EX-99.(D) 2 a2139296zex-99_d.txt EXHIBIT 99.(D) AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT made as of the 1st day of May, 2004 by and between the registered investment companies, including any portfolio/series thereof, as set forth on Schedule A (each, a "FUND" and collectively, the "FUNDS") as may be amended from time to time, and Morgan Stanley Investment Advisors Inc., a Delaware corporation (hereinafter called the "INVESTMENT MANAGER"): WHEREAS, each Fund is engaged in business as an open-end management investment company or as a closed-end management investment company, as identified as such on Schedule A, and is registered as such under the Investment Company Act of 1940, as amended (the "ACT"); and WHEREAS, the Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940, and engages in the business of acting as investment adviser; and WHEREAS, each Fund entered into an Investment Management Agreement to provide management and investment advisory services with the Investment Manager, or its predecessor as the case may be, effective as of the date set forth in SCHEDULE A (the "CURRENT INVESTMENT MANAGEMENT AGREEMENTS"); and WHEREAS, each Fund desires to retain the Investment Manager to render management and investment advisory services in the manner and on the terms and conditions hereinafter set forth; and WHEREAS, the Investment Manager desires to be retained to perform services on said terms and conditions; and WHEREAS, this Agreement amends and restates, in its entirety, the Current Investment Management Agreements to combine the Current Investment Management Agreements into a single Amended and Restated Investment Management Agreement to reflect the current parties to such agreements (and Annexes 1, 2 and 3 will be amended, if necessary, to add a Fund when such Fund is first included in Schedule A) and to make other ministerial changes designed to facilitate the administration of this Agreement; WITNESSETH In consideration of the mutual covenants and agreements of the parties hereto as hereinafter contained, each Fund and the Investment Manager agree as follows: 1. Each Fund hereby retains the Investment Manager to act as investment manager of such Fund and, subject to the supervision of the Trustees/Directors, to supervise the investment activities of such Fund as hereinafter set forth. Without limiting the generality of the foregoing, the Investment Manager shall obtain and evaluate such information and advice relating to the economy, securities, securities markets and commodities markets as it deems necessary or useful to discharge its duties hereunder; shall continuously manage the assets of each Fund in a manner consistent with the investment objectives and policies of a Fund; shall determine the securities to be purchased, sold or otherwise disposed of by a Fund and the timing of such purchases, sales and dispositions; and shall take such further action, including the placing of purchase and sale orders on behalf of a Fund, as the Investment Manager shall deem necessary or appropriate. The Investment Manager shall also furnish to or place at the disposal of each Fund such of the information, evaluations, analyses and opinions formulated or obtained by the Investment Manager in the discharge of its duties as each Fund may, from time to time, reasonably request. 2. In connection with those Funds identified in ANNEX 1 to this Agreement and as permitted in their respective Current Investment Management Agreements, and in connection with all Funds added to SCHEDULE A after the date hereof, the Investment Manager may, subject to the approval of the Board of Trustees/Directors (and in the case of the Morgan Stanley European Growth Fund Inc., Morgan Stanley International SmallCap Fund, Morgan Stanley Japan Fund, Morgan Stanley Pacific Growth Fund Inc. and Morgan Stanley Variable Investment Series (on behalf of its European Growth and Pacific Growth Portfolios) shall) at its own expense, enter into a Sub-Advisory Agreement with a Sub-Advisor to make determinations as to certain or all of the securities and commodities to be purchased, sold or otherwise disposed of by such Funds and the timing of such purchases, sales and dispositions and to take such further action, including the placing of purchase and sale orders on behalf of such Funds as the Sub-Advisor, in consultation with the Investment Manager, shall deem necessary or appropriate; provided that the Investment Manager shall be responsible for monitoring compliance by such Sub-Advisor with the investment policies and restrictions of such Funds and with such other limitations or directions as the Trustees/Directors of the Fund may from time to time prescribe. 3. The Investment Manager shall, at its own expense, maintain such staff and employ or retain such personnel and consult with such other persons as it shall from time to time determine to be necessary or useful to the performance of its obligations under this Agreement. Without limiting the generality of the foregoing, the staff and personnel of the Investment Manager shall be deemed to include persons employed or otherwise retained by the Investment Manager to furnish statistical and other factual data, advice regarding economic factors and trends, information with respect to technical and scientific developments, and such other information, advice and assistance as the Investment Manager may desire. The Investment Manager shall, as agent for each Fund, maintain the Fund's records and books of account (other than those maintained by the Fund's transfer agent, registrar, custodian and other agents). All such books and records so maintained shall be the property of each Fund and, upon request therefor, the Investment Manager shall surrender to each Fund such of the books and records so requested. 4. Each Fund will, from time to time, furnish or otherwise make available to the Investment Manager such financial reports, proxy statements and other information relating to the business and affairs of such Fund as the Investment Manager may reasonably require in order to discharge its duties and obligations hereunder. 5. The Investment Manager shall bear the cost of rendering the investment management and supervisory services to be performed by it under this Agreement, and shall, at its own expense, pay the compensation of the officers and employees, if any, of the Funds who are also directors, officers or employees of the Investment Manager, and provide such office space and equipment and such clerical and bookkeeping services as each Fund shall reasonably require in the conduct of its business. The Investment Manager shall also bear the cost of telephone service, heat, light, power and other utilities provided to each Fund. 6. Each Fund assumes and shall pay or cause to be paid all other expenses of such Fund, including without limitation: the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and commodities and other property, and any stock transfer or dividend agent or agents appointed by the Fund; brokers' commissions chargeable to the Fund in connection with portfolio securities transactions to which the Fund is a party; all taxes, including securities and commodities issuance and transfer taxes, and fees payable by the Fund to Federal, State or other governmental agencies; the cost and expense of engraving or printing share 2 certificates representing shares of the Fund; all costs and expenses in connection with the registration and maintenance of registration of the Fund and its shares with the Securities and Exchange Commission and various states and other jurisdictions (including filing fees and legal fees and disbursements of counsel); the cost and expense of printing (including typesetting) and distributing prospectuses of the Fund and supplements thereto to the Fund's shareholders; all expenses of shareholders' and Trustees'/Directors' meetings and of preparing, printing and mailing proxy statements and reports to shareholders; fees and travel expenses of Trustees/Directors or members of any advisory board or committee who are not employees of the Investment Manager or any corporate affiliate of the Investment Manager; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption (and in the case of the closed-end funds, any dividend or distribution program), whether in shares or in cash; charges and expenses of any outside pricing service used for pricing of the Fund's shares; charges and expenses of legal counsel, including counsel to the Trustees/Directors of the Fund who are not interested persons (as defined in the Act) of the Fund or the Investment Manager, and of independent accountants in connection with any matter relating to the Fund; membership dues of the Investment Company Institute (and in the case of the closed-end funds, other appropriate industry associations); interest payable on Fund borrowings; (and in the case of the closed-end funds, fees and expenses incident to the listing of the funds' shares on any stock exchange); postage; insurance premiums on property or personnel (including officers and Trustees/Directors) of the Fund which inure to its benefit; extraordinary expenses (including but not limited to legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Fund's operation unless otherwise explicitly provided herein. 7. For the services to be rendered, the facilities furnished, and the expenses assumed by the Investment Manager, each Fund shall pay to the Investment Manager monthly compensation determined by applying the annual rates to the Fund's daily net assets (weekly net assets with respect to each closed-end fund) as set forth in SCHEDULE A. For the purposes of calculating the management fee for the closed-end funds referenced on ANNEX 2 the liquidation preference of any Preferred Shares issued by each of such Funds will not be deducted from the Fund's total assets. Except as hereinafter set forth, compensation under this Agreement shall be calculated and accrued daily and the amounts of the daily accruals shall be paid monthly. Such calculations shall be made by applying 1/365ths of the annual rates to each Fund's net assets each day determined as of the close of business on that day or the last previous business day. In connection with the closed-end funds identified on SCHEDULE A, compensation under this Agreement shall be calculated and accrued weekly and paid monthly by applying the annual rates to the average weekly net assets of the Fund determined as of the close of the last business day of each week, except for such closed-end funds as may be specified in SCHEDULE A. At the request of the Investment Manager, compensation hereunder shall be calculated and accrued at more frequent intervals in a manner consistent with the calculation of fees on a weekly basis. 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 fees as set forth in SCHEDULE A. Subject to the provisions of paragraph 8 hereof, payment of the Investment Manager's compensation for the preceding month shall be made as promptly as possible after completion of the computation contemplated by paragraph 8 hereof. 8. This section is applicable only to those Funds listed on ANNEX 3 and subject to any fund specific requirements set forth in Annex 3. In the event the operating expenses of those Funds identified in Annex 3 to this Agreement, including amounts payable to the Investment Manager pursuant to paragraph 7 hereof, for any fiscal year ending on a date on which this Agreement is in effect, exceed the expense limitations applicable to a Fund imposed by state securities laws or regulations thereunder, as 3 such limitations may be raised or lowered from time to time, the Investment Manager shall reduce its management fee to the extent of such excess and, if required, pursuant to any such laws or regulations, will reimburse a Fund for annual operating expenses in excess of any expense limitation that may be applicable; provided, however, there shall be excluded from such expenses the amount of any interest, taxes, brokerage commissions and extraordinary expenses (including but not limited to legal claims and liabilities and litigation costs and any indemnification related thereto) paid or payable by a Fund. Such reduction, if any, shall be computed and accrued daily (and in the case of the closed-end funds, weekly), shall be settled on a monthly basis, and shall be based upon the expense limitation applicable to a Fund as at the end of the last business day of the month. Should two or more such expense limitations be applicable as at the end of the last business day of the month, (and in the case of the closed-end funds, as at the end of the last full week of the month) that expense limitation which results in the largest reduction in the Investment Manager's fee shall be applicable. 9. The Investment Manager will use its best efforts in the supervision and management of the investment activities of each Fund, but in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations hereunder, the Investment Manager shall not be liable to a Fund or any of its investors for any error of judgment or mistake of law or for any act or omission by the Investment Manager or for any losses sustained by a Fund or its investors. 10. Nothing contained in this Agreement shall prevent the Investment Manager or any affiliated person of the Investment Manager from acting as investment adviser or manager for any other person, firm or corporation and shall not in any way bind or restrict the Investment Manager or any such affiliated person from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom they may be acting. Nothing in this Agreement shall limit or restrict the right of any trustee/director, officer or employee of the Investment Manager 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 other business whether of a similar or dissimilar nature. 11. This Agreement shall continue in effect with respect to each Fund for a period of one year from the effective date hereof (except with respect to any Fund added to Schedule A of this Agreement after the date hereof, for an initial period of two years from the date that such Fund is added) and thereafter provided such continuance is approved at least annually by the vote of holders of a majority (as defined in the Act) of the outstanding voting securities of each Fund (if applicable, Common Shares and Preferred Shares voting together as a single class) or by the Board of Trustees/Directors of such Fund; provided that in either event such continuance is also approved annually by the vote of a majority of the Trustees/Directors of such Fund who are not parties to this Agreement or "interested persons" (as defined in the Act) of any such party, which vote must be cast in person at a meeting called for the purpose of voting on such approval; provided, however, that (a) each Fund may, at any time and without the payment of any penalty, terminate this Agreement upon thirty days' written notice to the Investment Manager, either by majority vote of the Board of Trustees/Directors of such Fund or by the vote of a majority of the outstanding voting securities of such Fund (if applicable, Common Shares and Preferred Shares voting together as a single class); (b) this Agreement shall immediately terminate in the event of its assignment (within the meaning of the Act) unless such automatic termination shall be prevented by an exemptive order of the Securities and Exchange Commission; and (c) the Investment Manager may terminate this Agreement without payment of penalty on thirty days' written notice to such Fund. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed post-paid, to the other party at the principal office of such party Any approval of this Agreement by the holders of a majority of the outstanding voting securities of any portfolio/series of a Fund shall be effective to continue this Agreement with respect to such portfolio/series notwithstanding (a) that this Agreement has not been approved by the holders of a 4 majority of the outstanding voting securities of any other portfolio/series or (b) that this Agreement has not been approved by the vote of a majority of the outstanding voting securities of the Fund of which it is a portfolio/series unless such approval shall be required by any other applicable law or otherwise. 12. This Agreement may be amended by the parties without the vote or consent of shareholders of a Fund to supply any omission, to cure, correct or supplement any ambiguous, defective or inconsistent provision hereof, or if they deem it necessary to conform this Agreement to the requirements of applicable federal laws or regulations, but neither the Funds nor the Investment Manager shall be liable for failing to do so. 13. This Agreement shall be construed in accordance with the law of the State of New York and the applicable provisions of the Act. To the extent the applicable law of the State of New York, or any of the provisions herein, conflicts with the applicable provisions of the Act, the latter shall control. 14. The Declaration of Trust, together with all amendments thereto establishing each Fund identified in Schedule A as a Massachusetts business trust (the "Declaration"), is on file in the office of the Secretary of the Commonwealth of Massachusetts, provides that the name of such Funds 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 such Funds 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 such Funds, but the Trust Estate only shall be liable. 15. The Investment Manager and each Fund agree that the name Morgan Stanley is a property right of the Investment Manager or its parent. Each Fund agrees and consents that (i) it will only use the name Morgan Stanley as a component of its name and for no other purpose, (ii) it will not purport to grant to any third party the right to use the Name for any purpose, (iii) the Investment Manager or its parent, or any corporate affiliate of the Investment Manager's parent, may use or grant to others the right to use the name Morgan Stanley, or any combination or abbreviation thereof, as all or a portion of a corporate or business name or for any commercial purpose, including a grant of such right to any other investment company, (iv) at the request of the Investment Manager or its parent or any corporate affiliate of the Investment Manager's parent, each Fund will take such action as may be required to provide its consent to the use name Morgan Stanley, or any combination or abbreviation thereof, by the Investment Manager or its parent or any corporate affiliate of the Investment Manager's parent, or by any person to whom the Investment Manager or its then current parent or a corporate affiliate of the Investment Manager's parent shall have granted the right to such use, and (v) upon the termination of any investment advisory agreement into which a corporate affiliate of the Investment Manager's parent and each Fund may enter, or upon termination of affiliation of the Investment Manager with its parent, each Fund shall, upon request of the Investment Manager or its parent or any corporate affiliate of the Investment Manager's parent, cease to use the Name as a component of its name, and shall not use the name, or any combination or abbreviation thereof, as a part of its name or for any other commercial purpose, and shall cause its officers, trustees/directors and shareholders to take any and all actions which the Investment Manager or its parent or any corporate affiliate of the Investment Manager's parent, may request to effect the foregoing and to reconvey to the Investment Manager's parent any and all rights to such name. 5 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement, on May 1, 2004, in New York, New York. ON BEHALF OF EACH FUND AS SET FORTH IN SCHEDULE A By:/s/ Ronald E. Robison --------------------- Ronald E. Robison Executive Vice President and Principal Executive Officer Attest: /s/ A. Thomas Smith III ----------------------- A. Thomas Smith III Assistant Secretary MORGAN STANLEY INVESTMENT ADVISORS INC. By: Mitchell M. Merin ----------------- Mitchell M. Merin President Attest: /s/ Barry Fink -------------- Barry Fink Managing Director 6 SCHEDULE A ALL OF THE FUNDS REFERENCED BELOW ARE ORGANIZED AS MASSACHUSETTS BUSINESS TRUSTS UNLESS OTHERWISE INDICATED. I. OPEN-END FUNDS: Monthly Compensation calculated daily by applying the following annual rates to a fund's daily net assets:
EFFECTIVE DATE OF AGREEMENT AND FIXED INCOME FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley California Tax- Free 05/31/97, as amended on 0.55% of the portion of the daily net assets not Income Fund 04/30/98 exceeding $500 million; 0.525% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.50% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.475% of the portion of the daily net assets exceeding $1 billion. Morgan Stanley Convertible Securities 05/31/97 0.60% of the portion of the daily net assets not Trust exceeding $750 million; 0.55% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.50% of the portion of the daily net assets of the exceeding $1 billion but not exceeding $1.5 billion; 0.475% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.45% of the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.425% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley Federal Securities Trust 05/31/97, as amended on 0.55% of the portion of the daily net assets not 04/30/98 exceeding $1 billion; 0.525% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.50% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.475% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.45% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $5 billion; 0.425% of the portion of the daily net assets exceeding $5 billion but not exceeding $7.5 billion; 0.40% of the portion of the daily net assets exceeding $7.5 billion but not exceeding $10 billion; 0.375% of the portion of the daily net assets exceeding $10 billion but not exceeding $12.5 billion; and 0.35% of the portion of the daily net assets exceeding $12.5 billion. Morgan Stanley Flexible Income Trust 05/31/97, as amended on 0.40% of the daily net assets. 04/30/98 Morgan Stanley Hawaii Municipal Trust 05/31/97, as amended on 0.35% of the daily net assets. 04/30/98
EFFECTIVE DATE OF AGREEMENT AND FIXED INCOME FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley High Yield Securities 05/31/97 0.50% of the portion of the daily net assets not Inc. (Maryland corporation) exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion; 0.325% of the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.30% of the portion of daily net assets exceeding $3 billion. Morgan Stanley Limited Duration Fund 05/31/97, as amended on 0.600% of the first $1 billion of daily net assets; 04/30/98, 05/01/04 0.550% of the second $1 billion of daily net assets; and 0.500% of the daily net assets exceeding $2 billion. Morgan Stanley Limited Duration U.S. 05/31/97, as amended on 0.35% of the daily net assets. Treasury Trust 04/30/98 Morgan Stanley Limited Term Municipal 05/31/97, as amended on 0.50% of the daily net assets. Trust 04/30/98 Morgan Stanley Multi-State Municipal 05/31/97, as amended on 0.35% of the daily net assets. Series Trust-- 04/30/98 - ARIZONA SERIES - FLORIDA SERIES - NEW JERSEY SERIES - PENNSYLVANIA SERIES Morgan Stanley New York Tax- Free 05/31/97, as amended on 0.55% of the portion of the daily net assets not Income Fund 04/30/98 exceeding $500 million; and 0.525% of the portion of the daily net assets exceeding $500 million. Morgan Stanley Quality Income Trust 05/31/97, as amended on 0.60% of the portion of the daily net assets not 04/30/98 exceeding $500 million; 0.50% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.40% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; and 0.30% of the portion of the daily net assets exceeding $1 billion. Morgan Stanley Select Dimensions 05/31/97, as amended on 0.40% of the daily net assets. Investment Series-- 04/30/98 - FLEXIBLE INCOME PORTFOLIO Morgan Stanley Tax-Exempt Securities 05/31/97, as amended on 0.50% of the portion of the daily net assets not Trust 04/30/98, 05/01/02 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.25 billion; 0.325% of the portion of the daily net assets exceeding $1.25 billion.
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EFFECTIVE DATE OF AGREEMENT AND FIXED INCOME FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley U.S. Government 05/31/97, as amended on 0.50% of the portion of the daily net assets not Securities Trust 04/30/98 exceeding $1 billion; 0.475% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.45% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.425% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.40% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $5 billion; 0.375% of the portion of the daily net assets exceeding $5 billion but not exceeding $7.5 billion; 0.35% of the portion of the daily net assets exceeding $7.5 billion but not exceeding $10 billion; 0.325% of the portion of the daily net assets exceeding $10 billion but not exceeding $12.5 billion; and 0.30% of the portion of the daily net assets exceeding $12.5 billion. Morgan Stanley Variable Investment Series-- - HIGH YIELD PORTFOLIO 05/31/97, as amended on .50% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; and 0.425% of the daily net assets exceeding $500 million. - LIMITED DURATION PORTFOLIO 05/31/97, as amended on 0.45% of the daily net assets. 05/01/98, 05/01/99, 05/01/00 - QUALITY INCOME PLUS PORTFOLIO 05/31/97, as amended on 0.50% of the portion of the daily the net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; and 0.45% of the portion of the daily net assets exceeding $500 million. EQUITY, BALANCED AND ASSET ALLOCATION FUNDS Morgan Stanley Aggressive Equity Fund 12/02/98 0.75% of the portion of the daily net assets not exceeding $2 billion; and 0.725% of the portion of the daily net assets exceeding $2 billion. Morgan Stanley Allocator Fund 12/12/02 0.75% of the daily net assets. Morgan Stanley American Opportunities 05/31/97 0.625% of the portion of the daily net assets not Fund exceeding $250 million; 0.50% of the portion of the daily net assets exceeding $250 million but not exceeding $2.5 billion; 0.475% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.450% of the portion of the daily net assets exceeding $3.5 billion but not exceeding $4.5 billion; and 0.425% of the portion of the daily net assets exceeding $4.5 billion. Morgan Stanley Balanced Growth Fund 05/31/97, as amended on 0.60% of the portion of the daily net assets not 04/30/98, 05/01/99 exceeding $500 million; and 0.575% of the portion of the daily net assets exceeding $500 million.
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EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Balanced Income Fund 05/31/97, as amended on 0.60% of the portion of the daily net assets not 04/30/98 exceeding $500 million; and 0.575% of the portion of the daily net assets exceeding $500 million. Morgan Stanley Biotechnology Fund 05/13/02 1.0% of the daily net assets. The Investment Manager has agreed to assume all operating expenses (except for brokerage and 12b-1 fees) and waive the compensation provided in its Management Agreement with the Fund until such time as the Fund attains $50 million of net assets or until December 31, 2003, whichever occurs first. Morgan Stanley Capital Opportunities 06/28/99 0.75% of the portion of daily net assets not Trust exceeding $500 million; 0.725% of the portion of daily net assets exceeding $500 million but not exceeding $2 billion; 0.70% of the portion of daily net assets exceeding $2 billion but not exceeding $3 billion and; 0.675% of the portion of daily net assets exceeding $3 billion. Morgan Stanley Developing Growth 05/31/97, as amended on 0.50% of the portion of the daily net assets not Securities Trust 04/30/98 exceeding $500 million; and 0.475% of the portion of the daily net assets exceeding $500 million. Morgan Stanley Dividend Growth 05/31/97, as amended on 0.625% of the portion of the daily net assets not Securities Inc. 04/30/98 exceeding $250 million; 0.50% of the portion of the daily net assets exceeding $250 million but not (Maryland corporation) exceeding $1 billion; 0.475% of the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion; 0.45% of the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; 0.425% of the portion of the daily net assets exceeding $3 billion but not exceeding $4 billion; 0.40% of the portion of the daily net assets exceeding $4 billion but not exceeding $5 billion; 0.375% of the portion of the daily net assets exceeding $5 billion but not exceeding $6 billion; 0.35% of the portion of the daily net assets exceeding $6 billion but not exceeding $8 billion; 0.325% of the portion of the daily net assets exceeding $8 billion but not exceeding $10 billion; 0.30% of the portion of the daily net assets exceeding $10 billion but not exceeding $15 billion; and 0.275% of the portion of the daily net assets exceeding $15 billion. Morgan Stanley European Growth Fund 05/31/97, as amended on 0.95% to the portion of daily net assets not Inc. 04/30/98, 12/01/98, 05/01/00 exceeding $500 million; 0.90% to the portion of daily net assets exceeding $500 million but not (Maryland corporation) exceeding $2 billion; and 0.85% to the portion of daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.825% to the portion of daily net assets exceeding $3 billion.
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EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Financial Services Trust 05/31/97, as amended on 0.75% of the portion of the daily net assets not 04/30/98, 05/01/99, 05/01/01 exceeding $500 million; 0.725% of the portion of the daily net assets exceeding $500 million but not exceeding $1.0 billion; and 0.70% of the portion of the daily net assets exceeding $1.0 billion. Morgan Stanley Fund of Funds- 07/28/97, as amended on None 04/30/98 - DOMESTIC PORTFOLIO - INTERNATIONAL PORTFOLIO Morgan Stanley Fundamental Value Fund 08/19/02 0.75% of the daily net assets. Morgan Stanley Global Advantage Fund 11/06/97, as amended on 0.65% of the portion of the daily net assets not 05/01/98 exceeding $1.5 billion; and 0.625% of the portion of the daily net assets exceeding $1.5 billion. Morgan Stanley Global Dividend Growth 05/31/97, as amended on 0.75% of the portion of the daily net assets not Securities 05/01/98 exceeding $1 billion; 0.725% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.70% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2.5 billion; 0.675% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.650% of the portion of the daily net assets exceeding $3.5 billion but not exceeding $4.5 billion; and 0.625% of the portion of the daily net assets exceeding $4.5 billion. Morgan Stanley Global Utilities Fund 05/31/97, as amended on 0.65% of the portion of daily net assets not 04/30/98, 05/01/99, 05/01/01 exceeding $500 million; 0.625% of the portion of daily net assets exceeding $500 million but not exceeding $1 billion; 0.60% of the portion of daily net assets exceeding $1 billion but not exceeding $1.5 billion; and 0.575% of the portion of daily net assets exceeding $1.5 billion. Morgan Stanley Growth Fund 03/02/98 0.80% of the portion of such daily net assets not exceeding $750 million; 0.75% of the portion of such daily net assets exceeding $750 million, but not exceeding $1.5 billion; and 0.70% of the portion of such daily net assets exceeding $1.5 billion. Morgan Stanley Health Sciences Trust 05/31/97, as amended on 1.00% of the portion of daily net assets not 04/30/98, 05/01/01 exceeding $500 million; 0.95% of the portion of daily net assets exceeding $500 million but not exceeding $1 billion; and 0.925% of the portion of daily net assets exceeding $1 billion. Morgan Stanley Income Builder Fund 05/31/97, as amended on 0.75% of the portion of the net assets not exceeding 05/01/98 $500 million; and 0.725% of the portion of daily net assets exceeding $500 million.
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EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Information Fund 05/31/97, as amended on 0.75% of the portion of the daily net assets not 04/30/98, 05/01/00 exceeding $500 million; 0.725% of the portion of the daily net assets exceeding $500 million but not exceeding $3 billion; and 0.70% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley International Fund 05/04/99, as amended on 1.00% of daily net assets up to $1 billion; and 05/01/01 0.95% of daily net assets exceeding $1 billion. Morgan Stanley International SmallCap 05/31/97, as amended on 1.15% of the daily net assets. Fund 12/01/97, 04/30/98 Morgan Stanley International Value 02/14/01 1.00% of the daily net assets. Equity Fund Morgan Stanley Japan Fund 05/31/97, as amended on 0.95% of the daily net assets. 04/30/98, 10/01/98 Morgan Stanley KLD Social Index Fund 05/21/01, as amended on 0.20% of the daily net assets. 05/01/04 The Investment Manager has agreed to continue to assume all operating expenses (except for brokerage and 12b-1 fees) and waive the compensation provided in the Management Agreement until December 31, 2004 or until such time as the Fund has $50 million of net assets, whichever occurs first. Thereafter, the Investment Manager has agreed to cap the Fund's operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund's "other expenses" and/or waiving its management fees to the extent such operating expenses exceed on an annualized basis 0.40% of the average daily net assets of the Fund, which may reduce the investment management fee below 0.20% of the Fund's average daily net assets. Morgan Stanley Latin American Growth 06/28/99 1.25% of the portion of daily net assets not Fund exceeding $500 million; and 1.20% of the portion of daily net assets exceeding $500 million. Morgan Stanley Mid-Cap Value Fund 05/16/01 0.80% of the daily net assets. Morgan Stanley Nasdaq-100 Index Fund 05/17/01, as amended on 0.20% of the daily net assets. 05/01/04 The Investment Manager has agreed to cap the Fund's operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund's "other expenses" and/or waiving its management fee to the extent such operating expenses exceed on an annualized basis 0.40% of the average daily net assets of the Fund, which may reduce the investment management fee below 0.20% of the Fund's average daily net assets. Morgan Stanley Natural Resource 05/31/97, as amended on 0.625% of the portion of the daily net assets not Development Securities Inc. 04/30/98 exceeding $250 million; and 0.50% of the portion of the daily net assets exceeding $250 million.
6
EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Pacific Growth Fund Inc. 05/31/97, as amended on 0.95% to the portion of daily net assets not 04/30/98, 11/01/98 exceeding $1 billion; 0.90% to the portion of daily (Maryland corporation) net assets exceeding $1 billion but not exceeding $2 billion; and 0.85% to the portion of daily net assets exceeding $2 billion. Morgan Stanley Real Estate Fund 02/09/99 1.00% of the daily net assets. Morgan Stanley Select Dimensions Investment Series- - AMERICAN OPPORTUNITIES PORTFOLIO 05/31/97, as amended on 0.625% of the portion of the daily net assets not 03/02/98, 05/01/98, 05/01/00 exceeding $500 million; 0.60% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; and 0.575% of the portion of the daily net assets exceeding $1 billion. - BALANCED GROWTH PORTFOLIO 05/31/97, as amended on 0.60% of the daily net assets. 03/02/98, 05/01/98, 05101100 - CAPITAL OPPORTUNITIES PORTFOLIO 05/31/97, as amended on 0.75% of the daily net assets. 03/02/98, 05/01/98, 05/01/00 - DEVELOPING GROWTH PORTFOLIO 05/31/97, as amended on 0.50% of the daily net assets. 03/02/98, 05/01/98, 05/01/00 - DIVIDEND GROWTH PORTFOLIO 05/31/97, as amended on 0.625% of the portion of the daily net assets not 03/02/98, 05/01/98, 05/01/00 exceeding $500 million; 0.50% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; and 0.475% of the portion of the daily net assets exceeding $1 billion. - GLOBAL EQUITY PORTFOLIO 05/31/97, as amended on 1.00% of the daily net assets. 03/02/98, 05/01/98, 05/01/00 - GROWTH PORTFOLIO 05/31/97, as amended on 0.80% of the daily net assets. 03/02/98, 05/01/98, 05/01/00 - UTILITIES PORTFOLIO 05/31/97, as amended on 0.65% of the daily net assets. 03/02/98, 05/01/98, 05/01/00 - VALUE-ADDED MARKET PORTFOLIO 05/31/97, as amended on 0.50% of the daily net assets. 04/30/98
7
EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley S&P 500 Index Fund 07/28/97, as amended on 0.20% of the daily net assets. 04/30/98, 05/01/99, 05/01/04 The Investment Manager has agreed to cap the Fund's operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund's "other expenses" and/or waiving its management fee to the extent such operating expenses exceed on an annualized basis 0.40% of the average daily net assets of the Fund, which may reduce the investment management fee below 0.20% of the Fund's average daily net assets. Morgan Stanley Small-Mid Special Value 04/04/02 0.75% of the daily net assets. Fund Morgan Stanley Special Growth Fund 06/28/99, as amended on 1.00% of the portion of daily net assets not 05/01/00 exceeding $1.5 billion; and 0.95% of the portion of daily net assets exceeding $1.5 billion. Morgan Stanley Special Value Fund 05/31/97, as amended on 0.75% of the portion of the daily net assets not 04/30/98, 05/01/99 05/01/02 exceeding $500 million; 0.725% of the portion of daily net assets exceeding $500 million but not exceeding $1.0 billion; and 0.70% of the portion of daily net assets exceeding $1.0 billion. Morgan Stanley Strategist Fund 05/31/97, as amended on 0.60% of the portion of the daily net assets not 05/01/98, 05/01/00 exceeding $500 million; 0.55% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; 0.50% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.475% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.45% of the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.425% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley Total Market Index Fund 07/21/ 99, as amended on 0.20% of the daily net assets. 05/01/04 The Investment Manager has agreed to cap the Fund's operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund's "other expenses" and/or waiving its management fee to the extent such operating expenses exceed on an annualized basis 0.40% of the average daily net assets of the Fund, which may reduce the investment management fee below 0.20% of the Fund's average daily net assets. Morgan Stanley Total Return Trust 06/28/99, as amended on 0.75% of the portion of daily net assets not 05/01/00, 05/01/01 exceeding $500 million; 0.725% of the portion of daily net assets exceeding $500 million but not exceeding $1 billion; and 0.70% of the portion of daily net assets exceeding $1 billion.
8
EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Utilities Fund 05/31/97, as amended on 0.65% of the portion of the daily net assets not 04/30/98 exceeding $500 million; 0.55% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; 0.525% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.50% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2.5 billion; 0.475% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.45% of the portion of the daily net assets exceeding $3.5 but not exceeding $5 billion; and 0.425% of the daily net assets exceeding $5 billion. Morgan Stanley Value-Added Market 05/31/97, as amended on 0.50% of the portion of the daily net assets not Series 05/01/98 exceeding $500 million; 0.45% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; 0.425% of the portion of the daily net assets exceeding $1.0 billion but not exceeding $2.0 billion; and 0.40% of the portion of the daily net assets exceeding $2 billion. Morgan Stanley Value Fund 07/22/98, as amended on 0.500% of the first $1 billion of daily net assets; 05/01/02, 05/01/04 0.450% of the second $1 billion of daily net assets; 0.400% of the third $1 billion of daily net assets; and 0.350% of the daily net assets exceeding $3 billion. Morgan Stanley Variable Investment Series- - AGGRESSIVE EQUITY PORTFOLIO 05/31/97, as amended on 0.75% of the daily net assets. 05/01/98, 05/01/99, 05/01/00 - DIVIDEND GROWTH PORTFOLIO 05/31/97, as amended on 0.625% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; 0.50% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; 0.475% of the portion of the daily net assets exceeding $1.0 billion but not exceeding $2.0 billion; 0.45% of the portion of the daily net assets exceeding $2 billion but not exceeding $3 billion; and 0.425% of the portion of the daily net assets exceeding $3 billion. - EQUITY PORTFOLIO 05/31/97, as amended on 0.50% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $1 billion; 0.475% of the portion of the daily net assets exceeding $1 billion but not exceeding $2 billion; and 0.45% of the portion of the daily net assets exceeding $2 billion. - EUROPEAN GROWTH PORTFOLIO 05/31/97, as amended on 0.95% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; and 0.90% of the portion of the daily net assets exceeding $500 million. - GLOBAL ADVANTAGE PORTFOLIO 05/31/97, as amended on 0.65% of the daily net assets. 05/01/98, 05/01/99, 05/01/00
9
EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- - GLOBAL DIVIDEND GROWTH PORTFOLIO 05/31/97, as amended on 0.75% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $1 billion; and 0.725% of the portion of daily net assets exceeding $1 billion. - INCOME BUILDER PORTFOLIO 05/31/97, as amended on 0.75% of the daily net assets. 05/01/98, 05/01/99, 05/01/00 - INFORMATION PORTFOLIO 05/31/97, as amended on 0.75% of the daily net assets. 05/01/98, 05/01/99, 05/01/00 - PACIFIC GROWTH PORTFOLIO 05/31/97, as amended on 0.95% of the daily net assets. 05/01/98, 05/01/99, 05/01/00 - S&P 500 INDEX PORTFOLIO 05/31/97, as amended on 0.20% of the daily net assets. 05/01/98, 05/01/99, 05/01/00, 05/01/04 The Investment Manager has agreed to cap the Fund's operating expenses (except for brokerage and 12b-1 fees) by assuming the Fund's "other expenses" and/or waiving its management fees to the extent such operating expenses exceed on an annualized basis 0.40% of the average daily net assets of the Fund, which may reduce the investment management fee below 0.20% of the Fund's average daily net assets. - STRATEGIST PORTFOLIO 05/31/97, as amended on 0.50% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $1.5 billion; and 0.475% of the portion of the daily net assets exceeding $1.5 billion. - UTILITIES PORTFOLIO 05/31/97, as amended on 0.65% of the portion of the daily net assets not 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; 0.55% of the portion of the daily net assets exceeding $500 million but not exceeding $1 billion; and 0.525% of the portion of the daily net assets exceeding $1 billion. MONEY MARKET FUNDS Active Assets California Tax-Free Trust 05/31/97, as amended on 0.50% of the portion of the daily net assets not 04/30/98 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.25% of the portion of the daily net assets exceeding $3 billion
10
EFFECTIVE DATE OF EQUITY, BALANCED AND ASSET AGREEMENT AND ALLOCATION FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Active Assets Government Securities 05/31/97, as amended on 0.50% of the portion of the daily net assets not Trust 04/30/98 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.25% of the portion of the daily net assets exceeding $3 billion. Active Assets Institutional Government 03/08/02 0.15% of the daily net assets. Securities Trust On an ongoing basis, the Investment Manager has agreed under its Management Agreement with the Fund to assume Fund operating expenses (except for brokerage fees) to the extent that such operating expenses exceed on an annualized basis 0.20% of the average daily net assets of the Fund. This may reduce the investment management fee below 0.15% for the Fund.
11
EFFECTIVE DATE OF AGREEMENT AND MONEY MARKET FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Active Assets Institutional Money Trust 01/06/00 0.15% of the daily net assets. On an ongoing basis, the Investment Manager has agreed under its Management Agreement with the Fund to assume Fund operating expenses (except for brokerage fees) to the extent that such operating expenses exceed on an annualized basis 0.20% of the average daily net assets of the Fund. This may reduce the investment management fee below 0.15% for the Fund. Active Assets Money Trust 05/31/97, as amended on 0.50% of the portion of the daily net assets not 04/30/98, 05/01/99, exceeding $500 million; 0.425% of the portion of the 05/01/01, 05/01/02 daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.25% of the portion of the daily net assets exceeding $3 billion; 0.249% of the portion of daily net assets exceeding $15 billion but not exceeding $17.5 billion; and 0.248% of the portion of daily net assets exceeding $17.5 billion but not exceeding $25 billion; and 0.247% of the portion of daily net assets exceeding $25 billion but not exceeding $30 billion; and 0.246% of the portion of daily net assets exceeding $30 billion. Active Assets Tax-Free Trust 05/31/97, as amended on 0.50% of the portion of the daily net assets not 04/30/98 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.25% of the portion of the daily net assets exceeding $3 billion; 0.249% of the portion of daily net assets exceeding $15 billion.
12
EFFECTIVE DATE OF AGREEMENT AND MONEY MARKET FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley California Tax- Free 05/31/97, as amended on 0.50% of the portion of the daily net assets not Daily Income Trust 04/30/98 exceeding 500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley Liquid Asset Fund Inc. 05/31/97, as amended on 0.50% of the portion of the daily net assets not 04/30/98, 05/01/01, 05/01/02 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.35 billion; 0.325% of the portion of the daily net assets exceeding $1.35 billion but not exceeding $1.75 billion; 0.30% of the portion of the daily net assets exceeding $1.75 billion but not exceeding $2.15 billion; 0.275% of the portion of the daily net assets exceeding $2.15 billion but not exceeding $2.5 billion; 0.25% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $15 billion; 0.249% of the portion of the daily net assets exceeding $15 billion but not exceeding $17.5 billion; 0.248% of the portion of the daily net assets exceeding $17.5 billion but not exceeding $25 billion; 0.247% of the portion of the daily net assets exceeding $25 billion but not exceeding $30 billion; and 0.246% of the portion of daily net assets exceeding $30 billion. Morgan Stanley New York Municipal Money 05/31/97, as amended on 0.50% of the portion of the daily net assets not Market Trust 04/30/98 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the portion of the daily net assets exceeding $3 billion.
13
EFFECTIVE DATE OF AGREEMENT AND MONEY MARKET FUNDS ANY AMENDMENTS INVESTMENT MANAGEMENT FEE ------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Select Dimensions 05/31/97, as amended on 0.50% of the daily net assets. Investment Series- 03/02/98, 05/01/98, 05/01/00 - MONEY MARKET PORTFOLIO Morgan Stanley Tax-Free Daily Income 05/31/97, as amended on 0.50% of the portion of the daily net assets not Trust 04/30/98 exceeding 500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley U.S. Government Money 05/31/97, as amended on 0.50% of the portion of the daily net assets not Market Trust 04/30/98 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.375% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.275% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the portion of the daily net assets exceeding $3 billion. Morgan Stanley Variable Investment 05/31/97, as amended on 0.50% of the portion of the daily net assets not Series- 05/01/98, 05/01/99, 05/01/00 exceeding $500 million; 0.425% of the portion of the daily net assets exceeding $500 million but not - MONEY MARKET PORTFOLIO exceeding $750 million; and 0.375% of the portion of the daily net assets exceeding $750 million.
14 II. CLOSED-END FUNDS: Monthly compensation calculated weekly by applying the following annual Rates to a fund's weekly net assets (except as indicated): Morgan Stanley California Insured 05/31/97 0.35% of the average weekly net assets. Municipal Income Trust Morgan Stanley California Quality 05/31/97 0.35% of the average weekly net assets. Municipal Securities Morgan Stanley Government Income Trust 05/31/97 0.50% of the average weekly net assets. Morgan Stanley Income Securities Inc. 05/31/97 0.50% of the average weekly net assets. (Maryland corporation) Morgan Stanley Insured California 05/31/97 0.35% of the average weekly net assets. Municipal Securities Morgan Stanley Insured Municipal Bond 05/31/97 0.35% of the average weekly net assets. Trust Morgan Stanley Insured Municipal Income 05/31/97 0.35% of the average weekly net assets. Trust Morgan Stanley Insured Municipal 05/31/97 0.35% of the average weekly net assets. Securities Morgan Stanley Insured Municipal Trust 05/31/97 0.35% of the average weekly net assets. Morgan Stanley New York Quality 05/31/97 0.35% of the average weekly net assets. Municipal Securities Morgan Stanley Quality Municipal 05/31/97 0.35% of the average weekly net assets. Securities Morgan Stanley Quality Municipal Income 05/31/97 0.35% of the average weekly net assets. Trust Morgan Stanley Quality Municipal 05/31/97 0.35% of the average weekly net assets. Investment Trust
15 1 ANNEX 1 LIST OF FUNDS FOR WHICH THE CURRENT INVESTMENT MANAGEMENT AGREEMENT SPECIFIES SECTION 2 IS APPLICABLE: Morgan Stanley Allocator Fund Morgan Stanley Biotechnology Fund Morgan Stanley Capital Opportunities Trust Morgan Stanley Fundamental Value Fund Morgan Stanley Growth Fund Morgan Stanley International Fund Morgan Stanley International Value Equity Fund Morgan Stanley KLD Social Index Fund Morgan Stanley Latin American Growth Fund Morgan Stanley Mid-Cap Value Fund Morgan Stanley Nasdaq-100 Index Fund Morgan Stanley Select Dimensions Investment Series Morgan Stanley Small-Mid Special Value Fund Morgan Stanley Special Growth Fund Morgan Stanley Total Return Trust 2 ANNEX 2 LIST OF CLOSED-END FUNDS FOR WHICH THE LIQUIDATION PREFERENCE OF ANY PREFERRED SHARES ISSUED BY SUCH FUND WILL NOT BE DEDUCTED FROM THE FUND'S TOTAL ASSETS FOR PURPOSES OF CALCULATING THE MANAGEMENT FEE: Morgan Stanley California Insured Municipal Income Trust Morgan Stanley California Quality Municipal Securities Morgan Stanley Insured Municipal Bond Trust Morgan Stanley Insured Municipal Income Trust Morgan Stanley Insured Municipal Trust Morgan Stanley New York Quality Municipal Securities Morgan Stanley Quality Municipal Income Trust Morgan Stanley Quality Municipal Investment Trust Morgan Stanley Quality Municipal Securities 1 ANNEX 3 LIST OF FUNDS FOR WHICH THE CURRENT INVESTMENT MANAGEMENT AGREEMENT SPECIFIES THAT SECTION 8 IS APPLICABLE AND ANY FUND-SPECIFIC OPERATING EXPENSE LIMITATION: Active Assets California Tax-Free Trust Active Assets Government Securities Trust Active Assets Money Trust Active Assets Tax-Free Trust Morgan Stanley American Opportunities Fund Morgan Stanley Balanced Growth Fund Morgan Stanley California Tax-Free Daily Income Trust Morgan Stanley California Tax-Free Income Fund Morgan Stanley Capital Opportunities Trust Morgan Stanley Convertible Securities Trust Morgan Stanley Developing Growth Securities Trust Morgan Stanley Dividend Growth Securities Inc. Morgan Stanley European Growth Fund Inc. Morgan Stanley Federal Securities Trust Morgan Stanley Global Dividend Growth Securities Morgan Stanley Global Utilities Fund Morgan Stanley Government Income Trust (a) 1 1/2 % of the first $30 million of the average weekly net assets of the Fund during such year and 1 % of such average weekly net assets in excess of $30 million; or (b) 25% of the Fund's gross income for such year, the Investment Manager will pay to the Fund the greater of the excess as computed under (a) or (b). Morgan Stanley Growth Fund Morgan Stanley Hawaii Municipal Trust Morgan Stanley Health Sciences Trust 2 Morgan Stanley High Yield Securities Inc. Morgan Stanley Income Builder Fund Morgan Stanley Income Securities Inc. (a) 1 1/2 % of the first $30 million of the average weekly net assets of the Fund during such year and 1 % of such average weekly net assets in excess of $30 million; or (b) 25% of the Fund's gross income for such year, the Investment Manager will pay to the Fund the greater of the excess as computed under (a) or (b). Morgan Stanley Information Fund Morgan Stanley International SmallCap Fund Morgan Stanley Japan Fund Morgan Stanley Latin American Growth Fund Morgan Stanley Limited Duration Fund Morgan Stanley Limited Duration U.S. Treasury Trust Morgan Stanley Limited Term Municipal Trust Morgan Stanley Liquid Asset Fund Inc. Morgan Stanley Multi-State Municipal Series Trust Morgan Stanley Natural Resource Development Securities Inc. Morgan Stanley New York Municipal Money Market Trust Morgan Stanley Pacific Growth Fund Inc. Morgan Stanley Select Dimensions Investment Series: American Opportunities Portfolio, Balanced Growth Portfolio, Developing Growth Portfolio, Dividend Growth Portfolio, Flexible Income Portfolio, Global Equity Portfolio, Growth Portfolio, Money Market Portfolio, Utilities Portfolio, or Value-Added Market Portfolio: 2.5% of the average daily net assets of such Portfolio up to $30 million, 2.0% of the next $70 million and 1.5% of the average daily net assets of such Portfolio in excess of $100 million Morgan Stanley Special Growth Fund Morgan Stanley Special Value Fund 3 Morgan Stanley Strategist Fund Morgan Stanley Tax-Exempt Securities Trust Morgan Stanley Tax-Free Daily Income Trust Morgan Stanley Total Return Trust Morgan Stanley U.S. Government Securities Trust Morgan Stanley Utilities Fund Morgan Stanley Value-Added Market Series Morgan Stanley Variable Investment Series: Dividend Growth Portfolio, Equity Portfolio, High Yield Portfolio, Money Market Portfolio, Quality Income Plus Portfolio, Strategist Portfolio, or Utilities Portfolio: 1.5% of the average daily net assets of such Portfolio up to $30 million and 1.0% of the average daily net assets of such Portfolio in excess of $30 million European Growth Portfolio, Global Dividend Growth Portfolio, or Pacific Growth Portfolio: 2.5% of the average daily net assets of such Portfolio up to $30 million, 2.0% of the next $70 million and 1.5% of the average daily net assets of such Portfolio in excess of $100 million