employee  Directors").  The Plan was amended by the
Board and the Class B voting common stockholder on February 5, 1996. The amended
Plan is described below.

      The purpose of the Plan is to assist the Company and its  subsidiaries  in
attracting and retaining highly  competent  officers and directors and otherwise
on behalf of the  Company.  The Plan also  acts as an  incentive  in  motivating
selected  officers and key  employees  to achieve  long-term  objectives  of the
Company, which will inure to the benefit of all stockholders of the Company. Any
proceeds  raised by the Company under the Plan will be used for working  capital
purposes.

    GENERAL PROVISIONS

      Duration of the Plan;  Share  Authorization.  The Plan will  terminate  on
December 6, 2005, unless terminated earlier by the Board.

      Three hundred  thousand  (300,000)  shares of the Company's Class A Common
Stock  ("Shares")  are  available  for Awards  under the Plan.  The Shares to be
offered under the Plan are authorized and unissued Shares, or issued Shares that
have been reacquired by the Company and held in its treasury.  Holders of Shares
do not have  voting  rights  except as  specifically  provided  by the  Delaware
General Corporation Law.

      Shares covered by any unexercised  portions of terminated options,  Shares
forfeited by  Participants,  and Shares subject to any Awards that are otherwise
surrendered by a Participant without receiving any payment or other benefit with
respect  thereto may again be subject to new Awards under the Plan. In the event
the purchase price of an option or tax withholding  relating to an Award is paid
in whole or in part  through  the  delivery  of  Shares,  the  number  of Shares
issuable  in  connection  with  the  exercise  of the  option  may not  again be
available for the grant of Awards under the Plan.






                                                       -33-


<PAGE>






      Plan  Administration.  The  Plan  is  administered  by  the  Stock  Option
Committee  ("Committee") of the Board. The Committee is composed of at least two
directors of the Company, each of whom is a "disinterested person" as defined in
Rule  16b-3  promulgated  by the SEC  ("Rule  16b-3")  under  Section  16 of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). The Committee will
determine  the  officers  and other key  employees  who will be eligible for and
granted  Awards,  determine the amount and type of Awards,  establish and modify
administrative   rules  relating  to  the  Plan,   impose  such  conditions  and
restrictions  on Awards as it determines  appropriate and take such other action
as may be necessary or advisable for the proper  administration of the Plan. The
Committee may, with respect to Participants who are not subject to Section 16 of
the Exchange Act, delegate such of its powers and authority under the Plan as it
deems appropriate to certain officers or employees of the Company.

      Plan  Participants.  Any  employee  of the  Company  or its  subsidiaries,
whether or not a director of the  Company,  may be selected by the  Committee to
receive an Award under the Plan.  Non-Employee  Directors only receive automatic
and  non-discretionary  stock  options and are not eligible to receive any other
Awards under the Plan.

    AWARDS AVAILABLE UNDER THE PLAN

      Awards to employees  under the Plan may take the form of stock  options or
Restricted  Share  Awards.  Awards  under  the Plan may be  granted  alone or in
combination  with  other  Awards.  The stock  options  awarded  to  Non-Employee
Directors are automatic and  non-discretionary  in operation.  The consideration
for issuance of Awards under the Plan is the continued services of the employees
and non-employee directors to the Company and its subsidiaries.

      Stock  Options  Granted to  Employees.  Stock  options  ("Incentive  Stock
Options")  meeting the  requirements of Section 422 of the Internal Revenue Code
of 1986, as amended from time to time, or any successor  thereto  ("Code"),  and
stock  options  that  do not  meet  such  requirements  ("Non-  Qualified  Stock
Options") are both available for grant to employees under the Plan.

      The term of each option will be determined by the Committee, but no option
will be exercisable  prior to six months from the date of grant or more than ten
years after the date of grant. If, however, an Incentive Stock Option is granted
to a Participant who, at the time of grant of the option,  owns (or is deemed to
own  under  Section   424(d)  of  the  Code)  more  than  10%  (a  "Ten  Percent
Shareholder")  of the Company's Class B common stock,  par value $0.01 per share
("Company  Voting  Securities"),  the option is not  exercisable  more than five
years after the date of grant.  Options may also be subject to  restrictions  on
exercise,  such as exercise in periodic  installments,  performance  targets and
waiting periods, as determined by the Committee.

      The exercise price of each option is determined by the Committee; however,
the per share  exercise price of an option must be at least equal to 100% of the
Fair  Market  Value (as  defined  below) of a Share on the date of grant of such
option.  If,  however,  an  Incentive  Stock  Option is granted to a Ten Percent
Shareholder,  the per share  exercise price of the option must be at least equal
to 110% of the Fair Market Value of a Share on the date of grant of such option.
Fair Market  Value of a Share  means,  as of any given date,  the most  recently
reported  sale  price of a Share on such date as of the time  when  Fair  Market
Value is being determined on the principal national securities exchange on which
the Shares are then  traded or, if the Shares are not then  traded on a national
securities exchange, the most recently reported sale price of the Shares on such
date as of the time  when  Fair  Market  Value is being  determined  on  Nasdaq;
provided,  however,  that, if there were no sales reported as of such date, Fair
Market Value is the last sale price previously reported. In the event the Shares
are not admitted to trade on a securities exchange or quoted on Nasdaq, the Fair
Market Value of a Share as of any given date is as  determined  in good faith by
the Committee.  Notwithstanding the foregoing,  the Fair Market Value of a Share
will never be less than par value per share.





                                                       -34-


<PAGE>






      Subject to whatever installment exercise and waiting period provisions the
Committee  may impose,  options may be exercised in whole or in part at any time
prior to  expiration of the option by giving  written  notice of exercise to the
Company  specifying  the number of Shares to be  purchased.  Such notice must be
accompanied  by  payment  in  full of the  purchase  price  in such  form as the
Committee may accept  (including  payment in accordance with a cashless exercise
program under which, if so instructed by the  Participant,  Shares may be issued
directly  to the  Participant's  broker or dealer upon  receipt of the  purchase
price in cash from the broker or dealer). If and to the extent determined by the
Committee in its sole  discretion at or after grant,  payment in full or in part
may also be made in the form of Shares  duly owned by the  Participant  (and for
which  the  Participant  has  good  title,  free  and  clear  of any  liens  and
encumbrances)  or by  reduction  in the  number  of  Shares  issuable  upon such
exercise based, in each case, on the Fair Market Value of the Shares on the date
the option is exercised.  In the case of an Incentive Stock Option, however, the
right  to make  payment  of the  purchase  price in the  form of  Shares  may be
authorized only at the time of grant.

      Stock options granted under the Plan are not  transferable  except by will
or the  laws of  descent  and  distribution  and may be  exercised,  during  the
Participant's lifetime, only by the Participant.

      Unless  the  Committee  provides  for a  shorter  period  of time,  upon a
Participant's  termination  of  employment  other  than by  reason  of  death or
disability,  the  Participant  may,  within  three  months from the date of such
termination  of  employment,  exercise  all or any part of his or her options as
were  exercisable  at the date of  termination of employment but only if (x) the
Participant resigns or retires and the Committee consents to such resignation or
retirement and (y) such termination of employment is not for cause. In no event,
however,  may any  option be  exercised  after the time when it would  otherwise
expire. If such termination of employment is for cause or the Committee does not
so  consent,  the  right of such  Participant  to  exercise  such  options  will
terminate at the date of termination of employment.

      Further,  unless the Committee provides for a shorter period of time, upon
a Participant's  becoming disabled (such date being the "Disability  Date"), the
Participant  may, within one year after the Disability  Date,  exercise all or a
part of his or her options that were  exercisable  upon such Disability Date. In
no event,  however,  may any  option be  exercised  after the time when it would
otherwise expire.

      Further,  unless the Committee  provides for a shorter  period of time, in
the event of the death of a Participant  while  employed by the Company or prior
to the expiration of the option as provided for in the event of  disability,  to
the extent all or any part of the option was exercisable as of the date of death
of the Participant,  the right of the Participant's  beneficiary to exercise the
option  will  expire  upon  the  expiration  of one  year  from  the date of the
Participant's  death (but in no event more than one year from the  Participant's
Disability Date) or on the stated  termination date of the option,  whichever is
earlier. In the event of the Participant's death, the Committee may, in its sole
discretion,  accelerate  the right to exercise all or any part of an Option that
would not otherwise be exercisable.

      To the extent all or any part of an option was not  exercisable  as of the
date of a Participant's termination of employment, such right will expire at the
date of such  termination of  employment.  Notwithstanding  the  foregoing,  the
Committee,  in its sole discretion and under such terms as it deems appropriate,
may permit a Participant who will continue to render significant services to the
Company after his or her termination of employment to continue to accrue service
with  respect to the right to exercise  his or her options  during the period in
which the individual continues to render such services.







                                                       -35-


<PAGE>






      Reload  Options.  The  Committee  may  provide,  at the  time of  grant of
Incentive Stock Options and at or after the time of grant of Non-Qualified Stock
Options,  that, if a Participant surrenders Shares in full or partial payment of
the purchase  price of an option,  then,  concurrent  with such  surrender,  the
Participant,  subject  to the  availability  of Shares  under the Plan,  will be
granted a new  Non-Qualified  Stock Option (a "Reload Option") covering a number
of Shares equal to the number so surrendered. No Reload Option may be granted to
a Non-Employee  Director.  A Reload Option may be granted in connection with the
exercise of an option that is itself a Reload  Option.  Each Reload  Option will
have the same  expiration  date as the original  option and a per share exercise
price  equal  to the  Fair  Market  Value of a Share on the date of grant of the
Reload  Option.  A Reload  Option  is  exercisable  at such time or times as the
Committee  determines  (except that no Reload Option is  exercisable  during the
first six months  after  grant)  and will be  subject  to such  other  terms and
conditions as the Committee may prescribe.

      Restricted Shares. The Committee may award restricted Shares  ("Restricted
Shares") to a Participant. Such a grant gives a Participant the right to receive
Shares  subject to a risk of  forfeiture  based  upon  certain  conditions.  The
forfeiture  restrictions on the Restricted  Shares may be based upon performance
standards,  length of service or other  criteria as the Committee may determine.
Until all  restrictions  are  satisfied,  lapsed or  waived,  the  Company  will
maintain control over the Restricted Shares but the Participant will be entitled
to receive  dividends on the  Restricted  Shares;  provided,  however,  that any
Shares  distributed  as a dividend or otherwise  with respect to any  Restricted
Shares as to which the  restrictions  have not yet lapsed will be subject to the
same  restrictions as such Restricted  Shares.  When all restrictions  have been
satisfied  and/or  waived  or have  lapsed,  the  Company  will  deliver  to the
Participant or, in the case of the Participant's  death, his or her beneficiary,
stock  certificates  for  the  appropriate   number  of  Shares,   free  of  all
restrictions (except those imposed by law). None of the Restricted Shares may be
assigned  or  transferred  (other  than  by  will or the  laws  of  descent  and
distribution),  pledged  or sold  prior to lapse or  release  of the  applicable
restrictions.

      All of a Participant's  Restricted Shares and rights thereto are forfeited
to the Company unless the Participant continues in the service of the Company or
any parent or subsidiary of the Company as an employee  until the  expiration of
the forfeiture period,  and all other applicable  restrictions of the Restricted
Shares.   Notwithstanding  the  foregoing,   the  Committee  may,  in  its  sole
discretion, waive the forfeiture period and any other applicable restrictions on
a Participant's  Restricted  Share Award,  provided that the Participant must at
that  time have  completed  at least  one year of  employment  after the date of
grant.

      Non-Employee  Director  Options.  The  Plan  provides  for the  grant of a
Non-Qualified Stock Option  ("Non-Employee  Director Option") to purchase 10,000
Shares to each Non-Employee  Director on the date said Non-Employee  Director is
elected as such for the first time. However, with respect to directors Edward G.
Webb, Jr. and Charles A. Carroll, they were each granted a Non-Employee Director
Option on December 6, 1995.  The per share exercise price for such Non- Employee
Director  Options  is the Fair  Market  Value  of a Share on the date of  grant.
Accordingly,  the per share  exercise  price of the  options  granted to Messrs.
Carroll and Webb was $1.75. All such options are Non-Qualified Stock Options and
have a five year term.  Each such option is fully  exercisable  six months after
the date of grant,  but is forfeited if the person  ceases to be a Non- Employee
Director within six months of the date of grant of such option.

      If a Non-Employee Director's service with the Company terminates by reason
of death or disability,  his or her options may be exercised for a period of one
year from the date of such  disability  or death or until the  expiration of the
option,  whichever is shorter.  If a  Non-Employee  Director's  service with the
Company  terminates  other  than by  reason of death or  disability,  his or her
options  may be  exercised  for a period of three  months  from the date of such
termination or until the expiration of the option, whichever is shorter.






                                                       -36-


<PAGE>






    TERMINATION AND AMENDMENT

      The  Board  may  amend or  terminate  the  Plan at any  time it is  deemed
necessary or  appropriate;  provided,  however,  that no amendment  may be made,
without the  affirmative  approval of the holder of Company  Voting  Securities,
that would  require  stockholder  approval  under Rule 16b-3,  the Code or other
applicable  law  unless the Board  determines  that  compliance  with Rule 16b-3
and/or the Code is no longer desired.

      Except as provided by the Committee,  in its sole discretion,  at the time
of an Award or pursuant to certain antidilution provisions (as discussed below),
no Award granted under the Plan to a  Participant  may be modified  (unless such
modification does not materially decrease the value of the Award) after the date
of grant  except by  express  written  agreement  between  the  Company  and the
Participant,  provided that any such change (a) may not be inconsistent with the
terms of the Plan, and (b) must be approved by the Committee.

      The Board has the right and the power to  terminate  the Plan at any time.
No Award may be granted under the Plan after the  termination  of the Plan,  but
the  termination  of the  Plan  will not have any  other  effect  and any  Award
outstanding at the time of the  termination  of the Plan may be exercised  after
termination of the Plan at any time prior to the  expiration  date of such Award
to the same  extent  such  Award  would have been  exercisable  had the Plan not
terminated.

    ANTIDILUTION PROVISIONS

      Recapitalization.  The  number and kind of shares  subject to  outstanding
Awards,  the purchase price or exercise price of such Awards, and the number and
kind of shares available for Awards subsequently  granted under the Plan will be
appropriately adjusted to reflect any stock dividend,  stock split,  combination
or exchange of shares,  merger,  consolidation or other change in capitalization
with a similar  substantive effect upon the Plan or the Awards granted under the
Plan.  The Committee  has the power and sole  discretion to determine the nature
and amount of the adjustment to be made in each case.  However, in no event will
any adjustment be made in accordance with the Plan's antidilution  provisions to
any previous  grant of Restricted  Shares if an  adjustment  has been or will be
made to the Shares  awarded to a  Participant  in such  person's  capacity  as a
stockholder.

      Sale or Reorganization. After any reorganization,  merger or consolidation
in which the Company is the  surviving  entity,  each  Participant  will,  at no
additional cost, be entitled upon the exercise of an Award  outstanding prior to
such  event,  and in  connection  with the payout  after such event of any Award
outstanding  at the time of such  event,  to receive  (subject  to any  required
action  by  stockholders),  in  lieu  of the  number  of  Shares  receivable  or
exercisable  pursuant to such option, the number and class of shares of stock or
other securities to which such Participant  would have been entitled pursuant to
the terms of the reorganization, merger or consolidation if, at the time of such
reorganization, merger or consolidation, such Participant had been the holder of
record of a number  of  Shares  equal to the  number  of  Shares  receivable  or
exercisable  pursuant  to such  Award.  Comparable  rights  will  accrue to each
Participant   in  the   event  of   successive   reorganizations,   mergers   or
consolidations of the character described above.

      Options to Purchase Stock of Acquired Companies. After any reorganization,
merger  or  consolidation  in which  the  Company  is a  surviving  entity,  the
Committee  may  grant  substituted  options  under the  provisions  of the Plan,
pursuant to Section 424 of the Code,  replacing old options granted under a plan
of another  party to the  reorganization,  merger or  consolidation  whose stock
subject to the old  options  may no longer be issued  following  such  merger or
consolidation.  The  foregoing  adjustments  and  manner of  application  of the
foregoing provisions will be determined by the Committee in its sole discretion.
Any such  adjustments may provide for the  elimination of any fractional  Shares
that might otherwise become subject to any options.





                                                       -37-


<PAGE>






    LOANS

      The Company is entitled,  if the Committee in its sole discretion deems it
necessary  or  desirable,  to lend money to a  Participant  for  purposes of (a)
exercising  his or her rights under an Award  hereunder or (b) paying any income
tax  liability  related  to  an  Award;  provided,  however,  that  Non-Employee
Directors are not eligible to receive such loans and provided, further, that the
portion of the per share  exercise price of an option equal to the par value per
Share  may  not be paid by  means  of a  promissory  note.  Such a loan  must be
evidenced  by a recourse  promissory  note  payable to the order of the  Company
executed by the  Participant  and containing  such other terms and conditions as
the  Committee  may deem  desirable.  The  interest  rate on such  loans must be
sufficient to avoid imputed interest under the Code.


ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      (a) Bassett S. Winmill,  Chairman of the Board of  Directors,  owns all of
the issued and outstanding  shares of the Company's Class B Common Stock,  which
represents 100% of the Company's voting securities.

      (b) The following table sets forth,  as of December 31, 1996,  information
relating  to  beneficial  ownership  by  individual  directors  of the  Company,
executive officers named in the Summary  Compensation Table and by directors and
executive  officers  of the  Company  as a group,  of the  currently  issued and
outstanding Class A Common Stock of the Company.

                                            AMOUNT AND NATURE OF        PERCENT
      NAME OF BENEFICIAL OWNER              BENEFICIAL OWNERSHIP (3)    OF CLASS
      ------------------------              ------------------------    --------

      Bassett S. Winmill                             223,104             16.5%
      Robert D. Anderson                              98,414              7.3%
      Thomas B. Winmill                                 79,870 (1)        5.9%
      Mark C. Winmill                                 30,800              2.3%
      Edward G. Webb, Jr.                              6,684               (2)
      Charles A. Carroll                              10,000               (2)
      Brett B. Sneed                                  20,000              1.5%
      All directors and executive officers
         as a group (11 persons)                     468,872             34.7%

         (1)    Includes  36,000 and 10,000  shares held by Thomas B.  Winmill's
                wife and sons,  respectively  of which he  disclaims  beneficial
                ownership.

         (2)    Less than 1%.

         (3)    The  nature  of the  beneficial  ownership  for all the  Class A
                Common Stock is investment power.











                                                       -38-


<PAGE>






      (c)  OTHER INFORMATION

      In June 1994,  the Board of Directors of the Company  rejected an offer of
$3.50 per share  contained  in a letter  dated May 17, 1994 to the Company  from
Maxus Investment  Group.  Maxus, of Pepper Pike, Ohio, which was part of a group
that  purportedly  at that  time  owned  26.5% of the  Company's  Class A stock,
offered $3.50 per share for the balance of the Class A stock outstanding subject
to due diligence and the agreement by the holder of the Class B voting stock, to
sell all his  Class B voting  stock.  The  holder  of the  Class B voting  stock
indicated to Maxus,  as he had on numerous  previous  occasions,  that he had no
intention  of  selling  his Class B voting  stock.  In July  1994,  the Board of
Directors of the Company  unanimously  determined  not to proceed with a revised
proposal of Maxus  Investment  Group to  liquidate  the  Company  and  guarantee
shareholders  no less than $5.00 per share, as reflected in Maxus' letters dated
June 17, 1994 and June 28, 1994.  The holder of the Class B voting stock advised
Maxus that he had no intention of selling his Class B stock or voting such stock
for any  proposal  or  transaction  involving  the  merger,  sale,  acquisition,
reorganization, dissolution, or any like extraordinary transaction involving the
Company (See also Note 11).


ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The following sets forth the reportable  items  regarding  indebtedness of
management  in excess of  $60,000.  In  connection  with the  exercise  of stock
options and related tax  expense,  the Company  received  notes with an interest
rate of 4.86% per annum  payable on the earlier of November 1, 1998 or within 60
days of termination of employment.

                                       LARGEST                     AMOUNT
                                       AMOUNT OF             OUTSTANDING AT
NAME AND RELATIONSHIP                  INDEBTEDNESS       DECEMBER 31, 1996

Bassett S. Winmill, Chairman            $83,888                  $80,000





























                                                       -39-


<PAGE>



                                                      PART IV



ITEM 14.     EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES, AND
             REPORTS ON FORM 8-K

    (a)        (1)   Financial Statements
                         See Item 8 for a list of the financial statements filed
as part of this report.

               (2)   Financial  Statement  Schedules by  Regulation  S-X are not
                     required   under   the   related    instructions   or   are
                     inapplicable, and therefore have been omitted.

               (3)   Exhibits
                         (2)  Not applicable
                         (3)  Certificate of  Incorporation  as amended  October
                              24,  1989 as filed as an  exhibit to Form 10-K for
                              the year ended December 31, 1992 and  incorporated
                              herein by  reference  and  By-Laws  amended  as of
                              October  1,  1993 as filed as an  exhibit  to Form
                              10-K  for the year  ended  December  31,  1993 and
                              incorporated herein by reference.
                         (4)  Instruments   defining   the  rights  of  security
                              holders, including indentures (see Article Four of
                              Certificate of Incorporation).
                         (9)  Not applicable.
                       (10)   Material Contracts

                              (a)   Investment      Management       Agreements,
                                    Distribution     Agreements,     Plans    of
                                    Distribution ("12b-1 Plans") and Shareholder
                                    Administration       Agreements      between
                                    subsidiaries  of the  Company  and the Funds
                                    and Non-Exclusive License Agreements between
                                    the Company and the Funds:

<TABLE>
                                                                                         SHAREHOLDER      NON-EXCLUSIVE
                                                     MANAGEMENT   DISTRIBUTION   12B-1   ADMINISTRATION        LICENSE
                FUND                                 AGREEMENT     AGREEMENT     PLAN       AGREEMENT          AGREEMENT

<S>                                                     <C>          <C>       <C>         <C>             <C>
(i)    Bull & Bear Dollar Reserves                      (2)          (2)       (2)         (5)             (7)
(ii)   Bull & Bear Gold Investors Ltd.                  (2)          (2)       (2)         (5)             (7)
(iii)  Bull & Bear Global Income Fund, Inc.             (7)           -         -           -              (7)
(iv)   Bull & Bear U.S. and Overseas Fund               (2)          (2)       (2)         (5)             (7)
(v)    Bull & Bear Special Equities Fund, Inc.          (2)          (2)       (2)         (5)             (7)
(vi)   Bull & Bear Municipal Income Fund, Inc.          (7)           -         -           -              (7)
(vii)  Bull & Bear U.S. Government Securities
           Fund, Inc.                                   (7)           -         -           -              (7)
(viii) Midas Fund, Inc.                                 (6)          (6)       (6)         (6)             (7)
(ix)   Rockwood Fund, Inc.                              (7)          (7)       (7)         (7)             (7)
</TABLE>

(1)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1991  and
     incorporated herein by reference.

(2)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1993  and
     incorporated herein by reference.

(3)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1989  and
     incorporated herein by reference.

(4)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1990  and
     incorporated herein by reference.

(5)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1994  and
     incorporated herein by reference.



                   -40-


<PAGE>






(6)  Filed as  exhibits to Form 10-K for the
     year  ended   December   31,  1995  and
     incorporated herein by reference.

(7)  Filed as  exhibits to Form 10-K for the
     year ended  December 31, 1996 and filed
     herewith.

 (b)   Bull  &  Bear  Group,  Inc.  1995  Long-Term
       Incentive Plan, as adopted  December 6, 1995
       and  amended  February  6,  1996,  filed  as
       exhibit  to Form  10-K  for the  year  ended
       December 31, 1995 and incorporated herein by
       reference.

 (c)   Section 422A Incentive Stock Option Plan, as
       adopted  December 5, 1990,  filed as exhibit
       to Form 10-K for the year ended December 31,
       1990 and incorporated herein by reference.

 (e)   Investment  Management  Transfer  Agreements
       between    the     investment     management
       subsidiaries  of the  Company  and  filed as
       exhibit  to Form  10-K  for the  year  ended
       December 31, 1992 and incorporated herein by
       reference.

 (e)   Bull & Bear  Investment  Plan,  filed  as an
       exhibit  to Form  10-K  for the  year  ended
       December 31, 1993 and incorporated herein by
       reference.

 (f)   Death Benefit  Agreement dated July 22, 1994
       and  filed as  exhibit  to Form 10-K for the
       year   ended    December    31,   1994   and
       incorporated herein by reference.

 (g)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Bassett S. Winmill filed as an exhibit to Form 10-K for
       the year ended December 31, 1995 and incorporated herein by
       reference.

 (h)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Robert D. Anderson filed as an exhibit to Form 10-K
       for the year ended December 31, 1995 and incorporated herein by
       reference.

 (i)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Mark C. Winmill filed as an exhibit to Form 10-K for the
       year ended December 31, 1995 and incorporated herein by
       reference.

 (j)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Thomas B. Winmill filed as an exhibit to Form 10-K for
       the year ended December 31, 1995 and incorporated herein by
       reference.

 (k)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Steven A. Landis filed as an exhibit to Form 10-K for
       the year ended December 31, 1995 and incorporated herein by
       reference.

 (l)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Edward G. Webb, Jr. filed as an exhibit to Form 10-K for
       the year ended December 31, 1995 and incorporated herein by
       reference.


                          -41-


<PAGE>






 (m)   Bull & Bear Group, Inc. Incentive Stock Option Agreement for
       Employees - Charles A. Carroll filed as an exhibit to Form 10-K for
       the year ended December 31, 1995 and incorporated herein by
       reference.

(11)   Statement Regarding Computation of Per Share Earnings
(12)   Not applicable.
(13)   Not applicable.
(16)   Not applicable.
(18)   Not applicable.
(21)   Wholly-Owned Subsidiaries of the Company
(22)   Not applicable.
(23)   Not applicable.
(24)   Not applicable.
(27)   Not applicable.
(28)   Not applicable.
(99)   Not applicable.

  (b)  Reports on Form 8-K. No reports on Form 8-K were filed  during the last
       quarter of the period covered by this report.


































                                                       -42-



<PAGE>



                                                    SIGNATURES



      Pursuant to the requirements of Section 13 of the Securities  Exchange Act
of 1934,  the  Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                              BULL & BEAR GROUP, INC.



March 28, 1997                      By:     /s/ Joseph Leung
                                            Joseph Leung
                                            Treasurer, Chief Accounting Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the Company and in
the capacities and on the dates indicated.



March 28, 1997                    By:     /s/ Bassett S. Winmill
                                          ----------------------
                                          Bassett S. Winmill,
                                          Chairman of the Board, Director



March 28, 1997                    By:     /s/ Robert D. Anderson
                                          ----------------------
                                          Robert D. Anderson,
                                          Vice Chairman, Director



March 28, 1997                    By:     /s/ Mark C. Winmill
                                          Mark C. Winmill,
                                          Co-President, Chief Financial Officer,
                                          Director



March 28, 1997                    By:     /s/ Thomas B. Winmill
                                          ---------------------
                                          Thomas B. Winmill, Esq.
                                          Co-President, General Counsel,
                                          Director



March 28, 1997                   By:       /s/ Edward G. Webb, Jr.
                                          -----------------------
                                          Edward G. Webb, Jr.
                                          Director



March 28, 1997                   By:       /S/ Charles A. Carroll
                                           ----------------------
                                           Charles A. Carroll,
                                           Director







                                                       -43-


<PAGE>



                                INDEX TO EXHIBITS



(3)  Exhibits

(10)   Material Contracts

  (a)   Investment Management Agreement between a subsidiary of the Company
        and Rockwood Fund, Inc.

  (b)   Distribution Agreement between a subsidiary of the Company and Rockwood
        Fund, Inc.

  (c)   Plan of Distribution between a subsidiary of the Company and Rockwood
        Fund, Inc.

  (d)   Shareholder Administration Agreement between a subsidiary of the Company
        and Rockwood Fund, Inc.

  (e)   Investment Management Agreement between a subsidiary of the Company
        and Bull & Bear Municipal Income Fund, Inc.

  (f)   Investment Management Agreement between a subsidiary of the Company
        and Bull & Bear U.S. Government Securities Fund, Inc.

  (g)   Investment Management Agreement between a subsidiary of the Company
        and Bull & Bear Global Income Fund, Inc.

  (h)   Non-Exclusive License Agreement between the Company and Bull & Bear
        Funds I, Inc.

  (i)   Non-Exclusive License Agreement between the Company and Bull & Bear
        Funds II, Inc.

  (j)   Non-Exclusive License Agreement between the Company and Bull & Bear Gold
        Investors, Ltd.

  (k)   Non-Exclusive License Agreement between the Company and Bull & Bear
        Global Income Fund, Inc.

  (l)   Non-Exclusive License Agreement between the Company and Midas Fund, Inc.

  (m)   Non-Exclusive License Agreement between the Company and Bull & Bear
        Municipal Income Fund, Inc.

  (n)   Non-Exclusive License Agreement between the Company and Rockwood Fund,
        Inc.

  (o)   Non-Exclusive License Agreement between the Company and Bull & Bear
        Special Equities Fund, Inc.

  (p)   Non-Exclusive License Agreement between the Company and Bull & Bear U.S.
        Government Securities Fund, Inc.

(11)   Statement Regarding Computation of Per Share Earnings

(21)   Wholly-Owned Subsidiaries of the Company




                                               -44-


<PAGE>



                         INVESTMENT MANAGEMENT AGREEMENT



        AGREEMENT  made as of this 28th day of  February,  1997,  by and between
ROCKWOOD FUND, INC. a Maryland  corporation (the "Fund") and ROCKWOOD  ADVISERS,
INC., a Delaware corporation (the "Investment Manager").

        WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end  management  investment  company and
offers for public sale shares of common stock; 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 the assets of the Fund thereof, 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, (a) salaries of administrative and
clerical personnel; (b) brokerage commissions;  (c) taxes and governmental fees;
(d) costs of insurance  and  fidelity  bonds;  (e) fees of the  transfer  agent,
custodian,  legal  counsel and  auditors;  (f)  association  fees;  (g) costs of
preparing,  printing  and  mailing  proxy  materials,  reports  and  notices  to
shareholders;  (h) costs of preparing,  printing and mailing the  prospectus and
statement of additional  information  and  supplements  thereto;  (i) payment of
dividends and other distributions; (j) costs of stock certificates; (k) costs of
Board and  shareholders  meetings;  (l) fees of the independent  directors;  (m)
necessary office space rental; (n) all fees and expenses  (including expenses of
counsel)  relating to the registration  and  qualification of shares of the Fund
under  applicable  federal  and  state  securities  laws  and  maintaining  such
registrations and  qualifications;  and (o) 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. 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 for the
Investment  Manager's  own account or may be made on behalf of the Fund pursuant
to a written  agreement  relating to a plan of distribution  adopted pursuant to
Rule 12b-1 under the 1940 Act.





<PAGE>






4. 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  to  examination  by those
directors of the Fund 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 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  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.

7. As  compensation  for its services,  with respect to the Fund the  Investment
Manager  will be paid by the Fund a fee  payable  monthly  and  computed  at the
annual rate of 1% of the first $200  million of average  daily net assets of the
Fund, .95% of such net assets over $200 million up to $400 million, .90% of such
net assets over $400  million up to $600  million,  .85% of such net assets over
$600 million up to $800 million, .80% of such net assets over $800 million up to
$1  billion,  and .75% of such net assets  over $1 billion.  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.





























<PAGE>






        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 other  investment  companies or
series thereof for which the Investment  Manager or an affiliate  thereof serves
as  investment  adviser.  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 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 Fund,  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 remunera tion received by such affiliate from the Fund.

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 or such  lesser  amount as may be agreed to by the
Fund's Board of Directors and the Investment  Manager.  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 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  or 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.

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 Fund 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 Fund 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 Fund 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  Fund.  This  Agreement  shall  immediately  terminate  in the  event of its
assignment.







<PAGE>






12. 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.

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.



ROCKWOOD FUND, INC.



By:/s/Thomas B. Winmill



ROCKWOOD ADVISERS, INC.



By:/s/Robert D. Anderson
























<PAGE>



                             DISTRIBUTION AGREEMENT



        AGREEMENT  made as of February 28, 1997,  between  ROCKWOOD  FUND,  INC.
("Fund"),  a corporation  organized and existing  under the laws of the State of
Maryland,  and Investor  Service  Center,  Inc.  ("Distributor"),  a corporation
organized and existing under the laws of the State of Delaware.

        WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company; and

        WHEREAS  the  Fund  desires  to  retain  the  Distributor  as  principal
distributor  in  connection  with the  offering and sale of the shares of common
stock  ("Shares")  and of such  other  series  as may  hereafter  be  designated
("Series") by the Fund's Board of Directors ("Board"); and

        WHEREAS the  Distributor is willing to act as principal  distributor for
such Shares and 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 Fund hereby appoints the Distributor as its exclusive
agent to be the principal distributor to sell and to 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 Fund 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 Fund,  and any  supplements  thereto,  under the
Securities Act of 1933, as amended ("1933 Act"), and the 1940 Act.

        (b) Upon the later of the date of this Agreement or the initial offering
of the  Shares to the  public  by a Series,  the  Distributor  will hold  itself
available to receive purchase orders, satisfactory to the Distributor for Shares
of that  Series and will accept such orders on behalf of the Fund as of the time
of receipt of such orders and promptly  transmit  such orders as are accepted to
the Fund'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 Fund.

        (d) The  offering  price of the Shares of each  Series  shall be the net
asset value per Share as next  determined  by the Fund  following  receipt of an
order at the Distributor's principal office. The Fund 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 Series and any other  services now or
hereafter  deemed to be appropriate  subjects for the payments of "service fees"
under  Rule 2830 of the  National  Association  of  Securities  Dealers,  Inc.'s
Conduct Rules (collectively, "service activities").







<PAGE>






        (g)  The  Distributor   shall  have  the  right  to  use  any  lists  of
shareholders  of the Fund or any other  lists of  investors  which 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
Fund.

3.  Authorization  to Enter into Dealer  Agreements  and to  Delegate  Duties as
Distributor. With respect to any or all Series, 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  also may  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-  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 Fund, 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  distribution  and service  activities under
this Agreement with respect to each Series and its shareholders, the Distributor
shall  receive from the Fund a fee (or fees) at the rate and under the terms and
conditions of the Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act
("Plan") adopted by the Fund with respect to the Series, as such Plan is amended
from time to time,  and  subject to any further  limitations  on such fee as the
Board may impose.

        (b) The  Distributor  may  reallow  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 Fund.

        (a) The Fund 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 Fund shall determine in its sole discretion whether certificates
shall be issued with  respect to the  Shares.  If the Fund has  determined  that
certificates shall be issued, the Fund will not cause certificates  representing
Shares to be issued  unless so  requested  by  shareholders.  If such request is
transmitted  by the  Distributor,  the Fund will cause  certificates  evidencing
Shares to be issued in such names and  denominations  as the  Distributor  shall
from time to time direct.

        (c) The Fund 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 which 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 Fund
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 Fund shall
cooperate  fully in the efforts of the  Distributor  to sell and arrange for the
sale of the  Shares of the Series and in the  performance  of the  Distributor's
duties under this Agreement.







<PAGE>






        (d) The Fund  shall  take,  from  time to time,  all  necessary  action,
including  payment of the related  filing fee, as may be  necessary  to register
Shares of each Series 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
Fund 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 which omission would make the statements therein misleading.

        (e) The Fund  shall use its best  efforts to qualify  and  maintain  the
qualification  of an appropriate  number of Shares of each Series for sale under
the securities laws of such states or other jurisdictions as the Distributor and
the Fund may approve,  and, if necessary or appropriate in connection therewith,
to qualify and maintain the  qualification  of the Fund as a broker or dealer in
such  jurisdictions;  provided  that the Fund 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  may  be   required  by  the  Fund  in   connection   with  such
qualifications.

7.  Expenses  of the  Fund.  The Fund  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 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 Fund as a broker or dealer  under
the securities laws of such  jurisdictions  as shall be selected by the Fund 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 Fund
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  share  holders 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.

















<PAGE>






9.      Indemnification.

        (a) The Fund 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)  which 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 Fund for use in
the Registration  Statement;  provided,  however,  that this indemnity agreement
shall not inure to the  benefit of any person who is also an officer or director
of the Fund or who  controls  the Fund  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 Fund 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
Fund shall not be liable to the Distributor under this indemnity  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 Fund 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 Fund of any claim shall not relieve the Fund from
any liability  which it may have to the  Distributor  or any person against whom
such action is brought  otherwise than on account of this  indemnity  agreement.
The Fund 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 indemnity agreement. If the Fund elects to assume the defense of
any such claim, the defense shall be conducted by counsel chosen by the Fund and
satisfactory to indem nified  defendants in the suit whose approval shall not be
unreasonably  withheld.  In the event that the Fund 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 Fund 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 Fund agrees to notify the Distributor  promptly 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 Fund 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 reckless disregard by it of its obligations and duties under this
Agreement;  provided,  however, that the Fund shall not be liable for Check Loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Distributor.









<PAGE>






        (c) The Distributor agrees to indemnify,  defend, and hold the Fund, its
officers and  directors  and any person who controls the Fund 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) which the Fund, 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 Fund for use in the Registration Statement,  arising out of or based upon
any alleged  omission  to state a material  fact in  connection  with such infor
mation  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 Fund 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 Fund, shall be
deemed,  when  rendering  services to the Fund or acting in any  business of the
Fund, to be rendering  such services to or acting for solely the Fund 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 as of the date first written
above,  provided that, with respect to any Series, this 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 Fund who are not
interested  persons  of the  Fund,  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 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 Independent Directors, cast
in person at a meeting  called for the purpose of voting on such  approval,  and
(ii) by the Board or with  respect to any given  Series by vote of a majority of
the outstanding voting securities of such Series.

        (c)  Notwithstanding  the  foregoing,  with respect to any Series,  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 Shares of such Series
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
Fund or such Series. This Agreement will automatically terminate in the event of
its assignment.

        (d) Termination of this Agreement with respect to any given Series shall
in no way affect the  continued  validity of this  Agreement or the  performance
thereunder with respect to any other Series.





<PAGE>






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:                                       ROCKWOOD FUND, INC.


/s/William J. Maynard                 By: /s/Thomas B. Winmill



ATTEST:                                       INVESTOR SERVICE CENTER, INC.


/s/William J. Maynard                         By: /s/Robert D. Anderson



























<PAGE>



                              PLAN OF DISTRIBUTION



     WHEREAS ROCKWOOD FUND, INC. (the "Fund") is registered under the Investment
Company  Act of  1940,  as  amended  ("1940  Act"),  as an  open-end  management
investment  company,  and offers for public  sale  shares of common  stock;  and

     WHEREAS the Fund has entered into a  Distribution  Agreement  ("Agreement")
with Investor  Service Center,  Inc. (the  "Distributor")  pursuant to which the
Distributor has agreed to serve as the principal  distributor for the Fund;
     NOW, THEREFORE,  the Fund hereby adopts this plan of distribution  ("Plan")
with respect to the Fund in accordance with Rule 12b-1 under the 1940 Act.

1. As  Distributor  for the Fund, the  Distributor  may spend such amounts as it
deems appropriate on any activities or expenses  primarily intended to result in
the sale of the Fund's shares or the servicing and  maintenance  of  shareholder
accounts,  including,  but  not  limited  to:  advertising,   direct  mail,  and
promotional  expenses;  compensation  to  the  Distributor  and  its  employees;
compensation  to and  expenses,  including  overhead  and  telephone  and  other
communication  expenses,  of the Distributor,  the Investment Manager, the Fund,
and selected  broker/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  distribut  ing  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 Distributor and
allocated by the Distributor to its efforts to distribute  shares of the Fund or
service  shareholder  accounts  such as  office  rent  and  equipment,  employee
salaries, employee bonuses and other overhead expenses.

2. A. The Fund is authorized to pay to the Distributor,  as compensation for the
Distributor's  distribution  and service  activities  as defined in paragraph 13
hereof  with  respect  to its  shareholders,  a fee at the  rate of  0.25% on an
annualized  basis of its average daily net assets.  All or a portion of such fee
may be  designated  by the  Fund's  board of  directors  ("Board")  as a fee for
service  activities or as a fee for distribution  activities.  Such fee shall be
calculated and accrued daily and paid monthly or at such other  intervals as the
Board shall determine.

     B. The Fund may pay fees to the  Distributor at a lesser rate than the fees
specified in  paragraph  2A of this Plan as mutually  agreed to by the Board and
the Distributor.

3.       This Plan shall not take effect until it has been approved by:

     A. the vote of at least a majority of the outstanding  voting securities of
the Fund; and

        B. the vote cast in person at a meeting called for the purpose of voting
on this Plan of a majority of both (i) those  directors  of the Fund who are not
interested persons of the Fund and have no direct or indirect financial interest
in the  operation  of  this  Plan or any  agreement  related  to it  (the  "Plan
Directors"), and (ii) all of the directors then in office.

4. This  Plan  shall  continue  in effect  for one year  from its  execution  or
adoption and thereafter for so long as such continuance is specifically approved
at least annually in the manner  provided for approval of this Plan in paragraph
3B.

5. The  Distributor  shall provide to the Board and the Board shall  review,  at
least  quarterly,  a written report of the amounts  expended under this Plan and
the purposes for which such expenditures  were made. A reasonable  allocation of
overhead  and other  expenses  of the  Distributor  related to its  distribution
activities and service  activities,  including telephone and other communication
expenses, may be included in the information regarding amounts expended for such
activities.







<PAGE>






6.  This Plan may not be  amended  to  increase  materially  the  amount of fees
provided for in paragraphs 2A and 2B hereof unless such amendment is approved by
a vote of a majority of the  outstanding  voting  securities of the Fund, and no
material  amendment to this Plan shall be made unless  approved by the Board and
the Plan Directors in the manner provided for approval of this Plan in paragraph
3B.

7.  The  amount  of the  fees  payable  by the  Fund  to the  Distributor  under
paragraphs 2A and 2B hereof is not related directly to expenses  incurred by the
Distributor  on behalf of the Fund in serving as  distributor,  and  paragraph 2
hereof  does  not  obligate  the  Fund to  reimburse  the  Distributor  for such
expenses.  The fees set forth in paragraphs 2A and 2B hereof will be paid by the
Fund to the Distributor unless and until this Plan is terminated or not renewed.
If this  Plan  is  terminated  or not  renewed,  any  expenses  incurred  by the
Distributor on behalf of the Fund in excess of payments of the fees specified in
paragraphs  2A and 2B hereof  which the  Distributor  has  received  or  accrued
through the termination  date are the sole  responsibility  and liability of the
Distributor, and are not obligations of the Fund.

8. Any other  agreements  related  to this  Plan  shall  not take  effect  until
approved in the manner provided for approval of this Plan in paragraph 3B.

9. The Distributor shall use its best efforts in rendering  services to the Fund
hereunder,  but in the  absence  of  willful  misfeasance,  bad  faith  or gross
negligence  in the  performance  of its  duties  or  reckless  disregard  of its
obligations and duties  hereunder,  the  Distributor  shall not be liable to the
Fund,  the Fund or to any  shareholder of the Fund for any act or failure to act
by the  Distributor or any affiliated  person of the Distributor or for any loss
sustained by the Fund, the Fund or the Fund's shareholders.

10.  This Plan may be  terminated  at any time by vote of a majority of the Plan
Directors,  or by vote of a majority of the outstanding voting securities of the
Fund.

11. While this Plan is in effect,  the selection and nomination of directors who
are not  interested  persons of the Fund shall be committed to the discretion of
the directors who are not interested persons.

12. The Fund shall preserve copies of this Plan and any other agreements related
to this Plan and all reports made  pursuant to paragraph 5 hereof,  for a period
of not less than six years from the date of this  Plan,  or the date of any such
agreement or of any such  report,  as the case may be, the first two years in an
easily accessible place.

13.  For  purposes  of this  Plan,  "distribution  activities"  shall  mean  any
activities  in connection  with the  Distributor's  performance  of its services
under  this Plan or the  Agreement  that are not  deemed  "service  activities."
"Service activities" shall mean activities covered by the definition of "service
fee" contained in Rule 2830 of the National  Association of Securities  Dealers,
Inc.'s Conduct Rules.

14.As  used in  this  Plan,  the  terms:  "majority  of the  outstanding  voting
securities" and  "interested  person" shall have the same meaning as those terms
have in the 1940 Act.

        IN WITNESS  WHEREOF,  the Fund has executed  this Plan as of the day and
year set forth below in the City and State of New York.

DATE: February 28, 1997


ATTEST:                                 ROCKWOOD FUND, INC.


/s/ William J. Maynard                   By:/s/ Thomas B. Winmill





<PAGE>



                      SHAREHOLDER ADMINISTRATION AGREEMENT



        AGREEMENT made as of February 28, 1997 between  Rockwood  Fund,  Inc., a
Maryland  corporation  ("Fund"),  and Investor Service Center,  Inc. ("ISC"),  a
Delaware corporation.

        WHEREAS,  the Fund is  registered as an open-end  management  investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and

        WHEREAS,  the Fund desires to retain ISC to provide certain  shareholder
services for the Fund and each Series of shares now  existing or as  hereinafter
may be established; and

        WHEREAS,  as a  convenience  to the  Fund  and its  shareholders  ISC is
willing to furnish such services at cost and without a view to profit thereby;

        NOW,  THEREFORE,  in  consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:

1.  Appointment.  The Fund hereby  appoints ISC as agent to perform the services
for the period and on the terms set forth in this  Agreement.  ISC accepts  such
appointment  and agrees to furnish the services  herein set forth, in return for
the  reimbursement  specified  in paragraph 3 of this  Agreement.  ISC agrees to
comply with all relevant  provisions of the 1940 Act and the Securities Exchange
Act of 1934,  as amended  ("1934 Act"),  and  applicable  rules and  regulations
thereunder in performing such services.

2.  Services  and  Duties of ISC.  ISC shall be  responsible  for the  following
services  relating to shareholders of the Fund  ("Shareholders"):  (a) assisting
the  transfer  agent in  receiving  and  responding  to  written  and  telephone
Shareholder  inquiries  concerning  their accounts;  (b) processing  Shareholder
telephone requests for transfers, purchases, redemptions, changes of address and
similar matters; (c) assisting as necessary in proxy solicitation; (d) providing
a service center for coordinating,  researching and answering general inquiries,
as well as those required by legal process,  regarding Shareholder account data;
and (e)  administering and correcting Fund records as authorized by the Board of
Directors of the Fund.

3.  Reimbursement.  For the performance of its obligations  hereunder,  the Fund
will  reimburse ISC the actual costs incurred with respect  thereto,  including,
without  limitation,  the following costs and all other expenses  related to the
performance of ISC's  obligations  hereunder:  (a) benefits,  payroll taxes, and
search costs of ISC personnel; (b) telephone; (c) rent; (d) equipment, including
telephone PBX,  answering  machine,  call  distributor,  conversation  recording
machine and maintenance  thereon;  (e) blue sky  registration and filing for ISC
and its registered representatives; (f) travel and meals; (g) mail, postage, and
overnight delivery services; (h) allocated E&O and fidelity bond insurance;  (i)
publications, memberships, and subscriptions; (j) office supplies; (k) printing;
(l) Shareholder  service related training  courses;  and (m) corporate audit and
franchise  taxes.  Such costs and expenses shall be allocated among the Fund and
the other investment  companies or series thereof for which ISC or any affiliate
thereof  provides  services  similar to those  provided  hereunder  based on the
relative  number  of  open   Shareholder   accounts  and  other  factors  deemed
appropriate by the Board of Directors of the Fund.

4. Cooperation with Accountants. ISC shall cooperate with the Fund's independent
public  accountants  and shall take all reasonable  action in the performance of
its obligations under this Agreement to assure that the necessary information is
made  available to such  accountants  for the  expression  of their  unqualified
opinion,  including  but not  limited  to the  opinion  included  in the  Fund's
semi-annual reports on Form N-SAR.

5.Equipment  Failures.  In the event of failures beyond ISC's control, ISC shall
take  reasonable  steps to  minimize  service  interruptions  but shall  have no
liability with respect thereto.





<PAGE>






6.  Responsibility  of ISC.  ISC  shall be under no duty to take any  action  on
behalf of the Fund or any Series except as  specifically  set forth herein or as
may be  specifically  agreed to by ISC in  writing.  In the  performance  of its
duties  hereunder,  ISC shall be obligated to exercise care and  diligence,  but
shall not be liable for any act or omission  which does not  constitute  willful
misfeasance,  bad  faith or  gross  negligence  on the  part of ISC or  reckless
disregard  by ISC of its  duties  under this  Agreement.  Without  limiting  the
generality  of the  foregoing or of any other  provision of this  Agreement,  in
connection  with its duties  under this  Agreement,  ISC shall not be liable for
delays or errors  occurring by reason of  circumstances  beyond  ISC's  control,
including acts of civil or military  authorities,  national  emergencies,  labor
difficulties,  fire,  mechanical breakdown,  flood or catastrophe,  acts of God,
insurrection, war, riots or failure of the mails, transportation,  communication
or power supply.

7.  Indemnification.  The Fund agrees to indemnify and hold harmless ISC and its
agents from all taxes, charges,  expenses,  assessments,  claims and liabilities
including (without  limitation)  liabilities arising under the Securities Act of
1933, as amended, the 1934 Act and any state and foreign securities and blue sky
laws and  regulations,  all as or to be amended from time to time, and expenses,
including  (without  limitation)   attorneys'  fees  and  disbursements  arising
directly  or  indirectly  from any  action or matter  which ISC takes or does or
omits to take or do.

8. Duration and  Termination.  This Agreement shall continue until terminated by
the Fund with respect to any or all Series  thereof,  or by ISC.  Termination of
this  Agreement  with  respect  to any given  Series  shall in no way affect the
continued validity of this Agreement or the performance  thereunder with respect
to any other Series.

9.Amendments.  This  Agreement or any part thereof may be changed or waived only
by an instrument in writing  signed by the party  against which  enforcement  of
such change or waiver is sought.

10. Miscellaneous. This Agreement embodies the entire contract and understanding
between the parties  hereto.  The  captions in this  Agreement  are included for
convenience  of  reference  only  and in no way  define  or  delimit  any of the
provisions  thereof 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 and shall inure to the benefit
of the parties hereto and their respective successors.

        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first above written.


ATTEST:                                 ROCKWOOD FUND, INC.



/s/William J. Maynard           By: /s/Thomas B. Winmill



ATTEST:                                 INVESTOR SERVICE CENTER, INC.



/s/ William J. Maynard          By:/s/Robert D. Anderson









<PAGE>



                         INVESTMENT MANAGEMENT AGREEMENT


        AGREEMENT made on November 8, 1996, by and between BULL & BEAR MUNICIPAL
INCOME FUND, INC. a Maryland  corporation (the "Fund") and BULL & BEAR ADVISERS,
INC., a Delaware corporation (the "Investment Manager").

        WHEREAS the Fund is registered 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 and qualification 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 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.













<PAGE>






        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 0.60% of
the first $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 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 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 Fund,  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 remunera tion 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.







<PAGE>






        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 or 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 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 or by 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 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.

        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.















<PAGE>






        IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement on
the day and year first above written.



BULL & BEAR MUNICIPAL INCOME FUND, INC.



By: /s/ Robert D. Anderson



BULL & BEAR ADVISERS, INC.



By: /s/ Thomas B. Winmill












































<PAGE>



                         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 is registered 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 and qualification 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 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.













<PAGE>






        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 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 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 Fund,  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 remunera tion 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.







<PAGE>






        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 or 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 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 or by 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 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.

        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.















<PAGE>






        IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement on
the day and year first above written.



BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.



By: /s/ Robert D. Anderson



BULL & BEAR ADVISERS, INC.



By: /s/ Thomas B. Winmill












































<PAGE>



                         INVESTMENT MANAGEMENT AGREEMENT



        AGREEMENT made as of the 7th day of February,  1997, by and between BULL
& BEAR GLOBAL INCOME FUND, INC. a Maryland  corporation ("Fund") and BULL & BEAR
ADVISERS, INC., a Delaware corporation ("Investment Manager").

        WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended ("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 the assets of the Fund thereof, 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, (a) salaries of administrative and
clerical personnel; (b) brokerage commissions;  (c) taxes and governmental fees;
(d) costs of insurance  and  fidelity  bonds;  (e) fees of the  transfer  agent,
custodian,  legal  counsel and  auditors;  (f)  association  fees;  (g) costs of
preparing,  printing  and  mailing  proxy  materials,  reports  and  notices  to
shareholders;  (h) costs of preparing,  printing and mailing the  prospectus and
statement of additional  information  and  supplements  thereto;  (i) payment of
dividends and other distributions; (j) costs of stock certificates; (k) costs of
Board and  shareholders  meetings;  (l) fees of the independent  directors;  (m)
necessary office space rental; (n) all fees and expenses  (including expenses of
counsel)  relating to the registration  and  qualification of shares of the Fund
under  applicable  federal  and  state  securities  laws  and  maintaining  such
registrations and  qualifications;  and (o) 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  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.










<PAGE>






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,  with respect to the Fund the  Investment
Manager  will be paid by the Fund a fee  payable  monthly  and  computed  at the
annual rate of 1% of the first $200  million of average  daily net assets of the
Fund, .95% of such net assets over $200 million up to $400 million, .90% of such
net assets over $400  million up to $600  million,  .85% of such net assets over
$600 million up to $800 million, .80% of such net assets over $800 million up to
$1  billion,  and .75% of such net assets  over $1 billion.  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.

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
Fund shares and shares of other investment companies or series thereof for which
the Investment Manager or an affiliate thereof serves as investment adviser. 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  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 Fund, 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 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 or such  lesser  amount as may be agreed to by the
Fund's Board of Directors and the Investment  Manager.  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.





<PAGE>






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  or 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. 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 Fund 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 Fund 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 Fund 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  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.

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.






















<PAGE>






        IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement on
the day and year first above written.



BULL & BEAR GLOBAL INCOME FUND, INC.



By: /s/ Robert D. Anderson



BULL & BEAR ADVISERS, INC.



By: /s/ Thomas B. Winmill












































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a  Delaware  corporation  (the  "Licensor")  and BULL & BEAR  FUNDS I,  INC.,  a
Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The license  provided for in this  Agreement may be terminated in the event the
Investment  Manager of the Licensee shall not be Bull & Bear  Advisers,  Inc. or
some other corporation  controlling,  controlled by, or under the common control
of the Licensor.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the  purposes of this  Agreement.  2The  representations  and  warranties
contained  herein  shall  continue  after and  survive the  termination  of this
Agreement.  No  provision  of this  Agreement  may be amended or modified in any
manner except by a written  agreement  properly  authorized and executed by each
party hereto.  This  agreement  may not be assigned by the Licensee  without the
prior  written  consent of the  Licensor,  although the Licensor may assign this
Agreement  at any time  without  notice or  penalty.  Subject to the  Licensee's
Articles of Incorporation,  with such amendments, if any, as may be in effect as
of the date hereof,  this Agreement  supersedes any prior agreement  between the
parties.














<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                                    BULL & BEAR GROUP, INC.


                                                    By: /s/ Thomas B. Winmill



                                                    BULL & BEAR FUNDS I, INC.


                                                    By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



1.      Bull & Bear Performance Account

2.      Bull & Bear Performance Plus Account

3.      Performance

4.      Bull & Bear

5.      Performance Driven

6.      Bull & Bear Performance Driven

7.      Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a  Delaware  corporation  (the  "Licensor")  and BULL & BEAR FUNDS II,  INC.,  a
Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,  NOW, THEREFORE, the
parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The license  provided for in this  Agreement may be terminated in the event the
Investment  Manager of the Licensee shall not be Bull & Bear  Advisers,  Inc. or
some other corporation  controlling,  controlled by, or under the common control
of the Licensor.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the  purposes of this  Agreement.  2The  representations  and  warranties
contained  herein  shall  continue  after and  survive the  termination  of this
Agreement.  No  provision  of this  Agreement  may be amended or modified in any
manner except by a written  agreement  properly  authorized and executed by each
party hereto.  This  agreement  may not be assigned by the Licensee  without the
prior  written  consent of the  Licensor,  although the Licensor may assign this
Agreement  at any time  without  notice or  penalty.  Subject to the  Licensee's
Articles of Incorporation,  with such amendments, if any, as may be in effect as
of the date hereof,  this Agreement  supersedes any prior agreement  between the
parties.














<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                   BULL & BEAR GROUP, INC.


                                   By: /s/ Thomas B. Winmill



                                   BULL & BEAR FUNDS II, INC.


                                   By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



8.      Bull & Bear Performance Account

9.      Bull & Bear Performance Plus Account

10.     Performance

11.     Bull & Bear

12.     Performance Driven

13.     Bull & Bear Performance Driven

14.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a Delaware  corporation  (the "Licensor") and BULL & BEAR GOLD INVESTORS LTD., a
Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The license  provided for in this  Agreement may be terminated in the event the
Investment  Manager of the Licensee shall not be Bull & Bear  Advisers,  Inc. or
some other corporation  controlling,  controlled by, or under the common control
of the Licensor.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the  purposes of this  Agreement.  2The  representations  and  warranties
contained  herein  shall  continue  after and  survive the  termination  of this
Agreement.  No  provision  of this  Agreement  may be amended or modified in any
manner except by a written  agreement  properly  authorized and executed by each
party hereto.  This  agreement  may not be assigned by the Licensee  without the
prior  written  consent of the  Licensor,  although the Licensor may assign this
Agreement  at any time  without  notice or  penalty.  Subject to the  Licensee's
Articles of Incorporation,  with such amendments, if any, as may be in effect as
of the date hereof,  this Agreement  supersedes any prior agreement  between the
parties.














<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                                BULL & BEAR GROUP, INC.


                                                By: /s/ Thomas B. Winmill



                                                BULL & BEAR GOLD INVESTORS LTD.


                                                By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



15.     Bull & Bear Performance Account

16.     Bull & Bear Performance Plus Account

17.     Performance

18.     Bull & Bear

19.     Performance Driven

20.     Bull & Bear Performance Driven

21.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a Delaware  corporation  (the  "Licensor")  and BULL & BEAR GLOBAL  INCOME FUND,
INC., a Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The  license  may  be  withdrawn  by the  Licensor  at any  time,  in its  sole
discretion  and without prior notice,  in which case the Licensee  shall have no
further  right   whatsoever  to  use  the  Licensed  Marks  and  the  Licensee's
shareholders,  officers and directors shall promptly take whatever action may be
necessary to  eliminate  all use of and  reference to the Licensed  Marks in the
Licensor's name and otherwise.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the purposes of this Agreement.

2The  representations  and warranties  contained herein shall continue after and
survive the termination of this Agreement. No provision of this Agreement may be
amended  or  modified  in any  manner  except  by a written  agreement  properly
authorized and executed by each party hereto. This agreement may not be assigned
by the Licensee without the prior written consent of the Licensor,  although the
Licensor  may assign  this  Agreement  at any time  without  notice or  penalty.
Subject to the Licensee's  Articles of Incorporation,  with such amendments,  if
any, as may be in effect as of the date hereof,  this  Agreement  supersedes any
prior agreement between the parties.











<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                     BULL & BEAR GROUP, INC.


                                     By: /s/ Thomas B. Winmill



                                     BULL & BEAR GLOBAL INCOME FUND, INC.


                                     By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



22.     Bull & Bear Performance Account

23.     Bull & Bear Performance Plus Account

24.     Performance

25.     Bull & Bear

26.     Performance Driven

27.     Bull & Bear Performance Driven

28.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a  Delaware  corporation  (the  "Licensor")  and MIDAS  FUND,  INC.,  a Maryland
corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The  license  may  be  withdrawn  by the  Licensor  at any  time,  in its  sole
discretion  and without prior notice,  in which case the Licensee  shall have no
further  right   whatsoever  to  use  the  Licensed  Marks  and  the  Licensee's
shareholders,  officers and directors shall promptly take whatever action may be
necessary to  eliminate  all use of and  reference to the Licensed  Marks in the
Licensor's name and otherwise.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the purposes of this Agreement.

2The  representations  and warranties  contained herein shall continue after and
survive the termination of this Agreement. No provision of this Agreement may be
amended  or  modified  in any  manner  except  by a written  agreement  properly
authorized and executed by each party hereto. This agreement may not be assigned
by the Licensee without the prior written consent of the Licensor,  although the
Licensor  may assign  this  Agreement  at any time  without  notice or  penalty.
Subject to the Licensee's  Articles of Incorporation,  with such amendments,  if
any, as may be in effect as of the date hereof,  this  Agreement  supersedes any
prior agreement between the parties.












<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                            BULL & BEAR GROUP, INC.


                                            By: /s/ Thomas B. Winmill



                                            MIDAS FUND, INC.


                                            By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



29.     Bull & Bear Performance Account

30.     Bull & Bear Performance Plus Account

31.     Performance

32.     Bull & Bear

33.     Performance Driven

34.     Bull & Bear Performance Driven

35.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a Delaware  corporation  (the "Licensor") and BULL & BEAR MUNICIPAL INCOME FUND,
INC., a Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The  license  may  be  withdrawn  by the  Licensor  at any  time,  in its  sole
discretion  and without prior notice,  in which case the Licensee  shall have no
further  right   whatsoever  to  use  the  Licensed  Marks  and  the  Licensee's
shareholders,  officers and directors shall promptly take whatever action may be
necessary to  eliminate  all use of and  reference to the Licensed  Marks in the
Licensor's name and otherwise.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the purposes of this Agreement.

2The  representations  and warranties  contained herein shall continue after and
survive the termination of this Agreement. No provision of this Agreement may be
amended  or  modified  in any  manner  except  by a written  agreement  properly
authorized and executed by each party hereto. This agreement may not be assigned
by the Licensee without the prior written consent of the Licensor,  although the
Licensor  may assign  this  Agreement  at any time  without  notice or  penalty.
Subject to the Licensee's  Articles of Incorporation,  with such amendments,  if
any, as may be in effect as of the date hereof,  this  Agreement  supersedes any
prior agreement between the parties.











<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                               BULL & BEAR GROUP, INC.


                               By: /s/ Thomas B. Winmill



                               BULL & BEAR MUNICIPAL INCOME FUND, INC.


                               By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



36.     Bull & Bear Performance Account

37.     Bull & Bear Performance Plus Account

38.     Performance

39.     Bull & Bear

40.     Performance Driven

41.     Bull & Bear Performance Driven

42.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a Delaware  corporation  (the  "Licensor")  and ROCKWOOD FUND,  INC., a Maryland
corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,  NOW, THEREFORE, the
parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The  license  may  be  withdrawn  by the  Licensor  at any  time,  in its  sole
discretion  and without prior notice,  in which case the Licensee  shall have no
further  right   whatsoever  to  use  the  Licensed  Marks  and  the  Licensee's
shareholders,  officers and directors shall promptly take whatever action may be
necessary to  eliminate  all use of and  reference to the Licensed  Marks in the
Licensor's name and otherwise.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the purposes of this Agreement.

2The  representations  and warranties  contained herein shall continue after and
survive the termination of this Agreement. No provision of this Agreement may be
amended  or  modified  in any  manner  except  by a written  agreement  properly
authorized and executed by each party hereto. This agreement may not be assigned
by the Licensee without the prior written consent of the Licensor,  although the
Licensor  may assign  this  Agreement  at any time  without  notice or  penalty.
Subject to the Licensee's  Articles of Incorporation,  with such amendments,  if
any, as may be in effect as of the date hereof,  this  Agreement  supersedes any
prior agreement between the parties.












<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                  BULL & BEAR GROUP, INC.


                                  By: /s/ Thomas B. Winmill



                                  ROCKWOOD FUND, INC.


                                  By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



43.     Bull & Bear Performance Account

44.     Bull & Bear Performance Plus Account

45.     Performance

46.     Bull & Bear

47.     Performance Driven

48.     Bull & Bear Performance Driven

49.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a Delaware  corporation  (the "Licensor") and BULL & BEAR SPECIAL EQUITIES FUND,
INC., a Maryland corporation (the "Licensee").

                              W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The license  provided for in this  Agreement may be terminated in the event the
Investment  Manager of the Licensee shall not be Bull & Bear  Advisers,  Inc. or
some other corporation  controlling,  controlled by, or under the common control
of the Licensor.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the  purposes of this  Agreement.  2The  representations  and  warranties
contained  herein  shall  continue  after and  survive the  termination  of this
Agreement.  No  provision  of this  Agreement  may be amended or modified in any
manner except by a written  agreement  properly  authorized and executed by each
party hereto.  This  agreement  may not be assigned by the Licensee  without the
prior  written  consent of the  Licensor,  although the Licensor may assign this
Agreement  at any time  without  notice or  penalty.  Subject to the  Licensee's
Articles of Incorporation,  with such amendments, if any, as may be in effect as
of the date hereof,  this Agreement  supersedes any prior agreement  between the
parties.














<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                                    BULL & BEAR GROUP, INC.


                                    By: /s/ Thomas B. Winmill



                                    BULL & BEAR SPECIAL EQUITIES FUND, INC.


                                    By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



50.     Bull & Bear Performance Account

51.     Bull & Bear Performance Plus Account

52.     Performance

53.     Bull & Bear

54.     Performance Driven

55.     Bull & Bear Performance Driven

56.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>



                         NON-EXCLUSIVE LICENSE AGREEMENT



        AGREEMENT dated as of January 17, 1997 between BULL & BEAR GROUP,  INC.,
a  Delaware  corporation  (the  "Licensor")  and  BULL  & BEAR  U.S.  GOVERNMENT
SECURITIES FUND, INC., a Maryland corporation (the "Licensee").

                               W I T N E S S E T H

        WHEREAS,  the Licensor is the owner of all right,  title and interest in
and to the service marks listed on Annex A hereto,  as such Annex may be amended
from  time to  time,  (hereinafter  collectively  referred  to as the  "Licensed
Marks"), and

     WHEREAS,  the Licensee  has  requested a  non-exclusive  license to use the
Licensed Marks in connection with its corporate activities,

        NOW, THEREFORE, the parties hereto agree as follows:

2The Licensor grants to the Licensee the non-exclusive right to use the Licensed
Marks in connection with its activities as an investment company.

2The  grant of the  license  provided  for in  paragraph  1 herein is  personal,
indivisible, non-exclusive and not subject to succession or transfer.

2The Licensee agrees to follow all rules  reasonably  imposed by the Licensor to
protect the Licensor's rights in the Licensed Marks.

2The Licensee agrees that the nature and quality of all services rendered by the
Licensee in connection with the Licensed Marks shall conform to standards set by
the Licensor and be under control of the Licensor.

2The  license  may  be  withdrawn  by the  Licensor  at any  time,  in its  sole
discretion  and without prior notice,  in which case the Licensee  shall have no
further  right   whatsoever  to  use  the  Licensed  Marks  and  the  Licensee's
shareholders,  officers and directors shall promptly take whatever action may be
necessary to  eliminate  all use of and  reference to the Licensed  Marks in the
Licensor's name and otherwise.

2In the event of termination as provided for in paragraph 5 herein, the Licensee
agrees to promptly do all such acts and things as may be  necessary to terminate
its use of the Licensed Marks and will, after such termination,  make no further
reference to the Licensed Marks or any confusingly similar term in its business.

2The  Licensor and the Licensee  agree to do all such further acts and things to
effect the purposes of this Agreement.

2The  representations  and warranties  contained herein shall continue after and
survive the termination of this Agreement. No provision of this Agreement may be
amended  or  modified  in any  manner  except  by a written  agreement  properly
authorized and executed by each party hereto. This agreement may not be assigned
by the Licensee without the prior written consent of the Licensor,  although the
Licensor  may assign  this  Agreement  at any time  without  notice or  penalty.
Subject to the Licensee's  Articles of Incorporation,  with such amendments,  if
any, as may be in effect as of the date hereof,  this  Agreement  supersedes any
prior agreement between the parties.











<PAGE>






        IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.


                          BULL & BEAR GROUP, INC.


                          By: /s/ Thomas B. Winmill



                          BULL & BEAR U.S. GOVERNMENT SECURITIES FUND, INC.


                          By: /s/ William J. Maynard















































<PAGE>



                                                      ANNEX A



57.     Bull & Bear Performance Account

58.     Bull & Bear Performance Plus Account

59.     Performance

60.     Bull & Bear

61.     Performance Driven

62.     Bull & Bear Performance Driven

63.     Bull & Bear Stockfax

2Bull & Bear No-Fee IRA

2Performance Plus









































<PAGE>






       EXHIBIT 11 - STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS

<TABLE>


                                              1996                      1995                       1994
                                   ---------------------------------------------------------------------------
                                                  FULLY                      FULLY                      FULLY
                                   PRIMARY       DILUTED       PRIMARY      DILUTED      PRIMARY       DILUTED
Weighted average
   common shares
<S>                               <C>            <C>           <C>           <C>           <C>            <C>
   outstanding                    1,369,402      1,369,402     1,499,516     1,499,516     1,523,152      1,523,152

Weighted average common
shares issuable upon
exercise of stock
options under the
treasury stock method                93,877         99,952        50,299        52,048        87,291         87,506

Weighted average
   common shares
   issuable upon
   exercise of
   warrants under
   the treasury
   stock method                                                     -             -             -              -

Weighted average
   common shares
   and common
   share equivalents
   utilized for
   earnings per
   share computation              1,463,279      1,469,354     1,549,815     1,551,564     1,610,443      1,610,658



</TABLE>






















                                                       -45-


<PAGE>






             EXHIBIT 21 - WHOLLY-OWNED SUBSIDIARIES OF THE COMPANY



Bull & Bear Securities, Inc.,
   a Delaware corporation

Investor Service Center, Inc.,
   a Delaware corporation

Bull & Bear NJ Properties, Inc.,
   a Delaware corporation

Hanover Direct Advertising Company, Inc.,
   a Delaware corporation

Bull & Bear Advisers, Inc.,
   a Delaware corporation

Lion Exploration, Inc.,
   a Delaware corporation

Midas Management Corporation
   a Delaware corporation

Rockwood Advisers, Inc.
   a Delaware Corporation