HOTCHKIS AND WILEY FUNDS ADDENDUM TO THE FUND ADMINISTRATION SERVICING AGREEMENT
HOTCHKIS
AND WILEY FUNDS
ADDENDUM
TO THE
THIS
ADDENDUM
dated as
of the 23rd
day of
August, 2006, to the Fund Administration Servicing Agreement, dated as of
February 18, 2005, as amended as of February 8, 2006 (the "Agreement"), is
entered by and between HOTCHKIS
AND WILEY FUNDS, a
Delaware statutory trust (the "Trust") and U.S.
BANCORP FUND SERVICES, LLC,
a
Wisconsin limited liability company ("USBFS").
RECITALS
WHEREAS,
the
parties have entered into a Fund Administration Servicing Agreement;
and
WHEREAS,
the
parties desire to modify said Agreement; and
WHEREAS,
Section
6 of the Agreement allows for its modification by a written instrument executed
by both parties.
NOW,
THEREFORE,
the
parties agree that the following provisions shall be added following Section
13
of the Agreement:
14.
Additional Services to be provided by USBFS
The
Trust
desires USBFS to provide, and USBFS agrees to provide, the services that are
listed below (each, a “System”). Each System is described and may be subject to
additional terms and conditions specified in its respective exhibit noted below,
as such may be amended from time to time:
Eagle
Portal (Appendix I)
The
Trust
hereby acknowledges that exhibits are an integral part of this Agreement and,
to
the extent services included in Appendix
I
are
selected by the Trust, such services shall also be subject to the terms of
this
Agreement. To the extent the terms and conditions of this Agreement conflict
with the terms and conditions included in Appendix
I,
as
applicable, the exhibits shall control. The provisions of Appendix
I,
as
applicable, shall continue in effect for as long as this Agreement remains
in
effect, unless sooner terminated pursuant to Section 13 hereof.
15.
System Maintenance
The
Trust
understands that USBFS will perform periodic maintenance to the System(s),
which
may cause temporary service interruptions. To the extent possible, USBFS shall
notify the Trust of all planned outages and will perform any necessary
maintenance during non-business hours.
16.
Additional Representations and Warranties
The
parties hereby warrant that neither party shall knowingly insert into any
interface, other software, or other program provided by such party to the other
hereunder, any “back door,” “time bomb,” “Trojan Horse,” “worm,” “drop dead
device,” “virus” or other computer software code or routines or hardware
components designed to disable, damage or impair the operation of any System,
program or operation hereunder. For failure to comply with this warranty, the
non-complying party shall immediately replace all copies of the affected work
product, System or software. All costs incurred with replacement including,
but
not limited to, cost of media, shipping, deliveries and installation, shall
be
borne by such party.
17.
Proprietary Rights
A.
The
Trust acknowledges and agrees that by virtue of accessing the System(s), it
shall not obtain any rights in or to any of the software, templates, screen
and
file formats, interface protocols, formats and development tools and
instructions, hardware, processes, trade secrets, instruction manuals,
enrollment authorization, authentication and other business processes,
proprietary information or distribution and communication networks used to
allow
access to the System(s) owned by or licensed to USBFS. Any interface and other
software or programs provided to the Trust in order to provide connectivity
to
the System(s) shall be used by the Trust only for the period during which this
Agreement is in effect and only in accordance with the terms of this Agreement,
and shall not be used by the Trust to provide connectivity to or through any
other system or person without USBFS’s prior written approval. The Trust shall
not copy, decompile or reverse engineer any software or programs provided to
the
Trust hereunder. The Trust also agrees not to take any action which would mask,
delete or otherwise alter any on-screen disclaimers and copyright, trademark
and
service ▇▇▇▇ notifications, or any “point and click” features relating to
acknowledgment and acceptance of such disclaimers and
notifications.
B.
The
Trust
agrees
that USBFS would not have an adequate remedy at law in the event of the Trust’s
breach or threatened breach of its obligations under this Section 17 of this
Agreement and that USBFS would suffer irreparable injury and damage as a result
of any such breach. Accordingly, in the event the Trust breaches or threatens
to
breach the obligations set forth in this Section of this Agreement, in addition
to and not in lieu of any legal or other remedies USBFS may pursue hereunder
or
under applicable law, the Trust hereby consents to the granting of equitable
relief (including the issuance of a temporary restraining order, preliminary
injunction or permanent injunction) against it by a court of competent
jurisdiction, without the necessity of proving actual damages or posting any
bond or other security therefor, prohibiting any such breach or threatened
breach. In any proceeding upon a motion for such equitable relief, the Trust’s
ability to answer in damages shall not be interposed as a defense to the
granting of such equitable relief. The provisions of this Section relating
to
equitable relief shall survive termination of this Agreement.
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C.
Each
party acknowledges and agrees that it obtains no rights in or to any of the
software, hardware, processes, trade secrets, and proprietary information or
distribution and communication networks of the other hereunder. Except in the
normal course of business and in conformity with Federal copyright law or with
the other party’s consent, neither party nor any of its affiliates shall
disclose, use, copy, decompile or reverse engineer any software or other
programs provided to such party by the other in connection
herewith.
18.
Additions to Standard of Care; Indemnification; Limitation of
Liability
A.
USBFS
shall not be liable for any loss or damages resulting from fraudulent,
unauthorized, or otherwise improper use of any identification or security codes
or systems access mechanisms assigned by USBFS in connection with access to
the
System(s), except a loss or damages arising out of or relating to the USBFS’s
refusal or failure to comply with the terms of this Agreement or from its bad
faith, negligence, or willful misconduct in the performance of its duties under
this Agreement.
B.
The
Trust understands that certain services made available through the System(s)
are
provided through the use of the equipment, software, and other related services
pursuant to certain contracts between various vendors and USBFS. The Trust
agrees to release and hold harmless USBFS against any and all claims, demands,
losses, expenses and liabilities of any and every nature (including reasonable
attorneys’ fees) (collectively, “Liabilities”) which may arise from or by reason
of the Trust’s use of such equipment, software or services provided by such
vendors to USBFS, except Liabilities arising out of or relating to the USBFS’s
refusal or failure to comply with the terms of this Agreement or from its bad
faith, negligence, or willful misconduct in the performance of its duties under
this Agreement.
C.
USBFS
CANNOT AND DOES NOT GUARANTEE AVAILABILITY OF THE SYSTEM(S). Accordingly,
USBFS’s sole liability to the Trust or any third party (including end users) for
any claims, notwithstanding the form of such claims (e.g., contract, negligence,
or otherwise), arising out of the delay of or interruption in the System(s)
to
be provided by USBFS hereunder shall be to use its best reasonable efforts
to
commence or resume the System(s) as promptly as is reasonably
possible.
D.
Because the ability of USBFS to deliver the System(s) is dependent upon the
Internet and equipment, software, systems, data and services provided by various
telecommunications carriers, equipment manufacturers, firewall providers and
encryption system developers and other vendors and third parties, USBFS shall
not be liable for delays or failures to perform its obligations hereunder to
the
extent that such delays or failures are attributable to circumstances beyond
its
reasonable control which interfere with the delivery of the System(s) by means
of the Internet or any of the equipment, software and services which support
the
Internet provided by such third parties. USBFS shall also not be liable for
the
actions or omissions of any third party wrongdoers (i.e., hackers not employed
by USBFS or its affiliates) or of any third parties involved in the System(s)
and shall not be liable for the selection of any such third party, unless USBFS
selected the third party in bad faith or in a negligent manner. USBFS affirms
that it has an obligation on its part and it will use reasonable care in
selecting all agents and subproviders.
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19.
Warranties
The
Trust
acknowledges that it is responsible for determining the suitability and accuracy
of the information provided through its access to the System(s). USBFS MAKES
NO
WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED, WITH RESPECT TO THE
SUITABILITY AND ACCURACY OF THE SYSTEM(S). However, USBFS will assist the Trust
in verifying the accuracy of any of the information available to the Trust
through the System(s).
20.
Addition to File Security and Retention; Confidentiality
USBFS
and
its agents will provide reasonable security to ensure that unauthorized third
parties do not have access to the Trust’s databases, files, and other
information provided by the Trust to USBFS for use with the System(s), the
names
of end users or end user transaction or account data (collectively, “Trust
Files”). USBFS’s security provisions with respect to the System(s), the Trust’s
web site(s) and the Trust Files will be no less protected than USBFS’s security
provisions with respect to its own proprietary information. USBFS agrees that
any and all Trust Files maintained by USBFS for the Trust hereunder shall be
available for inspection by the Trust’s regulatory authorities during regular
business hours, upon reasonable prior written notice to USBFS, and will be
maintained and retained in accordance with applicable requirements of the 1940
Act. USBFS will not use, or permit the use of, names of end users for the
purpose of soliciting any business, product, or service whatsoever except where
the communication is necessary and appropriate for USBFS’s delivery of the
System(s). USBFS will comply with all applicable state and federal regulations
regarding privacy and security as well as the Trust’s privacy policy.
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Appendix
I
Eagle
Portal (a/k/a “Advisor Information Source”, or “AIS”) for Hotchkis and Wiley
Funds
USBFS
utilizes the Eagle Portal, a web-based report delivery system that generates
holdings, position, and tax reports. Data from IDC, CPORT, S&P, and GICs
populate the data warehouse from which reports are generated. Reports can be
customer run or scheduled for automatic delivery to a portal inbox. This is
an
internal software application which is maintained and monitored by internal
staff.
Duties
and Responsibilities of USBFS
USBFS
shall:
| A. |
Provide
access to the System 24 hours a day, 7 days a week, subject to scheduled
maintenance and events outside of USBFS’s reasonable control. Unless an
emergency is encountered, no routine maintenance will occur during
the
hours of 8:00 a.m. to 3:00 p.m. Central
Time.
|
| B. |
Supply
necessary software to access the System, if
necessary.
|
| C. |
Provide
training and connectivity support as outlined in the standard pricing
model included herein.
|
| D. |
Maintain
and support the System, which shall include providing error corrections,
minor enhancements and interim upgrades to the System and providing
help
desk support to provide assistance to the Trust’s employees and agents
with their use of the System. Maintenance and support, as used herein,
shall not include (i) access to or use of any substantial added
functionality, new interfaces, new architecture, new platforms, new
versions or major development efforts, unless made generally available
by
USBFS to System customers, as determined solely by USBFS or (ii)
maintenance of customized features.
|
| E. |
Provide
monthly invoices of fees as stated in the standard pricing model
or the
fee schedule.
|
| F. |
Establish
systems to guide assist and permit End Users (as defined below) who
access
the System from the Trust’s web site(s) to electronically perform
inquiries and create and transmit transaction requests to
USBFS.
|
| G. |
Address
and mail, at the Trust’s expense, notification and promotional mailings
and other communications provided by the Trust to shareholders regarding
the availability of the System.
|
| H. |
Issue
to each shareholder, financial adviser or other person or entity
who
desires to make inquiries concerning the Trust or perform transactions
in
accounts with the Trust using the System (the “End User”) a unique user ID
and password for authentication purposes, which may be changed upon
an End
User’s reasonable request in accordance with policies to be determined
by
USBFS and the Trust. USBFS will require the End User to use his/her
user
ID and password in order to access the
System.
|
5
| I. |
Utilize
encryption and secure transport protocols intended to prevent fraud
and
ensure confidentiality of End User accounts and transactions. In
no event
shall USBFS use encryption weaker than a 40-bit RC4 Stream. USBFS
will
take reasonable actions, including periodic scans of Internet interfaces
and the System, to protect the Internet web site that provides the
System
and related network, against viruses, worms and other data corruption
or
disabling devices, and unauthorized, fraudulent or illegal use, by
using
appropriate virus detection and destructive software and by adopting
such
other security procedures as may be
necessary.
|
| J. |
Establish
and provide to the Trust written procedures, which may be amended
from
time to time by USBFS with the written consent of the Trust, regarding
End
User access to the System. Such written procedures shall establish
security standards for the System, including, without
limitation:
|
| (1) |
Encryption/secure
transport protocols.
|
| (2) |
End
User lockout standards (e.g., lockout after three unsuccessful attempts
to
gain access to the System).
|
| (3) |
User
ID and password issuance and reissuance
standards.
|
| (4) |
Access
standards, including limits on access to End Users whose accounts
are
coded for privilege.
|
| (5) |
Automatic
logoff standards (e.g., if the session is inactive for longer than
15
minutes).
|
| K. |
Ensure
that the HTTPS Server is accessible via the
Internet.
|
Duties
and Responsibilities of the Trust
The
Trust
shall:
| A. |
Provide
and maintain, at its own expense, one or more personal computers
for
accessing the System that will accommodate and be compatible with
the
software provided by USBFS.
|
| B. |
Follow
any and all procedures necessary to access the System as may be set
forth
in any user guide or instruction manual provided and which may be
amended
or supplemented from time to time.
|
| C. |
Provide
for the security of all codes and system access mechanisms relating
to the
System and implement such security procedures and/or devices to ensure
the
integrity of the System when accessed by the Trust from its principal
place of business.
|
6
| D. |
The
Trust hereby acknowledges that all programs, software, manuals and
other
written information relating to the System shall remain the exclusive
property of USBFS at all times.
|
| E. |
The
Trust acknowledges that it is responsible for determining the suitability
and accuracy of the information obtained through its access to the
System.
USBFS MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED,
WITH
RESPECT TO THE SUITABILITY AND ACCURACY OF FUND DATA, SYSTEMS, INDUSTRY
INFORMATION AND PROCESSES ACCESSED THROUGH THE SYSTEM. However, USBFS
will
assist the Trust in verifying the accuracy of any of the information
made
available to the Trust through the System and covered by this
Agreement.
|
| F. |
In
the event of termination of this Agreement, the Trust shall immediately
end its access to the System and return all codes, system access
mechanisms, programs, manuals and other written information to USBFS,
and
shall destroy or erase all such information on any diskettes or other
storage medium, unless such access continues to be permitted pursuant
to a
separate agreement between the Trust and USBFS that is in
effect.
|
| G. |
Assume
exclusive responsibility for the consequences of any instructions
it may
give to USBFS, for the Trust’s or End Users’ failure to properly access
the System in the manner prescribed by USBFS, and for the Trust’s failure
to supply accurate information to
USBFS.
|
| H. |
Promptly
notify USBFS of any problems or errors with the System of which the
Trust
becomes aware or any changes in policies or procedures of the Trust
requiring changes to the System.
|
| I. |
Comply,
and instruct End Users to comply, with all the End User enrollment
and
authorization procedures.
|
| J. |
Obtain
and pay for connectivity to the HTTPS
Server.
|
| K. |
Have
the proper equipment and software to enable End Users to access the
HTTPS
Server and download the files and obtain all related maintenance,
including support in the event of download
problems.
|
FEES:
No additional fees for the Advisor Information Service
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Except
to
the extent supplemented hereby, the Agreement shall remain in full force and
effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
by
a duly authorized officer on one or more counterparts as of the date and year
first written above.
| HOTCHKIS AND WILEY FUNDS | U.S. BANCORP FUND SERVICES, LLC | |
| By: _/s/ ▇▇▇▇▇ ▇. Celick_____________ | By: __/s/ ▇▇▇▇▇▇▇ ▇. McVoy____________ | |
| Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| Title: President | Title: Sr. Vice President |
8