PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
(Liquid Assets Series)
Amended Management and Administrative Services Agreement
Agreement, made this 1st day of November, 1996, as amended on May 29, 1997,
between Prudential Institutional Liquidity Portfolio, Inc. (the Fund), a
Maryland corporation, and Prudential Investments Fund Management LLC (the
Manager), a Delaware corporation, with respect to the Liquid Assets Series of
the Fund.
WITNESSETH
WHEREAS, the Fund is a diversified, open-end management investment company
registered under the Investment Company Act of 1940, as amended (the 1940 Act);
and
WHEREAS, the shares of common stock of the Fund are divided into separate
series, each of which was established by the Board of Directors of the Fund in
accordance with the Fund's Articles of Incorporation, and the Board of Directors
may from time to time terminate such series or establish and terminate
additional series; and
WHEREAS, the Fund has entered into a management agreement dated July 31,
1989 with the Manager with respect to other series of the Fund and
notwithstanding Section 8 of that agreement and references in that agreement to
the effect that it covers the series of the Fund, this Management and
Administrative Services Agreement shall govern the arrangement between the
Manager and the Fund with respect to the Liquid Assets Series; and
WHEREAS, the Fund desires to retain the Manager to render or contract to
obtain as hereinafter provided investment
advisory services to the Liquid Assets Series and the Fund also desires to avail
itself of the facilities available to the Manager with respect to the
administration of the day to day corporate affairs of the Liquid Assets Series,
and the Manager is willing to render such investment advisory and administrative
services;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Manager to act as manager of the Liquid
Assets Series and administrator of its corporate affairs for the period and on
the terms set forth in this Agreement. The Manager accepts such appointment and
agrees to render the services herein described, subject to reimbursement of
certain administrative costs as herein provided. Pursuant to a subadvisory
agreement (the Subadvisory Agreement), dated July 31, 1989, with The Prudential
Investment Corporation (PIC), PIC furnishes to each series of the Fund
(including the Liquid Assets Series) investment advisory services in connection
with the management of the Fund. The Manager shall have responsibility for all
investment advisory services furnished to the Liquid Assets Series pursuant to
the Subadvisory Agreement.
2. Subject to the supervision of the Board of Directors of the Fund, the
Manager shall administer the corporate affairs of the Liquid Assets Series and,
in connection therewith, shall furnish the Liquid Assets Series with office
facilities and with clerical, bookeeping and recordkeeping services at such
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office facilities and, subject to Section 1 hereof, the Manager shall manage the
investment operations of the Liquid Assets Series and the composition of its
portfolio, including the purchase, retention and disposition thereof, in
accordance with its investment objectives, policies and restrictions as stated
in the Prospectus (hereinafter defined) and subject to the following
understandings:
(a) The Manager shall provide supervision of the Liquid Assets Series'
investments and determine from time to time what investments or securities
will be purchased, retained, sold or loaned by it, and what portion of its
assets will be invested or held uninvested as cash.
(b) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus (hereinafter defined) of the Fund and
with the instructions of the Board of Directors of the Fund and will
conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations.
(c) The Manager shall determine the securities to be purchased or sold
by the Liquid Assets Series and will place orders pursuant to its
determinations with or through such persons, brokers or dealers (including
but
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not limited to Prudential Securities Incorporated) in conformity with the
policy with respect to brokerage as set forth in the Fund's Registration
Statement and prospectus (hereinafter defined) or as the Board of Directors
may direct from time to time. In providing the Liquid Assets Series with
investment supervision, it is recognized that the Manager will give primary
consideration to securing the most favorable price and efficient execution.
Consistent with this policy, the Manager may consider the financial
responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any such
transaction or other transactions to which other clients of the Manager may
be a party. It is understood that prudential Securities Incorporated may be
used as principal broker for securities transactions but that no formula
has been adopted for allocation of the Series' investment transaction
business. It is also understood that it is desirable for the Liquid Assets
Series that the Manager have access to supplemental investment and market
research and security and economic analysis provided by brokers and that
such brokers may execute brokerage transactions at a higher cost to the
Series than may result when allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient execution.
Therefore, the Manager is
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authorized to pay higher brokerage commissions for the purchase and sale of
securities for the Liquid Assets Series to brokers who provide such
research and analysis, subject to review by the Fund's Board of Directors
from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such broker may be
useful to the Manager in connection with its services to other clients.
On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Liquid Assets Series as well as other
clients of the Manager or the Subadviser, the Manager, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be so sold or purchased in order
to obtain the most favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Manager in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Liquid
Assets Series and to such other clients.
(d) The Manager shall maintain all books and records with respect to
the portfolio transactions of the Liquid Assets Series and shall render to
the Fund's Board of Director such periodic and special reports as the
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Board may reasonably request.
(e) The Manager shall be responsible for the financial and accounting
records to be maintained by the Fund (including those being maintained by
the Fund's Custodian) with respect to the Liquid Assets Series.
(f) The Manager shall provide the Fund's Custodian on each business
day with information relating to all transactions concerning the assets of
the Liquid Assets Series.
(g) The investment management services of the Manager to the Liquid
Assets Series under this Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar services to others.
3. The Fund has delivered to the Manager copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
(a) Articles of Incorporation of the Fund, as filed with the Secretary
of State of Maryland (such Articles of Incorporation, as in effect on the
date hereof and as amended from time to time, are herein called the
"Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof
and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Manager and
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approving the form of this agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-1A (the Registration Statement), as filed
with the Securities and Exchange Commission (the Commission) relating to
the Liquid Assets Series of the Fund and shares of its Common Stock and all
amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus of the Liquid Assets Series (such Prospectus and
Statement of Additional Information, as currently in effect and as amended
or supplemented from time to time, being herein called the "Prospectus").
4. The Manager shall authorize and permit any of its directors, officers
and employees who may be elected as directors or officers of the Fund to serve
in the capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through the medium of any such
directors, officers or employees of the Manager.
5. The Manager shall keep the books and records required to be maintained
by it pursuant to paragraph 2 hereof. The Manager agrees that all records which
it maintains for the Liquid Assets Series of the Fund are the property of the
Fund and will surrender promptly to the Fund any such records upon the Fund's
request, provided however that the Manager may retain a copy
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of such records. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by the Manager pursuant Paragraph 2 hereof.
6. During the term of this Agreement, the Manager assumes and will pay the
costs and expenses payable to PIC for furnishing investment advisory services to
the Liquid Assets Series pursuant to the Subadvisory Agreement.
The Liquid Assets Series assumes and will pay the expenses described below:
(a) the allocable and direct (out-of-pocket) administrative costs and
expenses incurred by the Manager that are subject to reimbursement by the
Liquid Assets Series as set forth in paragraph 8 hereof;
(b) the fees and expenses of directors who are not affiliated persons
of the Manager or the Fund's investment adviser,
(c) the fees and expenses of the Custodian that relate to (i) the
custodial function and the recordkeeping connected therewith, (ii)
preparing and maintaining the general accounting records of the Liquid
Assets Series and the providing of any such records to the Manager useful
to the Manager in connection with the Manager's responsibility for the
accounting records of the Liquid Assets Series pursuant to Section 31 of
the 1940 Act and the rules promulgated thereunder, (iii) the pricing of the
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shares of the Liquid Assets Series, including the cost of any pricing
service or services which may be retained pursuant to the authorization of
the Board of Directors of the Fund, and (iv) for both mail and wire orders,
the cashiering function in connection with the issuance and redemption of
the securities of the Liquid Assets Series,
(d) the fees and expenses of the Fund's Transfer and Dividend
Disbursing Agent, which may be the Custodian, that relate to the
maintenance of each shareholder account of the Liquid Assets Series,
(e) the charges and expenses of legal counsel and independent
accountants for the Fund,
(f) brokers' commissions and any issue or transfer taxes chargeable to
the Liquid Assets Series in connection with its securities transactions,
(g) all taxes and corporate fees payable by the Fund with respect to
the Liquid Assets Series to federal, state or other governmental agencies,
(h) the fees of any trade associations of which the Fund may be a
member,
(i) the cost of stock certificates representing, and/or non-negotiable
share deposit receipts evidencing, shares of the Liquid Assets Series,
(j) the cost of fidelity, directors and officers and errors and
omissions insurance,
(k) the fees and expenses involved in registering
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and maintaining registration of the Liquid Assets Series of the Fund and of
its shares with the Securities and Exchange Commission, registering the
Fund as a broker or dealer and qualifying its shares under state securities
laws, including the preparation and printing of the registration
statements, prospectuses and statements of additional information with
respect to the Liquid Assets Series for filing under federal and state
securities laws for such purposes,
(1) expenses of shareholders' and directors meetings and of preparing,
printing and mailing reports to shareholders in the amount necessary for
distribution to the shareholders, and
(m) Litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund's business.
7. In the event the expenses of the Liquid Assets Series for any fiscal
year (excluding interest, taxes, brokerage commissions, and litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) exceed the lowest applicable annual
expense limitation established and enforced pursuant to the statute or
regulations of any jurisdictions in which shares of the Liquid Assets Series are
then qualified for offer and sale, the reimbursement due the Manager will be
reduced by the amount of such excess.
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8. For the administrative services provided and the expenses assumed
pursuant to this Agreement, the Fund will reimburse the Manager for reasonable
costs and expenses of the Liquid Assets Series incurred by the Manager. The
costs and expenses subject to reimbursement include the allocable direct and
indirect costs and expenses incurred by the Manager in providing the following
facilities and services, among others, to the Liquid Assets Series: (i)
furnishing office facilities; (ii) paying the salaries and expenses of the
Fund's officers and other personnel engaged in administering the Liquid Assets
Series business; (iii) paying the costs and expenses incurred in managing the
Series portfolio; (iv) monitoring financial and shareholder accounting services
provided to the Series; (v) responding to shareholder inquiries and
disseminating information to shareholders; (vi) monitoring compliance with the
Series' registration statements and other operating documents, with federal and
state securities laws and rules thereunder and with the Internal Revenue Code of
1986, as amended; (vii) preparing semi-annual and annual reports to
shareholders; (viii) preparing filings required by the Securities and Exchange
Commission; (iv) preparing federal, state and local tax returns; (x) maintaining
the Series' registration in each of the 50 states, District of Columbia and
Puerto Rico; (xi) preparing information required by the Board of Directors for
ongoing review, approval and action and (xii) organizing meetings of the Board
of Directors and annual and special meetings of the Series' shareholders.
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This reimbursement amount will be computed daily and will be paid to the
Manager monthly. Any reduction in the amount of reimbursement payable pursuant
to paragraph 7 shall be made monthly and is subject to readjustment during the
year.
9. The Manager shall not be liable for any error of judgment or for any
loss suffered by the Liquid Assets Series in connection with the matters to
which this Agreement relates, except a loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in
Section 36(b)(3) of the 0000 Xxx) or loss resulting from willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement.
10. This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated with respect to the
Liquid Assets Series by the Fund at any time, without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities as defined in the 0000 Xxx) of the Series, or by
the Manager at any time, without the payment of any penalty, on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall terminated automatically in the event of its assignment (as defined
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in the 1940 Act).
11. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Manager who may also be a director, officer
or employee of the Fund to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any business,
whether of a similar or dissimilar nature, nor limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other corporation, firm, individual or association.
12. Except as otherwise provided herein or authorized by the Board of
Directors of the Fund from time to time, the Manager shall for all purposes
herein be deemed to be an independent contractor and shall have no authority to
act for or represent the Liquid Assets Series or the Fund in any way or
otherwise be deemed an agent of the Series or the Fund.
13 During the term of this Agreement, the Fund agrees to furnish the
Manager at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Fund or the public, which refer in any way to the Manager,
prior to use thereof and not to use such material if the Manger reasonably
objects in writing within five business days (or such other time as may be
mutually agreed) after receipt thereof. In the event of termination of this
Agreement, the Fund will continue to furnish to the Manager copies of any of the
above
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mentioned materials which refer in any way to the Manager. Sales literature may
be furnished to the Manager hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery. The Fund shall furnish or
otherwise make available to the Manager such other information relating to the
business affairs of the Fund as the Manager at any time, or from time to time,
reasonably requests in order to discharge its obligations hereunder.
14. This Agreement may be amended by mutual consent, but the consent of the
Series must be obtained in conformity with the requirements of the 1940 Act.
15. Any notice or other communication required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid, (1) to the Manager at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, X.X. 00000,
Attention: Secretary; or (2) to the Fund at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, X.X.
00000, Attention: President.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. The Fund may use the name "Prudential Institutional Liquidity
Portfolio, Inc." or any name including the work "Prudential" only for so long as
this Agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to the Manager's business as Manager or any extension, renewal or amendment
thereof remain in effect. at such time as
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such an agreement shall no longer be in effect, the Fund will (to the extent
that it lawfully can) cease to use such a name or any other name indicating that
it is advised by, managed by or otherwise connected with the Manager, or any
organization which shall have so succeeded to such businesses. In no event shall
the Fund use the name "Prudential Institutional Liquidity Portfolio, Inc." or
any name including the word "Prudential" if the Manager's function is
transferred or assigned to a company of which The Prudential Insurance Company
of America does not have control.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
(Liquid Assets Series)
By /s/ XXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxx, President
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC.
By /s/ XXXXX X. XXXX
------------------------------------
Xxxxx X. Xxxx, Vice President
