EXHIBIT 99.(H)(3)
TRANSFER AGENT SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 19th day of October,
2001, by and between Hotchkis and Wiley Funds, a Delaware business trust (the
"Trust") and Firstar Mutual Fund Services, LLC, a Wisconsin limited liability
company ("FMFS").
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and is authorized to issue shares of beneficial interest in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets;
WHEREAS, FMFS is, among other things, in the business of administering
transfer and dividend disbursing agent functions for the benefit of its
customers; and
WHEREAS, the Trust desires to retain FMFS to provide transfer and
dividend disbursing agent services to each series of the Trust listed on Exhibit
A hereto (as amended from time to time) (each a "Fund", collectively the
"Funds").
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
do hereby agree as follows:
1. APPOINTMENT OF FMFS AS TRANSFER AGENT
The Trust hereby appoints FMFS as transfer agent of the Trust
on the terms and conditions set forth in this Agreement, and FMFS
hereby accepts such appointment and agrees to perform the services and
duties set forth in this Agreement.
2. SERVICES AND DUTIES OF FMFS
FMFS shall perform all of the customary services of a transfer
agent and dividend disbursing agent for the Funds, and as relevant,
agent in connection with accumulation, open account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program) and agent for any broker-dealer selling Fund
shares, including but not limited to:
A. Receive orders for the purchase of shares.
B. Process purchase orders with prompt delivery, where appropriate, of
payment and supporting documentation to the Trust's custodian, and
issue the appropriate number of uncertificated shares with such
uncertificated shares being held in the appropriate shareholder
account.
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C. Arrange for issuance of shares obtained through transfers of funds
from Fund shareholders' accounts at financial institutions and
arrange for the exchange of shares for shares of other eligible
investment companies, when permitted by the Fund's current
prospectus ("Prospectus").
D. Process redemption requests received in good order and, where
relevant, deliver appropriate documentation to the Trust's
custodian.
E. Maintain records sufficient to permit the imposition of contingent
deferred sales charges described in the prospectus and pay on behalf
of the Trust's Distributor to the broker-dealer the applicable CDSC.
F. Pay monies upon receipt from the Trust's custodian, where relevant,
in accordance with the instructions of redeeming shareholders.
G. Process transfers of shares in accordance with the shareholder's
instructions.
H. Process exchanges between Funds and conversions of class B to class
A shares of Funds.
I. Prepare and transmit payments for dividends and distributions
declared by the Trust with respect to the Fund, after deducting any
amount required to be withheld by any applicable laws, rules and
regulations and in accordance with shareholder instructions.
J. Make changes to shareholder records, including, but not limited to,
address changes in plans (e.g., systematic withdrawal, automatic
investment, dividend reinvestment).
K. Record the issuance of shares of the Fund and maintain, pursuant to
Rule 17Ad-10(e) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), a record of the total number
of shares of the Fund which are authorized, issued and outstanding.
L. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies.
M. Mail shareholder reports and Prospectuses to current shareholders.
N. Prepare and file U.S. Treasury Department Forms 1099 and other
appropriate information returns required with respect to dividends
and distributions for all shareholders.
O. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders or
broker-dealers for all
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purchases, redemptions and other confirmable transactions as agreed
upon with the Trust.
P. Maintain records sufficient to calculate redemption fee to be paid
by certain shareholders.
Q. Mail requests for shareholders' certifications under penalties of
perjury and pay on a timely basis to the appropriate federal
authorities any taxes to be withheld on dividends and distributions
paid by the Trust, all as required by applicable federal tax laws
and regulations.
R. Provide a Blue Sky system that will enable the Trust to monitor the
total number of shares of the Fund sold in each state. In addition,
the Trust or its agent, including FMFS, shall identify to FMFS in
writing those transactions and assets to be treated as exempt from
the Blue Sky reporting for each state. The responsibility of FMFS
for the Trust's Blue Sky state registration status is solely limited
to the initial compliance by the Trust and the reporting of such
transactions to the Trust or its agent.
S. Answer correspondence from shareholders, securities brokers and
others relating to FMFS's duties hereunder and such other
correspondence as may from time to time be mutually agreed upon
between FMFS and the Trust.
T. Reimburse the Fund each month for all material losses resulting from
"as of" processing errors for which FMFS is responsible in
accordance with the "as of" processing guidelines set forth on
Exhibit C hereto.
3. COMPENSATION
FMFS shall be compensated for providing the services set forth in this
Agreement in accordance with the fee schedule set forth on Exhibit B
hereto (as amended from time to time). The Trust shall pay all fees and
reimbursable expenses within thirty (30) calendar days following
receipt of the billing notice, except for any fee or expense subject to
a good faith dispute. The Trust shall notify FMFS in writing within
thirty (30) calendar days following receipt of each invoice if the
Trust is disputing any amounts in good faith. The Trust shall settle
such disputed amounts within ten (10) calendar days of the day on which
the parties agree to the amount to be paid. With the exception of any
fee or expense the Trust is disputing in good faith as set forth above,
unpaid invoices shall accrue a finance charge of one and one-half
percent (1-1/2%) per month, after the due date. Notwithstanding
anything to the contrary, amounts owed by the Trust to FMFS shall only
be paid by the investment adviser or out of assets and property of the
particular Fund involved.
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4. INDEMNIFICATION; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its duties
under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FMFS's control, except a loss
arising out of or relating to FMFS's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or
willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this
Agreement, if FMFS has exercised reasonable care in the performance
of its duties under this Agreement, the Trust shall indemnify and
hold harmless FMFS from and against any and all claims, demands,
losses, expenses, and liabilities of any and every nature (including
reasonable attorneys' fees) which FMFS may sustain or incur or which
may be asserted against FMFS by any person arising out of any action
taken or omitted to be taken by it in performing the services
hereunder, except for any and all claims, demands, losses, expenses,
and liabilities arising out of or relating to FMFS's refusal or
failure to comply with the terms of this Agreement or from bad
faith, negligence or from willful misconduct on its part in
performance of its duties under this Agreement, (i) in accordance
with the foregoing standards, or (ii) in reliance upon any written
or oral instruction provided to FMFS by any duly authorized officer
of the Trust, such duly authorized officer to be included in a list
of authorized officers furnished to FMFS and as amended from time to
time in writing by resolution of the Board of Trustees of the Trust
(the "Board of Trustees" or "Trustees").
FMFS shall indemnify and hold the Trust harmless from and against
any and all claims, demands, losses, expenses, and liabilities of
any and every nature (including reasonable attorneys' fees) that the
Trust may sustain or incur or that may be asserted against the Trust
by any person arising out of any action taken or omitted to be taken
by FMFS as a result of FMFS's refusal or failure to comply with the
terms of this Agreement, its bad faith, negligence, or willful
misconduct.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, FMFS shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond FMFS's control. FMFS will make every
reasonable effort to restore any lost or damaged data and correct
any errors resulting from such a breakdown at the expense of FMFS.
FMFS agrees that it shall, at all times, have reasonable contingency
plans with appropriate parties, making reasonable provision for
emergency use of electrical data processing equipment to the extent
appropriate equipment is available. Representatives of the Trust
shall be entitled to inspect FMFS's premises and operating
capabilities at any time during regular business hours of FMFS, upon
reasonable notice to FMFS.
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Notwithstanding the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the
indemnitor may be asked to indemnify or hold the indemnitee
harmless, the indemnitor shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is
further understood that the indemnitee will use all reasonable care
to notify the indemnitor promptly concerning any situation that
presents or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to defend the
indemnitee against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it will
so notify the indemnitee and thereupon the indemnitor shall take
over complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee shall
in no case confess any claim or make any compromise in any case in
which the indemnitor will be asked to indemnify the indemnitee
except with the indemnitor's prior written consent.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and
prior, present, or potential shareholders (and clients of said
shareholders) and not to use such records and information for any
purpose other than the performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may
not be withheld where FMFS may be exposed to civil or criminal contempt
proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities, or when so requested by
the Trust.
Further, FMFS will adhere to the privacy policies adopted by the Trust
pursuant to Title V of the Xxxxxx-Xxxxx-Xxxxxx Act, as may be modified
from time to time (the "Act"). Notwithstanding the foregoing, FMFS will
not share any nonpublic personal information concerning any of the
Trust's shareholders with any third party unless specifically directed
by the Trust or allowed under one of the exceptions noted under the
Act.
6. TERM OF AGREEMENT; AMENDMENT
This Agreement shall become effective as of the date first written
above and will continue in effect for a period of three years.
Subsequent to the initial two-year term, this Agreement may be
terminated by either party upon giving ninety (90) days prior written
notice to the other party or such shorter period as is mutually agreed
upon by the parties. However, this Agreement may be amended by mutual
written consent of the parties.
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7. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder in the form and manner, and for such period, as it may deem
advisable and is agreeable to the Trust, but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating to
the services to be performed by FMFS hereunder are the property of the
Trust and will be preserved, maintained, and made available in
accordance with such applicable sections and rules of the 1940 Act and
will be promptly surrendered to the Trust on and in accordance with its
request.
8. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin, without regard to conflicts of law principles. To
the extent that the applicable laws of the State of Wisconsin, or any
of the provisions herein, conflict with the applicable provisions of
the 1940 Act, the latter shall control, and nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or
order of the Securities and Exchange Commission thereunder.
9. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Trust by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Trust, transfer to such successor
all relevant books, records, correspondence, and other data established
or maintained by FMFS under this Agreement in a form reasonably
acceptable to the Trust (if such form differs from the form in which
FMFS has maintained, the Trust shall pay any expenses associated with
transferring the data to such form), and will cooperate in the transfer
of such duties and responsibilities, including provision for assistance
from FMFS's personnel in the establishment of books, records, and other
data by such successor.
10. DATA NECESSARY TO PERFORM SERVICES
The Trust or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at such times
and in such form as mutually agreed upon. If FMFS is also acting in
another capacity for the Trust, nothing herein shall be deemed to
relieve FMFS of any of its obligations in such capacity.
11. ASSIGNMENT
This Agreement may not be assigned by either party without the prior
written consent of the other party.
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12. NOTICES
Any notice required or permitted to be given by either party to the
other shall be in writing and shall be deemed to have been given on the
date delivered personally or by courier service, or three (3) days
after sent by registered or certified mail, postage prepaid, return
receipt requested, or on the date sent and confirmed received by
facsimile transmission to the other party's address set forth below:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
Hotchkis and Wiley Funds
000 X. Xxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the date
first above written.
HOTCHKIS AND WILEY FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxx
-------------------------------- ---------------------------------
Xxxxx X. Xxxxxx Xxx Xxxxxxx
Title: President Title: President
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EXHIBIT A
TO THE
TRANSFER AGENT SERVICING AGREEMENT
FUND NAMES
Separate Series of Hotchkis & Wiley Funds
Name of Series Date Added
-------------- ----------------
Hotchkis and Wiley Large Cap Value Fund October 19, 2001
Hotchkis and Wiley Mid-Cap Value Fund October 19, 2001
Hotchkis and Wiley Cap Value Fund October 19, 2001
Hotchkis and Wiley Equity Fund For Insurance Companies October 19, 2001
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EXHIBIT B
TO THE
TRANSFER AGENT SERVICING AGREEMENT
FEE SCHEDULE
Shareholder Account Fee (Subject to Minimum)
No-Load - $15.00 per account
Load Fund - $16.00 per account
Money Market - $21.00 per account
NSCC Network Level 3 Accounts - $11.00 per account per year
Closed Accounts - $2.00 per account per year
Annual Minimum:
$15,000 first class per fund
$7,500 each additional class per fund
$5,000 -- Equity Fund for Insurance Companies
Plus 1 basis point per year -- cap at $75,000 per fund family (excludes Equity
Fund for Insurance Companies)
Activity Charges
Telephone Call - $1.00 per call
Draft Check Processing - $1.00 per draft
Daily Valuation Trades - $6.75 per trade
ACH Shareholder Services
$125.00 per month per fund group
$ .50 per ACH item, setup and/or change
$5.00 per correction, reversal, return item
Plus out-of-pocket expenses, including but not limited
to:
- Telephone -- toll-free lines
- Postage, Stationery, Envelopes
- Programming, Special Reports
- Insurance
- Record Retention
- Microfilm/fiche of records
- Proxies, Proxy Services
- ACH fees
- NSCC charges
- All other out-of-pocket expenses
Extraordinary services - quoted separately
Conversion Estimate -- $1.00-$4.00 per shareholder
account, minimum $8,000 (if necessary)
SERVICE CHARGES TO INVESTORS
Qualified Plan Fees (Billed to Investors)
- $12.50 /qualified plan acct (Cap at $25.00 per SSN)
- $ 5.00 /education XXX acct (Cap at $25.00 per SSN)
- $15.00 /transfer to successor trustee
- $15.00 /distribution to participant (Excluding SWPs)
- $15.00 /refund of excess contribution
Additional Shareholder Fees (Billed to Investors)
- $15.00 /outgoing wire transfer
- $15.00 /overnight delivery
- $ 5.00 /telephone exchange
- $25.00 /return check or ACH
- $25.00 /stop payment
- $ 5.00 /research request (For requested items of the second calendar
year [or previous] to the request) (Cap at $25.00)
Fees and out-of-pocket expenses are billed to the fund monthly
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FIRSTAR MUTUAL FUND SERVICES, LLC
SAMPLE OUT-OF-POCKET EXPENSE ITEMS*
PER ITEM ESTIMATES
Forms Costs
- Statement Paper
- #9, #10 Envelopes
- Check/Statement Paper
- Certificate
- Wire Order Confirm (non-NSCC)
- Firstar Fulfillment Envelope
Presort Postage (one ounce)
VRU Services -- Port Allocation
VRU Modifications -- Per Project
Shareholder System Select Request
Systems Development/Programming
Fund Group Addition
Fund Additions
Fund Group Restore
Lost Shareholder Search (Xxxxx Tracers)
DAZL
- Installation
- Monthly
- Price record transmission
- Other record
NSCC Setup (Fund/SERV, Networking, Exchanges, ACATS, MF Profile, DCCS, TORA,
Commission Settlement)
* This is a sample list only. Plus additional out-of-pocket items as required by
the client.
- $ .038/item
- $ .043/item
- $ .25 /item
- $ 1.00 /item
- $ .22 /item
- $ .25 /item
$ .35 /item
$ 14.00 per port per month
$ 200.00 /hour
$ 250.00 /request
$ 150.00 /hour
$2,000.00 /fund group
$1,000.00 /fund or class
$1,000.00 /occurrence
$ 3.00 /search
$5,000 installation
$1,000.00 /month
$ .015 /price record
$ .025 /record -- other records
$5,000.00 /fund group installation
Plus NSCC Transaction and Networking Charges
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EXHIBIT C
TO THE
TRANSFER AGENT SERVICING AGREEMENT
AS OF PROCESSING POLICY
FMFS will reimburse each Fund for any net material loss that may exist
on the Fund's books and for which FMFS is responsible, at the end of each
calendar month. "Net Material Loss" shall be defined as any remaining loss,
after netting losses against any gains, which impacts a Fund's net asset value
per share by more than 1/2 cent. Gains and losses will be reflected on the
Fund's daily share sheet, and the Fund will be reimbursed for any net material
loss on a monthly basis. FMFS will reset the as of ledger each calendar month so
that any losses which do not exceed the materiality threshold of 1/2 cent will
not be carried forward to the next succeeding month. FMFS will notify the
advisor to the Fund on the daily share sheet of any losses for which the advisor
may be held accountable.
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