INVESTMENT SUB-ADVISER AGREEMENT
Agreement made as of this ____ 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 Fund (the "Fund"), 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 and 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.
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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
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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
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hereto and made a part hereof. Such fee shall be paid by the Adviser and the
Trust shall have no liability therefor.
5. Portfolio Transactions and Brokerage
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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
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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
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(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.
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(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 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
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(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 or 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.
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(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 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.
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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.
INVESTORS BANK & TRUST COMPANY ("ADVISER")
By: ______________________________
Name: Xxxxx X. Xxxxxxx
Title: President
M&I INVESTMENT MANAGEMENT CORP. ("SUB-ADVISER")
By: ______________________________
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
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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.
