EXHIBIT 99.(H)(5)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT (the "Agreement") is made as of October
19, 2001 by and between Xxxxxxxx Inc. ("Xxxxxxxx") and Hotchkis and Wiley Funds,
a Delaware business trust (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company desires to retain Xxxxxxxx to render certain
administrative services for the investment portfolios of the Company listed on
Schedule I (individually, a "Fund" and collectively, the "Funds"), and Xxxxxxxx
is willing to render such services.
WITNESSETH:
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints Xxxxxxxx to act as
Administrator of the Funds and Xxxxxxxx hereby accepts such appointment and
agrees to render such services and duties set forth in Paragraph 3, for the
compensation and on the terms herein provided. Absent written notification to
the contrary by either the Company or Xxxxxxxx, each new investment portfolio
established in the future by the Company shall automatically become a "Fund" for
all purposes hereunder as if listed on Schedule I.
2. Delivery of Documents. The Company has furnished Xxxxxxxx with copies
properly certified or authenticated of each of the following:
(a) The Company's most recent Amendment to its Registration
Statement on Form N-IA (the "Registration Statement") under the Securities Act
of 1933, as amended, and under the 1940 Act as filed with the Securities and
Exchange Commission (the "SEC") as relates to the Funds' shares (the "Shares");
(b) The Funds' most recent Prospectus(es); and
(c) The Funds' most recent Statement(s) of Additional
Information.
The Company will furnish Xxxxxxxx from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, the Company will provide Xxxxxxxx with any other
documents that Xxxxxxxx may reasonably request and will notify Xxxxxxxx as soon
as possible of any matter materially affecting Xxxxxxxx' performance of its
services under this Agreement.
3. Duties as Administrator. Subject to the supervision and direction of
the Board of Trustees of the Company, Xxxxxxxx, as Administrator, will assist in
supervising various aspects of the Company's administrative operations and
undertakes to perform the following specific services from and after the
effective date of this Agreement:
(a) Maintaining office facilities (which may be in the offices of
Xxxxxxxx or a corporate affiliate);
(b) Furnishing statistical and research data, data processing
services, clerical services, and internal executive and administrative services
and stationery and office supplies in connection with the foregoing;
(c) Furnishing corporate secretarial services, including
coordinating the preparation and distribution of materials for Board of
Trustees' meetings;
(d) Providing the services of certain persons who may be
appointed as officers of the Company by the Company's Board of Trustees;
(e) Coordinating the provision of legal advice and counsel to the
Company with respect to regulatory matters, including monitoring regulatory and
legislative developments which may affect the Company and assisting in the
strategic response to such developments, counseling and assisting the Company in
routine regulatory examinations or investigations of the Company, and working
closely with outside counsel to the Company in connection with any litigation in
which the Company is involved;
(f) Coordinating the preparation of reports to the Company's
shareholders of record and the SEC including, but not necessarily limited to,
Annual Reports and Semi-Annual Reports to Shareholders and on Form N-SAR and
Notices pursuant to Rule 24f-2 under the 1940 Act;
(g) Coordinating the provision of insurance coverage for Director
and Officer Liability and Fidelity Bond coverage. Xxxxxxxx will monitor the
mandatory fidelity bond requirements pursuant to Rule 17g-1.
(h) Coordinating with the Company and its Distributor regarding
the jurisdictions in which notice filings relating to the Shares of the Funds
shall be made and, in connection therewith, being responsible for these filings
and the maintenance of such filings for sale of Shares under the securities laws
of any state. Payment of share registration fees and any fees for any Fund as a
dealer or broker shall be made or reimbursed by the Company or that Fund,
respectively;
(i) Preparing and filing on a timely basis various reports,
registration statements and post-effective amendments thereto and other
documents required by federal, state and other applicable laws and regulations
other than those filed or required to be filed by the Adviser, Transfer Agent or
Custodian, as needed;
(j) Preparing and filing on a timely basis the Company's Rule
24f-2 Notice;
(k) Monitoring the development and implementation of compliance
procedures for the Company which will include, among other matters, monitoring
each Fund's status as a regulated investment company under Sub-Chapter M of the
Internal Revenue Code of 1986, as amended, and compliance by each Fund with its
investment objective, policies, restrictions, tax matters and applicable laws
and regulations; and
(l) Generally assisting in all aspects of the Company's
operations.
In performing all services under this Agreement, Xxxxxxxx shall (a)
act in conformity with the Company's Agreement and Declaration of Trust and
By-Laws; the 1940 Act, the Investment Advisers Act of 1940 and other applicable
laws, as the same may be amended from time to time; and the Company's
Registration Statement, as such Registration Statement may be amended from time
to time, (b) consult and coordinate with legal counsel for the Company, as
necessary and appropriate, and (c) advise and report to the Company and its
legal counsel, as necessary or appropriate, with respect to any compliance or
other matters that come to its attention.
In connection with its duties under this Paragraph 3, Xxxxxxxx may,
at its own expense, enter into subadministration agreements with other service
providers, provided that each such service provider agrees with Xxxxxxxx to
comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder. Xxxxxxxx will provide the Company with a copy of each
subadministration agreement it executes relating to the Company. Xxxxxxxx will
be liable for acts or omissions of any such subadministrators under the
standards of care provided herein under Paragraph 5.
In addition to the services specifically identified above, Xxxxxxxx
shall coordinate the provision of services to the Company by other service
providers, as needed.
4. Compensation. Xxxxxxxx shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
Paragraph 4(b) below.
(a) Xxxxxxxx will from time to time employ or associate with
itself such person or persons as Xxxxxxxx may believe to be particularly suited
to assist it in performing services under this Agreement. Such person or persons
may be officers and employees who are employed by both Xxxxxxxx and the Company.
The compensation of such person or persons shall be paid by Xxxxxxxx and no
obligation shall be incurred on behalf of the Company in such respect.
(b) Xxxxxxxx shall not be required to pay any of the following
expenses incurred by the Company: investment advisory expenses, prospectuses,
reports and notices; interest on borrowed money; brokerage fees and commissions;
taxes and fees payable to Federal, state and other governmental agencies; fees
of Trustees of the Company who are not affiliated with Xxxxxxxx; outside
auditing expenses; outside legal expenses; fees of any other service provider to
the Company (other than a subadministrator engaged pursuant to Paragraph 3) or
other expenses not specified in this Section 4 which may be properly payable by
the Company and which are approved by the Company's President or Treasurer.
(c) For the services to be rendered, the facilities to be
furnished and the payments to be made by Xxxxxxxx, as provided for in this
Agreement, Xxxxxxxx shall be compensated by the Company at the annual rate of
.10% of the aggregate net asset value of the shares of the Funds up to $200
million, .09% of the aggregate net asset value of the shares of the Funds over
$200 million up to $700 million and .08% of the aggregate net asset value of the
shares of the Funds over $700 million, computed daily and payable monthly. Fees
in respect of each calendar month shall be paid on or before the 30th day of the
following month.
5. Limitation of Liabilities; Indemnification.
(a) Xxxxxxxx shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Company in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from Xxxxxxxx' willful misfeasance, bad faith or gross negligence in
the performance of such obligations and duties, or by reason of its reckless
disregard thereof. Any person, even though also an officer, Director, partner,
employee or agent of Xxxxxxxx, shall be deemed, when rendering services to the
Company or acting on any business of the Company (other than services or
business in connection with Xxxxxxxx' duties as Administrator hereunder), to be
acting solely for the Company and not as an officer, Director, partner, employee
or agent or one under the control or discretion of Xxxxxxxx even though paid by
it.
(b) The Company, on behalf of each Fund, will indemnify Xxxxxxxx
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit relating to the particular Fund
and not resulting from the willful misfeasance, bad faith or gross negligence of
Xxxxxxxx in the performance of such obligations and duties or by reason of its
reckless disregard thereof. Xxxxxxxx will not confess any claim or settle or
make any compromise in any instance in which the Company will be asked to
provide indemnification, except with the Company's prior written consent. Any
amounts payable by the Company under this Section 5(b) shall be satisfied only
against the assets of the Fund involved in the claim, demand, action or suit and
not against the assets of any other Fund of the Company.
6. Termination of Agreement.
(a) This Agreement shall become effective October 19, 2001 and
shall remain in full force and effect unless terminated pursuant to the
provisions of subsection (b) of this Section 6.
(b) This Agreement may be terminated at any time without payment
of any penalty, upon 60 days' written notice, by the Board of Trustees of the
Company or by Xxxxxxxx. Xxxxxxxx will cooperate with and assist the Company, its
agents and any successor administrator or administrators in the
substitution/conversion process.
(c) Section 8 shall survive this Agreement's termination.
7. Amendments. No provision of this Agreement may be changed, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, discharge or termination is sought.
8. Confidentiality. All books, records, information and data pertaining
to the business of the Company, its prior, present or potential shareholders and
the Adviser's customers that are exchanged or received pursuant to the
performance of Xxxxxxxx' duties under this Agreement shall remain confidential
and shall not be disclosed to any other person, except as specifically
authorized by the Company or as may be required by law, and shall not be used
for any purpose other than performance of its responsibilities and duties
hereunder.
9. Service to Other Companies or Accounts.
The Company acknowledges that Xxxxxxxx now acts, will continue to
act and may act in the future as investment adviser to fiduciary and other
managed accounts, and as investment adviser, sub-investment adviser and/or
administrator to other investment companies or series of investment companies,
and the Company has no objection to Xxxxxxxx' so acting. The Company further
acknowledges that the persons employed by Xxxxxxxx to assist in the performance
of Xxxxxxxx' duties under this Agreement may not devote their full time to such
service and nothing contained in this Agreement shall be deemed to limit or
restrict the right of Xxxxxxxx or any affiliate of Xxxxxxxx to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
10. Miscellaneous
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Company or Xxxxxxxx shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Company:
Hotchkis and Wiley Funds
000 X. Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxx Xxxxx
To Xxxxxxxx:
Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other party.
(c) This Agreement shall be construed in accordance with the laws
of the State of Arkansas.
(d) This Agreement may be executed in counterparts each of which
shall be deemed to be an original and which collectively shall be deemed to
constitute only on instrument.
(e) The captions of 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.
(f) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters described herein.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed and delivered by their duly authorized officers
as of the date first written above.
XXXXXXXX INC.
By: /s/ Xxxxxxx x. Xxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
HOTCHKIS AND WILEY FUNDS
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
SCHEDULE I
1. Small Cap Value Fund
2. Mid-Cap Value Fund
3. Large Cap Value Fund
4. Equity Fund for Insurance Companies
