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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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SIGNATURE THOMAS F. MCDONOUGH
TITLE SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Tax Free Money Fund Annual Report for the fiscal year ended 12/31/97 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 0
<NAME>Scudder Tax Free Money Fund
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 277,287,552
<INVESTMENTS-AT-VALUE> 277,287,552
<RECEIVABLES> 4,555,367
<ASSETS-OTHER> 5,533,967
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 287,376,886
<PAYABLE-FOR-SECURITIES> 3,011,340
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,309,713
<TOTAL-LIABILITIES> 4,321,053
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 283,754,875
<SHARES-COMMON-STOCK> 282,884,441
<SHARES-COMMON-PRIOR> 220,070,917
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (699,042)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 283,055,833
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 8,306,132
<OTHER-INCOME> 0
<EXPENSES-NET> (1,456,833)
<NET-INVESTMENT-INCOME> 6,849,299
<REALIZED-GAINS-CURRENT> (2,932)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 6,846,367
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6,849,299)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 815,443,293
<NUMBER-OF-SHARES-REDEEMED> (758,866,018)
<SHARES-REINVESTED> 6,236,249
<NET-CHANGE-IN-ASSETS> 62,813,524
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (696,110)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,120,092
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,694,927
<AVERAGE-NET-ASSETS> 224,127,946
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.031
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.031)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Coopers
& Lybrand
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of Scudder Tax Free Money Fund:
In planning and performing our audit of the financial statements and
financial highlights of Scudder Tax Free Money Fund for the year ended December
31, 1997, we considered its internal control, including controls over
safeguarding securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and financial
highlights and to comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of Scudder Tax Free Money Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements and financial highlights for external purposes that are fairly
presented in conformity with generally accepted accounting principles. Those
controls include the safeguarding of assets against unauthorized acquisition,
use, or disposition.
Because of inherent limitations in internal control, errors or fraud may
occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of any
specific internal control component does not reduce to a relatively low level
the risk that errors or fraud in amounts that would be material in relation to
the financial statements and financial highlights being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control, including controls over safeguarding securities, that we
consider to be material weaknesses as defined above as of December 31, 1997.
This report is intended solely for the information and use of management of
Scudder Tax Free Money Fund and the Securities and Exchange Commission.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
February 11, 1998
Shareholder Meeting Results
A Special Meeting of Shareholders (the "Meeting") of Scudder Tax Free Money Fund
("Fund") was held on October 24, 1997, at the offices of Scudder Kemper
Investments, Inc. (formerly Scudder Stevens & Clark, Inc.), Two International
Place, Boston, Massachusetts 02110. At the Meeting, as adjourned and reconvened,
the following matters were voted upon by the shareholders (the resulting votes
for each matter are presented below). With regard to certain proposals, it was
recommended that the Meeting be reconvened in order to provide shareholders with
an additional opportunity to return their proxies. The date of the reconvened
meeting at which the matters were decided is noted after the proposed matter.
1. To approve the new Investment Management Agreement between the Fund and
Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
144,693,513 4,083,786 5,213,834 0
2. To elect Trustees.
Number of Votes:
----------------
Trustee For Withheld
------- --- --------
Henry P. Becton, Jr. 149,140,801 4,850,333
Dawn-Marie Driscoll 149,153,285 4,837,849
Peter B. Freeman 148,922,104 5,069,030
George M. Lovejoy, Jr. 148,963,784 5,027,349
Dr. Wesley W. Marple, Jr. 149,002,170 4,988,963
Daniel Pierce 149,209,950 4,781,184
Kathryn L. Quirk 149,009,586 4,981,548
Jean C. Tempel 149,073,843 4,917,291
3. To approve the Board's discretionary authority to convert the Fund to a
master/feeder fund structure through a sale or transfer of assets or
otherwise.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
137,284,323 9,798,118 6,875,556 33,137
<PAGE>
4. To approve certain amendments to the Declaration of Trust. Sufficient
proxies had not been received by December 2, 1997 to approve the
amendments to the Declaration of Trust. Management has determined not to
continue to seek shareholder approval for this item.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
138,255,446 8,711,493 7,621,925 33,137
5. To approve the revisions of certain fundamental investment policies.
<TABLE>
<CAPTION>
Number of Votes:
----------------
Broker
Fundamental Policies For Against Abstain Non-Votes*
-------------------- --- ------- ------- ----------
<S> <C> <C> <C> <C>
5.1 Diversification 138,831,457 7,210,448 7,916,092 33,137
5.2 Borrowing 138,405,301 7,636,603 7,916,092 33,137
5.3 Senior securities 138,711,187 7,330,718 7,916,092 33,137
5.4 Concentration 138,681,591 7,360,314 7,916,092 33,137
5.5 Loans 138,905,038 7,136,867 7,916,092 33,137
5.6 Underwriting of securities 138,912,277 7,122,302 7,923,417 33,137
5.7 Investment in real estate 138,919,594 7,122,311 7,916,092 33,137
5.8 Purchase of physical commodities 138,919,602 7,122,302 7,916,092 33,137
5.9 Investment in California municipal N/A N/A N/A N/A
securities
5.10 Investment in municipal securities N/A N/A N/A N/A
5.11 Investment in Massachusetts N/A N/A N/A N/A
municipal securities
5.12 Investment in New York municipal N/A N/A N/A N/A
securities
5.13 Investment in Ohio municipal N/A N/A N/A N/A
securities
5.14 Investment in Pennsylvania N/A N/A N/A N/A
municipal securities
<PAGE>
Broker
Fundamental Policies For Against Abstain Non-Votes*
-------------------- --- ------- ------- ----------
5.15 Investment in short-term municipal 138,933,446 7,108,459 7,916,092 33,137
securities
5.16 Elimination of tax diversification N/A N/A N/A N/A
5.17 Purchases of voting securities N/A N/A N/A N/A
5.18 Affiliated transactions N/A N/A N/A N/A
5.19 Disclosed practices N/A N/A N/A N/A
</TABLE>
6. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's independent
accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
147,512,984 1,704,063 4,774,087
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter.
Scudder Tax Free Money Fund
Two International Place
Boston, Massachusetts 02110
December 31, 1997
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Scudder Tax Free Money Fund
Ladies and Gentlemen:
Scudder Tax Free Money Fund (the "Trust") has been established as a
Massachusetts business trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees may divide the Trust's shares of
beneficial interest, par value $.01 per share, (the "Shares") into separate
series, or funds. Series may be abolished and dissolved, and additional series
established, from time to time by action of the Trustees.
The Trust has selected you to act as the sole investment manager of the
Trust and to provide certain other services, as more fully set forth below, and
you have indicated that you are willing to act as such investment manager and to
perform such services under the terms and conditions hereinafter set forth.
Accordingly, the Trust agrees with you as follows:
1. Delivery of Documents. The Trust engages in the business of investing
and reinvesting the assets of the Trust in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") included in the Trust's Registration Statement on Form N-1A, as
amended from time to time, (the "Registration Statement") filed by the Trust
under the Investment Company Act of 1940, as amended, (the "1940 Act") and the
Securities Act of 1933, as amended. Copies of the documents referred to in the
preceding sentence have been furnished to you by the Trust. The Trust has also
furnished you with copies properly certified or authenticated of each of the
following additional documents related to the Trust:
(a) The Declaration dated December 8, 1987, as amended to date.
(b) By-Laws of the Trust as in effect on the date hereof (the "ByLaws").
(c Resolutions of the Trustees of the Trust and the shareholders of the Trust
selecting you as investment manager and approving the form of this
Agreement.
<PAGE>
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Scudder," "Scudder Kemper
Investments, Inc." and "Scudder, Stevens & Clark, Inc." trademarks (together,
the "Scudder Marks"), you hereby grant the Trust a nonexclusive right and
sublicense to use (i) the "Scudder" name and mark as part of the Trust's name
(the "Trust Name"), and (ii) the Scudder Marks in connection with the Trust's
investment products and services, in each case only for so long as this
Agreement, any other investment management agreement between you and the Trust,
or any extension, renewal or amendment hereof or thereof remains in effect, and
only for so long as you are a licensee of the Scudder Marks, provided however,
that you agree to use your best efforts to maintain your license to use and
sublicense the Scudder Marks. The Trust agrees that it shall have no right to
sublicense or assign rights to use the Scudder Marks, shall acquire no interest
in the Scudder Marks other than the rights granted herein, that all of the
Trust's uses of the Scudder Marks shall inure to the benefit of Scudder Trust
Company as owner and licensor of the Scudder Marks (the "Trademark Owner"), and
that the Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
shall cooperate with you and the Trademark Owner and shall execute and deliver
any and all documents necessary to maintain and protect (including but not
limited to in connection with any trademark infringement action) the Scudder
Marks and/or enter the Trust as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Trust Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust use the Scudder Marks or any
other name or mark confusingly similar thereto (including, but not limited to,
any name or mark that includes the name "Scudder") if this Agreement or any
other investment advisory agreement between you (or your successor) and the
Trust is terminated.
3. Portfolio Management Services. As manager of the assets of the Trust,
you shall provide continuing investment management of the assets of the Trust in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Trust so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Trust shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Trust in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Trust's investment records and ledgers as are necessary to assist the Trust in
complying with the requirements of the 1940 Act and other applicable laws. To
the extent required by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in connection with the
2
<PAGE>
services provided pursuant to this Agreement which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Trust and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Trust policies
as expressed in the Registration Statement. You shall determine what portion of
the Trust's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Trust and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
4. Administrative Services. In addition to the portfolio management
services specified above in section 3, you shall furnish at your expense for the
use of the Trust such office space and facilities in the United States as the
Trust may require for its reasonable needs, and you (or one or more of your
affiliates designated by you) shall render to the Trust administrative services
necessary for operating as an open-end investment company and not provided by
persons not parties to this Agreement including, but not limited to, preparing
reports to and meeting materials for the Trust's Board of Trustees and reports
and notices to Trust shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Trust
operations; preparing and making filings with the Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the Trust's transfer agent; assisting in the
preparation and filing of the Trust's federal, state and local tax returns;
preparing and filing the Trust's federal excise tax return pursuant to Section
4982 of the Code; providing assistance with investor and public relations
matters; monitoring the valuation of portfolio securities and the calculation of
net asset value; monitoring the registration of Shares of the Trust under
applicable federal and state securities laws; maintaining or causing to be
maintained for the Trust all books, records and reports and any other
information required under the 1940 Act, to the extent that such books, records
and reports and other information are not maintained by the Trust's custodian or
other agents of the Trust; assisting in establishing the accounting policies of
the Trust; assisting in the resolution of accounting issues that may arise with
respect to the Trust's operations and consulting with the Trust's independent
accountants, legal counsel and the Trust's other agents as necessary in
connection therewith; establishing and monitoring the Trust's operating expense
budgets; reviewing the Trust's bills; processing the payment of bills that have
been approved by an authorized person; assisting the Trust in determining the
amount of dividends and distributions available to be paid by the Trust to its
shareholders, preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is required for
such parties to effect the payment of dividends and distributions; and otherwise
assisting the Trust as it may reasonably request in the conduct of the Trust's
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Trust or any other person not a party to this
Agreement which is obligated to provide services to the Trust.
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5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including the Trust's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Trust, the services of such of your directors,
officers and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. You
shall provide at your expense the portfolio management services described in
section 3 hereof and the administrative services described in section 4 hereof.
You shall not be required to pay any expenses of the Trust other than those
specifically allocated to you in this section 5. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Trust's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Trust: organization expenses of the
Trust (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Trust advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Trust's custodian
or other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Trust in connection with membership in investment company trade
organizations; fees and expenses of the Trust's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Trust; expenses relating to investor and
public relations; expenses and fees of registering or qualifying Shares of the
Trust for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Trust's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Trust business) of Trustees, officers and
employees of the Trust who are not affiliated persons of you; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Trust; expenses of printing and distributing reports, notices and
dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Trust and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust or any committees thereof or
advisors thereto held outside of Boston, Massachusetts or New York, New York.
You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Trust if and to the
extent that (i) such expenses are required to be borne by a principal
underwriter which acts as the distributor of the Trust's Shares pursuant to an
underwriting agreement which provides that the underwriter shall assume some or
all of such expenses, or (ii) the Trust shall have adopted a plan in conformity
with Rule 12b-1 under the 1940 Act providing that the Trust (or some other
party) shall assume some or all of such expenses. You shall be required to pay
such of the foregoing sales expenses as are not required to be paid by the
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Trust (or some other party) pursuant to such a plan.
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6. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the Trust
shall pay you in United States Dollars on the last day of each month the unpaid
balance of a fee equal to the excess of 1/12 of 0.50 of 1 percent of the average
daily net assets as defined below of the Fund for such month; provided that, for
any calendar month during which the average of such values exceeds $500 million,
the fee payable for that month based on the portion of the average of such
values in excess of $500 million shall be 1/12 of 0.48 of 1 percent of such
portion over any compensation waived by you from time to time (as more fully
described below). You shall be entitled to receive during any month such interim
payments of your fee hereunder as you shall request, provided that no such
payment shall exceed 75 percent of the amount of your fee then accrued on the
books of the Trust and unpaid.
The "average daily net assets" of the Trust shall mean the average of the
values placed on the Trust's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Trust is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Trust lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Trust shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 6, the value of the net
assets of the Trust as last determined shall be deemed to be the value of its
net assets as of 4:00 p.m. (New York time), or as of such other time as the
value of the net assets of the Trust's portfolio may be lawfully determined on
that day. If the Trust determines the value of the net assets of its portfolio
more than once on any day, then the last such determination thereof on that day
shall be deemed to be the sole determination thereof on that day for the
purposes of this section 6.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Trust's expenses, as if such waiver
or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Trust, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Trust's account with
brokers or dealers selected by you in accordance with Trust policies as
expressed in the Registration Statement. If any occasion should arise in which
you give any advice to clients of yours concerning the Shares of the Trust, you
shall act solely as investment counsel for such clients and not in any way on
behalf of the Trust.
Your services to the Trust pursuant to this Agreement are not to be deemed
to be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Trust. Whenever the Trust and
one or more other accounts or investment companies advised by the Manager have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by the Manager to be
equitable to each entity. Similarly, opportunities to sell securities shall be
allocated in a manner believed by the Manager to be equitable. The Trust
recognizes that in some cases this procedure may adversely affect the size of
the position that may be acquired or disposed of for the Trust.
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8. Limitation of Liability of Manager. As an inducement to your undertaking
to render services pursuant to this Agreement, the Trust agrees that you shall
not be liable under this Agreement for any error of judgment or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
this Agreement relates, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Trust or its
shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
Any person, even though also employed by you, who may be or become an employee
of and paid by the Trust shall be deemed, when acting within the scope of his or
her employment by the Trust, to be acting in such employment solely for the
Trust and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall remain
in force until September 30, 1998, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Trustees who are not parties
to this Agreement or interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Trust. The aforesaid requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and regulations
thereunder and any applicable SEC exemptive order therefrom.
This Agreement may be terminated with respect to the Trust at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Trust or by the Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.
10. 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 whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Scudder Tax Free
Money Fund" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Trust, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust to any extent whatsoever, but that
the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as
set forth in the Declaration and you agree that the obligations assumed by the
Trust pursuant to this Agreement shall be limited in all cases to the Trust and
its assets, and you shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Trust or any other series of the Trust,
or from any Trustee, officer, employee or agent of the Trust. You understand
that the rights and obligations of each series, under the Declaration are
separate and distinct from those of any and all other series.
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12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In interpreting the provisions of this Agreement, the definitions contained
in Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Trust to fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
SCUDDER TAX FREE MONEY FUND
By:
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President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS,
INC.
By:
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Managing Director
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