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EXHIBIT 99.(H)(3)
TRANSFER AGENCY, DIVIDEND DISBURSING AGENCY
AND SHAREHOLDER SERVICING AGENCY AGREEMENT
THIS AGREEMENT made as of the 10th day of July, 2000 by and between
Hotchkis and Wiley Funds, a Massachusetts business trust (the "Fund"), on behalf
of itself and each of its series listed on Exhibit A, and Financial Data
Services, Inc. ("FDS"), a Florida corporation.
WITNESSETH:
WHEREAS, the Fund wishes to appoint FDS to be the Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent upon, and subject to, the terms
and provisions of this Agreement, and FDS is desirous of accepting such
appointment upon, and subject to, such terms and provisions:
NOW THEREFORE, in consideration of mutual covenants contained in this
Agreement, the Fund and FDS agree as follows:
1. APPOINTMENT OF FDS AS TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND
SHAREHOLDER SERVICING AGENT.
a. The Fund hereby appoints FDS to act as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent for the Fund upon, and subject
to, the terms and provisions of this Agreement.
b. FDS hereby accepts the appointment as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent for the Fund, and agrees to act
as such upon, and subject to, the terms and provisions of this Agreement.
2. DEFINITIONS.
a. In this Agreement:
(I) The term "Act" means the Investment Company Act of 1940 as
amended from time to time and any rule or regulation thereunder;
(II) The term "Account" means any account of a Shareholder, or, if
the shares are held in an account in the name of a Broker-Dealer, as defined
below, for the benefit of an identified person, such account, including a Plan
Account, any account under a plan (by whatever name referred to in the
Prospectus) pursuant to the Self-Employed Individuals Retirement Act of 1962
("Xxxxx Act Plan") and any account under any plan (by whatever name referred to
in the Prospectus) pursuant to Section 401(k) of the Internal Revenue Code
("Fund Master Plan");
(III) The term "application" means an application made by a
Shareholder or prospective Shareholder respecting the opening of an Account;
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(IV) The term "Fund Distributor" means Mercury Funds Distributor,
a division of Princeton Funds Distributor, Inc., a Delaware corporation;
(V) The term "Broker-Dealer" means a registered broker-dealer
that sells shares of the Fund pursuant to a selected dealer's agreement with the
Fund Distributor;
(VI) The term "Officer's Instruction" means an instruction in
writing given on behalf of the Fund to FDS, and signed on behalf of the Fund by
the President, any Vice President, the Secretary or the Treasurer of the Fund;
(VII) The term "Prospectus" means the Prospectus and the Statement
of Additional Information of the Fund as from time to time in effect;
(VIII) The term "Shares" means shares of beneficial interest of the
Fund, irrespective of class or series;
(IX) The term "Shareholder" means the holder of record of Shares;
(X) The term "Plan Account" means an account opened by a
Shareholder or prospective Shareholder in respect to an open account, monthly
payment or withdrawal plan (in each case by whatever name referred to in the
Prospectus), and may also include an account relating to any other plan if and
when provision is made for such plan in the Prospectus.
3. DUTIES OF FDS AS TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND
SHAREHOLDER SERVICING AGENT.
a. Subject to the succeeding provisions of the Agreement, FDS hereby
agrees to perform the following functions as Transfer Agent, Dividend Disbursing
Agent and Shareholder Servicing Agent for the Fund;
(I) Issuing, transferring and redeeming Shares;
(II) Opening, maintaining, servicing and closing Accounts;
(III) Acting as agent for the Fund Shareholders and/or customers of
a Broker-Dealer in connection with Plan Accounts, upon the terms and subject to
the conditions contained in the Prospectus and application relating to the
specific Plan Account;
(IV) Acting as agent of the Fund and/or a Broker-Dealer,
maintaining such records as may permit the imposition of such contingent
deferred sales charges as may be described in the Prospectus, including such
reports as may be reasonably requested by the Fund with respect to such Shares
as may be subject to a contingent deferred sales charge;
(V) Upon the redemption of Shares subject to such a contingent
deferred sales charge, calculating and deducting from the redemption proceeds
thereof the amount of such charge in the manner set forth in the Prospectus. FDS
shall pay, on behalf of the Fund Distributor, to a Broker-Dealer such deducted
contingent deferred sales charges imposed upon all Shares maintained in the name
of that Broker-Dealer, or maintained in the name of an account
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identified as a customer account of that Broker-Dealer. Sales charges imposed
upon any other Shares shall be paid by FDS to the Fund Distributor.
(VI) Exchanging the investment of a Shareholder into, or from the
shares of other open-end investment companies or other series portfolios of the
Fund if and to the extent permitted by the Prospectus at the direction of such
Shareholder.
(VII) Processing redemptions;
(VIII) Examining and approving legal transfers;
(IX) Furnishing such confirmations of transactions relating to
their Shares as required by applicable law;
(X) Acting as agent for the Fund with respect to furnishing each
Shareholder such appropriate periodic statements relating to Accounts, together
with additional enclosures, including appropriate income tax information and
income tax forms duly completed, as required by applicable law, as well as
furnishing such information to each Broker-Dealer to enable the Broker-Dealer to
provide such information to its customers;
(XI) Acting as agent for the Fund with respect to mailing annual,
semi-annual and quarterly reports prepared by or on behalf of the Fund, and
mailing new Prospectuses upon their issue to each Shareholder as required by
applicable law, as well as causing such materials to be mailed to each
Broker-Dealer to enable the Broker-Dealer to deliver such materials to its
customers;
(XII) Furnishing such periodic statements of transactions effected
by FDS, reconciliations, balances and summaries as the Fund may reasonably
request;
(XIII) Maintaining such books and records relating to transactions
effected by FDS as are required by the Act, or by any other applicable provision
of law, rule or regulation, to be maintained by the Fund or its transfer agent
with respect to such transactions, and preserving, or causing to be preserved
any such books and records for such periods as may be required by any such law,
rule or regulation and as may be agreed upon from time to time between FDS and
the Fund. In addition, FDS agrees to maintain and preserve master files and
historical computer tapes on a daily basis in multiple separate locations a
sufficient distance apart to ensure preservation of at least one copy of such
information;
(XIV) Withholding taxes on non-resident alien Accounts, preparing
and filing U.S. Treasury Department Form 1099 and other appropriate forms as
required by applicable law with respect to dividends and distributions; and
(XV) Reinvesting dividends for full and fractional shares and
disbursing cash dividends, as applicable pursuant to instructions received from
the Shareholder at the time an Account is established.
b. FDS agrees to act as proxy agent in connection with the holding of
annual, if any, and special meetings of Shareholders, mailing such notices,
proxies and proxy statements in
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connection with the holding of such meetings as may be required by applicable
law, receiving and tabulating votes cast by proxy and communicating to the Fund
the results of such tabulation accompanied by appropriate certificates, and
preparing and furnishing to the Fund certified lists of Shareholders as of such
date, in such form and containing such information as may be required by the
Fund.
c. FDS agrees to deal with, and answer in a timely manner, all
correspondence and inquiries relating to the functions of FDS under this
Agreement with respect to Accounts.
d. FDS agrees to furnish to the Fund such information and at such
intervals as is necessary for the Fund to comply with the registration and/or
the reporting requirements (including applicable escheat laws) of the Securities
and Exchange Commission, Blue Sky authorities or other governmental authorities.
e. FDS agrees to provide to the Fund such information as may reasonably
be required to enable the Fund to reconcile the number of outstanding Shares
between FDS's records and the account books of the Fund.
f. Notwithstanding anything in the foregoing provisions of this
paragraph, FDS agrees to perform its functions thereunder subject to such
modification (whether in respect of particular cases or in any particular class
of cases) as may from time to time be agreed in a writing signed by both
parties.
4. COMPENSATION.
The Fund agrees to pay FDS the fees and charges, as well as FDS's
out of pocket costs, for services described in this Agreement as set forth in
the Schedule of Fees attached hereto.
5. RIGHT OF INSPECTION.
FDS agrees that it will in a timely manner make available to, and
permit, any officer, accountant, attorney or authorized agent of the Fund to
examine and make transcripts and copies (including photocopies and computer or
other electronic information storage media and print-outs) of any and all of its
books and records which relate to any transaction or function performed by FDS
under or pursuant to this Agreement.
6. CONFIDENTIAL RELATIONSHIP.
FDS agrees that it will, on behalf of itself and its officers and
employees, treat all transactions contemplated by this Agreement, and all
information germane thereto, as confidential and not to be disclosed to any
person (other than the Shareholder concerned, or the Fund, or as may be
disclosed in the examination of any books or records by any person lawfully
entitled to examine the same) except as may be authorized by the Fund by way of
an Officer's Instruction.
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7. INDEMNIFICATION.
The Fund shall indemnify and hold FDS harmless from any loss, costs,
damage and reasonable expenses, including reasonable attorney's fees (provided
that such attorney is appointed with the Fund's consent, which consent shall not
be unreasonably withheld), incurred by it resulting from any claim, demand,
action, or suit in connection with the performance of its duties hereunder,
provided that this indemnification shall not apply to actions or omissions of
FDS in cases of willful misconduct, failure to act in good faith or negligence
by FDS, its officers, employees or agents, and further provided that prior to
confessing any claim against it which may be subject to this indemnification,
FDS shall give the Fund reasonable opportunity to defend against said claim in
its own name or in the name of FDS. An action taken by FDS upon any Officer's
Instruction reasonably believed by it to have been properly executed shall not
constitute willful misconduct, failure to act in good faith or negligence under
this Agreement.
FDS shall indemnify and hold the Fund harmless from any loss, costs,
damage and reasonable expenses, including reasonable attorney's fees (provided
that such attorney is appointed with the Fund's consent, which consent shall not
be unreasonably withheld), incurred by it resulting from any claim, demand,
action, or suit by any person in connection with any action taken or omitted to
be taken by FDS as a result of FDS's refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or willful misconduct.
8. REGARDING FDS.
a. FDS hereby agrees to hire, purchase, develop and maintain such
dedicated personnel, facilities, equipment, software, resources and capabilities
as both parties may mutually determine to be reasonably necessary for the
satisfactory performance of the duties and responsibilities of FDS. FDS warrants
and represents that its officers and supervisory personnel charged with carrying
out its functions as Transfer Agent, Dividend Disbursing Agent and Shareholder
Servicing Agent for the Fund possess the special skill and technical knowledge
appropriate for that purpose. FDS shall at all times exercise due care and
diligence in the performance of its functions as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent for the Fund. FDS agrees that,
in determining whether it has exercised due care and diligence, its conduct
shall be measured by the standard applicable to persons possessing such special
skill and technical knowledge.
b. FDS warrants and represents that it is duly authorized and permitted
to act as Transfer Agent, Dividend Disbursing Agent and Shareholder Servicing
Agent under all applicable laws and that it will immediately notify the Fund of
any revocation of such authority or permission or of the commencement of any
proceeding or other action which may lead to such revocation.
9. TERMINATION.
a. This Agreement shall become effective as of the date first above
written and shall remain in force for two years thereafter and shall thereafter
continue from year to year. This Agreement may be terminated by the Fund or FDS
(without penalty to the Fund or FDS) provided that the terminating party gives
the other party written notice of such termination at least sixty (60) days in
advance, except that the Fund may terminate this Agreement immediately
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upon written notice to FDS if the authority or permission of FDS to act as
Transfer Agent, Dividend Disbursing Agent and Shareholder Servicing Agent has
been revoked or if any proceeding or other action which the Fund reasonably
believes will lead to such revocation has been commenced.
b. Upon termination of this Agreement, FDS shall deliver all
Shareholder records, books, stock ledgers, instruments and other documents
(including computerized or other electronically stored information) made or
accumulated in the performance of its duties as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent for the Fund along with a
certified locator document clearly indicating the complete contents therein, to
such successor as may be specified in a notice of termination or Officer's
Instruction; and the Fund assumes all responsibility for failure thereafter to
produce any paper, record or documents so delivered and identified in the
locator document, if and when required to be produced.
10. AMENDMENT.
Except to the extent that the performance by FDS or its functions
under this Agreement may from time to time be modified by an Officer's
Instruction, this Agreement may be amended or modified only by further written
agreement between the parties.
11. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New
York.
12. Agreement Binding Only on Fund Property.
FDS understands that the obligations of this Agreement are not
binding upon any Shareholder of the Fund personally, but bind only the Fund's
property. FDS represents that it has notice of the provisions of the Fund's
Declaration of Trust disclaiming Shareholder liability for acts or obligations
of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective duly authorized officers and their respective
corporate seals hereunto duly affixed and attested, as of the day and year above
written.
Hotchkis and Wiley Funds
By: /s/
Xxxxx X. Xxxxxx
President
Financial Data Services, Inc.
By: /s/
Xxxxxx Xxxxxxxxxxx
Vice President
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EXHIBIT A
INDIVIDUAL SERIES OF HOTCHKIS AND WILEY FUNDS:
Equity Income Fund
Mid-Cap Fund
Small Cap Fund
International Fund
Global Equity Fund
Balanced Fund
Total Return Bond Fund
Low Duration Fund
Short-Term Investment Fund
Equity Fund for Insurance Companies
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SCHEDULE OF FEES
(July 10, 2000)
HOTCHKIS AND WILEY FUNDS (EXCEPT EQUITY FUND FOR INSURANCE COMPANIES)
--------------------- ------------------ ------------------ ------------------ ------------------
Charge per
Investor Class Distributor Class Closed Accounts transaction
--------------------- ------------------ ------------------ ------------------ ------------------
Direct $20.00 $20.00 -0- -0-
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Fund/SERV Network $16.00 $16.00 -0- -0-
Level 3
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EQUITY FUND FOR INSURANCE COMPANIES. The annual fee for the Equity Fund for
Insurance Companies will be $1,000 per year.
NOTE 1. There will be an annual fee for each intermediary (except MLPF&S and
GES) of $5,000 and $10,000, respectively, for omnibus accounts trading through
Fund/SERV and omnibus accounts trading via fax or non-FDS systems. This payment
compensates the transfer agent for NSCC fees, balancing and manual work involved
with intermediaries who trade on a next day basis. An intermediary is defined as
any omnibus account, except MLPF&S and GES, for which there is a
revenue-sharing/sub-transfer agency agreement.
NOTE 2. The Funds will pay out-of-pocket costs for: postage,
envelopes/stationary, record storage and retrieval, telephone (local and long
distance), pre-authorized checks, returned check fees/charges and other similar
fees/charges, handling costs (ADP or other similar vendor), Fed wire charges
(excluding wires to/from Fund custody accounts), forms, and any other costs as
agreed in writing by the parties.
