FORM OF SHAREHOLDER SERVICING AGREEMENT
XXXXXX BROTHERS INSTITUTIONAL LIQUIDITY FUNDS
This Agreement is made as of [____], 2006 between Xxxxxx Brothers
Institutional Liquidity Funds, a Delaware statutory trust ("Trust"), and
Xxxxxxxxx Xxxxxx Management Inc., a New York corporation ("NBMI"), with respect
to each class of shares listed on Schedule A hereto (each, a "Class") of each
series, also listed on Schedule A hereto, as it may be amended from time to time
(each, a "Portfolio").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end, diversified management investment
company and has established one or more separate series of shares, with each
Portfolio having its own assets and investment policies, and with each Portfolio
having one or more classes of shares;
WHEREAS, the Trust desires to retain NBMI to furnish shareholder
services, which may include shareholder accounting, recordkeeping, or other
services to shareholders, to each Portfolio (or as appropriate, a Class of each
such Portfolio), and NBMI is willing to furnish such services,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. SHAREHOLDER SERVICES. NBMI shall provide to the shareholders and
beneficial owners of each Class of a Portfolio the shareholder services listed
on Schedule B for that Class (some or all of which may be provided by banks,
trust companies or other institutions that will provide such shareholder
services to their accounts ("Accounts") and their Account holders and which have
entered into a service agreement with NBMI (each, a "Service Organization")).
NBMI may compensate a Service Organization for the shareholder services it
provides to Accounts and Account holders pursuant to such service agreement.
Under this Agreement, NBMI shall not have any obligation to provide, nor shall
it provide or be compensated by a Portfolio to provide, any services related to
the distribution of a Portfolio's shares, or any other services that are the
subject of a separate agreement or arrangement between a Portfolio and NBMI.
NBMI can use any of the officers and employees of Xxxxxxxxx Xxxxxx, LLC or
Xxxxxx Brothers Asset Management LLC to provide any of the services or reports
required under this agreement.
2. EXPENSES OF EACH PORTFOLIO.
2.1 EXPENSES TO BE PAID BY NBMI. NBMI shall pay all salaries, expenses
and fees of the officers, trustees, or employees of the Trust who are officers,
directors or employees of NBMI. If NBMI pays or assumes any expenses of the
Trust, or a Portfolio or Class not required to be paid or assumed by NBMI under
this Agreement, NBMI shall not be obligated hereby to pay or assume the same or
any similar expense in the future; PROVIDED, that nothing herein contained shall
be deemed to relieve NBMI of any obligation to the Trust or to a Portfolio or
Class under any separate agreement or arrangement between the parties.
2.2 EXPENSES TO BE PAID BY THE PORTFOLIO. Each Portfolio shall bear
all expenses of its operation, except those specifically allocated to NBMI under
this Agreement or under any separate agreement between such Portfolio and NBMI.
Expenses to be borne by such Portfolio shall include both expenses directly
attributable to the operation of that Portfolio, as well as the portion of any
expenses of the Trust that is properly allocable to such Portfolio in a manner
approved by the trustees of the Trust ("Trustees"). (The allocation of such
expenses among the classes of a Portfolio, on either a class-specific or a pro
rata basis, shall be made in accordance with the Trust's Rule 18f-3 Plan, if
applicable.)
3. SHAREHOLDER SERVICING FEE.
3.1 FEE. As compensation for all services rendered under this
Agreement, each Class of a Portfolio shall pay NBMI an annual fee for that Class
as set out in Schedule C to this Agreement.
3.2 COMPUTATION AND PAYMENT OF FEE. The shareholder servicing fee
shall accrue on each calendar day, and shall be payable monthly on the first
business day of the next succeeding calendar month. The daily fee accrual for
each Portfolio shall be computed by multiplying the fraction of one divided by
the number of days in the calendar year by the applicable annual fee rate for
the applicable Class (as set forth in Schedule C hereto), and multiplying this
product by the net assets of the Class of such Portfolio, determined in the
manner set forth in such Portfolio's then-current Prospectus for that Class, as
of the close of business on the last preceding business day on which the net
assets of the Class of such Portfolio were determined.
4. OWNERSHIP OF RECORDS. All records required to be maintained and
preserved by each Portfolio pursuant to the provisions or rules or regulations
of the Securities and Exchange Commission ("SEC") under Section 31(a) of the
1940 Act and maintained and preserved by NBMI on behalf of such Portfolio are
the property of such Portfolio and shall be surrendered by NBMI promptly on
request by the Portfolio; PROVIDED, that NBMI may at its own expense make and
retain copies of any such records.
5. REPORTS TO NBMI. Each Portfolio shall furnish or otherwise make
available to NBMI such copies of that Portfolio's Prospectus, SAI, financial
statements, proxy statements, reports, and other information for each Class
relating to the Portfolio's business and affairs as NBMI may, at any time or
from time to time, reasonably require in order to discharge its obligations
under this Agreement.
6. REPORTS TO EACH PORTFOLIO. NBMI shall prepare and furnish to each
Portfolio such reports, statistical data and other information in such form and
at such intervals as such Portfolio may reasonably request.
7. OWNERSHIP OF SOFTWARE AND RELATED MATERIALS. All computer programs,
written procedures and similar items developed or acquired and used by NBMI in
performing its obligations under this Agreement shall be the property of NBMI,
and no Portfolio will acquire any ownership interest therein or property rights
with respect thereto.
8. CONFIDENTIALITY. NBMI agrees, on its own behalf and on behalf of
its employees, agents and contractors, to keep confidential any and all records
maintained and other information obtained hereunder which relates to any
Portfolio or to any of a Portfolio's former, current or prospective
shareholders, EXCEPT that NBMI may deliver records or divulge information (a)
when requested to do so by duly constituted authorities after prior notification
to and approval in writing by such Portfolio (which approval will not be
- 2 -
unreasonably withheld and may not be withheld by such Portfolio where NBMI
advises such Portfolio that it may be exposed to civil or criminal contempt
proceedings or other penalties for failure to comply with such request) or (b)
whenever requested in writing to do so by such Portfolio.
9. NBMI'S ACTIONS IN RELIANCE ON PORTFOLIO'S INSTRUCTIONS, LEGAL
OPINIONS, ETC.; PORTFOLIO'S COMPLIANCE WITH LAWS.
9.1 NBMI may at any time apply to an officer of the Trust for
instructions, and may consult with legal counsel for a Portfolio or with NBMI's
own legal counsel, in respect of any matter arising in connection with this
Agreement; and NBMI shall not be liable for any action taken or omitted to be
taken in good faith and with due care in accordance with such instructions or
with the advice or opinion of such legal counsel. NBMI shall be protected in
acting upon any such instructions, advice or opinion and upon any other paper or
document delivered by a Portfolio or such legal counsel which NBMI believes to
be genuine and to have been signed by the proper person or persons, and NBMI
shall not be held to have notice of any change of status or authority of any
officer or representative of the Trust, until receipt of written notice thereof
from the Portfolio.
9.2 Except as otherwise provided in this Agreement or in any separate
agreement between the parties and except for the accuracy of information
furnished to each Portfolio by NBMI, each Portfolio assumes full responsibility
for the preparation, contents, filing and distribution of the Prospectus and SAI
of each Class of such Portfolio, and full responsibility for other documents or
actions required for compliance with all applicable requirements of the 1940
Act, the Securities Exchange Act of 1934, the Securities Act of 1933, and any
other applicable laws, rules and regulations of governmental authorities having
jurisdiction over such Portfolio.
10. SERVICES TO OTHER CLIENTS. Nothing herein contained shall limit
the freedom of NBMI or any affiliated person of NBMI to render shareholder
services to other investment companies, to act as shareholder servicing agent to
other persons, firms, or corporations, or to engage in other business
activities.
11. LIMITATION OF LIABILITY REGARDING THE TRUST. NBMI shall look only
to the assets of each Portfolio for performance of this Agreement by the Trust
on behalf of such Portfolio, and neither the Trustees nor any of the Trust's
officers, employees or agents, whether past, present or future shall be
personally liable therefor.
12. INDEMNIFICATION BY PORTFOLIO. Each Portfolio shall indemnify NBMI
and hold it harmless from and against any and all losses, damages and expenses,
including reasonable attorneys' fees and expenses, incurred by NBMI that result
from: (i) any claim, action, suit or proceeding in connection with NBMI's entry
into or performance of this Agreement with respect to such Portfolio; or (ii)
any action taken or omission to act committed by NBMI in the performance of its
obligations hereunder with respect to such Portfolio; or (iii) any action of
NBMI upon instructions believed in good faith by it to have been executed by a
duly authorized officer or representative of the Trust with respect to such
Portfolio; PROVIDED, that NBMI shall not be entitled to such indemnification in
respect of actions or omissions constituting negligence or misconduct on the
part of NBMI or its employees, agents or contractors. Before confessing any
claim against it which may be subject to indemnification by a Portfolio
- 3 -
hereunder, NBMI shall give such Portfolio reasonable opportunity to defend
against such claim in its own name or in the name of NBMI.
13. INDEMNIFICATION BY NBMI. NBMI shall indemnify each Portfolio and
hold it harmless from and against any and all losses, damages and expenses,
including reasonable attorneys' fees and expenses, incurred by such Portfolio
which result from: (i) NBMI's failure to comply with the terms of this Agreement
with respect to such Portfolio; or (ii) NBMI's lack of good faith in performing
its obligations hereunder with respect to such Portfolio; or (iii) NBMI's
negligence or misconduct or that of its employees, agents or contractors in
connection herewith with respect to such Portfolio. A Portfolio shall not be
entitled to such indemnification in respect of actions or omissions constituting
negligence or misconduct on the part of that Portfolio or its employees, agents
or contractors other than NBMI unless such negligence or misconduct results from
or is accompanied by negligence or misconduct on the part of NBMI, any
affiliated person of NBMI, or any affiliated person of an affiliated person of
NBMI. Before confessing any claim against it which may be subject to
indemnification hereunder, a Portfolio shall give NBMI reasonable opportunity to
defend against such claim in its own name or in the name of the Trust on behalf
of such Portfolio.
14. EFFECT OF AGREEMENT. Nothing herein contained shall be deemed to
require the Trust or any Portfolio to take any action contrary to the Trust
Instrument or By-laws of the Trust or any applicable law, regulation or order to
which it is subject or by which it is bound, or to relieve or deprive the
Trustees of their responsibility for and control of the conduct of the business
and affairs of the Portfolio or Trust.
15. TERM OF AGREEMENT. The term of this Agreement shall begin on the
date first written above with respect to each Portfolio and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect
through October 31, 2007. Thereafter, this Agreement shall continue in effect
with respect to each Portfolio from year to year, subject to the termination
provisions and all other terms and conditions hereof; PROVIDED, such continuance
with respect to a Portfolio is approved at least annually by vote or written
consent of the Trustees, including a majority of the Trustees who are not
interested persons of either party hereto ("Disinterested Trustees"); and
PROVIDED FURTHER, that NBMI shall not have notified a Portfolio in writing at
least sixty days prior to the first expiration date hereof or at least sixty
days prior to any expiration date in any year thereafter that it does not desire
such continuation. NBMI shall furnish any Portfolio, promptly upon its request,
such information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal or amendment thereof.
16. AMENDMENT OR ASSIGNMENT OF AGREEMENT. Any amendment to this
Agreement shall be in writing signed by the parties hereto; PROVIDED, that no
such amendment shall be effective unless authorized on behalf of any Portfolio
(i) by resolution of the Trustees, including the vote or written consent of a
majority of the Disinterested Trustees, or (ii) by vote of a majority of the
outstanding voting securities of the applicable Class of such Portfolio. This
Agreement shall terminate automatically and immediately in the event of its
assignment; provided, that with the consent of a Portfolio, which may be general
or specific, NBMI may subcontract to another person any of its responsibilities
with respect to such Portfolio.
17. TERMINATION OF AGREEMENT. This Agreement may be terminated at any
time by either party hereto, without the payment of any penalty, upon at least
sixty days' prior written notice to the other party; PROVIDED, that in the case
- 4 -
of termination by any Portfolio, such action shall have been authorized (i) by
resolution of the Trustees, including the vote or written consent of the
Disinterested Trustees, or (ii) by vote of a majority of the outstanding voting
securities of the applicable Class of such Portfolio.
18. INTERPRETATION AND DEFINITION OF TERMS. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the 1940 Act shall be
resolved by reference to such term or provision of the 1940 Act and to
interpretation thereof, if any, by the United States courts or, in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the SEC validly issued pursuant to the 1940 Act. Specifically, the terms
"vote of a majority of the outstanding voting securities," "interested persons,"
"assignment" and "affiliated person," as used in this Agreement shall have the
meanings assigned to them by Section 2(a) of the 1940 Act. In addition, when the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is modified, interpreted or relaxed by a rule, regulation or order of
the SEC, whether of special or of general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
19. CHOICE OF LAW. This Agreement is made and to be principally
performed in the State of New York, and except insofar as the 1940 Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York.
20. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
21. EXECUTION IN COUNTERPARTS. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
- 5 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
seals to be hereunto affixed, as of the day and year first above written.
XXXXXX BROTHERS INSTITUTIONAL
LIQUIDITY FUNDS (on behalf of each
Portfolio listed on Schedule A)
-----------------------------------------
Name:
Title:
XXXXXXXXX XXXXXX
MANAGEMENT INC.
--------------------------
Name:
Title:
Date: [_____], 2006
- 6 -
XXXXXX BROTHERS INSTITUTIONAL LIQUIDITY FUNDS
SHAREHOLDER SERVICING AGREEMENT
SCHEDULE A
CLASSES OF SHARES:
-----------------
Cash Management Class
Capital Class
Select Class
Administrative Class
Service Class
Premier Class
THE PORTFOLIOS OF XXXXXX BROTHERS INSTITUTIONAL LIQUIDITY FUNDS CURRENTLY
--------------------------------------------------------------------------------
SUBJECT TO THIS AGREEMENT:
--------------------------
Money Market Portfolio
Prime Portfolio
Government Portfolio
Government Reserves Portfolio
Treasury Portfolio
Treasury Reserves Portfolio
Tax-Exempt Portfolio
Municipal Portfolio
New York Municipal Portfolio
Dated: [____], 2006
- 7 -
XXXXXX BROTHERS INSTITUTIONAL LIQUIDITY FUNDS
SHAREHOLDER SERVICING AGREEMENT
SCHEDULE B
SHAREHOLDER SERVICES PROVIDED TO EACH CLASS:
--------------------------------------------
Cash Management Class
---------------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Cash Management shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions; and
(iv) such other similar services as a Portfolio may reasonably request
to the extent permissible under applicable statutes, rules and
regulations.
Capital Class
-------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Capital shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions;
(iv) processing or assisting in processing confirmations concerning
customer orders to purchase, redeem and exchange Capital shares; and
(v) such other similar services as a Portfolio may reasonably request
to the extent permissible under applicable statutes, rules and
regulations.
Select Class
------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Select shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions;
(iv) processing or assisting in processing confirmations concerning
customer orders to purchase, redeem and exchange Select shares;
- 8 -
(v) providing the technological means to facilitate the inclusion of a
Portfolio in accounts, products or services offered to customers by or
through the service organization, for example, retirement, asset
allocation, bank trust or private banking programs or services; and
(vi) such other similar services as the Portfolio may reasonably
request to the extent permissible under applicable statutes, rules and
regulations.
Administrative Class
--------------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Administrative shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions;
(iv) processing or assisting in processing confirmations concerning
customer orders to purchase, redeem and exchange Administrative shares;
(v) providing the technological means to facilitate the inclusion of a
Portfolio in accounts, products or services offered to customers by or
through service organizations;
(vi) processing, or assisting in processing, dividend payments on
behalf of customers; and
(vii) such other similar services as the Portfolio may reasonably
request to the extent permissible under applicable statutes, rules and
regulations.
Service Class
-------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Service shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions;
(iv) processing or assisting in processing confirmations concerning
customer orders to purchase, redeem and exchange Service shares;
(v) providing the technological means to facilitate the inclusion of a
Portfolio in accounts, products or services offered to customers by or
through service organizations;
(vi) processing, or assisting in processing, dividend payments on
behalf of customers; and
(vii) such other similar services as the Portfolio may reasonably
request to the extent permissible under applicable statutes, rules and
regulations.
- 9 -
Premier Class
-------------
(i) acting, directly or through an agent, as the shareholder of record
and nominee for customers;
(ii) maintaining, or assisting in maintaining, account records for
customers who beneficially own Premier shares;
(iii) receiving and transmitting, or assisting in receiving and
transmitting, funds for share purchases and redemptions;
(iv) processing or assisting in processing confirmations concerning
customer orders to purchase, redeem and exchange Premier shares;
(v) providing the technological means to facilitate the inclusion of a
Portfolio in accounts, products or services offered to customers by or
through service organizations;
(vi) processing, or assisting in processing, dividend payments on
behalf of customers; and
(vii) such other similar services as the Portfolio may reasonably
request to the extent permissible under applicable statutes, rules and
regulations.
Dated: [____], 2006
- 10 -
XXXXXX BROTHERS INSTITUTIONAL LIQUIDITY FUNDS
SHAREHOLDER SERVICING AGREEMENT
SCHEDULE C
FEE RATES FOR EACH CLASS:
------------------------
Cash Management 0.05% per annum of the average daily net assets
Capital Class 0.10% per annum of the average daily net assets
Select Class 0.15% per annum of the average daily net assets
Administrative Class 0.25% per annum of the average daily net assets
Service Class 0.25% per annum of the average daily net assets
Premier Class 0.25% per annum of the average daily net assets
- 11 -
