Exhibit 8(a)
ADMINISTRATION AGREEMENT
AGREEMENT made as of March __, 2003, by and between WCMA TAX-EXEMPT
FUND, a Massachusetts business trust (the "Fund") and FUND ASSET MANAGEMENT,
L.P., a Delaware limited partnership (the "Administrator").
W I T N E S S E T H:
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WHEREAS, the Fund is engaged in business as an open-end diversified
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Fund is one of the "feeder" funds for and invests all of
its assets in Master Tax-Exempt Trust, which serves as the "master" portfolio
and has the same investment objective and policies as the Fund;
WHEREAS, the Fund desires to retain the Administrator to provide
management and administrative services to the Fund, in the manner and on the
terms hereinafter set forth; and
WHEREAS, the Administrator is willing to provide management and
administrative services to the Fund, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
ARTICLE I
Duties of the Administrator
The Fund hereby employs the Administrator to act as a manager and
administrator and to furnish, or arrange for affiliates to furnish, the
management and administrative services described below, subject to review by and
the overall control of the Board of Trustees of the Fund (the "Trustees"), for
the period and on the terms and conditions set forth in this Agreement. The
Administrator hereby accepts such employment and agrees during such period, at
its own expense, to render, or arrange for the rendering of, such services and
to assume the obligations herein set forth for the compensation provided for
herein. The Administrator and its affiliates shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed agents of the Fund.
(a) Management Services. The Administrator shall perform (or arrange
for the performance by affiliates of) the management and administrative services
necessary for the operation of the Fund, including administering shareholder
accounts and handling shareholder relations for the Fund. The Administrator
shall provide the Fund with office space, facilities, equipment and necessary
personnel and such other services as the Administrator, subject to review by the
Trustees, shall from time to time determine to be necessary or useful to perform
its obligations under this Agreement.
(b) Administrative Services. The Administrator shall also, on behalf of
the Fund, conduct relations with custodians, depositories, transfer agents,
dividend disbursing agents, other shareholder servicing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers,
banks and such other persons in any such other capacity deemed to be necessary
or desirable. The Administrator shall make reports to the Trustees of its
performance of obligations hereunder and furnish advice and recommendations with
respect to such other aspects of the business and affairs of the Fund as it
shall determine to be desirable.
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ARTICLE II
Allocation of Charges and Expenses
(a) The Administrator. The Administrator assumes and shall pay, or
cause its affiliate to pay, for maintaining the staff and personnel necessary to
perform its obligations under this Agreement, and shall, at its own expense,
provide the office space, facilities and necessary personnel which it is
obligated to provided under Article I hereof. The Administrator shall pay, or
cause its affiliate to pay, compensation of all officers of the Fund and all
Trustees of the Fund who are affiliated persons of the Administrator or of an
affiliate of the Administrator or any of its affiliates.
(b) The Fund. The Fund assumes and shall pay or cause to be paid all
other expenses of the Fund (except for the expenses paid by the distributor of
the Fund's shares (the "Distributor")), including, without limitation: taxes,
expenses for legal and auditing services, costs of preparing, printing and
mailing proxies, stock certificates, shareholder reports, prospectuses and
statements of additional information, charges of the custodian, any
sub-custodian and transfer agent, expenses of portfolio transactions, expenses
of redemption of shares, Securities and Exchange Commission fees, expenses of
registering the shares under Federal, state and foreign laws, fees and actual
out-of-pocket expenses of Trustees who are not affiliated persons of the
Administrator, or of an affiliate of the Administrator, accounting and pricing
costs (including the daily calculation of the net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or nonrecurring
expenses, and other expenses properly payable by the Fund. It also is understood
that if the Administrator or any of its affiliates provide accounting services
to the Fund, the Fund will reimburse the Administrator and its affiliates for
their costs in providing accounting services to the Fund. The Distributor will
pay
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certain of the expenses of the Fund incurred in connection with the
continuous offering of shares of beneficial interest in the Fund.
ARTICLE III
Compensation of the Administrator
For the services rendered, the facilities furnished and expenses
assumed by the Administrator, the Fund shall pay to the Administrator at the end
of each calendar month a fee based upon the average daily value of the net
assets of the Fund, as determined and computed in accordance with the
description of the determination of net asset value contained in the prospectus
and statement of additional information of the Fund, at the annual rate of 0.25%
of the average daily net assets of the Fund, commencing on the day following
effectiveness hereof. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fee as set forth
above. Payment of the Administrator's compensation for the preceding month shall
be made as promptly as possible after completion of the computations
contemplated above. During any period when the determination of the net asset
value is suspended by the Trustees, the net asset value of a share as of the
last business day prior to such suspension shall for this purpose be deemed to
be the net asset value at the close of each succeeding business day until it is
again determined.
ARTICLE IV
Limitation of Liability of the Administrator
The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in the
management and administration of the Fund,
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except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder. As used in this Article IV, the term "Administrator" shall
include any affiliates of the Administrator performing services for the Fund
contemplated hereby and partners, shareholders, directors, officers and
employees of the Administrator and such affiliates.
ARTICLE V
Activities of the Administrator
The services of the Administrator to the Fund are not to be deemed to
be exclusive, and the Administrator and each affiliate is free to render
services to others. It is understood that Trustees, officers, employees and
shareholders of the Fund are or may become interested in the Administrator and
its affiliates, as directors, officers, employees, partners and shareholders or
otherwise, and that the Administrator and directors, officers, employees,
partners and shareholders of the Administrator and its affiliates are or may
become similarly interested in the Fund as shareholders or otherwise.
ARTICLE VI
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above
written and shall remain in force for two years thereafter and thereafter shall
continue from year to year, but only so long as such continuance is specifically
approved at least annually by (i) the Trustees of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund, and (ii) a majority
of those Trustees who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such approval.
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This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees or by the vote of a majority of the outstanding
voting securities of the Fund, or by the Administrator, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.
ARTICLE VII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by a majority of those Trustees who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
ARTICLE VIII
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person" and "interested person," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission under
said Act.
ARTICLE IX
Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Investment Company Act.
To the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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ARTICLE X
Limitation of Liability of Trustees, Shareholders,
Officers, Employees and Agents
The Fund's Declaration of Trust, dated August 30, 2002, a copy of which,
together with all amendments thereto (the "Declaration"), is on file in the
office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "WCMA Tax-Exempt Fund" refers to the Trustees under the Declaration
collectively as Trustees, but not as individuals or personally; and no Trustee,
shareholder, officer, employee or agent of the Fund shall be held to any
personal liability, nor shall resort be had to their private property for the
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Fund, but the Fund Property only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
WCMA TAX-EXEMPT FUND
By:
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Name: Xxxxxx X. Xxxxx
Title: Vice President and Treasurer
FUND ASSET MANAGEMENT, L.P.
By: PRINCETON SERVICES INC.,
General Partner
By:
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Name: Xxxxxx X. Xxxxx
Title: First Vice President and Treasurer
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