Exhibit (h)(9)
XXXXXX XXXXXXX XXXX XXXXXX
XXXXXX XXXXXXX & CO. INCORPORATED
0000 XXXXXX XX XXX XXXXXXXX, 00xx XXXXX
XXX XXXX, XXX XXXX 00000
The following terms and conditions dated as of June 19, 2000 supplement (i) the
Master Securities Loan Agreement between MS Securities Services Inc.
("Borrower") and Nvest Kobrick Investment Trust on behalf of each of the funds
listed on Schedule B thereto, as may be amended and supplemented from time to
time to add additional funds (each, a "Lender"; collectively the "Lenders"),
dated as of June 19, 2000 (the "Agreement") and (ii) the Master Securities Loan
Agreement between Xxxxxx Xxxxxxx & Co. Incorporated (also, "Borrower"and,
together with MS Securities Services Inc., the "Borrowers") and Nvest Kobrick
Investment Trust on behalf of each of the funds listed on Schedule B thereto, as
may be amended and supplemented from time to time to add additional funds (each
also a "Lender"; collectively the "Lenders"), dated as of June 19, 2000 (also,
the "Agreement").
Borrowers hereby agree to pay each Lender the minimum fee as set forth in
Appendix A hereto (the "Minimum Fee") which shall be payable in monthly
installments over the twelve (12) month period commencing as of
_______________________(the "Lending Period") and any additional fees resulting
from Borrowers' actual usage of that Lender's securities, calculated as set
forth in subparagraphs (b) and (i) below (the Minimum Fee and any additional
fees shall be referred to collectively as the "Fee"). The fee arrangement as
described in this Letter Agreement shall be subject to the following terms and
conditions:
(a) Borrowers' portfolio evaluations are based upon the contents of each
Lender's portfolios as of the date indicated in Schedule B (the "Portfolio
Valuation Date"). Each Lender hereby agrees, as consideration for the Fee,
to lend its equity securities (collectively, "Borrowable Securities")
exclusively to Borrowers subject to the maximum percentage of a Lender's
total assets that may be lent to Borrowers as disclosed by Lender or as may
be otherwise limited by Lender in writing. Lenders and Borrowers agree that
for each Lender, such maximum percentage is 33 1/3% of such Lender's total
assets.
(b) Each Lender acknowledges that Borrowers have set the relevant Fee on the
understanding that the Borrowable Securities are not subject to
restrictions on transferability in any way by a Lender, other than
restrictions set forth in an Agreement or in this Letter Agreement.
(c) If on a particular day that a Borrower seeks to enter into a Loan hereunder
the net asset value of a Lender or the market value of Borrowable
Securities issued within a particular jurisdiction held by a Lender
decreases by more than 10% from the Portfolio Valuation Date, the parties
may agree to reduce the Fee on a pro rata basis.
(d) If on a particular day that a Borrower seeks to enter into a Loan hereunder
the net asset value of a Lender or the market value of Borrowable
Securities issued within a particular jurisdiction held by a Lender
increases by more than 10% from the Portfolio Valuation Date, the parties
may agree to increase the Fee on a pro rata basis provided Borrower is able
to use the additional Borrowable Securities in such Lender.
(e) If during the Lending Period (i) a Lender informs Borrower in writing that
certain Borrowable Securities (other than Borrowable Securities unavailable
due to the restrictions set forth in (a) above or in an Agreement) are
unavailable for lending, (ii) any change occurs (whether retrospective or
otherwise) which is verifiable by reference to any public statute,
regulation or other public announcement on the part of any relevant
governmental or fiscal agency or body; and relates to any existing tax rate
or other relevant fiscal rates in relation to any dividends; (iii) Borrower
or a Lender, acting reasonably, and after having taken appropriate legal
advice, determines that any change in tax or fiscal laws or regulations or
any political, operational, settlement or other risks, adversely affects
the securities lending arrangement under this Paragraph (e) or (iv) a
Lender recalls or sells Borrowable Securities that relates to a Loan prior
to a record
date and it affects the expected securities lending revenue for such Loan,
Borrower and such Lender will discuss the appropriateness of modifying the
Fee.
(f) Borrowers will provide to each Lender a monthly reporting of each Lender's
securities lending activity and such other reports as (i) Lender may
reasonably request from time to time and (ii) will allow Lender to
calculate Borrowers Net Revenue (as defined below).
(g) Each Lender in the reinvestment of cash collateral shall use its best
efforts to achieve competitive market rates with respect to overnight cash
reinvestment, as mutually agreed to by the parties from time to time.
Borrowers shall be entitled to all such monies earned on each Lender's
reinvestment of cash collateral and such monies shall be remitted to
Borrowers monthly.
(h) Borrowers shall at all times have the right to request from any Lender an
update of portfolio information, including information with respect to the
size and value of any portfolio from which Borrowers may borrow, and such
information shall not be unreasonably withheld.
(i) The amount of the Fee for the Lending Period may increase if Borrowers
increase their usage of Borrowable Securities of a Lender beyond currently
contemplated levels. Borrowers agree to share Borrower Net Revenue (as
defined below) with such Lender in accordance with the following formula:
Borrowers Net Revenue = (Borrower securities lending fee revenues from the
Borrowable Securities since the commencement of the Lending Period) LESS
(transaction fees paid by Borrowers, including taxes) LESS (the Minimum
Fee).
Should Borrowers Net Revenue, as defined above, exceed the Benchmark Amount
set forth in Appendix A for the relevant Lender, any such excess amount of
Borrowers Net Revenue over the Benchmark Amount shall be split in the
following proportions: 90% to the Lender and 10% to Borrowers.
(j) The parties hereto shall have the right to terminate this fee arrangement
upon sixty (60)days prior written notice for any reason, provided that the
parties shall have continuing obligations with respect to transactions
entered into prior to any such termination. The parties understand and
acknowledge that in the event of such termination, installment payments in
respect to the Fee will cease as of the date of termination.
(k) Borrowers and the Lenders will jointly review their performance under this
Agreement on a quarterly basis.
(l) Borrowers represent to each Lender that, as of the date hereof, the senior
debt of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. is rated Aa3 by Xxxxx'x Investors
Service and AA- by Standard & Poor's.
(m) Borrowers represent that MS Securities Services Inc. is a wholly owned
subsidiary of Xxxxxx Xxxxxxx & Co. Incorporated.
(n) Each Borrower represents that there has been no development in the business
or affairs of Borrower which development has resulted in or which likely,
in the reasonable judgment of Borrower, based on evaluations conducted in
the ordinary course of business, to result in a material adverse change in
its financial condition which would affect Borrower's ability to perform
hereunder.
The parties agree that this Letter Agreement shall constitute a separate and
discrete agreement between Borrowers and each Fund, as if set out in a separate
writing executed only by Borrowers and by or on behalf of such Fund alone.
Notwithstanding any other provision of this Letter Agreement or any relevant
Master Securities Lending Agreement, no Fund shall have any obligation or incur
any liability in respect of any Loan entered into by or on behalf of, or any
action, omission, or course of dealing of or in respect of, any other Fund.
Each Fund hereby represents to Borrowers that a copy of the "Agreement and
Declaration of Trust" of the Trust is on file with the Secretary of State of the
Commonwealth of Massachusetts. Notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust as Trustees and not
individually, and that the obligations
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arising out of this instrument are not binding upon any of the Trustees,
officers, or shareholders individually but are binding only upon the assets and
property of the Trust.
THIS SUPPLEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
Except as otherwise set forth herein, the Agreement shall remain unchanged and
in full force and effect. From and after the date hereof, any reference to the
Agreement shall be a reference to the Agreement as amended hereby.
NVEST KOBRICK INVESTMENT TRUST
XXXXXX XXXXXXX & CO. ON BEHALF OF EACH OF THE FUNDS
INCORPORATED IDENTIFIED ON APPENDIX A
By: /s/ Xxxxxx X. Tell By: /s/ Xxxxxxx Xxxxxxx
---------------------------- ----------------------------
Name: Xxxxxx X. Tell Name: Xxxxxxx Xxxxxxx
Title: Managing Director Title: Secretary
MS SECURITIES SERVICES INC.
By: /s/ Xxxxxx X. Tell
----------------------------
Name: Xxxxxx X. Tell
Title: President
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Appendix A
ASSET VALUE AS OF
APRIL 11, 2000 TOTAL ASSET VALUE MINIMUM BENCHMARK
LENDER COUNTRY BY COUNTRY AS OF APRIL 11, 2000 FEE AMOUNT
Kobrick Capital Fund USA $ 350,616,789 $ 350,616,789 $350,000 $ 75,000
Kobrick Emerging Growth Fund USA $ 149,975,538 $ 149,975,538 $350,000 $100,000
Kobrick Growth Fund USA $ 117,446,113 $ 117,446,113 $100,000 $ 25,000
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