INVESTMENT MANAGEMENT CONTRACT
SHORT TERM INCOME FUND, INC.
(the "Fund")
Money Market Portfolio
U.S. Government Portfolio
(the "Portfolios")
New York, New York
October 30, 2000
▇▇▇▇▇ & ▇▇▇▇ Asset Management L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 of our Portfolios 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 of
the Portfolios. 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 corporation 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 portfolios since your prior report, and will also keep us in
touch with important developments affecting our portfolios 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 portfolios, 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,
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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, with respect to the Class A Shares of each Portfolio only, pursuant to 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 the annual operating expenses for each
Portfolio (excluding taxes, brokerage, interest and extraordinary expenses)
exceed the limits on investment company expenses prescribed by any state in
which the shares for such Portfolio 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 the Portfolios will pay you a fee at
the annual rate of (i) .30% of the Money Market Portfolio's average daily net
assets not in excess of $750 million, plus .29% of such assets in excess of $750
million but not in excess of $1 billion, plus .28% of such assets in excess of
$1 billion but not in excess of $1.5 billion, plus .27% of such assets in excess
of $1.5 billion and (ii) .275% of the U.S. Government Portfolio's average daily
net assets not in excess of $250 million, plus .25% of such assets in excess of
$250 million. 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 August 31, 2002 and thereafter for successive
twelve-month periods (computed from each September 1), provided that such
continuation is specifically approved at least annually by our Board of
Directors or by a majority vote of the holders of the outstanding voting
securities of each respective Portfolio voting separately, 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, 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. With respect to each Portfolio,
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 and the rules
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thereunder, 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.
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 ▇▇▇▇▇ & ▇▇▇▇ 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,
SHORT TERM INCOME FUND, INC.
Money Market Portfolio
U.S. Government Portfolio
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
ACCEPTED: October 30, 2000
▇▇▇▇▇ & ▇▇▇▇ ASSET MANAGEMENT L.P.
By: ▇▇▇▇▇ & ▇▇▇▇ ASSET MANAGEMENT, INC.
General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
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