Exhibit h(3)
MASTER-FEEDER PARTICIPATION AGREEMENT AMONG
LKCM FUNDS,
TT INTERNATIONAL U.S.A. MASTER TRUST,
XXXXXX XXXX CAPITAL MANAGEMENT CORPORATION, AND
TT INTERNATIONAL INVESTMENT MANAGEMENT
THIS AGREEMENT is made and entered into as of the 28th day of July, 2000,
by and among: LKCM Funds (the "Trust"), on behalf of its series LKCM
International Fund (the "Fund"); TT International U.S.A. Master Trust (the
"Master Trust"), on behalf of its series TT EAFE Portfolio (the "Portfolio");
Xxxxxx Xxxx Capital Management Corporation ("LKCM"); and TT International
Investment Management ("TTI").
WHEREAS, the Fund and the Portfolio are series of open-end management
investment companies, and the Fund and the Portfolio have the same investment
objectives and substantively the same investment policies;
WHEREAS, the Fund desires to invest its investable assets in the Portfolio
in exchange for beneficial interests in the Portfolio ("Interests") on the
terms and conditions set forth herein, and the Portfolio believes that such
investments are in its best interests; and
WHEREAS, LKCM is the investment adviser for the Fund and TTI is the
investment adviser for the Portfolio;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
I
INVESTMENTS AND REDEMPTIONS
1.1 INVESTMENTS. The Fund will invest its investable assets in the
Portfolio and, in exchange therefor, the Portfolio will issue to the Fund
Interests equal in value to the assets of the Fund conveyed to the Portfolio
based on the net asset value of the Portfolio next determined after such
investment. All such investments by the Fund shall be made in accordance with
procedures mutually agreed to by the parties hereto (or their agents) from time
to time and the provisions of the Portfolio's Form N-1A registration statement
(the "Portfolio's N-1A").
1.2 INVESTMENT DATES. The initial investment by the Fund in the Portfolio
shall occur on such date as the parties hereto agree upon and further
investments by the Fund shall occur on subsequent Business Days as the Fund
determines. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Portfolio calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission
("SEC"). All acts occurring on the date of an investment shall be deemed to
occur simultaneously as of the last daily determination of the Portfolio's net
asset value on such date.
1.3 REDEMPTIONS. The Portfolio will redeem any full or fractional
Interests owned by the Fund when requested by LKCM on behalf of the Fund in
accordance with the operational procedures mutually agreed to by the parties
hereto (or their agents) from time to time and the provisions of the
Portfolio's N-1A. Payments will be made in accordance with the Portfolio's
N-1A.
1.4 PURCHASE AND REDEMPTION PROCEDURES. TTI and the Master Trust shall
instruct the Master Trust's placement agent to accept purchase and redemption
orders from the Fund on each Business Day, provided that such orders are
received by such placement agent prior to 9:00 a.m., New York time on such
Business Day and reflect purchase and redemption orders received from the
Fund's shareholders in good order prior to the time as of which the net asset
value of the Portfolio was priced (such Portfolio's "valuation time") on the
prior Business Day (which valuation time typically will be as of 4:00 p.m., New
York time). These purchase and redemption orders shall be placed in such
written, electronic or other form as may be mutually agreed upon by the parties
hereto (or their agents) from time to time. Payment by the Fund for a purchase
order that is transmitted to and accepted by the placement agent shall be made
promptly and in no event later than by 12:00 noon, New York time on the date of
such acceptance.
1.5 NET ASSET VALUE DATA. TTI and the Master Trust (or their agents) shall
make the Book Capital Account Balance of the Fund with respect to the Portfolio
available to LKCM and the Fund (or their designated agents) on each day on
which Book Capital Account Balances are required to be calculated as soon as
reasonably practical after such Book Capital Account Balances are calculated
and shall use their best efforts to make such Book Capital Account Balances
available by 6:30 p.m., New York time. Book Capital Account Balance as used
herein refers to the balance representing the value of the holdings of the Fund
as calculated in accordance with the Master Trust's Declaration of Trust and
applicable procedures.
1.6 CONDITIONS PRECEDENT. The obligations of each party hereto to
consummate the transactions provided for herein are subject to all
representations and warranties of the other parties contained herein being true
and correct in all material respects as of the date hereof and as of the date
of the transactions contemplated hereby.
II
REPRESENTATIONS AND WARRANTIES
2.1 THE TRUST. The Trust represents and warrants as follows:
(a) Organization. The Trust is duly organized and validly existing
under the laws of the State of Delaware as a Delaware business trust. The Fund
is a duly and validly designated series of the Trust and has the requisite
power and authority to own property and conduct its business as proposed to be
conducted pursuant to this Agreement.
(b) Agreement Authorization. The execution and delivery of this
Agreement by the Trust on behalf of the Fund and the consummation of the
transactions contemplated hereby have been duly authorized by the Trust's Board
of Trustees.
(c) No Bankruptcy Proceedings. The Fund is not under the jurisdiction
of a court in a proceeding under Title 11 of the United States Code (the
"Bankruptcy Code") or similar case within the meaning of Section 368(a)(3)(A)
of the Bankruptcy Code.
(d) Fiscal Year. The fiscal year end of the Fund is December 31.
(e) SEC Filings. The Trust has duly filed all forms, reports, proxy
statements and other documents (collectively, "SEC Filings") required to be
filed under the Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act") and the Investment Company Act
of 1940, as amended (the "1940 Act") (collectively, the "Securities Laws") in
connection with the registration of the Fund's shares, any meetings of the
Fund's shareholders and the Trust's registration as an investment company. The
SEC Filings were prepared in accordance with applicable requirements of the
Securities Laws and the rules and regulations thereunder, and do not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(f) 1940 Act Registration. The Trust is duly registered as an
open-end management investment company under the 1940 Act, and its registration
statement is in full force and effect.
(g) Private Placement Qualifications. The Fund is an "accredited
investor" as that term is defined in Regulation D under the 1933 Act, the Fund
is investing in the Portfolio for investment purposes, and the Fund has been
provided with access to information regarding the Portfolio consistent with
applicable requirements for private offerings of securities to accredited
investors.
(h) Ongoing Representations. The representations contained in this
Section 2.1 shall be deemed to be repeated upon each investment by the Fund in
the Portfolio.
2.2 THE MASTER TRUST. The Master Trust represents and warrants as follows:
(a) Organization. The Master Trust is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts as a Massachusetts
trust. The Portfolio is a duly and validly designated series of the Master
Trust and has the requisite power and authority to own property and conduct its
business as proposed to be conducted pursuant to this Agreement.
(b) Agreement Authorization. The execution and delivery of this
Agreement by the Master Trust on behalf of the Portfolio and the consummation
of the transactions contemplated hereby have been duly authorized by the Master
Trust's Board of Trustees.
(c) Issuance of Interests Authorization. The Master Trust's Board of
Trustees has duly authorized, or will have duly authorized by the initial
investment date in Section 1.2 herein, the issuance of Interests by the
Portfolio in exchange for investments by the Fund. When issued in accordance
with the terms of this Agreement, the Interests will be validly issued and
entitled to the rights set forth in the Declaration of Trust of the Master
Trust.
(d) No Bankruptcy Proceedings. The Portfolio is not under the
jurisdiction of a court in a proceeding under Title 11 of the Bankruptcy Code
or similar case within the meaning of Section 368(a)(3)(A) of the Bankruptcy
Code.
(e) Fiscal Year. The fiscal year end of the Portfolio is December 31.
(f) Auditors. The Portfolio has appointed, or will have appointed by
the initial investment date in Section 1.2 herein, PricewaterhouseCoopers LLP
as its independent public accountants to certify the Portfolio's financial
statements in accordance with Section 32 of the 1940 Act, and promptly shall
notify LKCM and the Trust if any other independent public accountant is
designated to perform this function.
(g) SEC Filings. The Master Trust has duly filed, or will have duly
filed by the initial investment date in Section 1.2 herein, all SEC Filings
required to be filed with the SEC pursuant to the 1934 Act and 1940 Act in
connection with any meetings of the Portfolio's investors and the Portfolio's
registration as an investment company. Interests of the Portfolio are not
required to be registered under the 1933 Act because such Interests are offered
solely in private placement transactions that do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. The SEC Filings
were prepared, or will be prepared by the initial investment date in Section
1.2 herein, in accordance with the requirements of the Securities Laws, as
applicable, and the rules and regulations thereunder, and do not contain, or
will not contain by the initial investment date in Section 12. herein, any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(h) 1940 Act Registration. The Master Trust will be duly registered
as an open-end management investment company under the 1940 Act, and its
registration will be in full force and effect by the initial investment date in
Section 1.2 herein.
(i) Tax Status. The Portfolio is classified, or will be classified by
the initial investment date in Section 1.2 herein, as a partnership under the
Internal Revenue Code of 1986, as amended (the "Code").
(j) Pricing and In-Kind Redemption Procedures. The Portfolio has
adopted, or will have adopted by the initial investment date in Section 1.2
herein, pricing and valuation procedures and in-kind redemption procedures that
comply with the 1940 Act and any related interpretations issued by the SEC
staff.
(k) Ongoing Representations. The representations contained in this
Section 2.2 shall be deemed to be repeated upon each investment by the Fund in
the Portfolio.
2.3 LKCM. LKCM represents and warrants as follows:
(a) Organization. LKCM is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite power and authority to conduct its business as contemplated by
this Agreement.
(b) Authorization. The execution and delivery of this Agreement by
the Adviser have been duly authorized by all necessary actions by LKCM.
(c) Investment Adviser. LKCM is duly registered as an investment
adviser with the SEC in good standing under the Investment Advisers Act of
1940, as amended (the "Advisers Act").
2.4 TTI. TTI represents and warrants as follows:
(a) Organization. TTI is a partnership duly organized, validly
existing and in good standing under the laws of England and has the requisite
power and authority to conduct its business as contemplated by this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by TTI have been duly authorized by all necessary actions by TTI.
(c) Investment Adviser. TTI is duly registered as an investment
adviser with the SEC in good standing under the Advisers Act and in all
jurisdictions where such registration is required to conduct the activities
contemplated herein.
(d) UK Regulation. TTI is duly registered with and authorized by the
Investment Management Regulatory Organisation to conduct investment management
business in the United Kingdom.
III
COVENANTS
3.1 THE TRUST. The Trust covenants as follows:
(a) Advance Review of Filings. The Trust will furnish to the Master
Trust and TTI (or their designated agents) at least three Business Days prior
to filing a draft of any amendment to its registration statement relating to
the Fund.
(b) Proxy Voting. If requested to vote on matters pertaining to the
Portfolio, the Fund will (i) call a meeting of its shareholders for the purpose
of seeking instructions from them regarding such matters, and (ii) vote all the
Fund's Interests proportionally in accordance with the voting instructions of
Fund shareholders who do give voting instructions. The Fund will hold such
meetings in accordance with a timetable reasonably consistent with the
Portfolio's needs. The Portfolio will be responsible for all reasonable costs
(including legal fees) associated with Fund proxies and shareholder meetings
called to vote on matters pertaining to the Portfolio.
(c) Registration Statement Amendments. If the Trust is required to
file an amendment to its registration statement on Form N-1A as a result of
amendments to the Portfolio's N-1A (other than annual amendments to the
Portfolio's N-1A made in the normal course of business), the Trust will prepare
and file such amendments. The Portfolio will be responsible for all reasonable
costs (including legal fees) associated with such amendments.
3.2 INDEMNIFICATION BY THE FUND.
(a) The Trust agrees, on behalf of the Fund, that the Fund will
indemnify and hold harmless the Master Trust, the Portfolio, TTI and their
respective trustees, directors, officers and employees and each other person
who controls the Master Trust, the Portfolio or TTI, as the case may be, within
the meaning of Section 15 of the 1933 Act (each a "Covered Person" and
collectively "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities and expenses (each a "Liability" and collectively
"Liabilities") (including the reasonable cost of investigating and defending
against any claims therefor and any counsel fees incurred in connection
therewith), joint or several, which
(i) arise out of or are based upon any of the Securities Laws,
any other statute or common law or are incurred in connection with or as a
result of any formal or informal administrative proceeding or investigation by
a regulatory agency, insofar as such Liabilities arise out of or are based upon
the ground or alleged ground that any direct or indirect omission or commission
by the Fund or LKCM (either during the course of its daily activities or in
connection with the accuracy of their representations or their warranties in
this Agreement) caused or continues to cause the Portfolio to violate any
federal or state securities laws or regulations or any other applicable
domestic or foreign law or regulations or common law duties or obligations, but
only to the extent that such Liabilities do not arise out of and are not based
upon an omission or commission of the Portfolio or TTI (other than an imputed
act or omission based upon an act or omission of the Fund or LKCM);
(ii) arise out of any misstatement of a material fact or an
omission of a material fact required to be stated in order that the statements
made are not misleading in either (A) the Fund's registration statement
(including amendments thereto) or (B) advertising or sales literature regarding
the Fund (or any other series of the Trust), other than information provided in
writing, by the Portfolio or TTI or included in Fund advertising or sales
literature at the written request of a Portfolio or TTI;
(iii) result from the failure of any representation or warranty
made by the Trust or LKCM to be accurate when made (or deemed to be repeated)
or the failure of the Trust, the Fund or LKCM to perform any covenant contained
herein or to otherwise comply with the terms of this Agreement;
(iv) arise out of any unlawful or negligent act of the Trust,
the Fund or LKCM or any director, officer, employee or agent thereof; or
(v) arise out of any sales practices of brokers that are
authorized by the Fund or LKCM to sell Fund shares.
provided, however, that in no case shall the Fund be liable with respect to any
claim made against any such Covered Person unless such Covered Person shall
have notified the Fund in writing of the nature of the claim within a
reasonable time after the summons, other first legal process or formal or
informal initiation of a regulatory investigation or proceeding shall have been
served upon or provided to a Covered Person, or any federal, state or local tax
deficiency has come to the attention of the TTI, the Portfolio or a Covered
Person. Failure to notify the Fund of such claim shall not relieve it from any
liability that it may have to any party otherwise than on account of the
indemnification contained in this Section.
(b) The Fund will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if the Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by the Fund with the approval of
TTI, provided that such approval shall not be unreasonably withheld or delayed.
In the event the Fund elects to assume the defense of any such suit and retain
such counsel, each Covered Person and any other defendant or defendants may
retain additional counsel, but shall bear the fees and expenses of such counsel
unless (A) the Fund shall have specifically authorized the retaining of such
counsel or (B) the parties to such suit include any Covered Person and the
Fund, and any such Covered Person has been advised by counsel that one or more
legal defenses may be available to it that may not be available to the Fund, in
which case the Fund shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Fund shall not be liable to indemnify any Covered Person for any settlement
of any claim effected without the Fund's written consent, which consent shall
not be unreasonably withheld or delayed, provided that such consent does not
include any admission of wrongdoing by, or restrictions on the future
activities of, the Fund. The indemnities set forth in paragraph (a) will be in
addition to any liability that a Fund might otherwise have to a Covered Person.
3.3 THE MASTER TRUST. The Master Trust covenants as follows:
(a) Advance Review of Filings. The Master Trust will furnish to LKCM
(or its designated agent) at least three Business Days prior to filing a draft
of any amendment to the Portfolio's N-1A relating to the Portfolio.
(b) Tax Status. The Portfolio will qualify to be, and will be,
classified as a partnership under the Code for all periods during which this
Agreement is in effect.
(c) Availability of Interests. Subject to compliance with the
Securities Laws and the terms of this Agreement, including without limitation
the continuing accuracy of the representations set forth in Sections 2.1 and
2.3, the Portfolio shall permit the Fund to make additional investments in the
Portfolio on each Business Day on which shares of the Fund are sold to the
public and purchase orders are submitted in proper form; provided, however,
that the Portfolio may refuse to permit the Fund to make additional investments
on any day on which the Trustees of the Master Trust reasonably determine that
permitting additional investments by the Fund would constitute a breach of
their fiduciary duties to the Portfolio.
(d) Investment Objective. The Portfolio will notify the Fund at least
75 days prior to amending its investment objective or policies in any material
respects.
3.4 INDEMNIFICATION BY THE MASTER TRUST AND TTI.
(a) The Master Trust and TTI will indemnify and hold harmless the
Trust, the Fund, LKCM and their respective trustees, officers and employees and
each other person who controls the Trust, the Fund or LKCM, as the case may be,
within the meaning of Section 15 of the 1933 Act (each a "Covered Person" and
collectively "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities and expenses (each a "Liability" and collectively the
"Liabilities") (including the reasonable costs of investigating and defending
against any claims therefor and any counsel fees incurred in connection
therewith), which
(i) arise out of or are based upon any of the Securities Laws,
any other statute or common law or are incurred in connection with or as a
result of any formal or informal administrative proceeding or investigation by
a regulatory agency, insofar as such Liabilities arise out of or are based upon
the ground or alleged ground that any direct or indirect omission or commission
by the Portfolio or TTI (either during the course of their daily activities or
in connection with the accuracy of their representations or their warranties in
this Agreement) caused or continues to cause the Fund to violate any federal or
state securities laws or regulations or any other applicable domestic or
foreign law or regulations or common law duties or obligations, but only to the
extent that such Liabilities do not arise out of and are not based upon an
omission or commission of the Trust, the Fund or LKCM (other than an imputed
act or omission based upon an act or omission of the Master Trust, the
Portfolio or TTI);
(ii) arise out of or are based upon an inaccurate calculation of
the Portfolio's net asset value (whether by the Portfolio or by any party
retained by the Portfolio for that purpose);
(iii) arise out of (A) any misstatement of a material fact or an
omission of a material fact in the Portfolio's N-1A (including amendments and
supplements thereto) required to be stated in order that the statements made
are not misleading, unless based upon information provided in writing by the
Trust, the Fund or LKCM, or included at the written request of the Portfolio or
TTI in advertising or sales literature used by the Fund, or (B) any
misstatement of a material fact or an omission of a material fact in
advertising or sales literature of any investor in the Portfolio, other than
the Fund, required to be stated in order that the statements made are not
misleading;
(iv) arise out of the Portfolio's having caused the Fund to fail
to qualify as a regulated investment company under the Code;
(v) result from the failure of any representation or warranty
made by the Master Trust or TTI to be accurate when made (or deemed to be
repeated) or the failure of the Master Trust, the Portfolio or TTI to perform
any covenant contained herein or to otherwise comply with the terms of this
Agreement;
(vi) arise out of any unlawful or negligent act by the Master
Trust, the Portfolio, TTI or any director, trustee, officer, employee or agent
thereof;
(vii) arise out of any claim that the systems, methodologies, or
technology used in connection with operating the Portfolio, including the
technologies associated with maintaining the master-feeder structure of the
Portfolio, violates any license or infringes upon any patent or trademark; or
(viii) result from any liability of the Portfolio to any
investor in the Portfolio (or shareholder thereof), other than the Fund (and
its shareholders);
provided, however, that in no case shall a Portfolio or TTI be liable with
respect to any claim made against any such Covered Person unless such Covered
Person shall have notified the Portfolio and TTI in writing of the nature of
the claim within a reasonable time after the summons, other first legal process
or formal or informal initiation of a regulatory investigation or proceeding
shall have been served upon or provided to a Covered Person or any federal,
state or local tax deficiency has come to the attention of the Fund or a
Covered Person. Failure to notify the Portfolio and TTI of such claim shall not
relieve it from any liability that it may have to any Covered Person otherwise
than on account of the indemnification contained in this Section.
(b) The Master Trust and TTI will be entitled to participate at its
own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but, if either elects to assume the
defense, such defense shall be conducted by counsel chosen by TTI with the
approval of LKCM, provided that such approval shall not be unreasonably
withheld or delayed. In the event the Master Trust and TTI elect to assume the
defense of any such suit and retain such counsel, each Covered Person and any
other defendant or defendants may retain additional counsel, but shall bear the
fees and expenses of such counsel unless (A) the Master Trust and TTI shall
have specifically authorized the retaining of such counsel or (B) the parties
to such suit include any Covered Person and the Master Trust or TTI, and any
such Covered Person has been advised by counsel that one or more legal defenses
may be available to it that may not be available to the Master Trust or TTI, in
which case the Master Trust or TTI shall not be entitled to assume the defense
of such suit notwithstanding their obligation to bear the fees and expenses of
such counsel. The Master Trust and TTI shall not be liable to indemnify any
Covered Person for any settlement of any claim effected without their written
consent, which consent shall not be unreasonably withheld or delayed, provided
that such consent does not include any admission of wrongdoing by, or
restrictions on the future activities of, the Master Trust or TTI. The
indemnities set forth in paragraph (a) will be in addition to any liability
that the Master Trust and TTI might otherwise have to a Covered Person.
(c) It shall not be a condition to the obligation of either the
Master Trust or TTI to provide any indemnity under this Section 3.4 in respect
of any Liability that any claim or demand shall have been made, or any
proceeding commenced or completed, against the other of such parties for
indemnity in respect of such Liability.
3.5 IN-KIND REDEMPTIONS. If the Fund desires to redeem all of its
Interests in the Portfolio, unless otherwise agreed to by the parties hereto,
the Portfolio will effect such redemption "in kind" and in such a manner that
the securities delivered to the Fund's custodian for the account of the Fund
will mirror, as closely as practicable, the composition of the Portfolio
immediately prior to such redemption. Unless otherwise agreed to by the
relevant parties hereto, no other redemption of any Interests will be satisfied
by means of an "in kind" redemption except in compliance with Rule 18f-1 under
the 1940 Act, provided, however, that for purposes of determining compliance
with Rule 18f-1, each shareholder of the Fund redeeming shares of the Fund on a
particular day will be treated as a direct holder of Interests in the Portfolio
being redeemed that day.
3.6 EXPENSE LIMITATION. For so long as the Fund invests all of its
investable assets in the Portfolio, TTI shall reimburse the Fund on a quarterly
basis as follows: (a) if the expenses of the Fund, as calculated daily,
including the expenses of the Fund borne indirectly by the Fund as a result of
investing in the Portfolio, but excluding interest, taxes, brokerage
commissions, and litigation and other extraordinary expenses ("Fund Expenses"),
exceed 1.38% of the Fund's net asset value on an annualized basis, TTI shall
reimburse all Fund Expenses in excess of 1.29% of the Fund's net asset value on
an annualized basis; (b) if Fund Expenses exceed 1.20% but are equal to or less
than 1.38% of the Fund's net asset value on an annualized basis, TTI shall
reimburse one-half (50%) of Fund Expenses in excess of 1.20% of the Fund's net
asset value on an annualized basis; and (c) if Fund Expenses are equal to or
less than 1.20% of the Fund's net asset value on an annualized basis, TTI has
no reimbursement duty with respect to such time period pursuant to this Section
3.6.
3.7 EXPENSE LIMITATION PROCEDURES. The following procedures shall apply to
the reimbursement payments described in Section 3.6:
(a) Within 30 days after the end of the first three calendar
quarters of each fiscal year of the Fund, the Fund shall deliver to TTI a
reasonably detailed statement setting forth the calculation of (i) Fund
Expenses from the start of the current fiscal year (or, if later, the first day
on which the Fund invested all of its investable assets in the Portfolio)
through the end of such quarter (the "Statement Period"), and (ii) any payment
required from TTI pursuant to Section 3.6 for the Statement Period, after
taking into full account any prior reimbursements by TTI for the Statement
Period ("Reimbursement"). TTI shall pay the Reimbursement subject to Section
3.7(c) below within 20 days after its receipt of such quarterly statement.
(b) Within 10 days after the preparation of the audited financial
statements of the Fund for each fiscal year, the Fund shall, based upon such
financial statements, deliver to TTI a reasonably detailed annual statement
setting forth the calculation of (i) the expenses of the Fund for such fiscal
year, (ii) the amount of such expenses required to be reimbursed by TTI for
such fiscal year as set forth in this Section 3.6, and (iii) the aggregate
amount of any payments made by TTI for such fiscal year under Section 3.6. If
in any such annual statement the amount of (iii) exceeds the amount of (ii),
the Fund shall forthwith refund the excess to TTI. If in any such annual
statement the amount of (ii) exceeds the amount of (iii), TTI shall, subject to
Section 3.7(c) below, pay to the Fund an amount equal to the excess within 20
days of its receipt of the annual statement.
(c) If TTI objects in writing to any payment required by any annual
or quarterly statement under Sections 3.6 and 3.7 herein, the obligation of TTI
to make such payment shall be suspended until the objection has been resolved
as provided in Section 3.7(d) below.
(d) If TTI objects in writing to any payment required by any annual
or quarterly statement under Sections 3.6 and 3.7, the Fund and TTI shall
negotiate in good faith to resolve the objection. If the parties are unable to
resolve the objection, they shall submit the matter for resolution to a firm of
independent public accountants that are chosen by mutual consent of TTI and the
Fund. The decision of any such firm shall be conclusive between the parties,
and the expenses of the accountants shall be divided evenly between TTI and the
Fund.
(e) The Fund and LKCM shall, when and as TTI may reasonably request,
make available to TTI and its representatives (i) all books and records of the
Fund necessary or convenient to confirm the calculations in any annual or
quarterly statement under Sections 3.6 and 3.7, and (ii) the accounting
personnel of the Fund (whether employed by the Fund or its service providers)
for purposes of discussing any annual or quarterly statement under Sections 3.6
and 3.7. No access to any information granted under this Section 3.7(e) is
intended to constitute a waiver of any privilege relating to such information.
(f) If the Fund invests all of its investable assets in the Portfolio
for less than an entire fiscal year, any reimbursement by TTI under Sections
3.6 or 3.7 shall be calculated on a pro rata basis according to the number of
days during such fiscal year in which the Fund invested all of its investable
assets in the Portfolio.
(g) The following expenses of the Fund shall be excluded from Fund
Expenses for all purposes of Sections 3.6 and 3.7: (i) expenses representing
any increase in the rate of compensation paid by the Fund to LKCM (or its
affiliates) under its management agreement or otherwise; (ii) any expenses
representing an increase in the rate of compensation of any service provider
engaged by the Fund other than LKCM or its affiliates from the level prevailing
for such service provider or its predecessor at the date of this Agreement in
excess of any increases in such service provider's standard rates charged to
other customers of the service provider for comparable services; (iii) any
expenses in excess of $10,000 in the aggregate for any fiscal year that are of
a type not borne by the Fund in its fiscal year ended December 31, 1999; (iv)
any expenses of accountants to be borne by the Fund as provided in Section
3.7(d); and (v) expenses reimbursed by TTI under other provisions of this
Agreement.
(h) No interest shall accrue on any payments under Sections 3.6 and
3.7.
3.8 EXISTING INVESTORS IN THE FUND. TTI will not solicit any investor in
the Fund at the date of this Agreement ("Fund Investor") to invest instead
directly in the Portfolio or in another feeder fund that invests in the
Portfolio, provided however, this Section shall not apply to:
(a) solicitations of (i) Dimension Capital for the account of
Transcafe SA of Las Margaritas Guatemala or other clients; (ii) Jesuit School;
and/or (iii) Dallas Symphony Orchestra investing directly or through Northern
Trust Global Advisers;
(b) any bona fide unsolicited subscriptions for shares or requests
for prospectuses or other marketing materials;
(c) any general advertising, such as newspaper and magazine
advertisements, or any general solicitations, whether through a company
sponsored benefit plan or otherwise, not knowingly mailed to Fund Investors.
3.9 REASONABLE ACTIONS. Each party covenants that it will, subject to the
provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement and to carry out its intent and
purpose.
IV
ADDITIONAL AGREEMENTS
4.1 NOTIFICATION OF CERTAIN MATTERS. Each party will give prompt notice to
the other parties upon learning of (a) the occurrence or non-occurrence of any
event that would be likely to cause any representation or warranty by such
notifying party contained in this Agreement to be untrue or inaccurate, and (b)
any material failure of such notifying party or any trustee, director, officer,
employee or agent thereof to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such person hereunder; provided,
however, that the delivery of any notice pursuant to this Section 4.1 shall not
limit or otherwise affect the remedies available, hereunder or otherwise, to
the party receiving such notice.
4.2 ACCESS TO INFORMATION. The Trust and the Master Trust shall afford
each other access at all reasonable times to such party's officers, employees,
agents and offices and to all its relevant books and records and shall furnish
each other party with all relevant financial and other data and information as
reasonably requested; provided, however, that nothing contained herein shall
obligate the Trust or the Master Trust to provide access to the books and
records relating to any other series of the Trust and the Master Trust other
than the Fund and Portfolio, respectively, nor shall anything contained herein
obligate the Fund to furnish the Portfolio with the Fund's shareholder list,
except as may be required to comply with applicable law or any provision of
this Agreement.
4.3 CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all non-public data and information obtained from another party
(unless such information is or becomes readily ascertainable from public
information or trade sources) and shall ensure that its officers, employees and
authorized representatives do not disclose such information to others without
the prior written consent of the party from whom it was obtained, except if
disclosure is required by the SEC, any other regulatory body or the respective
auditors of the Fund and the Portfolio, or in the opinion of counsel such
disclosure is required by law, and then only with as much prior written notice
to the other party as is practical under the circumstances.
4.4 PUBLIC ANNOUNCEMENTS. No party shall issue any press release or
otherwise make any public statements with respect to the matters covered by
this Agreement without the prior consent of the other parties hereto, which
consent shall not be unreasonably withheld; provided, however, that consent
shall not be required if, in the opinion of counsel, such disclosure is
required by law and the party making such disclosure shall provide the other
parties hereto with as much prior written notice of such disclosure as is
practical under the circumstances.
V
TERMINATION AND AMENDMENT
5.1 TERMINATION. This Agreement may be terminated (a) by the Trust or LKCM
upon not less than 30 days prior written notice to the Master Trust and TTI,
(b) by the Master Trust or TTI on not less than 120 days' prior written notice
to the Trust and LKCM, and (c) at any time immediately upon written notice to
the other parties in the event that formal proceedings are instituted against
another party to this Agreement by the SEC or any other regulatory body,
provided that the terminating party has a reasonable belief that the
institution of the proceeding is not without foundation and will have a
material adverse impact on the terminating party. The indemnification
obligations in Article III and the confidentiality provisions in Section 4.3
shall survive the termination of this Agreement. Nothing contained in this
Article V shall be construed to prevent the Fund, on any Business Day, from
redeeming any or all of its shares in the Portfolio and investing such
redemption proceeds elsewhere or placing them directly under the investment
discretion of another adviser, including LKCM.
5.2 AMENDMENT. This Agreement may be amended, modified or supplemented at
any time in such manner as may be mutually agreed upon in writing by the
parties.
VI
GENERAL PROVISIONS
6.1 NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
when actually received in person or by facsimile, or three days after being
sent by certified or registered United States mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Trust Xxxxxx Xxxx Capital Management Corp., Inc.
or LKCM: 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxx
Fax: (000) 000-0000
If to the Master Trust: TT International USA Master Trust
c/o Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxx
TT International Investment Management
0 Xxxxxx Xxxx
Xxxxxx, Xxxxxxx XX0X ODP
Fax: 00-00-0000-0000
If to TTI: TT International Investment Management
Attention: Xxxxxx Xxxxxxx
0 Xxxxxx Xxxx
Xxxxxx, Xxxxxxx XX0X ODP
Fax: 00-00-0000-0000
Any party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to all other parties to the
Agreement.
6.2 HEADINGS. The headings and captions in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.3 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement nevertheless
shall remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
6.4 ENTIRE AGREEMENT. This Agreement and the agreements and other
documents delivered pursuant hereto set forth the entire understanding among
the parties concerning the subject matter of this Agreement and incorporate or
supersede all prior understandings.
6.5 SUCCESSORS AND ASSIGNMENTS. Each and all of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and, except as otherwise specifically provided in this Agreement, their
respective successors and assigns. Notwithstanding the foregoing, no party
shall make any assignment of this Agreement or any rights or obligations
hereunder without the written consent of all other parties. As used herein, the
term "assignment" shall have the meaning ascribed thereto in the 1940 Act.
6.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
choice of law or conflicts of law provisions thereof. Each party consents to
the exclusive jurisdiction of the courts of Delaware.
6.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing one or more
counterparts.
6.8 LIMITATIONS OF LIABILITY. Each party expressly acknowledges the
provisions in the Declarations of Trust of the Trust and the Master Trust
limiting the personal liability of shareholders, officers and trustees of the
Trust and the Master Trust. The parties hereto also agree and acknowledge that
(a) the Trust has entered into this Agreement solely on behalf of the Fund, and
no other series of the Trust shall have any obligation hereunder with respect
to any liability of the Trust arising hereunder; (b) the Master Trust has
entered into this Agreement solely on behalf of the Portfolio, and no other
series of the Master Trust shall have any obligation hereunder with respect to
any liability of the Portfolio arising hereunder; and (c) no series or feeder
participant of the Master Trust shall be liable to any other series or feeder
participant of the Master Trust. In the event that Mr. J. Xxxxxx Xxxx, Xx.
becomes a Trustee of the Master Trust, the Master Trust, the Portfolio or TTI
shall have no liability under this Agreement on the account of any action or
omission to act by Mr. J. Xxxxxx Xxxx, Xx. in his capacity as a member of the
Board of the Master Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the
date first written above.
LKCM FUNDS, on behalf of its series, the LKCM International Fund
J. Xxxxxx Xxxx, Xx.
J. Xxxxxx Xxxx, Xx.
President
TT INTERNATIONAL U.S.A. MASTER TRUST, on behalf of its series,
the TT EAFE Portfolio
Xxxxx X.X. Xxxxxxx
Xxxxx X.X. Xxxxxxx
President
XXXXXX XXXX CAPITAL MANAGEMENT CORPORATION
J. Xxxxxx Xxxx, Xx.
J. Xxxxxx Xxxx, Xx.
President
TT INTERNATIONAL INVESTMENT MANAGEMENT
Xxxxx X.X. Xxxxxxx
Xxxxx X.X. Xxxxxxx
Managing Partner
