ADMINISTRATIVE SERVICES CONTRACT
VIRGINIA DAILY MUNICIPAL INCOME FUND, INC.
the "Fund"
New York, New York
October __, 1997
Xxxxx & Xxxx Asset Management L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and reinvesting
our assets in securities of the type, and in accordance with the limitations,
specified in our Articles of Incorporation, By-Laws and Registration Statement
filed with the Securities and Exchange Commission under the Investment Company
Act of 1940 (the "1940 Act") and the Securities Act of 1933, including the
Prospectus forming a part thereof (the "Registration Statement"), all as from
time to time in effect, and in such manner and to such extent as may from time
to time be authorized by our Board of Directors. We enclose copies of the
documents listed above and will furnish you such amendments thereto as may be
made from time to time.
2. (a) We hereby employ you as our administrator (the "Administrator")
to provide all management and administrative services reasonably necessary for
our operation, other than those services you provide to us pursuant to the
Investment Management Contract. The services to be provided by you shall include
but not be limited to those enumerated on Exhibit A hereto. The personnel
providing these services may be your employees or employees of your affiliates
or of other organizations. You shall make periodic reports to the Fund's Board
of Directors in the performance of your obligations under this Agreement and the
execution of your duties hereunder is subject to the general control of the
Board of Directors.
(b) It is understood that you will from time to time employ,
subcontract with or otherwise associate with yourself, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder. While this agreement is in effect, you or
persons affiliated with you, other than us ("your affiliates"),
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will provide persons satisfactory to our Board of Directors to be elected or
appointed officers or employees of our corporation. These shall be a president,
a secretary, a treasurer, and such additional officers and employees as may
reasonably be necessary for the conduct of our business.
(c) You or your affiliates will also provide persons, who may be
our officers, to (I) supervise the performance of bookkeeping and related
services and calculation of net asset value and yield by our bookkeeping agent
and (ii) prepare reports to and the filings with regulatory authorities, and
(iii) perform such clerical, other office and shareholder services for us as we
may from time to time request of you. Such personnel may be your employees or
employees of your affiliates or of other organizations. Notwithstanding the
preceding, you shall not be required to perform any accounting services not
expressly provided for herein. On behalf of the Fund, we will pay to you the
cost of such personnel for rendering such services to us at such rates as shall
from time to time be agreed upon between us, provided that we shall not bear or
pay any costs in respect of any services performed for us by officers of Xxxxx &
Xxxxx & Xxxx Asset Management Inc., your general partner, or officers of your
affiliates.
(d) You or your affiliates will also furnish us such
administrative and management supervision and assistance and such office
facilities as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which you may be
subject. On behalf of the Fund, we will reimburse you for all of our operating
costs incurred by you (in addition to the personnel reimbursement described in
the preceding subparagraph (c)), including rent, depreciation of equipment and
facilities, interest and amortization of loans financing equipment used by us
and all the expenses incurred by you to conduct our affairs. The amounts of such
reimbursements shall from time to time be agreed upon between us. You or your
affiliates will also pay the expenses of promoting the sale of our shares (other
than the costs of preparing, printing and filing our Registration Statement,
printing copies of the prospectus contained therein and complying with other
applicable regulatory requirements), except to the extent that we are permitted
to bear such expenses under a plan adopted pursuant to Rule 12b-1 under the 1940
Act or a similar rule.
3. We will expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or
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gross negligence in the performance of your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
4. In consideration of the foregoing, the Fund will pay you a fee of
.21% of the Fund's average daily net assets. Your fee will be accrued by us
daily, and will be payable on the last day of each calendar month for services
performed hereunder during that month or on such other schedule as we may agree
in writing. You may use any portion of this fee for distribution of our shares,
or for making payments to organizations whose customers or clients are our
shareholders. You may waive your right to any fee to which you are entitled
hereunder, provided such waiver is delivered to us in writing.
5. This Agreement will become effective on the date hereof and shall
continue in effect until _________________ and thereafter for successive
twelve-month periods (computed from each _____________), provided that such
continuation is specifically approved at least annually by our Board of
Directors and by a majority of those of our directors who are neither party to
this Agreement nor, other than by their service as directors of the Fund,
interested persons, as defined in the 1940 Act, of any such person who is party
to this Agreement. This Agreement may be terminated at any time, without the
payment of any penalty, (I) by vote of a majority of the outstanding voting
securities of each respective Portfolio voting separately, as defined in the
1940 Act, or (ii) by a vote of a majority of our entire Board of Directors, on
sixty days' written notice to you, or by you on sixty days' written notice to
us.
6. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
7. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
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8. This Agreement shall be construed in accordance with the laws of
the State of New York and the applicable provisions of the 1940 Act.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
VIRGINIA DAILY MUNICIPAL INCOME FUND, INC.
By:
----------------------------------------
Name:
Title:
ACCEPTED: October __, 1997
XXXXX & XXXX ASSET MANAGEMENT L.P.
By: XXXXX & XXXX ASSET MANAGEMENT INC., as General Partner
By:
---------------------------------
Name:
Title:
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Exhibit A
Administration Services To Be Performed
By Xxxxx & Xxxx Asset Management L.P.
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Administration Services
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1. In conjunction with Fund counsel, prepare and file all
Post-Effective Amendments to the Registration Statement, all
state and federal tax returns and all other required regulatory
filings.
2. In conjunction with Fund counsel, prepare and file all Blue Sky
filings, reports and renewals.
3. Coordinate, but not pay for, required Fidelity Bond and Directors
and Officers Insurance (if any) and monitor their compliance with
Investment Company Act.
4. Coordinate the preparation and distribution of all materials for
Directors, including the agenda for meetings and all exhibits
thereto, and actual and projected quarterly summaries.
5. Coordinate the activities of the Fund's Manager, Custodian, Legal
Counsel and Independent Accountants.
6. Prepare and file all periodic reports to shareholders and proxies
and provide support for shareholder meetings.
7. Monitor daily and periodic compliance with respect to all
requirements and restrictions of the Investment Company Act, the
Internal Revenue Code and the Prospectus.
8. Monitor daily the Fund's bookkeeping services agent's calculation
of all income and expense accruals, sales and redemptions of
capital shares outstanding.
9. Evaluate expenses, project future expenses, and process payments
of expenses.
10. Monitor and evaluate performance of accounting and accounting
related services by Fund's bookkeeping services agent. Nothing
herein shall be construed to require you to perform any
accounting services not expressly provided for in this Agreement.
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