Letter of Mutual Understanding

Dear Valued Client:
I would like to take this time to thank you for joining the Merrimac Corporate Securities’ Team of investment professionals. We at Merrimac strive to provide unbiased comprehensive investment support to each one of our clients. We also strive to make each client fully aware of the risks and rewards when dealing with any type of investment vehicle. This can be achieved through open dialogue between Merrimac Corporate Securities Account Executives and each client. However, we also need to understand that certain market conditions and events may occur that are not under our control. We mutually understand that in the securities markets, there are no equity investments without some risk. Therefore, we enjoy establishing and encouraging all clients to continuously communicate to Merrimac any issues that may arise in the normal course of doing business they may view as contrary to their risk tolerance and overall objectives. We believe by communicating to our clients, our obligation as well as theirs, we will create the necessary client/investment firm relationship to help achieve client objectives.

Your Obligation To Keep Us Informed
It’s important that you keep us informed about your finances, your investments and your business activities. You agree to notify us immediately if there is any significant change in your financial position, or if you become (1) a broker-dealer; (2) an officer, director, general partner, employee or agent of a broker-dealer; (3) an immediate family member of any person who is any of the above, where such person controls the account, either directly or indirectly; (4) a broker-dealer or any person who is an officer, director, general partner, employee or agent of a broker-dealer who has a beneficial interest in the account or (5) an employee of a securities exchange. (6) become an officer, employee of any bank, trust company or insurance company (7) become an officer, employee of any mutual fund, pension, profit sharing or similar entity. You agree to notify us if you become a policy-making officer, a director or a 10% shareholder of any publicly traded company. Also, we ask that you inform us in writing of any address changes.

Protecting You and Ourselves
Our individualized account management is designed to help protect you from inappropriate investment risks in several ways. Through an interview with a Merrimac Account Executive, we try to assess the appropriateness of your chosen asset allocation to meet your stated objectives and risk profile. Please review definitions of new account risk objectives on New Account Form with your Account Executive. We will randomly review positions we hold for your account, although our emphasis is on the overall performance of your portfolio in meeting your objectives, and not on the performance of individual securities. Although we do this, the primary responsibility remains with you. We manage all the assets in your account, except for “unmanaged assets”, which are securities for which you have retained independent management and for which we have no responsibility and charge no management fee. However, we believe thoroughly that all clients need to review all correspondence and activity and provide us any information on activity that may affect or change your individual account risk parameters and objectives.

Reports-Keeping you informed
We will send you a monthly or at a minimum a quarterly basis financial report on activity and positions in your account. We will provide you with confirmations promptly after execution of each transaction via the mail and/or email with all pertinent information including commissions, markups and/or markdowns. In addition, you have instant access to your accounts online 24 hours a day, 7 days a week providing complete access to your account information. We will also send you other compliance reminders on confirms and statements to contact us with any concerns regarding these confirms and statements. These and all other communications relating to your account will be sent to you at the address you have given us. Once we or our affiliates have sent a communication to that address, it will be considered that you have received it. At your written request, we and/or our affiliates will also send notices to appropriate interested parties, such as your attorney or accountant. If any activity was not authorized or doesn’t serve to meet your agreed upon goals and objectives, please contact us immediately for a personal review.

Risks and Rewards of Investing
We believe asset allocation-diversification among various categories of stocks, fixed income securities and other investment vehicles, are a substantial way to limit investment risk. We offer a wide range of services. However, we realize that due to market fluctuations and world events, no entity or person can eliminate risk associated with Equity investing. Your Merrimac Account Executive will work with you to determine the appropriate combinations of investments/products in varying proportions, based upon your particular financial goals and investment/tax situation to seek to determine the appropriate risk for you. Your Merrimac Account Executive is always available to discuss your overall asset mix and to reassess that mix based upon changes in your circumstances and financial needs. You and your Account Executive should have completely reviewed your chosen investments and objectives for suitability. A list of Investment Objectives along with their definitions to help you understand the appropriate risk associated with your chosen objectives are on your new account form application. Should you wish to change your mix, you need only send your request in writing to us.

We offer a number of equity services in which we attempt to attain superior performance over time. This may entail above average equity market risk. In general, our equity services are intended for investors who can accept the associated risks, and are not appropriate for individuals with limited investment resources, or who may need immediate access to their funds since capital market volatility and negative market fluctuation may impair our ability to liquidate securities for you. Depending on the amount involved, your account may be invested in one selected investment portfolio. If you are invested in one or more concentrated equity services, in other words, in an account that may hold 30 or fewer stocks (this number can vary greatly depending on the services, market conditions, and the total dollar amounts involved) your account may be even more volatile because of a focus on particular sectors of the market. If you are invested in one or more diversified equity services, which hold a greater number of securities, you are likely to diverge less from the market’s performance than in a concentrated account, but your account still will be subject to more risk than the broader market. It is possible that securities that are candidates for sale or purchase in some portfolios, using equity services, are also purchase candidates in one of our other growth services and vice versa. Finally, if you invested in international equity services, which primarily holds securities of companies in major developed foreign nations, your account may be subject to market, currency, political and other risks not associated with domestic investing that can lead to volatility and absolute market declines. Investing in emerging market’s countries involves even greater risk, since this type of investing involves exposure to economic structures that are generally less diverse and mature, and to social, political, and economic systems that can be expected to have less stability than those of developed countries. Accordingly, trading can be more difficult and an investor may be unable to liquidate certain holdings in an emerging-markets portfolio. The Emerging Markets should be considered as a vehicle for diversification and not as a substitute for a balanced investment program. By combining stocks with fixed income securities, your account’s volatility may be reduced, since these investment assets tend to react differently to economic events. However, Fixed Income account values may decline in market value when interest rates rise or the perceived credit quality of an issuer deteriorates. For this reason your Account Executive may not recommend to you fixed income products as part of your asset allocation. A more detailed description of the risks and rewards of various investment services is available by speaking with your Account Executive or myself directly.

Upon the opening of your account, we will confirm your chosen goals and objectives in writing on your Account Paperwork. In addition, you will be signing appropriate Risk Letters and Customer Account Agreements affirming any additional risk and agreed upon policies for doing business with Merrimac Corporate Securities, Inc. This letter is not intended to be a complete assessment of risks and/or Merrimac’s policies and procedures. Our intention is to provide an overview and understanding of our commitment to support open communication to you, but also from you, essential for a long- term business relationship.

Please review any questions with your Account Executive or call me directly. By opening an account with Merrimac Corporate Securities we understand you have received and read this Letter of Understanding and look forward to creating and maintaining a successful relationship with you.

Sincerely,
David W. Matthews
President & CCO