INVESTMENT MANAGEMENT CONTRACT
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
the "Fund"
New York, New York
June __, 1998
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 to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the investment management services
specified below.
(b) Subject to the general control of our Board
of Directors, you will make decisions with respect to all purchases and sales of
the portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our Fund itself might or could
do with respect to such purchases, sales or other transactions, as well as with
respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
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(c) You will report to our Board of Directors at
each meeting thereof all changes in our portfolio since your prior report, and
will also keep us in touch with important developments affecting our portfolio
and, on your initiative, will furnish us from time to time with such information
as you may believe appropriate for this purpose, whether concerning the
individual entities whose securities are included in our portfolio, the
activities in which such entities engage, Federal income tax policies applicable
to our investments, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical and analytical
information with respect to our portfolio securities as you may believe
appropriate or as we may reasonably request. In making such purchases and sales
of our portfolio securities, you will comply with the policies set from time to
time by our Board of Directors as well as the limitations imposed by our
Articles of Incorporation and by the provisions of the Internal Revenue Code and
the 1940 Act relating to regulated investment companies and the limitations
contained in the Registration Statement.
(d) 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.
(e) You or your affiliates will also furnish us,
at your own expense, such investment advisory supervision and assistance 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. You and
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 agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses, including: (a) brokerage and commission expenses, (b) Federal, state
or local taxes, including issue and transfer taxes incurred by or levied on us,
(c) commitment fees and certain insurance premiums, (d) interest charges on
borrowings, (e) charges and expenses of our custodian, (f) charges, expenses and
payments relating to the issuance, redemption, transfer and dividend disbursing
functions for us, (g) recurring and nonrecurring legal and accounting expenses,
including those of the bookkeeping agent, (h) telecommunications expenses, (i)
the costs of organizing and maintaining our
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existence as a trust, (j) compensation, including directors' fees, of any of our
directors, officers or employees who are not your officers or officers of your
affiliates, and costs of other personnel providing clerical, accounting
supervision and other office services to us as we may request, (k) costs of
shareholder's services including, charges and expenses of persons providing
confirmations of transactions in our shares, periodic statements to
shareholders, and recordkeeping and shareholders' services, (l) costs of
shareholders' reports, proxy solicitations, and Fund meetings, (m) fees and
expenses of registering our shares under the appropriate Federal securities laws
and of qualifying such shares under applicable state securities laws, including
expenses attendant upon the initial registration and qualification of such
shares and attendant upon renewals of, or amendments to, those registrations and
qualifications, (n) expenses of preparing, printing and delivering our
prospectus to existing shareholders and of printing shareholder application
forms for shareholder accounts, (o) payment of the fees and expenses provided
for herein, under the Administrative Services Agreement, and pursuant to the
Shareholder Servicing Agreement, with respect to the Class A shares only, and
Distribution Agreement, and (p) any other distribution or promotional expenses
contemplated by an effective plan adopted by us pursuant to Rule 12b-1 under the
Act. Our obligation for the foregoing expenses is limited by your agreement to
be responsible, while this Agreement is in effect, for any amount by which our
annual operating expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed the limits on investment company expenses
prescribed by any state in which our shares are qualified for sale.
4. 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 gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you a fee at
the annual rate of .40% 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
you shall request of us in writing. You may use any portion of this fee for
distribution of our shares, or for making servicing 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
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delivered to us in writing. Any reimbursement of our expenses, to which we may
become entitled pursuant to paragraph 3 hereof, will be paid to us at the same
time as we pay you.
6. This Agreement will become effective on the date hereof and
shall continue in effect until ____________ __, 2000 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 or by a majority vote of the holders of our outstanding voting
securities, as defined in the 1940 Act and the rules thereunder, and, in either
case, 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 trust, interested
persons, as defined in the 1940 Act and the rules thereunder, of any such person
who is party to this Agreement. Upon the effectiveness of this Agreement, it
shall supersede all previous Agreements between us covering the subject matter
hereof. This Agreement may be terminated at any time, without the payment of any
penalty, (i) by vote of a majority of our outstanding voting securities, as
defined in the 1940 Act and the rules thereunder, or (ii) by a vote of a
majority of our entire Board of Directors, on sixty days' written notice to you,
or (iii) by you on sixty days' written notice to us.
7. 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.
8. 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 employees or the officers and directors of Xxxxx & Xxxx
Asset Management, Inc., your general partner, who may also be a director,
officer or employee of ours, or of a person affiliated with us, as defined in
the 1940 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.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
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Very truly yours,
GEORGIA DAILY MUNICIPAL INCOME FUND, INC.
By:___________________________________
Name:
Title:
ACCEPTED: June __, 1998
XXXXX & XXXX ASSET MANAGEMENT L.P.
By: XXXXX & XXXX ASSET MANAGEMENT, INC., as General Partner
By: ___________________________________
Name:
Title:
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