EXHIBIT-99.B5(c)
INVESTMENT SUB-ADVISER AGREEMENT
Agreement made as of this 30th day of October, 1996, between Investors Bank and
Trust Company (the "Adviser"), a Massachusetts banking corporation, and The Bank
of New York (the "Sub-Adviser"), a New York banking corporation.
WHEREAS, Merrimac Cash 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 Fund, pursuant to the terms of an Investment Adviser
Agreement (the "Adviser Agreement");
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 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;
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;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Adviser and the Sub-Adviser, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Appointment
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(a) The Adviser hereby appoints the Sub-Adviser as the investment
sub-adviser of the Portfolio to provide investment advice and to
perform for the Portfolio such other duties and functions as are
hereinafter set forth. The Sub-Adviser hereby accepts such
appointment and agrees to give the Portfolio and the Trust's Board of
Trustees (the "Trustees"), directly or through the Adviser, the
benefit of the Sub-Adviser's best judgment, effort, advice and
recommendations in respect of its duties as defined in Section 2.
(b) The Adviser hereby represents and warrants to the Sub-Adviser,
which representations and warranties shall be deemed to be
continuing, that (i) it has full power and authority to enter into
this Agreement and to delegate investment management discretion on
behalf of the Portfolio to the Sub-Adviser, and (ii) it has taken all
necessary and proper action to authorize the execution and delivery
of this Agreement.
(c) The Sub-Adviser hereby represents and warrants to the Adviser,
which representations and warranties shall be deemed to be
continuing, that (i) it has full power and authority to enter into
this Agreement, and (ii) it has taken all necessary and proper action
to authorize the execution and delivery of this Agreement.
2. Delivery of Documents
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Prior to the execution of this Agreement or at such later date as specified in
this Section 2, 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 when filed with the SEC;
(e) The Trust's initial Registration Statement on Form N-1A under the
1940 Act when filed with the SEC and all amendments thereto;
(f) The current Confidential Offering Circular for the Fund;
(g) The policies and procedures applicable to the Portfolio as
adopted by the Trustees; and all amendments and supplements thereto.
The Adviser will promptly furnish the Sub-Adviser with copies of all
amendments of or supplements to the foregoing documents. The
Sub-Adviser shall be entitled to rely on all such documents furnished
to it by the Adviser and shall not be responsible for its failure to
perform its duties in accordance therewith if any such document is
not furnished to it.
3. Sub-Adviser Duties
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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 Fund's Confidential Offering
Circular, 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
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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 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, although the Portfolio will
pay the actual transaction costs, including without limitation, brokerage
commissions on portfolio transactions. In executing portfolio transactions and
selecting brokers or dealers, the Sub-Adviser shall seek on behalf of the
Portfolio the best overall terms available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall consider all factors it
deems relevant, including the breadth of the market in the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis). In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Sub-Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) provided to the Sub-Adviser or an affiliate of the Sub-Adviser in
respect of accounts over which it exercises investment discretion. The
Sub-Adviser is authorized to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Sub-Adviser
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised by the Sub-Adviser or
its affiliates. 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 (such approval not to be
unreasonably withheld).
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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
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The services of the Sub-Adviser to the Adviser are not to be deemed exclusive,
the Sub-Adviser being free to render services to others and engage in other
activities, provided, however, that such other services and activities do not,
during the term of this Agreement, interfere, in a material manner, with the
Sub-Adviser's ability to meet all of its obligations with respect to rendering
investment advice hereunder. The Sub-Adviser, its affiliates and its other
clients may at any time acquire or dispose of securities which are at the same
time being acquired or disposed of for the account of the Portfolio. The
Sub-Adviser shall not be obligated to acquire for the Portfolio any security or
other investment which the Sub-Adviser or its affiliates may acquire for its or
their own accounts or for the account of another client.
8. Compliance; Books and Records
---------------------------------
(a) The Sub-Adviser agrees to maintain 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 Sub-Adviser shall furnish to the Adviser, at the Adviser's
expense, copies of all records prepared and maintained in connection
with the performance of this Agreement and the maintenance of
compliance procedures pursuant to this Section 8 as the Adviser may
reasonably request.
(c) The Sub-Adviser agrees to provide upon reasonable request of the
Adviser, information regarding the Sub-Adviser, including but not
limited to, background information about the Sub-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 the records
required to be maintained by Rule 31a-1 under the 1940 Act. The
Sub-Adviser will treat confidentially and as proprietary information
of the Trust all records and
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other information relative to the Fund and prior, present or potential
shareholders, except as otherwise required by law.
9. Limitation of Liability of Sub-Adviser; Indemnification
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(a) 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 Fund 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 Fund
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.
(b) Notwithstanding Section 9(a) hereof, the Trust shall indemnify
the Sub-Adviser, any affiliated person of the Sub-Adviser, and each
person, if any, who within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "'33 Act"), controls the
Sub-Adviser (all of such persons being referred to as "Indemnified
Persons") against any and all losses, expenses, damages, liabilities
or claims (including attorneys' fees and expenses) to which an
Indemnified Person may become subject under the '33 Act, the 1940
Act, any other statute, common law or otherwise, which may be based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Trust's Notification of Registration on Form
N-8A under the 1940 Act, the Trust's Registration Statement on Form
N-1A under the 1940 Act, the Confidential Offering Circular for the
Fund and any amendment of, or supplement to, any of the foregoing
documents, or the omission or alleged omission or failure to state
therein a material fact known or which should have been known to the
Trust and was required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that no
Indemnified Person shall be entitled to indemnification hereunder for
any such statements, omissions, or failures that are (i) based upon
information provided to the Trust by the Sub-Adviser in writing, or
(ii) attributable to investments made by the Sub-Adviser which are
not in accordance with the investment objectives and policies of the
Portfolio. This indemnity shall be a continuing obligation of the
Trust, notwithstanding the termination of this Agreement.
(c) The Sub-Adviser shall indemnify the Trust, and each person, if
any, who within the meaning of Section 15 of the '33 Act controls the
Trust (all such persons being referred to as "Trust Indemnified
Persons") against any and all losses, expenses, damages, liabilities
or claims (including attorneys' fees and expenses) to which the Trust
Indemnified Person may become subject under the '33 Act, the 1940
Act, any other statute, common law or otherwise, which may be based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Trust's Notification of Registration on Form
N-8A under the 1940 Act, the Trust's Registration Statement on Form
N-1A under the 1940 Act, the Confidential Offering Circular for the
Fund and any amendment of, or supplement to, any of the foregoing
documents, or the omission or alleged omission or failure to state
therein a material fact known or which should have been known to the
Trust and was required to be stated therein or necessary to make the
statements therein not misleading and was (i) based upon information
provided to the Trust by the Sub-Adviser in writing, or (ii)
attributable to investments made by the Sub-Adviser which are
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not in accordance with the investment objectives and policies of the
Portfolio. This indemnity shall be a continuing obligation of the
Sub-Adviser, notwithstanding the termination of this Agreement.
(d) The Adviser shall indemnify the Sub-Adviser and hold it harmless
from and against any and all losses, expenses, damages, liabilities
or claims (including attorneys' fees and expenses), sustained or
incurred by it which may be based upon misfeasance, bad faith or
negligence by the Adviser in the discharge of its duties and
performance of its obligations under this Agreement or the Investment
Adviser Agreement. This indemnity shall be a continuing obligation of
the Adviser, notwithstanding the termination of this Agreement.
(e) The Sub-Adviser shall indemnify the Adviser and hold it harmless
from and against any and all losses, expenses, damages, liabilities
or claims (including attorneys' fees and expenses), sustained or
incurred by it which may be based upon misfeasance, bad faith or
negligence by the Sub-Adviser in the discharge of its duties and
performance of its obligations under this Agreement. This indemnity
shall be a continuing obligation of the Sub-Adviser, notwithstanding
the termination of 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 Fund. Unless
the Sub-Adviser receives a written notice of termination, the
Sub-Adviser shall be entitled to presume without further inquiry that
all consents or approvals required by Section 15 of the 1940 Act with
respect to the continuation of the Agreement have been obtained.
(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 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 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. Upon execution by
the Sub-Adviser of any modification or amendment agreement, the
Sub-Adviser shall be entitled to presume without further inquiry that
all consents or approvals required by Section 15 of the 1940 Act with
respect to such modification or amendment have been obtained.
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(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. Upon receipt by
the Sub-Adviser of a termination notice from the Portfolio, the
Sub-Adviser shall be entitled to presume without further inquiry that
all consents or approvals required by Section 15 of the 1940 Act with
respect to such termination have been obtained.
(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) The Sub-Adviser's duties and responsibilities are solely those
set forth herein and no other covenant or obligation shall be implied
against the Sub-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.
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(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.
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: /s/ Xxxxx X. Xxxxxxx
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Title: President and C.E.O.
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THE BANK OF NEW YORK
("SUB-ADVISER")
By: /s/ Xxxxxx Xxxxx
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Title: Senior Vice President
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The Merrimac Master Portfolio
on behalf of the Merrimac Cash
Portfolio hereby agrees to be bound by the provisions of Sections 9(b), 9(c) and
11 of this Agreement.
Merrimac Master Portfolio
("THE TRUST")
By: /s/ Xxxx X. Xxxxxxx
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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 a fee, computed and paid monthly at an annual
rate of .08% of the average daily net assets of the Portfolio. The fee for each
month shall be payable within 30 business days after the end of the month.
If the Sub-Adviser shall serve for any period less than a full month, the
foregoing compensation shall be prorated according to the proportion which such
period bears to a full month.
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