MSIM ADMINISTRATION AGREEMENT
Agreement dated as of October 23, 2003 between XXXXXX XXXXXXX INSTITUTIONAL
LIQUIDITY FUNDS, a Massachusetts business trust (the "Fund") and XXXXXX XXXXXXX
INVESTMENT MANAGEMENT INC., a Delaware corporation ("MSIM").
WHEREAS, the Fund has filed a Registration Statement on Form N-1A to
register as an investment company under the Investment Company Act of 1940 (the
"1940 Act") and to offer shares of seven portfolios (the Money Market Portfolio,
the Prime Portfolio, the Government Securities Portfolio, the Government
Portfolio, the Treasury Securities Portfolio, the Treasury Portfolio and the
Tax-Exempt Portfolio) (the "Portfolios") under the Securities Act of 1933; and
WHEREAS, the Fund desires to retain MSIM to render certain management,
administrative, transfer agency, dividend disbursing and other services to the
Fund, and MSIM is willing to render such services;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Fund hereby appoints MSIM to act as administrator to the Fund for the
period and on the terms set forth in this Agreement. In connection therewith,
MSIM accepts such appointment and agrees to render the services and provide, at
its own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the compensation
herein provided. The parties hereto agree that MSIM may render and provide the
services described herein directly or through the services of third parties. In
connection with such appointment, the Fund will deliver to MSIM copies of each
of the following documents and will deliver to it all future amendments and
supplements, if any:
A. Certified copies of the Declaration of Trust of the Fund as presently in
effect and as amended from time to time;
B. A certified copy of the Fund's By-Laws as presently in effect as amended
from time to time;
C. A copy of the resolution of the Fund's Board of Trustees authorizing
this Agreement;
D. The Fund's registration statement on Form N-1A as filed with, and
declared effective by, the U.S. Securities and Exchange Commission, and all
amendments thereto;
E. Each resolution of the Board of Trustees of the Fund authorizing the
original issue of its shares.
F. Certified copies of the resolutions of the Fund's Board of Trustees
authorizing: (1) certain persons to give instructions to the Fund's Custodian
pursuant to the Custody Agreement and (2) certain persons to sign checks and pay
expenses on behalf of the Fund.
G. A copy of the Investment Advisory Agreement dated October 23, 2003
between the Fund and Xxxxxx Xxxxxxx Investment Management Inc.
H. A copy of the Custody Agreement dated October 23, 2003 between the Fund
and X.X. Xxxxxx Chase Bank.
I. Such other certificates, documents or opinions which MSIM may, in its
reasonable discretion, deem necessary or appropriate in the proper performance
of its duties.
2. REPRESENTATION AND WARRANTIES OF MSIM
MSIM represents and warrants to the Fund that
A. It is a corporation, duly organized and existing in good standing under
the laws of Delaware.
B. It is duly qualified to carry on its business in the State of New York.
C. It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform the services contemplated in
this Agreement.
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D. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
E. It has and will continue to have and maintain, directly or through third
parties, the necessary facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
3. AUTHORIZED SHARES
The Fund certifies to MSIM that as of the close of business on the date of
this Agreement, the Fund is authorized to issue an unlimited number of shares of
beneficial interest ("shares"), $0.01 par value, and that the Board of Trustees
has the power to classify or reclassify unissued shares, from time to time, into
one or more classes ("Portfolios") of shares, and that it would initially offer
shares of seven Portfolios.
4. SERVICES PROVIDED BY MSIM
MSIM shall discharge, directly, or through third parties, the following
responsibilities subject to the control of the Fund's Board of Trustees, and in
compliance with the objectives, policies and limitations set forth in the Fund's
registration statement, By-Laws and applicable laws and regulations.
A. General Administration. Under the direction of the Fund's Board of
Trustees, MSIM shall manage, administer, and conduct all of the general business
activities of the Fund other than those which have been contracted to third
parties by the Fund, shall, directly or through third parties, provide the
personnel and facilities necessary to perform such general business activities
under the supervision of the Fund's Board of Trustees and Executive Officers.
B. Accounting. MSIM shall, directly or through third parties, provide the
following accounting services to the Fund:
1) Maintenance of the books and records and accounting controls for
the Fund's assets, including records of all securities transactions;
2) Daily calculation of the net asset value for each of the Fund's
Portfolios;
3) Accounting for dividends and interest received and distributions
made by each of the Fund's Portfolios;
4) Preparation and filing of the Fund's U.S. tax returns and annual
and semi-annual reports on Form N-SAR;
5) The production of transaction data, financial reports and such
other periodic and special reports as the Board of Trustees of the Fund may
reasonably request;
6) The preparation of financial statements for the annual and
semi-annual reports and other shareholder communications;
7) Liaison with the Fund's independent auditors;
8) Monitoring and administration of arrangements with the Fund's
custodian and depository banks; and
9) Maintenance of (but not the payment for) the Fidelity Bond required
to be maintained under the 1940 Act and preparation of the filings required
in connection, therewith.
C. Transfer Agent. The Fund hereby directs MSIM to be responsible for the
appointment of Transfer Agent for the Fund and MSIM agrees to act in such
capacity. In connection with such appointment, the transfer agent shall:
1) Maintain records showing for each Fund shareholder the following:
a) Name, address and tax identifying number (if applicable);
b) Number of shares of the Portfolio of the Fund held;
c) Historical information including dividends paid and date and
price of all transactions including individual purchases and
redemptions; and
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d) Any dividend reinvestment order, application, dividend address
and correspondence relating to the current maintenance of the account;
2) Record the issuance of shares of common stock of each Portfolio of
the Fund and shall notify the Fund in case any proposed issue of shares by
the Fund shall result in an over-issue as identified by Section 8-104(2) of
the Uniform Commercial Code and in case any issue would result in such an
over-issue, shall refuse to countersign and issue, and/or credit, said
shares. Except as specifically agreed in writing, MSIM and any transfer
agent appointed by MSIM shall have no obligation when countersigning and
issuing and/or crediting shares, to take cognizance of any other laws
relating to the issue and sale of such shares except insofar as policies
and procedures of the Stock Transfer Association recognize such laws.
3) Process all orders for the purchase of shares of each Portfolio of
the Fund in accordance with the Fund's current registration statement. Upon
receipt of any check or other payment for purchase of shares of the Fund
from an investor, the transfer agent will (i) stamp the order with the date
of receipt, (ii) determine the amounts thereof due the Fund, and notify the
Fund of such determination and deposit, such notification to be given on a
daily basis of the total amounts determined and deposited to said account
during such day. The transfer agent shall then credit the share account of
the investor with the number of shares to be purchased according to the
price of the Portfolio's shares in effect for purchases made or, the date
such payment is received as set forth in the Fund's current prospectus and
shall promptly mail a confirmation of said purchase to the investor, all
subject to any instructions which the Fund may give to MSIM or the transfer
agent with respect to the timing or manner of acceptance of orders for
shares relating to payments so received by it.
4) Receive and stamp with the date of receipt all requests for
redemptions of shares and shall process said redemptions requests as
follows:
a) If such redemption request complies with the applicable
standards approved by the Fund, MSIM or the transfer agent shall on
each business day notify the Fund of the total number of shares
presented and covered by such requests received by MSIM or the
transfer agent on such day;
b) On or prior to the seventh calendar day succeeding any such
request for redemption, MSIM or the transfer agent shall notify the
Custodian, subject to instructions from the Fund, to transfer monies
to such account as designated by MSIM or the transfer agent for such
payment to the redeeming shareholder of the applicable redemption or
repurchase price.
c) If any request for redemption does not comply with applicable
standards, MSIM or the transfer agent shall promptly notify the
investor of such fact, together with the reason therefore, and shall
effect such redemption at the Portfolio's price next determined after
receipt of documents complying with said standards or, at such other
time as the Fund shall so direct;
5) Acknowledge all correspondence from shareholders relating to their
share accounts and undertake such other shareholder correspondence as may
from time to time be mutually agreed upon;
6) Process redemptions, exchanges and transfers of Fund shares upon
telephone instructions from qualified shareholders in accordance with the
procedures set forth in the Fund's current prospectus. MSIM and any
transfer agent appointee by MSIM shall be permitted to act upon the
instruction of any person by telephone to redeem, exchange and/or transfer
Fund shares from any account for such services have been authorized. In
accordance with Section 7 herein, the Fund hereby agrees to indemnify and
hold MSIM and any transfer agent appointed by MSIM harmless against all
losses, costs or expenses, including attorney fees, suffered or incurred by
MSIM and any transfer agent appointed by MSIM directly or indirectly as a
result of (i) taping the telephone conversation of any shareholder, or (ii)
relying on the telephone instructions of any person acting on behalf of a
shareholder account for which telephone services have been authorized.
D. Recording of Transfer. A transfer agent duly appointed by MSIM is
authorized to transfer on the records of the Fund maintained by it, shares
represented by certificates, as well as issued shares held
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in non-certificate form, upon the surrender to it of the certificate or in the
case of non-certificated shares, comparable transfer documents in proper form
for transfer, and upon cancellation thereof to countersign and issue new
certificates or other document of ownership for a like amount of stock and to
deliver the same pursuant to the transfer instructions.
E. Returned Checks. In the event that any check or other order for the
payment of money is returned unpaid for any reason, MSIM or a third party
appointed by MSIM will take such steps, including redepositing said check for
collection or returning said check to the investor, as MSIM or a third party
appointed by MSIM may, at its discretion, deem appropriate, or as the Fund may
instruct.
F. Dividend Tax Reporting and Withholding. MSIM or a third party appointed
by MSAM will prepare, file with the Internal Revenue Service and mail to
shareholders such returns for reporting payment of dividends and distributions
as are required by applicable laws to be so filed and/or mailed and MSIM or a
third party appointed by MSIM shall withhold such sums as are required to be
withheld under applicable Federal income tax laws, rules and regulations.
G. Proxies. MSIM or a third party appointed by MSIM shall mail proxy
statements, proxy cards and other materials supplied to it by the Fund and shall
receive, examine and tabulate returned proxies. MSIM or a third party appointed
by MSIM shall make interim reports of the status of such tabulation to the Fund
upon request, and shall certify the final results of the tabulation.
H. Dividend Disbursing. MSIM or a third party appointed by MSIM shall act
as Dividend Disbursing Agent for the Fund and each of its Portfolios, and, as
such shall prepare and mail checks or credit income and capital gain payments to
shareholders. The Fund shall advise MSIM or a third party appointed by MSIM of
the declaration of any dividend or distribution and the record and payable date
thereof at least five (5) days prior to the record date. MSIM or a third party
appointed by MSIM shall, on or before the payment date of any such dividend or
distribution, notify the Fund's Custodian of the estimated amount required to
pay any portion of said dividend or distribution payable in cash, and on or
before the payment date of such distribution, the Fund shall instruct its
Custodian to make available to MSIM or a third party appointed by MSIM
sufficient funds for the cash amount to be paid out. If a shareholder is
entitled to receive additional shares by virtue of any such distribution or
dividend, appropriate credits will be made to his account and/or certificates
delivered where requested. A shareholder not electing issuance of certificates
will receive a confirmation from MSIM or a third party appointed by MSIM
indicating the number of shares credited to his account as a result of the
reinvested dividend or distribution.
I. Other Information. MSIM shall, directly or through third parties,
furnish for the Fund such other information as is required by law, including but
not limited to shareholder lists, and such statistical information as may be
reasonably requested by the Fund.
5. SERVICES TO BE OBTAINED INDEPENDENTLY BY THE FUND
The following shall be provided at no expense to MSIM hereunder:
A. Services of an independent accountant;
B. Services of outside legal counsel (including such counsel's review of
the Fund's registration statement, proxy materials and other reports and
materials prepared by MSIM directly or through third parties under this
Agreement);
C. Any services contracted for by the Fund directly from parties other than
MSIM;
D. Trading operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for its investment
portfolio;
E. Taxes, insurance premiums and other fees and expenses applicable to its
operation;
F. Investment advisory services;
G. Costs incidental to any meetings of shareholders including, but not
limited to, legal and accounting fees, proxy filing fees and the preparation,
printing and mailing of any proxy materials;
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H. Costs incidental to Trustees' meetings, including fees and expenses of
Trustees;
I. The salary and expenses of any officer or employee of the Fund;
J. Custodian and depository banks, and all services related thereto;
K. Costs incidental to the preparation, printing and distribution of its
registration statement and any amendments thereto, and shareholder reports;
L. All registration fees and filing fees required under the securities laws
of the United States and state regulatory authorities;
M. Fidelity bond and Director's and Officers' liability insurance.
6. PRICES, CHARGES AND INSTRUCTIONS
A. The Fund will pay to MSIM, as compensation for the services provided and
the expenses assumed pursuant to this Agreement, as agreed to in a written fee
schedule approved by the parties hereto (see Schedule A). In addition, MSIM, or
third parties providing such services for the benefit of the Fund through
arrangements within shall be reimbursed for the cost of any and all forms,
including blank checks and proxies, used by it in communicating with
shareholders of the Fund, or especially prepared for use in connection with its
obligations hereunder, as well as the cost of postage, telephone, telex and
telecopy used in communicating with shareholders of the Fund and microfilm used
each year to record the previous year's transactions in shareholder accounts aid
computer tapes used for permanent storage of records, permanent storage costs
for hard copy Fund records and cost of insertion of materials in mailing
envelopes by outside firms. Prior to ordering any forms in such supply as it
estimates will be adequate for more than two years' use, MSIM or any third party
appointed by MSIM shall obtain the written consent of the Fund. All forms for
which MSIM or any third party appointed by MSIM has received reimbursement from
the Fund shall be and remain the property of the Fund until used.
B. At any time MSIM, and third parties providing such services for the
benefit of the Fund through arrangements with MSIM may apply to any officer of
the Fund or officer of the Fund's investment adviser for instructions, and may
consult with legal counsel for the Fund, or its own outside legal counsel, at
the expense of the Fund, with respect to any matter arising in connection with
the services to be performed by MSIM or any third party appointed by MSIM under
this Agreement and MSIM and such third parties shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by it in good faith in
reliance upon such instructions. In carrying out its duties hereunder MSIM and
such third parties shall be protected and indemnified in acting upon any paper
or document believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the Fund.
MSIM shall also be protected and indemnified, except where a stop order is in
effect, in recognizing stock certificates which MSIM reasonably believes to bear
the proper manual or facsimile signature of the officers of the Fund, and the
proper counter-signatures of any former transfer agent.
7. LIMITATION OF LIABILITY AND INDEMNIFICATION
A. MSIM shall be responsible hereunder for the performance of only such
duties as are set forth or contemplated herein or contained in instructions
given to it which are not contrary to this Agreement. MSIM shall have no
liability for any loss or damage resulting from the performance or
nonperformance of its duties hereunder unless solely caused by or resulting from
the gross negligence or willful misconduct.
B. The Fund shall indemnify and hold MSIM, and third parties providing
services for the benefit of the Fund through arrangements with MSIM, harmless
from all loss, cost, damage and expense, including reasonable expenses for
counsel, incurred by such person resulting from any claim, demand, action or
omission by it in the performance of its duties hereunder or under such
arrangements with MSIM, or as a result of acting upon any instructions
reasonably believed by any such person have been executed by a duly authorized
officer of the Fund or of the Fund's investment advisers, provided that this
indemnification shall not apply to actions or omissions of MSIM, its officers,
employees or agents in cases of its or their own gross negligence or willful
misconduct.
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C. The Fund will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any liability subject to the indemnification provided above, but, if the
Fund elects to assume the defense, such defense shall be conducted by counsel
chosen by the Fund. In the event the Fund elects to assume the defense of any
such suit and retain such counsel, MSIM or any of its affiliated persons or any
third parties providing services for the benefit of term through arrangements
with MSIM, named as defendant or defendants in the suit, may retain additional
counsel but shall bear the fees and expenses of such counsel unless at such time
the Fund specifically authorizes in writing the retaining of such counsel at the
Fund's expense.
D. No provisions of this Agreement shall be deemed to protect MSIM or any
of its directors, officers and/or employees, against liability to the Fund or
its shareholders to which it might otherwise be subject by reason of any fraud,
willful misfeasance or gross negligence in the performance of its duties or the
reckless disregard of its obligations under this Agreement.
8. CONFIDENTIALITY
MSIM agrees that, except as otherwise required by law or as necessary in
accordance with this Agreement, MSIM will keep confidential all records and
information in its possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to any person except at the
request or with the written consent of the Fund.
9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS
The Fund assumes full responsibility hereunder for complying with all
applicable requirements of the Securities Act of 1933, the Investment Company
Act of 1940 and the Securities Exchange Act of 1934, all as amended, and any
laws, rules and regulations of governmental authorities having jurisdiction,
except to the extent that MSIM specifically assumes any such obligations under
the terms of this Agreement.
MSIM shall, directly or through third parties, maintain and preserve for
the periods prescribed, such records relating to the services to be performed by
MSIM under this Agreement as are required pursuant to the Investment Company Act
of 1940 and the Securities Exchange Act of 1934. All such records shall at all
times remain the respective properties of the Fund, shall be readily accessible
during normal business hours to each, and shall be promptly surrendered upon the
termination of this Agreement or otherwise on written request. Records shall be
surrendered in usable machine readable form.
10. STATUS OF MSIM
The services of MSIM to the Fund are not to be deemed exclusive, and MSIM
shall be free to render similar services to others. MSIM shall be deemed to be
an independent contractor hereunder and shall, unless otherwise expressly
provided herein authorized by the Fund from time to time, have no authority to
act or represent the Fund in any way or otherwise be deemed an agent of the Fund
with respect to this Agreement.
11. PRINTED MATTER CONCERNING THE FUND OR MSIM
Neither the Fund nor MSIM shall, with respect to this Agreement, publish
and circulate any printed matter which contains any reference to the other party
without its prior written approval, excepting such printed matter as refers in
accurate terms to MSIM's appointment under this Agreement and except as required
by applicable laws.
12. TERM, AMENDMENT AND TERMINATION
This Agreement may be modified or amended from time to time by mutual
agreement between the parties hereto. The Agreement shall remain in effect for a
period of one year from the date the Funds registration statement on file with
the U.S. Securities and Exchange Commission becomes effective and shall
automatically continue in effect thereafter unless terminated by either party at
the end of such period or thereafter on one 60 days' prior written notice. Upon
termination of the Agreement, the Fund
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shall pay to MSIM such compensation as may be due under the terms hereof as of
the care of such termination. If, during the initial one year period, either of
the parties hereto shall be in default in the performance of any of its duties
and obligations hereunder (the defaulting party), the other party hereto may
give written notice to the defaulting party and if such default shall not have
been remedied within 30 days after such written notice is given, then the party
giving such notice may terminate this Agreement by 90 days' written notice of
such termination to the defaulting party, but such termination shall not affect
any rights or obligations of either party arising from or relating to such
default under the terms hereof.
13. NOTICES
Any notice or other communication authorized or required by this Agreement
to be given to any party mentioned herein shall be sufficiently given if
addressed to such party and mailed postage prepaid or delivered to its principal
office.
14. NON-ASSIGNABILITY
This Agreement shall not be assigned by any of the parties hereto without
the prior consent in writing of the other party.
15. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of the
Fund and MSIM, and their respective successors.
16. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
17. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the day and year first above written.
ATTEST: XXXXXX XXXXXXX
INSTITUTIONAL LIQUIDITY FUNDS
/s/ Xxx Xxxx XxXxxxx By: /s/ Xxxx X. Xxxxxx
-------------------- -------------------------
Assistant Secretary President
ATTEST: XXXXXX XXXXXXX INVESTMENT
MANAGEMENT INC.
/s/ Xxx Xxxx XxXxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------- -------------------------
Assistant Secretary Principal
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SCHEDULE A
TO
MSIM ADMINISTRATION AGREEMENT DATED AS OF OCTOBER 23, 2003
XXXXXX XXXXXXX INSTITUTIONAL LIQUIDITY FUNDS
AND
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
FEE SCHEDULE
For the services provided and the expenses assumed pursuant to the attached
Xxxxxx Xxxxxxx Investment Management Inc. Administration Agreement, the Xxxxxx
Xxxxxxx Institutional Liquidity Funds shall pay to Xxxxxx Xxxxxxx Investment
Management Inc. an annual fee, in monthly installments, of 0.05% of the average
daily net assets of each of the Portfolios. This fee is allocated to each
Portfolio based on the relative net assets of each.
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