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 24, 1998
1
AGREEMENT
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THIS AGREEMENT is made and entered into as of the 24th day of June, 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
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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
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1.1 Agreement to Effect the Investment. The Trust agrees to assign, transfer
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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
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2.1 Time of Closing. The conveyance of the Assets in exchange for the
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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
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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
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accept Assets other than in the form of cash if: (a) acceptance of such Assets
or the issuance of an Interest in exchange therefor 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 as 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
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3.1 The Trust and Investors Bank. The Trust and Investors Bank each
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represents and warrants to the Portfolio Trust and the Adviser that:
(a) Organization. The Trust is a business trust duly organized,
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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
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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
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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
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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
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Closing, consist solely of cash.
(f) Taxable and Fiscal Year. The taxable and fiscal year end
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for the Fund is December 31.
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(g) Auditors. The Trust has appointed Ernst & Young LLP as the
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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
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force an errors and omissions liability insurance policy insuring the Fund and
other entities jointly against loss up to $10 million in the aggregate for
negligence or wrongful acts.
(j) SEC Filings. The Trust has duly filed all forms, reports,
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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.
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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
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Adviser each represents and warrants to the Trust that:
(a) Organization. The Portfolio Trust is a trust duly
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organized and validly existing under the common law of the State of New York
and has the requisite power
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and 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
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the Portfolio is December 31.
(f) Auditors. The Portfolio has appointed Coopers & Xxxxxxx LLP
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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 and other entities jointly against loss up to $10 million in the
aggregate 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
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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
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the Code.
3.3 The Adviser. The Adviser represents and warrants to the Trust and
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and Investors Bank that:
(a) Organization. The Adviser is a corporation, duly
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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
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Portfolio Trust and the Adviser that:
(a) Organization. Investors Bank is a limited purpose trust
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company 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.
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(b) Authorization of Agreement. The execution and delivery of
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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 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
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4.1 The Trust. The Trust covenants that:
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(a) Advance Review of Certain Documents. The Trust will
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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
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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
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to the Portfolio Trust or the Portfolio (other than a vote by the Trust to
continue the operation of the Portfolio
8
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 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 suc
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
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and omissions liability insurance with respect to the Fund covering losses for
negligence and wrongful acts in an amount not less than $10 million provided
that such insurance may be joint with other entities and the $10 million
coverage amount may apply in the aggregate to all joint insureds.
(f) Auditors. In the event the Fund's independent public
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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
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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
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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
9
so determined except to reflect purchase and redemption orders accepted by i
prior to the time the Portfolio's net asset value was determined on that
Closing Date.
4.2 The Portfolio Trust. The Portfolio Trust covenants that:
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(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
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errors and omissions liability insurance covering losses for negligence and
wrongful acts in an amount not less than $10 million provided that such
insurance may be joint with other entities and the $10 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
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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
10
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 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 Fund, Trust or IBT;
(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 in disclosure included
at the Adviser's or Portfolio Trust'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 of an investor 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 Trust or Adviser to be accurate when made or the
failure of the Portfolio Trust or Adviser to perform any covenant contained
herein or to otherwise comply with the terms of this Agreement;
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(vi) arise out of any unlawful or negligent act by the
Portfolio Trust, the Adviser or any director, trustee, officer, employee or
agent of the Portfolio Trust or Adviser, whether such act was committed against
the Portfolio, the Trust or any third party; or
(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
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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.
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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 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's net asset value by Investors Bank or its
affiliates as custodian or administrator of the Portfolio (which calculation is
considered material under procedures approved by the Portfolio Trust's Board of
Trustees), to the extent such inaccurate calculation is 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 Trust's registration statement
(including amendments thereto) or in disclosure included in advertising or
sales literature used by the Fund or the Trust's principal underwriter, except
to the extent such misstatement or omission was (a) also contained
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in the Portfolio Trust's registration statement (including amendments thereto)
and was included in the Trust's registration statement in conformity therewith;
or (b) in disclosure provided by the Adviser or the Portfolio Trust for the
express purpose of its inclusion in the Trust's registration statement or sales
literature;
(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; or
(vii) arise out of or are based upon any alleged
misstatement or misrepresentation of a material fact (other than in the Trust's
registration statement or sales literature used by the Fund) by, or alleged
misleading or fraudulent sales practices of, Investors Bank, the Trust's
principal underwriter, or their respective representatives.
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
14
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 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.
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(a) In the event the Trust desires to withdraw or redeem all or
part 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.
(b) 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
15
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.
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.
16
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 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 a
----------------
disclosure considered legally required shall provide the other parties heret
with as much prior written notice of such disclosure as is practical under the
circumstances.
17
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.
(c) This Agreement may be terminated by the Portfolio Trust 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 of
---------
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.
18
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.
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 Series
200 Clarendon Street, MER91
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxxx, Treasurer
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: 000-000-0000
If to the Adviser: Xxxxxxxx, Xxxx & Xxxx, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Director
Fax Number: 000-000-0000
If to the Portfolio Trust Xxxxxxxx, Xxxx & Xxxx Master Portfolio
Deloitte & Touche House
00 Xxxxxxxxx Xxxxxxx
Xxxxxx 0, Xxxxxxx
Attn: Xxxxxxx X'Xxxxx, Vice President
Fax Number: 000-000-0-000-0000
19
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 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.
20
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.
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.
21
MERRIMAC SERIES
on behalf of itself and the
MERRIMAC SHORT-TERM ASSET
RESERVE SERIES,
a series thereof
By /s/Xxxx X. Xxxxxxxx
-------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
XXXXXXXX, XXXX & XXXX MASTER
PORTFOLIO on behalf of itself and
the XXXXXXXX SHORT TERM ASSET
RESERVE PORTFOLIO, a series thereof
By /s/Xxxxxxx X'Xxxxx
------------------
Name: Xxxxxxx X'Xxxxx
Title: Vice President
XXXXXXXX, XXXX & XXXX, INC.
By /s/Xxxxxxx X. Xxxx
---------------
Name:
Title:
INVESTORS BANK & TRUST
COMPANY
By /s/Xxxxx X. Xxxxxxx
----------------
Name: Xxxxx X. Xxxxxxx
Title: President
22
