Exhibit 5(a)
INVESTMENT ADVISER AGREEMENT
Agreement made as of this 30th day of October, 1996, by and between
Merrimac Master Portfolio, a New York Trust (the "Trust") and Investors Bank and
Trust Company (the "Adviser"), a Massachusetts banking corporation.
WHEREAS, the Merrimac Cash Portfolio (the "Portfolio") is a series of
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");
WHEREAS, the Merrimac Cash Fund (the "Fund"), which is an open-end
diversified management investment company registered as such with the SEC
pursuant to the 1940 Act, will invest all of its investable assets in the
Portfolio;
WHEREAS, the Trust, on behalf of the Portfolio, desires to appoint the
Adviser to render, or contract to obtain as hereinafter provided, investment
advisory services to the Portfolio and to administer the Portfolio's day to day
business affairs and the Adviser is willing to act in such capacity upon the
terms herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Trust, on behalf of the Portfolio, and the
Adviser, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Appointment
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(a) The Trust, on behalf of the Portfolio, hereby appoints the Adviser
as the investment adviser of the Portfolio to administer its business affairs
and to perform for the Portfolio such other duties and functions as are
hereinafter set forth. The Adviser hereby accepts such appointment and agrees to
give the Portfolio and the Trust's Board of Trustees (the "Trustees"), the
benefit of the Adviser's best judgment, effort, advice and recommendations in
respect of its duties as defined in Section 2.
(b) The Trust 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.
(c) The Adviser hereby represents and warrants to the Trust, 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. Adviser Duties
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(a) The Adviser shall, subject to the direction and control of the
Trustees and in accordance with the objective and policies of the Portfolio and
the implementation thereof as set forth in the Fund's Confidential Offering
Circular, the Portfolio's Registration Statement on Form N-1A and any 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 provision of Section 4 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 Trust in such detail as the Trust may reasonably deem to be appropriate in
order to permit the Trust to determine the adherence by the Adviser to the
investment policies and legal requirements of the Portfolio; and (v) make its
officers and employees available to the Trust's officers at reasonable times to
review the investment policies of the Portfolio and to consult with the Trust's
officers regarding the investment affairs of the Portfolio.
(b) The Adviser is further authorized to enter into a sub-adviser
arrangement for the investment advisory services outlined in Section 2 (a) of
this Agreement in connection with the management of the Portfolio, provided that
no such arrangement shall be made until a sub-adviser agreement has been
approved by the Trustees. Should the Adviser enter into such a sub-adviser
agreement, the Adviser shall, nevertheless, retain supervisory responsibility
for all investment advisory services furnished pursuant to any such sub-advisory
arrangements and the Adviser's duties shall then include: (i) supervise and
monitor continuously the investment advisory services furnished pursuant to any
such sub-adviser arrangements; (ii) review the performance of the sub-adviser,
and make recommendations to the Trustees with respect to the retention and
renewal of such sub-adviser arrangements; (iii) provide reports on the foregoing
to the Trustees for each Board meeting; (iv) make its officers and employees
available to review the investment policies of the Portfolio and to consult with
the sub-adviser regarding the investment affairs of the Portfolio; (v) supervise
relationships with and monitor the performance of the custodian, depositories,
transfer agent, accountants, attorneys, insurers and other persons in any
capacity deemed to be necessary or desirable; and (vi) make recommendations to
the Trustees with respect to Portfolio policies and carry out such policies as
are adopted by the Trustees.
3. Compensation of the Adviser
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The Portfolio will pay to the Adviser as compensation for the Adviser's
services rendered and for the expenses borne by the Adviser, including personnel
expenses, a fee, determined as described in Schedule A which is attached hereto
and made a part hereof.
4. Portfolio Transactions and Brokerage
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The 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 Adviser, which may include
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where permissible under the 1940 Act, brokers or dealers affiliated with the
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.
5. Interested Trustees or Parties
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It is understood that Trustees, officers, and shareholders of the Trust
may be or become interested in the Adviser as directors, officers or employees
and that directors, officers and stockholders of the Adviser may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as a shareholder or otherwise.
6. Services Not Exclusive
----------------------
The services of the Adviser to the Portfolio are not to be deemed
exclusive, the 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 Adviser's ability to meet all of its obligations hereunder.
7. Compliance; Books and Records
-----------------------------
(a) The Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the applicable provisions of the 1940 Act and any
rules or regulations thereunder, the investment objective, policies and
restrictions of the Portfolio as set forth in the current Fund Confidential
Offering Circular and any other applicable provisions of state or federal law.
(b) The Adviser shall furnish to the Portfolio, at the Portfolio's
expense, copies of all records prepared in connection with the performance of
this Agreement and the maintenance of compliance procedures pursuant to this
Section 7 as the Portfolio may reasonably request.
(c) The Adviser agrees to provide upon reasonable request of the
Portfolio, information regarding the Adviser, including but not limited to,
background information about the Adviser and its personnel, 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 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 Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act. The Adviser
will treat confidentially and as proprietary information of the Trust all
records and other information
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relative to the Fund and prior, present or potential shareholders, except as
otherwise required by law.
8. Limitation of Liability of Adviser
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In consideration of the Adviser's undertaking to render the services
described in this Agreement, the Trust, on behalf of the Portfolio, agrees that
the Adviser shall not be liable under this Agreement for any loss suffered by
the Trust in connection with the performance of this Agreement, provided that
nothing in this Agreement shall be deemed to protect or purport to protect the
Adviser against any liability to the Trust or its shareholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement.
9. Duration, Amendment and Termination
-----------------------------------
(a) Subject to prior termination as provided in sub-section (d) of this
Section 9, 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 Trustees or by vote of a majority of the
outstanding voting securities of the Portfolio and the Fund.
(b) This Agreement may be modified by the written Agreement of the
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 Fund if required by law. The execution of any such
modification or amendment by a party shall constitute a representation and
warranty to the other party 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 9, the terms of any continuance or modification 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 or the Portfolio may, at any time on sixty (60)
days' prior written notice to the other party, terminate this Agreement, without
payment of any penalty, and in the case of the Portfolio, by action of its
Trustees, or by vote of a majority of its outstanding voting securities.
(e) This Agreement shall terminate automatically in the event of its
assignment.
(f) Termination of this Agreement shall not relieve the Adviser nor the
Trust 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 Adviser
shall be returned to the Portfolio as soon as reasonably practicable after the
termination of this Agreement.
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10. Disclaimer of Liability; Several Obligations
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The Adviser understands 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.
This Agreement is an agreement entered into between the Adviser and the
Trust on behalf of the Portfolio. With respect to any obligation of the Trust on
behalf of any other Portfolio arising out of this Agreement, the Adviser shall
look for payment or satisfaction of such obligation solely to the assets of the
Portfolio to which such obligation relates as though the Adviser had separately
contracted with the Trust by separate written instrument with respect to each
Portfolio.
11. 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) The Adviser's duties and responsibilities are solely those set
forth herein and no other covenant or obligation shall be implied against the
Adviser in connection with this Agreement.
(f) This Agreement may be executed in two or more counterparts, which
taken together shall constitute one and the same instrument.
(g) 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.
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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.
Merrimac Master Portfolio ("TRUST") on behalf of
the Merrimac Cash Portfolio ("PORTFOLIO")
By: /s/ Xxxx X. Xxxxxxx
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Title: President
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INVESTORS BANK & TRUST COMPANY
("ADVISER")
By: /s/ Xxxxx X. Xxxxxxx
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Title: President & CEO
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MERRIMAC CASH PORTFOLIO
FEE SCHEDULE
OCTOBER 30, 1996
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INVESTMENT ADVISER
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17 Basis Points Annually on Net Assets of Portfolio
Investment Adviser will pay from its fees the cost of Sub-Adviser fees,
portfolio custody, fund accounting, transfer agency and fund administration
(excluding transaction costs and out-of-pocket charges related to these services
as detailed below).
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TRANSACTION COSTS
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Per Transaction
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DTC/Fed Book Entry $12.00
Non-DTC, Boston Settlements $20.00**
Non-DTC, New York Settlement $35.00
Non-DTC, New York Maturities $10.00
GNMA Securities $40.00
Government Paydown $5.00
Futures $18.00
Incoming Wires $6.00
Outgoing Wires $8.00
** There is no charge for maturities of these items.
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OUT-OF-POCKET & BALANCE CREDITS
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Out-of-Pocket
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These charges consist of:
-Pricing & Verification Services
-Systems Customization (if required)
-Ad hoc Reports
-All local duties, script fees and any other market standard fee levied in
accordance with local market practices.
Balance Credits
---------------
We allow balance credits against fees (excluding out-of-pocket charges) for
collected fund balances arising out of the custody relationship. The monthly
earnings allowance will equal 75% of the 90 day Treasury Xxxx rate.
