INVESTMENT MANAGEMENT CONTRACT
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
the "Fund"
New York, New York
, 1996
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 the 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.
(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
existence as a corporation, (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 stockholder services including, charges and expenses
of persons providing confirmations of transactions in our shares, periodic
statements to stockholders, and recordkeeping and stockholders' services,
(l) costs of stockholders' reports, proxy solicitations, and corporate
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
stockholders and of printing stockholder application forms for stockholder
accounts, (o) payment of the fees and expenses provided for herein, under
the Administrative Services Agreement and under the Shareholder Servicing
Agreement 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 .30 of 1% 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 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 _______________ 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 corporation,
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, by vote of a majority of our
outstanding voting securities, as defined in the 1940 Act and the rules
thereunder, or 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.
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 &
Tang 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.
Very truly yours,
CONNECTICUT DAILY TAX FREE INCOME FUND, INC.
By:
ACCEPTED: , 1996
XXXXX & XXXX ASSET MANAGEMENT L.P.
By: XXXXX & XXXX ASSET MANAGEMENT, INC., General Partner
By: ___________________________________