Exhibit 10.3

CONFIDENTIAL TREATMENT REQUESTED BY NORTHERN FUNDS

AND NORTHERN INSTITUTIONAL FUNDS

UNDER RULE 81(b), 17 C.F.R. 81(b)

CAPITAL SUPPORT AGREEMENT

THIS CAPITAL SUPPORT AGREEMENT (this “Agreement”) is made as of February 21,
2008, by and between Northern Trust Corporation (the “Support Provider”) and
Northern Institutional Funds (the “Trust”) on behalf of its series the Liquid
Assets Portfolio (the “Fund”).

W I T N E S S E T H:

WHEREAS, the Trust is an investment company registered with the Securities and
Exchange Commission in accordance with the Investment Company Act of 1940 (as
amended, the “1940 Act”);

WHEREAS, the Fund is a money market fund that seeks to maintain a stable net
asset value of $1.00 per share using the Amortized Cost Method as defined in and
in accordance with Rule 2a-7 promulgated under the 1940 Act (as amended, “Rule
2a-7”);

WHEREAS, the Fund holds notes (“Notes”) issued by Whistlejacket Capital LLC
and/or White Pine Finance LLC (together the “Issuer”), which no longer are
“Eligible Securities” as defined in paragraph (a)(10) of Rule 2a-7;

WHEREAS, a sale of the Notes under current market conditions is unlikely to
result in the full recovery of the Fund’s investments, and may cause the Fund to
realize losses to the extent that it could no longer maintain a stable net asset
value of $1.00 per share;

WHEREAS, it is in the interest of the Support Provider and certain of its
affiliates for the Fund to maintain a stable net asset value of $1.00 per share;

NOW, THEREFORE, in consideration of the above premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Support Provider and Trust
hereby agree as follows:

1. Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings indicated:

(a) “Amortized Cost Value” means, with respect to any Eligible Note held by the
Fund, the value of that Eligible Note as determined using the Amortized Cost
Method in accordance with Rule 2a-7 on the relevant date.

(b) “Capital Contribution” means a cash contribution by the Support Provider to
the Fund pursuant to this Agreement for which the Support Provider does not
receive any shares or other consideration from the Fund.

(c) “Contribution Event” means, with respect to any Eligible Note held by the
Fund, any of the following occurrences:

 

  (i)

Any sale of the Eligible Note by the Fund for cash in an amount, after deduction
of any commissions or similar transaction costs, less than the

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Amortized Cost Value of the Eligible Note sold as of the date of settlement;

 

  (ii) Receipt of final payment on the Eligible Note in an amount less than the
Amortized Cost Value of that Eligible Note as of the date such payment is
received; or

 

  (iii) Issuance of orders by a court having jurisdiction over the matter
discharging the Issuer from liability for the Eligible Note and providing for
payments on that Eligible Note in an amount less than the Amortized Cost Value
of that Eligible Note as of the date such payment is received.

The excess of the Amortized Cost Value of the Eligible Notes subject to a
Contribution Event over the amount received by the Fund in connection with such
Contribution Event shall constitute the “Loss” on such Eligible Notes.

(d) “Eligible Notes” means the Notes held by the Fund as portfolio securities on
the date hereof or any securities or other instruments received in exchange for,
or as a replacement of, the Notes as a result of an exchange offer, debt
restructuring, reorganization or similar transaction pursuant to which the Notes
are exchanged for, or replaced with, new securities of the Issuer or a third
party, other than Notes or securities which are or become “Eligible Securities,”
as defined in paragraph (a)(10) of Rule 2a-7.

(e) “Maximum Contribution Amount” means twelve million and five hundred thousand
dollars ($12,500,000). The Maximum Contribution Amount may be increased at any
time as agreed by the Trust and the Support Provider.

(f) “Required Capital Contribution” means for the Fund on the date of any
Contribution Event, a Capital Contribution in an amount sufficient for the Fund
to maintain its net asset value per share at no less than the Minimum
Permissible NAV, after giving effect to the Contribution Event and all payments
received by the Fund in respect of the Eligible Notes. The net asset value for
purposes of calculating the amount of Required Capital Contribution shall
exclude any account receivable or other asset representing the Support
Provider’s obligations under this Agreement. Minimum Permissible NAV means
$0.995 for so long as the Fund is not rated by Standard & Poor’s, and $0.9975 if
the Fund is rated by Standard & Poor’s.

2. Covenants of the Fund. The Fund agrees that:

(a) To the extent consistent with the Fund’s interest, the Board of Trustees of
the Trust (the “Board”) shall consult with the Support Provider with respect to
all decisions regarding each Eligible Note (including, but not limited to, any
decision to sell the Eligible Note or to forgo the right to any payment) prior
to the occurrence of a Contribution Event with respect to that Eligible Note.
Nothing in this Agreement shall be construed to cause the delegation by the
Board to any person any authority which is not permitted to be delegated under
Rule 2a-7.

(b) The Fund will retain any Capital Contribution and not include the Capital
Contribution in any dividend or other distribution to the Fund’s shareholders.
For the avoidance of doubt, for purposes of this subparagraph, the redemption of
the Fund’s shares shall not constitute a “distribution” to shareholders.

(c) The Fund will promptly sell the Eligible Notes upon the earlier of (i) any
change in the Support Provider's short term credit ratings such that the Support
Provider's obligations no longer qualify as First Tier Securities as defined in
paragraph (a)(12) of Rule 2a-7, or (ii) on the business day immediately prior to
the date set forth in subparagraph 3(c)(iii).

 

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3. Contributions to the Fund.

(a) If a Contribution Event occurs prior to the occurrence of a Termination
Event (defined below), the Support Provider will make a Capital Contribution to
the Fund in the amount equal to the least of (i) the Loss incurred as a result
of Contribution Event, (ii) the Required Capital Contribution, or (iii) the
Maximum Contribution Amount reduced by the amount of any Capital Contribution
previously made by the Support Provider to the Fund.

(b) The Support Provider shall make the Capital Contribution to the Fund not
later than one business day after the occurrence of a Contribution Event, by
12:00 noon, Eastern Time. Each Capital Contribution made hereunder shall be made
in immediately available funds, without deduction, set-off or counterclaim, to
the Fund.

(c) The obligation of the Support Provider to make Capital Contributions
pursuant to this Agreement shall terminate upon the earlier of (such occurrence,
the “Termination Event”): (i) the Support Provider has made Capital
Contributions equal to the Maximum Contribution Amount, (ii) the Fund no longer
holds Eligible Notes, or (iii) 5:00 p.m. Eastern Time on July 31, 2008.

4. Reliance by the Fund and the Board. The Support Provider acknowledges and
consents to:

(a) The Board’s reliance on the Support Provider’s obligations under this
Agreement in making any determination required under Rule 2a-7; and

(b) For purposes of calculating the Fund’s daily net asset value calculated in
accordance with procedures adopted by the Board in compliance with Rule
2a-7(c)(7)(ii)(A), the inclusion of the Capital Contribution that would be
payable to the Fund under this Agreement if all of the Eligible Notes were sold
on the date of such net asset value calculation; and

(c) The inclusion of the Capital Contribution that would be payable to the Fund
under this Agreement if all of the Eligible Notes were sold on the date of such
net asset value calculation in the Fund’s audited or unaudited financial
statements, to the extent required by generally accepted accounting principles.

5. Representations and Warranties. The Support Provider hereby represents and
warrants that:

(a) It is duly organized and validly existing under the laws of the jurisdiction
of its organization or incorporation and, if relevant under such laws, in good
standing;

(b) It has the power to execute this Agreement, to deliver this Agreement and to
perform its obligations under this Agreement and has taken all necessary action
to authorize such execution, delivery and performance;

(c) Such execution, delivery and performance do not violate or conflict with any
law applicable to it, any provision of its constitutional documents, any order
or judgment of any court or other agency of government applicable to it or any
of its assets or any contractual restriction binding on or affecting it or any
of its assets;

 

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(d) All governmental and other consents that are required to have been obtained
by it with respect to this Agreement to which it is a party have been obtained
and are in full force and effect and all conditions of any such consents have
been complied with;

(e) Its obligations under this Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)); and

(f) It has obtained short-term credit ratings of A-1 from Standard & Poor’s, P-1
from Moody’s Investors Services and F-1 from Fitch Ratings.

6. General.

(a) Neither party may assign its rights under this Agreement to any person or
entity, in whole or in part, without the prior written consent of the other
party.

(b) No waiver of any provision hereof or of any right or remedy hereunder shall
be effective unless in writing and signed by the party against whom such waiver
is sought to be enforced. No delay in exercising, no course of dealing with
respect to or no partial exercise of any right or remedy hereunder shall
constitute a waiver of any other right or remedy, or future exercise thereof.

(c) If any provision of this Agreement is determined to be invalid under any
applicable statute or rule of law, it is to that extent to be deemed omitted,
and the balance of the Agreement shall remain enforceable.

(d) Subject to the next sentence, all notices shall be in writing and shall be
deemed to be delivered when received by certified mail, postage prepaid, return
receipt requested, or when sent by facsimile or e-mail confirmed by call back.
All notices shall be directed to the address set forth under the party’s
signature or to such other address as either party may, from time to time,
designate by notice to the other party.

(e) No amendment, change, waiver or discharge hereof shall be valid unless in
writing and signed by the Support Provider and the Trust, on behalf of the Fund;
provided that, in no event shall any amendment, change, waiver or discharge
hereof extend the date set forth in Section 3(c)(iii), unless the parties hereto
have obtained the prior approval of the staff of the U.S. Securities and
Exchange Commission.

(f) This Agreement shall be governed in all respects by the laws of the State of
Illinois without regard to its conflict of laws provisions.

(g) This Agreement constitutes the complete and exclusive statement of all
mutual understandings between the parties with respect to the subject matter
hereof, superseding all prior or contemporaneous proposals, communications and
understandings, oral or written.

(h) This Agreement is solely for the benefit of the Fund, and no other person
shall acquire or have any rights under or by virtue of this Agreement.

 

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IN WITNESS WHEREOF, the Support Provider has caused this Capital Support
Agreement to be executed this 21st day of February 2008.

 

NORTHERN TRUST CORPORATION By:  

/s/ William R. Dodds

Name:   William R. Dodds Title:   Treasurer ADDRESS FOR NOTICES: 50 S. LaSalle
St. Chicago, IL 60603 Attn: William R. Dodds NORTHERN INSTITUTIONAL FUNDS FOR
AND ON BEHALF OF ITS LIQUID ASSETS PORTFOLIO By:  

/s/ Lloyd A. Wennlund

Name:   Lloyd A. Wennlund Title:   President ADDRESS FOR NOTICES: 50 S. LaSalle
St. Chicago, IL 60603 Attn: Lloyd A. Wennlund

 

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