Exhibit (d12)
INVESTMENT SUB-ADVISER AGREEMENT
Agreement made as of this 1st day of June, 2003, between Investors Bank and
Trust Company - Advisory Division (the "Adviser"), a Massachusetts banking
corporation, and Lincoln Capital Fixed Income Management Company, LLC (the
"Sub-Adviser"), a Delaware limited liability company.
WHEREAS, MERRIMAC PRIME PORTFOLIO (the "Portfolio") is a series of the Merrimac
Master Portfolio (the "Trust"), which is an open-end diversified management
investment company registered as such with the Securities and Exchange
Commission (the "SEC") pursuant to the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Trust has appointed the Adviser as the
investment adviser for the Portfolio, pursuant to the terms of an Investment
Adviser Agreement (the "Adviser Agreement"); and
WHEREAS, the Adviser Agreement provides that the Adviser may, at its option,
subject to approval by the Trustees of the Trust (hereinafter, the "Trustees")
and, to the extent necessary, shareholders of the Portfolio, appoint a
sub-adviser to assume certain responsibilities and obligations of the Adviser
under the Adviser Agreement; and
WHEREAS, the Adviser desires to appoint the Sub-Adviser as its sub-adviser for
the Portfolio and the Sub-Adviser is willing to act in such capacity upon the
terms herein set forth; and
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Adviser and the Sub-Adviser, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Appointment
(a) The Adviser hereby appoints the Sub-Adviser as the investment
sub-adviser of the Portfolio to provide investment advice and to
perform for the Portfolio such other duties and functions as are
hereinafter set forth. The Sub-Adviser hereby accepts such
appointment and agrees to give the Portfolio and the Trustees,
directly or through the Adviser, the benefit of the Sub-Adviser's
best judgment, effort, advice and recommendations in respect of its
duties as defined in Section 3.
(b) The Adviser hereby represents and warrants to the Sub-Adviser,
which representations and warranties shall be deemed to be
continuing, that (i) it has full power and authority to enter into
this Agreement and to delegate investment management discretion on
behalf of the Portfolio to the Sub-Adviser, and (ii) it has taken
all necessary and proper action to authorize the execution and
delivery of this Agreement.
(c) The Sub-Adviser hereby represents and warrants to the Adviser,
which representations and warranties shall be deemed to be
continuing, that (i) it has full power and authority to enter into
this Agreement, and (ii) it has taken all necessary and proper
action to authorize the execution and delivery of this Agreement.
2. Delivery of Documents
Prior to the execution of this Agreement, the Adviser will furnish the
Sub-Adviser with copies, properly certified or authenticated, of each of the
following documents:
(a) Resolutions adopted by the Trustees, including a majority of the
Trustees who are not "interested persons" of the Trust under the
1940 Act, authorizing the appointment of the Sub-Adviser and
approving this Agreement;
(b) The Trust's Registration Statement on Form N-1A under the 1940
Act, as amended through the date hereof (the "Registration
Statement");
(c) The Current Confidential Offering Circular, Prospectus or
similar document of any entity which the Trust has authorized as an
investor in the Portfolio;
(d) All currently effective investment related policies and
procedures applicable to the Portfolio (the "Investment
Procedures"); and
(e) The Adviser Agreement.
3. Sub-Adviser Duties
The Sub-Adviser shall, subject to the direction and control of the Trustees or
the general supervision of the Adviser, and in accordance with the objective
and policies of the Portfolio and the implementation thereof as set forth in
the Registration Statement and the Investment Procedures and applicable laws:
(i) regularly provide investment advice and recommendations to the Portfolio,
with respect to the Portfolio's investments, investment policies and the
purchase and sale of securities; (ii) supervise and monitor continuously the
investment program of the Portfolio and the composition of its portfolio and
determine what securities and other investments shall be purchased and sold by
the Portfolio; (iii) arrange, subject to the provisions of Section 5 hereof,
for the purchase of securities and other investments for the Portfolio and the
sale of securities and other investments of the Portfolio; (iv) provide reports
on the foregoing to the Adviser in such detail as the Adviser may reasonably
deem to be appropriate in order to permit the Adviser to determine the
adherence by the Sub-Adviser to the investment policies and legal requirements
of the Portfolio; and (v) make its officers and employees available to the
Adviser at reasonable times to review the investment policies of the Portfolio
and to consult with the Adviser regarding the investment affairs of the
Portfolio. The Adviser agrees to provide the Sub-Adviser copies of all
amendments to the Registration Statement and the Investment Procedures that may
be filed or adopted during the term of this Agreement prior to the
effectiveness thereof, and the Sub-Adviser agrees to provide services hereunder
in conformity with the Registration Statement and the Investment Procedures as
so amended.
4. Compensation of the Sub-Adviser
The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered and for the expenses borne by the Sub-Adviser, a fee,
determined as described in Schedule A which is attached hereto and made a part
hereof. Such fee shall be paid by the Adviser and the Trust shall have no
liability therefor. Nothing in this Agreement shall require the Sub-Adviser to
bear expenses of the Adviser, the Portfolio or the Trust.
5. Portfolio Transactions and Brokerage
The Sub-Adviser shall place all orders for the purchase and sale of portfolio
securities for the Portfolio's account with issuers, brokers, dealers or banks
selected by the Sub-Adviser, which may include where permissible under the 1940
Act and the rules and regulations thereunder (or pursuant to the terms of any
applicable exemptive order issued by the SEC), brokers or dealers affiliated
with the Sub-Adviser. In the selection of such brokers or dealers and the
placing of such orders, the Adviser always shall seek best execution, which is
to place transactions where the Portfolio can obtain the most favorable
combination of price and execution services in particular transactions or
provided on a continuing basis by a broker or dealer, and to deal directly with
a principal market in connection with over-the-counter transactions, except
when it is believed that best execution is obtainable elsewhere. Nothing in
this Agreement shall preclude the combining of orders for the sale or purchase
of securities or other investments with other accounts managed by the
Sub-Adviser or its affiliates, provided that the Sub-Adviser does not favor any
account over any other account and provided that any purchase or sale orders
executed contemporaneously shall be allocated in an equitable manner among the
accounts involved.
6. Interested Trustees or Parties
It is understood that Trustees, officers, and shareholders of the Trust may be
or become interested in the Adviser or the Sub-Adviser as directors, officers
or employees and that directors, officers and stockholders of the Adviser or
the Sub-Adviser may be or become similarly interested in the Trust, and that
the Adviser or the Sub-Adviser may be or become interested in the Trust as a
shareholder or otherwise.
7. Services Not Exclusive
The services of the Sub-Adviser to the Adviser are not to be deemed exclusive,
the Sub-Adviser being free to render services to others and engage in other
activities, provided, however, that such other services and activities do not,
during the term of this Agreement, interfere, in a material manner, with the
Sub-Adviser's ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser, its affiliates and its other
clients may at any time acquire or dispose of securities which are at the same
time being acquired or disposed of for the account of the Portfolio. The
Sub-Adviser shall not be obligated to acquire for the Portfolio any security or
other investment which the Sub-Adviser or its affiliates may acquire for its or
their own accounts or for the account of another client.
8. Compliance; Books and Records
(a) The Sub-Adviser agrees to maintain compliance procedures which
are reasonably designed to ensure that the Portfolio's investment
holdings and transactions comply with the applicable provisions of
the 1940 Act and any rules or regulations thereunder and the
investment objective, policies and restrictions of the Portfolio as
set forth in the current Registration Statement and Investment
Procedures.
(b) The Sub-Adviser shall maintain, and shall furnish to the Adviser
and the Trust, copies of all records relating to the services
provided by the Sub-Adviser hereunder which are required to be
maintained by the Trust pursuant to the provisions of Rule 31a-1
under the 1940 Act or by any other rule thereunder or by the
Investment Procedures, or which relate to the compliance procedures
required by paragraph (a) of this Section 8 as the Adviser or the
Trust may reasonably request.
(c) The Sub-Adviser agrees to provide upon reasonable request of the
Adviser, information regarding the Sub-Adviser, including but not
limited to, background information about the Sub-Adviser and its
personnel, for use in connection with efforts to promote the Fund
and the sale of its shares. The Adviser agrees that it shall not
include, nor shall it permit any other person to include, any
information relating or referring to the Sub-Adviser, its personnel
or performance data in any prospectuses, statements of additional
information, offering materials, advertisements, sales literature or
other materials, without the prior approval of the Sub-Adviser.
(d) In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust in accordance with paragraph (b) of this
Section 8 are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request, provided however that the Sub-Adviser shall be permitted to
keep copies of all such records. The Sub-Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any records which it is required to maintain by Rule 31a-1 under the
1940 Act. The Sub-Adviser will treat confidentially and as
proprietary information of the Trust all records and other
information obtained from the Trust relative to the investment funds
that invest in the Trust ("Authorized Investors"), including prior
or potential Authorized Investors, except as otherwise required by
law.
9. Limitation of Liability of Sub-Adviser; Indemnification
The Adviser agrees that the Sub-Adviser shall not be liable for any loss
suffered by the Adviser, the Trust, Authorized Investors or their shareholders,
or the Portfolio in connection with the performance of this Agreement by the
Sub-Adviser, provided that nothing in this Agreement shall be deemed to protect
or purport to protect the Sub-Adviser against any liability to the Adviser, the
Trust, Authorized Investors or the Portfolio to which the Sub-Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
by the Sub-Adviser of its obligations and duties under this Agreement.
10. Duration, Amendment and Termination
(a) Subject to prior termination as provided in sub-section (d) of
this Section 10, this Agreement shall continue in effect until June
1, 2004 and for successive annual periods thereafter, but only so
long as the continuance after such initial period shall be
specifically approved at least annually by vote of the Trustees or
by vote of a majority of the outstanding voting securities of the
Portfolio and the Authorized Investors.
(b) This Agreement may be modified by the written agreement of the
Adviser, the Sub-Adviser and the Trust, such consent on the part of
the Trust to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio if required by law. The execution
of any such modification or amendment by a party shall constitute a
representation and warranty to the other parties that all necessary
consents or approvals with respect to such modification or amendment
have been obtained in the manner required by law and by this
Agreement.
(c) In addition to the requirements of paragraphs (a) and (b) of
this Section 10, the terms of any continuance, modification or
amendment of the Agreement must have been approved by the vote of a
majority of the Trustees who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Each of the Adviser, the Sub-Adviser or the Trust may, at any
time on not less than sixty (60) days' prior written notice to the
other parties, terminate this Agreement, without payment of any
penalty, and in the case of the Trust, such action may be taken by
the Trustees, or by vote of a majority of it's the outstanding
voting securities of the Portfolio.
(e) This Agreement shall terminate automatically in the event of its
assignment.
(f) Termination of this Agreement shall not relieve the Adviser nor
the Sub-Adviser from any liability or obligation in respect of any
matters, undertakings or conditions which shall not have been done,
observed or performed prior to such termination. All records of the
Trust in the possession of the Sub-Adviser shall be returned to the
Trust as soon as reasonably practicable after the termination of
this Agreement, provided however, that the Sub-Adviser shall be
permitted to keep copies of all such records.
11. Disclaimer of Shareholder Liability
The Adviser and the Sub-Adviser understand that the obligations of the Trust
under this Agreement are not binding upon any Trustee or shareholder of the
Trust personally, but bind only the Trust and the Trust's property.
12. Miscellaneous
(a) The terms "vote of a majority of the outstanding voting
securities," "assignment," and "interested persons," when used
herein, shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder as now in effect or as
hereafter amended.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(c) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
(d) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(e) This Agreement may be executed in two or more counterparts,
which taken together shall constitute one and the same instrument.
(f) Any notice under this Agreement shall be effective when it is
actually received by the party to whom it is given and shall be in
writing, addressed and delivered or mailed, postage prepaid, to the
other party at the following address, or such other address as a
party may designate by notice given in accordance with this
paragraph (f) of Section 12 for the receipt of such notice.
If to the Adviser:
Xxxxxx Xxxxx
Investors Bank & Trust Company - Advisory Division
000 Xxxxxxxxx Xxxxxx
Mail Stop ADM 003
Xxxxxx, Xxxxxxxxxxxxx 00000
If to the Sub-Adviser:
Lincoln Capital Fixed Income Management, LLC
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Tank
If to the Trust:
Xxxx Xxxxxxxx
Merrimac Master Portfolio
000 Xxxxxxxxx Xxxxxx
Mail Stop MER 091
Xxxxxx, Xxxxxxxxxxxxx 00000
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties have caused this instrument to be
executed by their respective officers designated below as of the day and year
first above written.
INVESTORS BANK & TRUST COMPANY - ADVISORY DIVISION
("ADVISER")
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
LINCOLN CAPITAL FIXED INCOME MANAGEMENT
COMPANY, LLC ("SUB-ADVISER")
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
The Merrimac Master Portfolio on behalf of the Merrimac Prime Portfolio hereby
acknowledges the execution of this Agreement
MERRIMAC MASTER PORTFOLIO
("THE TRUST")
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
SCHEDULE A
The Adviser will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered an annual fee, computed by applying the annual
percentage rates set forth below to the average daily net assets of the
Portfolio during the calendar month:
0.09% on the first $500,000,000 in assets;
0.07% on the next $500,000,000 in assets; and
0.06% on assets exceeding $1,000,000,000
The fee for each month shall be payable within 30 business days after the end
of the month. If this Agreement is effective for only a portion of any calendar
month, the fee payable for such partial month shall be pro rated based upon the
number of days during the month that the Agreement was in effect bears to the
number of days in the month.
