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EXHIBIT 4(l)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of September 22, 1999, by and between MERCURY
ASSET MANAGEMENT US (hereinafter referred to as "Mercury US"), a division of
Fund Asset Management, L.P., a Delaware limited partnership, and MERCURY ASSET
MANAGEMENT INTERNATIONAL LTD., a corporation organized under the laws of England
and Wales (hereinafter referred to as "Mercury International").
W I T N E S S E T H:
WHEREAS, the Mercury Asset Management Master Trust, a Delaware business
trust (hereinafter referred to as the "Trust") is engaged in business as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (hereinafter referred to as the "Investment Company
Act"); and
WHEREAS, the Trustees of the Trust (the "Trustees") are authorized to
establish separate series relating to separate portfolios of securities, each of
which may offer separate classes of shares; and
WHEREAS, the Trustees have established and designated the Mercury Master
U.S. Small Cap Growth Portfolio (hereinafter referred to as the "Portfolio") as
a series of the Trust; and
WHEREAS, Mercury US and Mercury International are engaged principally in
rendering investment advisory services and are registered as investment advisers
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, Mercury International is regulated by the Investment
Management Regulatory Organization, a self-regulating organization recognized
under the Financial Services
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Act of 1986 of the United Kingdom (hereinafter referred to as "IMRO"), and the
conduct of its investment business is regulated by IMRO; and
WHEREAS, Mercury US has entered into an investment advisory agreement
(the "Mercury US Advisory Agreement"), dated September 22, 1999 with the Trust,
pursuant to which Mercury US will provide investment advisory and management
services to the Trust with respect to the Portfolio; and
WHEREAS, Mercury International is willing to provide investment advisory
services to Mercury US in connection with the Portfolio's operations on the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the covenants
hereinafter contained, Mercury US and Mercury International hereby agree as
follows:
ARTICLE I
Duties of Mercury International
Mercury US hereby employs Mercury International to act as an investment
adviser to Mercury US and to furnish, or arrange for affiliates to furnish, the
investment advisory services, as described below, subject to the broad
supervision of Mercury US and the Trust, for the period and on the terms and
conditions set forth in this Agreement. Mercury International hereby accepts
such employment and agrees during such period, at its own expense, to render, or
arrange for the rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein. Mercury US and its
affiliates shall for all purposes herein be deemed a Non-private Customer as
defined under the rules promulgated by IMRO (hereinafter
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referred to as the "IMRO Rules"). Mercury International and its affiliates shall
for all purposes herein be deemed to be independent contractors and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Trust or Portfolio in any way or otherwise be deemed agents of
the Trust or Portfolio.
Mercury International shall have the right to make unsolicited calls on
Mercury US and shall provide (or arrange for affiliates to provide) Mercury US
with such investment research, advice and supervision as the latter may from
time to time consider necessary for the proper supervision of the assets of the
Portfolio; shall make recommendations from time to time as to which securities
shall be purchased, sold or exchanged and what portion of the assets of the
Portfolio shall be held in the various securities in which the Portfolio
invests, options, futures, options on futures or cash; all of the foregoing
subject always to the restrictions of the Declaration of Trust and By-Laws of
the Trust, as they may be amended from time to time, the provisions of the
Investment Company Act and the statements relating to the Portfolio's investment
objectives, investment policies and investment restrictions as the same are set
forth in the Trust's current Registration Statement.
Mercury International will not hold money on behalf of Mercury US, the
Trust or the Portfolio, nor will Mercury International be the registered holder
of the registered investments of Mercury US, the Trust or the Portfolio or be
the custodian of documents and other evidence of title.
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ARTICLE II
Allocation of Charges and Expenses
Mercury International assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement and shall at
its own expense provide the office space, equipment and facilities which it is
obligated to provide under Article I hereof and shall pay all compensation of
officers of the Trust and all Trustees of the Trust who are affiliated persons
of Mercury International to the extent not otherwise paid by Mercury US.
ARTICLE III
Compensation of Mercury International
For the services rendered, the facilities furnished and expenses assumed
by Mercury International, Mercury US shall pay to Mercury International at the
end of each calendar month a fee in an amount to be determined from time to time
by Mercury US and Mercury International, but in no event in excess of the amount
that Mercury US actually receives for providing services to the Trust and the
Portfolio pursuant to the Mercury US Advisory Agreement.
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ARTICLE IV
Limitation of Liability of Mercury International
Mercury International shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in the performance of sub-advisory services rendered hereunder with
respect to the Trust and the Portfolio, except for willful misfeasance, bad
faith or gross negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder. As used in this
Article IV, the term "Mercury International" shall include any affiliates of
Mercury International performing services for the Mercury US contemplated hereby
and directors, officers and employees of Mercury International and such
affiliates.
ARTICLE V
Activities of Mercury International
The services of Mercury International to the Trust and the Portfolio are
not to be deemed to be exclusive, and Mercury International and any person
controlled by or under common control with Mercury International (for purposes
of this Article V referred to as "affiliates") is free to render services to
others. It is understood that Trustees, officers, employees and shareholders of
the Trust and Portfolio are or may become interested in Mercury International
and its affiliates, as directors, officers, partners, employees and shareholders
or otherwise, and that Mercury International and its affiliates are or may
become similarly interested in the Trust or Portfolio.
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ARTICLE VI
Mercury International Statements Pursuant to IMRO Rules
Any complaints concerning Mercury International should be in writing
addressed to the attention of the Managing Director of Mercury International.
Mercury US has the right to obtain from Mercury International a copy of the IMRO
complaints procedure and to approach IMRO and the Investment Ombudsman directly.
Mercury International may make recommendations, subject to the investment
restrictions referred to in Article I herein, regarding Investments Not Readily
Realisable (as that term is used in the IMRO Rules) or investments denominated
in a currency other than British pound sterling. There can be no certainty that
market makers will be prepared to deal in unlisted or thinly traded securities
and an accurate valuation may be hard to obtain. The value of investments
recommended by Mercury International may be subject to exchange rate
fluctuations which may have favorable or unfavorable effects on investments.
Mercury International may make recommendations, subject to the investment
restrictions referred to in Article I herein, regarding options, futures or
contracts for differences. Markets can be highly volatile and such investments
carry a high degree of risk of loss exceeding the original investment and any
margin on deposit.
ARTICLE VII
Duration and Termination of this Agreement
This Agreement shall become effective as of the date first above written,
and shall remain in force until the date of termination of the Mercury US
Advisory Agreement (but not later than
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two years after the effective date of this Agreement) and thereafter, but only
so long as such continuance is specifically approved at least annually by (i)
the Trustees of the Trust, or by the vote of a majority of the outstanding
voting securities of the Portfolio, and (ii) a majority of those Trustees who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by Mercury US or by vote of a majority of the outstanding voting
securities of the Portfolio, or by Mercury International, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment. Any termination shall be without prejudice to the
completion of transactions already initiated.
ARTICLE VIII
Amendments of this Agreement
This Agreement may be amended by the parties only if such amendment is
approved in compliance with the requirements of the Investment Company Act and
the rules and regulations thereunder.
ARTICLE IX
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act and the rules and regulations
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hereunder, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
ARTICLE X
Governing Law
This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Investment Company Act.
To the extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
Limitation of Obligations of the Portfolio
The obligations of the Portfolio shall be limited to the assets of the
Portfolio, shall be separate from the obligations of any other series of the
Trust, and the Portfolio shall not be liable for the obligations of any other
series of the Trust.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written. This Agreement may be
executed by the parties hereto in any number of counterparts, all of which
together shall constitute one and the same instrument.
MERCURY ASSET MANAGEMENT US,
a division of Fund Asset Management, L.P.
By: PRINCETON SERVICES, INC.,
GENERAL PARTNER
By: /s/ XXXXX X. XXXXX
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Title: Executive Vice President and Director
MERCURY ASSET MANAGEMENT INTERNATIONAL LTD.
By: /s/ XXXXX X. XXXXX
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Title: Chairman and Chief Executive Officer
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