INVESTMENT SUB-ADVISER AGREEMENT
Agreement made as of this 4th day of January 1999, between Investors Bank and
Trust Company (the "Adviser"), a Massachusetts banking corporation, and M&I
Investment Management Corp. (the "Sub-Adviser"), a Wisconsin corporation.
WHEREAS, MERRIMAC TREASURY 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 Merrimac Treasury Series (the "Series"), an open-end diversified
management investment company registered as such with the SEC pursuant to the
1940 Act and the Securities Act of 1933, as amended (the "1933 Act") will
invest all of its investable assets in the Portfolio; and
WHEREAS, the Adviser Agreement provides that the Adviser may, at its option,
subject to approval by the Trustees of the Trust 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
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(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 Trust's Board of Trustees
(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 2.
(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
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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) The Trust's Agreement and Declaration; and all amendments thereto
or restatements thereof;
(b) The Trust's By-Laws; and all amendments thereto;
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Sub-Adviser and approving this Agreement;
(d) The Trust's original Notification of Registration on Form N-8A
under the 1940 Act;
(e) The Trust's initial Registration Statement on Form N-1A under the
1940 Act and all amendments thereto;
(f) The current Confidential Offering Circular, Prospectus or similar
document of any entity which the Trust has authorized as an investor
(the "Authorized Investor") in the Portfolio (the "Investor Offering
Documents");
(g) The policies and procedures applicable to the Portfolio as adopted
by the Trustees; and all amendments and supplements thereto.
(h) Any further documents, materials or information that the
Sub-Adviser may reasonably request from time to time to enable it to
perform its duties pursuant to this Agreement.
3. Sub-Adviser Duties
----------------------
The Sub-Adviser shall, subject to the direction and control of the Trustees or
the Adviser, and in accordance with the objective and policies of the Portfolio
and the implementation thereof as set forth in the Investor Offering Documents,
the Portfolio's Registration Statement on Form N-1A and any applicable federal
and state 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 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.
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.
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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 or dealers
selected by the Sub-Adviser, which may include where permissible under the 1940
Act, 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 in accordance with procedures
adopted by the Sub-Adviser and reviewed and approved by the Adviser.
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 the Portfolio's compliance 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 Investor Offering Documents
or any other applicable provisions or state or federal law.
(b) The Sub-Adviser shall furnish to the Adviser, at the Adviser's
expense, copies of all records prepared and maintained in connection
with the performance of this Agreement and the maintenance of
compliance procedures pursuant to this Section 8 as the Adviser 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-
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Adviser and its personnel and performance data, for use in connection
with efforts to promote the Fund and the sale of its shares.
(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 are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request. 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 Authorized Investors and prior or potential shareholders, except
as otherwise required by law.
9. Limitation of Liability of Sub-Adviser; Indemnification
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In consideration of the Sub-Adviser's undertaking to render the services
described in this Agreement, the Adviser agrees that the Sub-Adviser shall not
be liable for any loss suffered by the Adviser, the Trust, the Authorized
Investors or their shareholders, or the Portfolio in connection with the
performance of this Agreement, 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, the Authorized Investors or their shareholders, or
the Portfolio to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or negligence in the performance of its 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 two
years from the date hereof and for successive annual periods
thereafter, but only so long as the continuance after such initial two
year period shall be specifically approved at least annually by vote
of the Board of 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 Portfolio, such consent on the part
of the Portfolio to be authorized by vote of a majority of the
outstanding voting securities of the Portfolio and the Authorized
Investors 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.
(c) In addition to the requirements of sub-sections (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 those Trustees who are not parties to such Agreement or
interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser of the Portfolio may, at any
time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, and in the
case of the Portfolio, by action of its Board of Trustees, or by vote
of a majority of its outstanding voting securities.
(e) This Agreement shall terminate automatically in the event of its
assignment.
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(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
Portfolio in the possession of the Sub-Adviser shall be returned to
the Portfolio as soon as reasonably practicable after the termination
of this Agreement.
11. Disclaimer of Shareholder Liability
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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
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(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 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 in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice. No notice shall be effective until received.
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.
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INVESTORS BANK & TRUST COMPANY ("ADVISER")
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
M&I INVESTMENT MANAGEMENT CORP. ("SUB-ADVISER")
By: /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: President
The Merrimac Master Portfolio on behalf of the
Merrimac Treasury Portfolio hereby acknowledges
the execution of this Agreement
Merrimac Master Portfolio
("THE TRUST")
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: President
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SCHEDULE A
The Adviser will pay to the Sub-Adviser as full compensation for the
Sub-Adviser's services rendered an annual fee, computed and paid monthly at an
annual rate of 0.08% of the average daily net assets of the Portfolio. The fee
for each month shall be payable within 30 business days after the end of the
month. If the Sub-Adviser shall serve for any period less than a full month,
the foregoing compensation shall be prorated according to the proportion which
such period bears to a full month.
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