THIRD PARTY FEEDER FUND
AGREEMENT
AMONG
MERRIMAC SERIES,
XXXXXXXX, XXXX & XXXX MASTER PORTFOLIO,
INVESTORS BANK & TRUST COMPANY
AND
XXXXXXXX, AYER & WOOD, INC.
dated as of
June __, 1998
AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of ____, 1998,
by and among Merrimac Series, (the "Trust"), a Delaware business trust, in
respect of Merrimac Short Term Asset Reserve Series, a series thereof (the
"Fund"), Xxxxxxxx, Xxxx & Xxxx Master Portfolio (the "Portfolio Trust"), a trust
organized under the common law of the State of New York in respect of the
Xxxxxxxx Short Term Asset Reserve Portfolio (the "Portfolio"), Xxxxxxxx, Ayer &
Xxxx, Inc. a Massachusetts corporation (the "Adviser"), and Investors Bank &
Trust Company, a Massachusetts trust company ("Investors Bank") with respect to
the proposed investment by the Fund in the Portfolio.
WITNESSETH
WHEREAS, the Trust and the Portfolio Trust are each open-end management
investment companies and the Fund and the Portfolio have the same investment
objectives and substantively the same investment policies;
WHEREAS, the Adviser currently serves as the investment adviser of the
Portfolio;
WHEREAS, the Trust desires to invest all of the Fund's investable assets in
the Portfolio in exchange for a beneficial interest in the Portfolio (the
"Investment") on the terms and conditions set forth in this Agreement; WHEREAS,
the Portfolio Trust is willing to accept the Investment; and
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
I
THE INVESTMENT
--------------
1.1 Agreement to Effect the Investment. The Trust agrees to assign, transfer and
deliver all of the Fund's investable assets (the "Assets") to the Portfolio
Trust at each Closing (as hereinafter defined). The Portfolio Trust agrees in
exchange therefor to issue to the Fund a beneficial interest (the "Interest") in
the Portfolio equal in value to the net value of the Assets of the Fund conveyed
to the Portfolio on that date of Closing.
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II
CLOSING AND CLOSING DATE
------------------------
2.1 Time of Closing. The conveyance of the Assets in exchange for the
Interest, as described in Article I, together with related acts necessary to
consummate such transactions, shall occur initially on the date the Trust
commences its offering of shares of the Fund to the public and at each
subsequent date as the Trust desires to make a further Investment in the
Portfolio (each, a "Closing"). Except as otherwise provided in Section 4.1(j),
all acts occurring at any Closing shall be deemed to occur simultaneously as of
the determination of the Portfolio's net asset value on the date of Closing.
2.2 Related Closing Matters. On each date of Closing, the Trust, on behalf
of the Fund, shall authorize the Fund's custodian to deliver all of the Assets
held by such custodian to the Portfolio's custodian. The Fund's and the
Portfolio's custodians shall acknowledge, in a form acceptable to the other
party, their respective delivery and acceptance of the Assets. The Portfolio
shall deliver to the Trust acceptable evidence of the Fund's ownership of the
Interest. In addition, each party shall deliver to each other party such bills
of sale, checks, assignments, securities instruments, receipts or other
documents as such other party or its counsel may reasonably request. Each of the
representations and warranties set forth in Article III shall be deemed to have
been made anew on each date of Closing.
2.3 Rejection of Certain Assets. The Portfolio Trust may refuse to accept
Assets other than in the form of cash if: (a) acceptance of such Assets at that
time would result in a violation of any of the Portfolio's policies or
restrictions or any provision of the 1940 Act; (b) such Assets do not have a
readily ascertainable market value; or (c) acceptance of such Assets at that
time would result, in the absence of corrective action by the Adviser or
otherwise, in any investor in the Portfolio failing to qualify a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
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III
REPRESENTATIONS AND WARRANTIES
------------------------------
3.1 The Trust and Investors Bank. The Trust and Investors Bank each
represents and warrants to the Portfolio Trust and the Adviser that:
(a) Organization. The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware, the Fund
is a duly and validly designated series of the Trust, and the Trust and the Fund
have the requisite power and authority to own their property and conduct their
business as now being conducted and as proposed to be conducted pursuant to this
Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Trust and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the
Trust and no other action or proceeding is necessary for the execution and
delivery of this Agreement by the Trust, the performance by the Trust of its
obligations hereunder and the consummation by the Trust of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Trust and constitutes a legal, valid and binding obligation of the Trust in
respect of the Fund, enforceable against them in accordance with its terms.
(c) Authorization of Investment. The Investment has been duly authorized
by all necessary action on the part of the Board of Trustees of the Trust.
(d) No Bankruptcy Proceedings. Neither the Trust nor the Fund is under
the jurisdiction of a court in a proceeding under Title 11 of the United States
Code (the "Bankruptcy Code") or similar case within the meaning of Section
368(a)(3)(A) of the Bankruptcy Code.
(e) Fund Assets. The Fund's Assets will, at the initial Closing, consist
solely of cash.
(f) Taxable and Fiscal Year. The taxable and fiscal year end for the
Fund is December 31.
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(g) Auditors. The Trust has appointed Ernst & Young LLP as the Fund's
independent public accountants to certify the Fund's financial statements in
accordance with Section 32 of the Investment Company Act of 1940, as amended
(the "1940 Act").
(h) Registration Statement. The Trust has reviewed the Portfolio's
registration statement on Form N-1A, as filed with the Securities and Exchange
Commission ("SEC") and the Declaration of Trust of the Portfolio Trust, and
understands and agrees to the Portfolio Trust's and the Portfolio's policies and
methods of operations as described therein.
(i) Errors and Omissions Insurance Policy. The Trust has in force an
errors and omissions liability insurance policy insuring the Fund against loss
up to $10 million for negligence or wrongful acts.
(j) SEC Filings. The Trust has duly filed all forms, reports, proxy
statements and other documents (collectively, the "SEC Filings") required to be
filed under the Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act (collectively,
the "Securities Laws") in connection with the registration of its shares, any
meetings of its shareholders and its registration as an investment company. The
SEC Filings were prepared in accordance with the requirements of the Securities
Laws, as applicable, and the rules and regulations of the SEC thereunder, and do
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) 1940 Act, 1933 Act Registration and State Qualification. The Trust
is duly registered as an open-end management investment company under the 1940
Act and the Fund's shares are registered with the SEC under the 1933 Act. The
Fund and its shares are qualified in any states where such qualification is
necessary and such qualifications are in full force and effect.
3.2 The Portfolio Trust and the Adviser. The Portfolio Trust and the
Adviser each represents and warrants to the Trust that:
(a) Organization. The Portfolio Trust is a trust duly organized and
validly existing under the common law of the State of New York and has the
requisite power and
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authority to own its property and conduct its business as now being conducted
and as proposed to be conducted pursuant to this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Portfolio Trust and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Portfolio Trust by its Board of Trustees and no other action or
proceeding is necessary for the execution and delivery of this Agreement by the
Portfolio Trust, the performance by the Portfolio Trust of its obligations
hereunder and the consummation by the Portfolio Trust of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Portfolio Trust and constitutes a legal, valid and binding obligation of the
Portfolio, enforceable against it in respect of the Portfolio in accordance with
its terms.
(c) Authorization of Issuance of Interest. The issuance by the Portfolio
of the Interest in exchange for the Investment by the Fund of its Assets has
been duly authorized by all necessary action on the part of the Board of
Trustees of the Portfolio Trust. When issued in accordance with the terms of
this Agreement, the Interest will be validly issued, fully paid and
non-assessable by the Portfolio Trust.
(d) No Bankruptcy Proceedings. The Portfolio Trust is not under the
jurisdiction of a court in a proceeding under Title 11 of the Bankruptcy Code or
similar case within the meaning of Section 368(a)(3)(A) of the Bankruptcy Code.
(e) Taxable and Fiscal Year. The taxable and fiscal year end of the
Portfolio is December 31.
(f) Auditors. The Portfolio has appointed Coopers & Xxxxxxx LLP as the
Portfolio's independent public accountants to certify the Portfolio's financial
statements in accordance with Section 32 of the 1940 Act.
(g) Errors and Omissions Insurance Policy. The Portfolio Trust has in
force an errors and omissions liability insurance policy insuring the Portfolio
against loss up to $___ million for negligence or wrongful acts.
(h) SEC Filings. The Portfolio Trust has duly filed all SEC Filings
required to be filed with the SEC pursuant to the 1934 Act and the 1940 Act in
connection with any meetings of its investors and its registration as an
investment company. Beneficial interests in the Portfolio
6
are not required to be registered under the 1933 Act because such interests are
offered solely in private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. The SEC Filings
were prepared in accordance with the requirements of the Securities Laws, as
applicable, and the rules and regulations of the SEC thereunder, and do not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(i) 1940 Act Registration. The Portfolio Trust is duly registered as an
open-end management investment company under the 1940 Act and such registration
is in full force and effect.
(j) Tax Status. The Portfolio is taxable as a partnership under the
Code. 3.3 The Adviser. The Adviser represents and warrants to the Trust and
Investors Bank that:
(a) Organization. The Adviser is a corporation, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the requisite power and authority to conduct its business
as now being conducted.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Adviser have been duly authorized by all necessary action on
the part of the Adviser and no other action or proceeding is necessary for the
execution and delivery of this Agreement by the Adviser. This Agreement has been
duly executed and delivered by the Adviser and constitutes a legal, valid and
binding obligation of the Adviser.
(c) Advisers Act. The Adviser is a registered investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act").
3.4 Investors Bank. Investors Bank represents and warrants to the Portfolio
Trust and the Adviser that:
(a) Organization. Investors Bank is a [trust company (describe)] duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the requisite power and authority to
conduct its business as now being conducted.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by Investors Bank have been duly authorized by all necessary action on
the part of Investors Bank and no other action or proceeding is necessary for
7
the execution and delivery of this Agreement by Investors Bank. This Agreement
has been duly executed and delivered by Investors Bank and constitutes a legal,
valid and binding obligation of Investors Bank.
IV
COVENANTS
---------
4.1 The Trust. The Trust covenants that:
(a) Advance Review of Certain Documents. The Trust will furnish the
Portfolio Trust and the Adviser, at least 10 business days prior to filing or
first use, as the case may be, with drafts of its registration statement on Form
N-1A (including amendments) and prospectus supplements or amendments relating to
the Fund. The Trust will furnish the Portfolio Trust and the Adviser with any
proposed advertising or sales literature relating to the Fund at least 2
business days prior to filing or first use. The Trust agrees that it will
include in all such Fund documents any disclosures that may be required by law,
and it will include in all such Fund documents any material comments reasonably
made by the Adviser or Portfolio Trust. The Portfolio and Adviser will, however,
in no way be liable for any errors or omissions in such documents, whether or
not they make any objection thereto, except to the extent such errors or
omissions result from information provided by the Adviser or the Portfolio for
the purpose of inclusion therein. The Trust will not make any other written or
oral representation about the Portfolio Trust, the Portfolio or the Adviser
without their prior written consent.
(b) Tax Status. The Fund will qualify for treatment as a regulated
investment company under Subchapter M of the Code for all periods during which
this Agreement is in effect, except to the extent a failure to so qualify may
result from any action or omission of the Portfolio Trust.
(c) Investment Securities. The Fund will own no investment security (as
defined in Section 3(a)(3) of the 0000 Xxx) other than its Interest in the
Portfolio.
(d) Proxy Voting. If requested to vote on matters pertaining to the
Portfolio Trust or the Portfolio (other than a vote by the Trust to continue the
operation of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Trust will (i) call a meeting of shareholders of the Fund for
the purpose of seeking instructions from shareholders regarding
8
such matters, (ii) vote the Fund's Interest proportionally as instructed by Fund
shareholders, and (iii) vote the Fund's Interest with respect to the shares held
by Fund shareholders who do not give voting instructions in the same proportion
as the shares of Fund shareholders who do give voting instructions. The Trust
will hold each such meeting of Fund shareholders in accordance with a timetable
reasonably established by the Portfolio Trust.
(e) Insurance. The Trust shall at all times maintain errors and
omissions liability insurance with respect to the Fund covering losses for
negligence and wrongful acts in an amount not less than [$10] million.
(f) Auditors. In the event the Fund's independent public accountants
differ from those of the Portfolio, the Fund shall be responsible for any costs
and expenses associated with the need for the Portfolio's independent public
accountants to provide information to the Fund's independent public accountants.
(g) Compliance with Portfolio Trust. The Trust will comply with all
provisions of the Declaration of the Trust of the Portfolio Trust applicable to
investors in the Portfolio Trust, including without limitation the restrictions
on transfer of Interests set forth therein.
(h) Taxable and Fiscal Year. It will not change its taxable or fiscal
year from December 31, without the express written consent of the Portfolio
Trust.
(i) Principal Underwriter. At all times it will retain a principal
underwriter (as defined in Section 2(a)(29) of the 0000 Xxx) which is either
registered as a broker-dealer under the 1934 Act, as amended, or a person
controlled by such a registered broker-dealer.
(j) Acceptance of Purchases and Redemptions and Purchase and Redemption
of Interests. The Trust will accept orders for the purchase and redemption of
shares of the Fund only on such days and during such times as the Portfolio
Trust is obligated to accept orders for the purchase and redemption of Interests
in the Portfolio; and the Trust will not transmit to the Portfolio Trust after
the net asset value of the Portfolio is determined on a Closing Date any order
to purchase or redeem Interests in the Portfolio for execution at the net asset
value so determined except to reflect purchase and redemption orders accepted by
it prior to the time the Portfolio's net asset value was determined on that
Closing Date.
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4.2 The Portfolio Trust. The Portfolio Trust covenants that:
(a) Advance Review of Certain Documents. The Portfolio Trust will
furnish the Trust, at least 10 business days prior to filing or first use, as
the case may be, with drafts of its registration statement on Form N-1A
(including amendments). The Portfolio Trust will not make any written or oral
representation about the Trust without its prior written consent.
(b) Tax Status. The Portfolio Trust will qualify to be taxable as a
partnership under the Code for all periods during which this Agreement is in
effect, except to the extent that the failure to so qualify results from any
action or omission of the Fund.
(c) Insurance. The Portfolio Trust shall at all times maintain errors
and omissions liability insurance covering losses for negligence and wrongful
acts in an amount not less than $__ million provided that such insurance may be
joint with other entities and the $__ million coverage amount may apply in the
aggregate to all joint insureds.
(d) Availability of Interests. Conditional upon the Trust complying with
the terms of this Agreement, the Portfolio Trust shall permit the Fund to make
additional Investments in the Portfolio on each business day on which shares of
the Fund are sold to the public; provided, however, that the Portfolio Trust may
refuse to permit the Fund to make additional Investments in the Portfolio (i) on
any day on which the Portfolio Trust refuses to permit all other investors in
the Portfolio to make additional Investments in the Portfolio or (ii) in the
event the Trustees of the Portfolio Trust have reasonably determined that
permitting additional Investments by the Fund in the Portfolio would constitute
a breach of their fiduciary duties to the Portfolio.
4.3 Indemnification by the Adviser.
(a) The Adviser will indemnify and hold harmless Investors Bank, the
Trust, and their respective Trustees, directors, officers and employees and each
other person who controls Investors Bank, the Trust or the Fund, as the case may
be, within the meaning of Section 15 of the 1933 Act (each, a "Merrimac Covered
Person" and collectively, "Merrimac Covered Persons"), against any and all
losses, claims, demands, damages, liabilities and expenses (each, a "Liability"
and collectively, the "Liabilities") (including, unless the Adviser elects to
assume the defense pursuant to paragraph (b), the reasonable costs of
investigating and defending against any claims therefor and any counsel fees
incurred in connection therewith), joint or several,
10
whether incurred directly or indirectly by the Trust through the Trust's
Investment in the Portfolio, which
(i) arise out of or are based upon any of the Securities Laws, any other
statute or common law or are incurred in connection with or as a result of any
formal or informal administrative proceeding or investigation by a regulatory
agency, insofar as such Liabilities arise out of or are based upon the ground or
alleged ground that any direct or indirect omission or commission by the
Portfolio Trust (either during the course of its daily activities or in
connection with the accuracy or its representations or its warranties in this
Agreement) caused or continues to cause the Trust to violate any federal or
state securities laws or regulations or any other applicable domestic or foreign
law or regulations or common law duties or obligations, but only to the extent
that such Liabilities do not arise out of and are not based upon an omission or
commission of the Trust;
(ii) arise out of or are based upon an inaccurate calculation of the
Portfolio's net asset value which is considered material under procedures
adopted by the Board of Trustees of the Portfolio Trust (whether by the
Portfolio, the Adviser or any party retained for that purpose);
(iii) arise out of (A) any alleged misstatement of a material fact or an
omission of a material fact in the Portfolio Trust's registration statement
(including amendments thereto) or included at the Adviser's or Portfolio's
request in advertising or sales literature used by the Fund, or (B) any
misstatement of a material fact or an omission of a material fact in the
registration statement in the Portfolio, other than the Trust;
(iv) arise out of the Portfolio's having caused the Fund to fail to
qualify as a regulated investment company under the Code;
(v) result from the failure of any representation or warranty made by
the Portfolio or Adviser to be accurate when made or the failure of the
Portfolio or Adviser to perform any covenant contained herein or to otherwise
comply with the terms of this Agreement;
(vi) arise out of any unlawful or negligent act by the Portfolio, the
Adviser or any director, trustee, officer, employee or agent of the Portfolio or
Adviser, whether such act was committed against the Portfolio, the Trust or any
third party; or
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(vii) result from any Liability of the Portfolio to any investor in the
Portfolio (or shareholder thereof), other than the Fund (and its shareholders);
provided, however, that in no case shall the Adviser be liable with
respect to any claim made against any such Merrimac Covered Person unless such
Merrimac Covered Person shall have notified the Adviser in writing of the nature
of the claim within a reasonable time after the summons, other first legal
process or formal or informal initiation of a regulatory investigation or
proceeding shall have been served upon or provided to a Merrimac Covered Person
or any federal, state or local tax deficiency has come to the attention of the
Trust, or another Merrimac Covered Person. Failure to notify the Adviser of such
claim shall not relieve it from any liability that it may have to any Merrimac
Covered Person otherwise than on account of the indemnification contained in
this paragraph.
(b) The Adviser will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if the Adviser elects to assume the defense,
such defense shall be conducted by counsel chosen by the Adviser. In the event
the Adviser elects to assume the defense of any such suit and retain such
counsel, each Merrimac Covered Person and any other defendant or defendants in
the suit may retain additional counsel but shall bear the fees and expenses of
such counsel unless (A) the Adviser shall have specifically authorized the
retaining of such counsel or (B) the parties to such suit include any Merrimac
Covered Person and the Adviser, and any such Merrimac Covered Person has been
advised by counsel that one or more legal defenses may be available to it that
may not be available to the Adviser, in which case the Adviser shall not be
entitled to assume the defense of such suit notwithstanding the obligation to
bear the fees and expenses of such counsel. The Adviser shall not be liable to
indemnify any Merrimac Covered Person for any settlement of any such claim
effected without the Adviser's written consent, which consent shall not be
unreasonably withheld or delayed. The indemnities set forth in paragraph (a)
will be in addition to any liability that the Portfolio might otherwise have to
a Merrimac Covered Person.
4.4 Indemnification by Investors Bank.
(a) Investors Bank will indemnify and hold harmless the Adviser, the
Portfolio Trust, and their respective Trustees, directors, officers and
employees and each other person who
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controls the Adviser, the Portfolio Trust or the Portfolio, as the case may be,
within the meaning of Section 15 of the 1933 Act (each, a "Xxxxxxxx Covered
Person" and collectively, "Xxxxxxxx Covered Persons"), against any and all
Liabilities (as defined in Section 4.3(a)) (including, any amounts the Adviser
is obligated to pay pursuant to its indemnification obligation under Section
4.3, and, unless Investors Bank elects to assume the defense pursuant to
paragraph (b), the reasonable costs of investigating and defending against any
claims therefor and any counsel fees incurred in connection therewith), joint or
several, whether incurred directly or indirectly by the Adviser, the Portfolio
Trust, which
(i) arise out of or are based upon any of the Securities Laws, any other
statute or common law or are incurred in connection with or as a result of any
formal or informal administrative proceeding or investigation by a regulatory
agency, insofar as such Liabilities arise out of or are based upon the ground or
alleged ground that any direct or indirect omission or commission by Investors
Bank, the Trust or Fund (either during the course of its daily activities or in
connection with the accuracy or its representations or its warranties in this
Agreement) caused or continues to cause the Portfolio Trust to violate any
federal or state securities laws or regulations or any other applicable domestic
or foreign law or regulations or common law duties or obligations, but only to
the extent that such Liabilities do not arise out of and are not based upon an
omission or commission of the Adviser, the Portfolio Trust or the Portfolio;
(ii) arise out of or are based upon an inaccurate calculation of the
Portfolio Trust's net asset value by Investors Bank or its affiliates as
custodian or administrator of the Portfolio Trust (which calculation is
considered material under procedures approved by the Portfolio Trust's Board of
Trustees), provided such inaccurate calculation is significantly attributable to
the negligence of Investors Bank or its affiliates;
(iii) arise out of any alleged misstatement of a material fact or an
omission of a material fact in the Portfolio Trust's registration statement
(including amendments thereto) or included in advertising or sales literature
used by the Fund, except to the extent such misstatement or omission was (a)
also contained in the Portfolio Trust's registration statement (including
amendments thereto) and was included in the Trust's registration statement in
conformity therewith; or (b) provided by the Adviser or the Portfolio Trust for
the express purpose of its inclusion in the Trust's registration statement or
sales literature;
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(iv) arise out of the Fund's having caused the Portfolio to fail to
qualify as a partnership under the Code;
(v) result from the failure of any representation or warranty made by
the Trust or Investors Bank to be accurate when made or the failure of the Trust
or Investors Bank to perform any covenant contained herein or to otherwise
comply with the terms of this Agreement;
(vi) arise out of any unlawful or negligent act by the Trust or
Investors Bank or any director, trustee, officer, employee or agent of the Trust
or Investors Bank, whether such act was committed against the Portfolio Trust,
the Portfolio, the Adviser or any third party;
provided, however, that in no case shall Investors Bank be liable with
respect to any claim made against any such Xxxxxxxx Covered Person unless such
Xxxxxxxx Covered Person shall have notified Investors Bank in writing of the
nature of the claim within a reasonable time after the summons, other first
legal process or formal or informal initiation of a regulatory investigation or
proceeding shall have been served upon or provided to a Xxxxxxxx Covered Person
or any federal, state or local tax deficiency has come to the attention of the
Portfolio Trust, or another Xxxxxxxx Covered Person. Failure to notify Investors
Bank of such claim shall not relieve it from any liability that it may have to
any Xxxxxxxx Covered Person otherwise than on account of the indemnification
contained in this paragraph.
(b) Investors Bank will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if Investors Bank elects to assume the defense,
such defense shall be conducted by counsel chosen by Investors Bank. In the
event Investors Bank elects to assume the defense of any such suit and retain
such counsel, each Xxxxxxxx Covered Person and any other defendant or defendants
in the suit may retain additional counsel but shall bear the fees and expenses
of such counsel unless (A) Investors Bank shall have specifically authorized the
retaining of such counsel or (B) the parties to such suit include any Xxxxxxxx
Covered Person and Investors Bank, and any such Xxxxxxxx Covered Person has been
advised by counsel that one or more legal defenses may be available to it that
may not be available to Investors Bank, in which case Investors Bank shall not
be entitled to assume the defense of such suit notwithstanding the obligation to
bear the fees and expenses of such counsel. Investors Bank shall not be liable
to indemnify any Xxxxxxxx Covered Person for any settlement of any such claim
effected without Investors Bank 's written consent, which
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consent shall not be unreasonably withheld or delayed. The indemnities set forth
in paragraph (a) will be in addition to any liability that the Fund might
otherwise have to a Xxxxxxxx Covered Person.
4.5 In-Kind Redemption.
(a) In the event the Trust desires to withdraw or redeem all of the
Fund's Interests in the Portfolio, unless otherwise agreed to by the parties,
the Portfolio will effect such redemption "in kind" and in such a manner that
the securities delivered to the Fund's custodian for the account of the Fund
will mirror, as closely as practicable, the composition of the Portfolio
immediately prior to such redemption.
(b) In the event the Trust desires to withdraw or redeem less than all
of the Fund's Interests in the Portfolio, unless otherwise agreed, the Portfolio
Trust may in its discretion effect such redemption in whole or part in kind
provided that to the extent any such redemption is to be effected in kind: (a)
it shall be in compliance with the Portfolio Trust's election under Rule 18f-1
of the 1940 Act unless such election has been revoked by order of the SEC or
otherwise made ineffective by a published position of specific or general
application of the SEC or the SEC staff; and (b) it shall be effected in such a
manner that the securities delivered to the Fund's custodian for the account of
the Fund shall mirror, as closely as practicable, the composition of the
Portfolio immediately prior to such redemption.
(c) It is agreed that in the event of a redemption in-kind which
represents either a complete or partial withdrawal of the Fund's Interest in the
Portfolio, the Portfolio Trust need not deliver to the Trust's custodian any
portfolio securities the distribution of which to the Trust would result in the
recognition of taxable gain to any other investor in the Portfolio which had
contributed such security to the Portfolio.
4.6 Reasonable Actions. Each party covenants that it will, subject to the
provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement and to carry out its intent and
purpose.
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V
CONDITIONS PRECEDENT
--------------------
The obligations of each party to consummate the transactions provided for
herein shall be subject to (a) performance by the other parties of all the
obligations to be performed by the other parties hereunder on or before each
Closing, (b) all representations and warranties of the other parties contained
in this Agreement being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of each date of Closing, with the same force and effect as if
made on and as of the time of such Closing, and (c) the following further
conditions that shall be fulfilled on or before each Closing:
5.1 Regulatory Status. All necessary filings shall have been made with the
SEC and state securities authorities, and no order or directive shall have been
received that any other or further action is required to permit the parties to
carry out the transactions contemplated hereby.
5.2 Investment Objective/Restrictions. The Fund shall have the same
investment objective and substantively the same investment restrictions as the
Portfolio.
VI
ADDITIONAL AGREEMENTS
---------------------
6.1 Notification of Certain Matters. Each party will give prompt notice to
the other parties of (a) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause either (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate, or (ii) any condition precedent set forth in Article V hereof to be
unsatisfied in any material respect at the time of any Closing and (b) any
material failure of a party or any trustee, director, officer, employee or agent
thereof to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by such person hereunder; provided, however that the
delivery of any notice pursuant to this Section 6.1 shall not limit or otherwise
affect the remedies available, hereunder or otherwise, to the party receiving
such notice.
6.2 Access to Information. The Portfolio Trust and the Trust shall afford
each other access at all reasonable times to such party's officers, employees,
agents and offices and to all its relevant books and records reasonably
necessary to permit the other to perform this Agreement and to comply with
applicable legal requirements and shall furnish each other party with all
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relevant financial and other data and information as reasonably requested;
provided, however, that nothing contained herein shall obligate the Trust to
provide the Portfolio Trust with access to the books and records of the Trust
relating to any series of the Trust other than the Fund, or obligate the
Portfolio Trust to provide the Trust with access to the books and records of the
Portfolio Trust relating to any series of the Portfolio Trust other than the
Portfolio nor shall anything contained herein obligate either party to furnish
the other with its shareholder list, except as may be required to comply with
applicable law or any provision of this Agreement.
6.3 Confidentiality. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable through no act or fault of the
disclosing party from public or published information or trade sources) and
shall ensure that its officers, employees and authorized representatives do not
disclose such information to others without the prior written consent of the
party from whom it was obtained, except if disclosure is required by the SEC,
any other regulatory body or the Fund's or Portfolio's respective auditors, or
in the opinion of counsel such disclosure is required by law, and then only with
as much prior written notice to the other party as is practical under the
circumstances.
6.4 Public Announcements. No party shall issue any press release or
otherwise make any public statements with respect to the matters covered by this
Agreement without the prior consent of the other parties hereto, which consent
shall not be unreasonably withheld; provided, however, that consent shall not be
required if, in the opinion of counsel, such disclosure is required by law,
provided further however, that the party making such disclosure shall provide
the other parties hereto with as much prior written notice of such disclosure as
is practical under the circumstances.
VII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
7.1 Termination.
(a) This Agreement may be terminated by the mutual agreement of all
parties.
(b) This Agreement may be terminated at any time by the Trust by
withdrawing all of the Fund's Interest in the Portfolio.
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(c) This Agreement may be terminated on not less than 120 days' prior
written notice by the Portfolio Trust to the Trust.
(d) This Agreement shall terminate automatically with respect to the
Adviser and Investors Bank upon the effective date of termination by either the
Trust or the Portfolio Trust.
(e) This Agreement may be terminated by any party immediately upon
notice to the others in the event that the terminating party's continuing to act
under the Agreement would be in contravention of applicable law.
(f) This Agreement may be terminated at any time immediately upon
written notice to the other parties in the event that formal proceedings are
instituted against another party to this Agreement by the SEC or any other
regulatory body, provided that the terminating party has a reasonable belief
that the institution of the proceeding is not without foundation and will have a
material adverse impact on the terminating policy.
(g) The indemnification obligations of the Adviser and Investors Bank
set forth in Article IV, Sections 4.4 and 4.5 respectively, shall survive the
termination of this Agreement.
7.2 Amendment. This Agreement may be amended, modified or supplemented at
any time in such manner as may be mutually agreed upon in writing by the
parties.
7.3 Waiver. At any time prior to any Closing, any party may (a) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein.
VIII
DAMAGES
-------
8.1 The parties agree that, in the event of a breach of this Agreement, the
remedy of money damages would not be adequate and agree that injunctive relief
would be the appropriate relief.
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IX
GENERAL PROVISIONS
------------------
9.1 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
when actually received in person or by fax, or three days after being sent by
certified or registered United States mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Trust: Merrimac Funds
200 Clarendon Street, MER91
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxx, President
Fax Number: 000-000-0000
If to Investors Bank: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, XXX00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn.: Xxxx Xxxxx, General Counsel
[Fax Number]
If to the Adviser: Xxxxxxxx, Xxxx & Xxxx, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
[Attn.: Name of Individual]
[Fax Number]
If to the Portfolio Trust Xxxxxxxx, Ayer & Wood Master Portfolio
Deloitte & Touche House
00 Xxxxxxxxx Xxxxxxx
Xxxxxx 0, Xxxxxxx
[Attn.: Name of Individual]
[Fax Number]
Any party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to all other parties to the
Agreement.
9.2 Expenses, No Finders Fees, Etc. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses. No party hereto shall be
liable to any other party hereto or to any party with which a party hereto may
have contracted, for any "finder's" fees, referral fees, or
19
software licensing or similar fees as a result of execution of this Agreement or
the transactions contemplated herein, except as otherwise expressly agreed in
writing by the relevant parties.
9.3 Headings. The headings and captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
9.5 Entire Agreement. This Agreement and the agreements and other documents
delivered pursuant hereto set forth the entire understanding between the parties
concerning the subject matter of this Agreement and incorporate or supersede all
prior negotiations and understandings. There are no covenants, promises,
agreements, conditions or understandings, either oral or written, between them
relating to the subject matter of this Agreement other than those set forth
herein. No representation or warranty has been made by or on behalf of any party
to this Agreement (or any officer, director, trustee, employee or agent thereof)
to induce any other party to enter into this Agreement or to abide by or
consummate any transactions contemplated by any terms of this Agreement, except
representations and warranties expressly set forth herein.
9.6 Successors and Assignments. Each and all of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and, except as otherwise specifically provided in this Agreement, their
respective successors and assigns. Notwithstanding the foregoing, no party shall
make any assignment of this Agreement or any rights or obligations hereunder
without the written consent of all other parties. As used herein, the term
"assignment" shall have the meaning ascribed thereto in the 1940 Act.
20
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without giving
effect to the choice of law or conflicts of law provisions thereof.
9.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
9.9 Third Parties. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give any person, other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
9.10 Interpretation. Any uncertainty or ambiguity existing herein shall not
presumptively be interpreted against any party, but shall be interpreted
according to the application of the rules of interpretation for arm's length
agreements.
9.11 Limitation of Liability. The parties hereby acknowledge that the Trust
and the Portfolio Trust have entered into this Agreement solely on behalf of the
Fund and the Portfolio, respectively and that no other series of the Trust or
the Portfolio Trust, nor any of the Trust's or the Portfolio Trust's Trustees,
Officers or Shareholders, individually, shall have any obligation hereunder with
respect to any liability arising hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
MERRIMAC SERIES
on behalf of itself and the
MERRIMAC SHORT TERM ASSET
RESERVE SERIES,
a series thereof
By________________________
Name:
Title:
21
XXXXXXXX, XXXX & XXXX MASTER
PORTFOLIO on behalf of itself and the
XXXXXXXX SHORT TERM ASSET
RESERVE PORTFOLIO, a series thereof
By________________________
Name:
Title:
XXXXXXXX, XXXX & XXXX, INC.
By________________________
Name:
Title:
INVESTORS BANK & TRUST
COMPANY
By________________________
Name:
Title:
22
