Contract
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HOTCHKIS AND WILEY FUNDS
INVESTMENT ADVISORY AGREEMENT
Hotchkis & ▇▇▇▇▇ ▇▇▇▇ Cap Diversified Value Fund
THIS INVESTMENT ADVISORY AGREEMENT is made as of the 31st day of March, 2025, by
and between HOTCHKIS AND WILEY FUNDS, a Delaware statutory trust (the “Trust”), on behalf its
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇ Cap Diversified Value Fund (the “Fund”) and HOTCHKIS AND WILEY
CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (the “Advisor”).
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company, registered as such
under the Investment Company Act of 1940, as amended (the “Investment Company Act”); and
WHEREAS, the Fund is a series of the Trust having separate assets and liabilities; and
WHEREAS, the Advisor is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”) and is engaged in the business of supplying investment
advice as an independent contractor; and
WHEREAS, the Trust desires to retain the Advisor to render advice and services to the Fund
pursuant to the terms and provisions of this Agreement, and the Advisor desires to ▇▇▇▇▇▇▇ said advice and
services; and
NOW, THEREFORE, in consideration of the covenants and the mutual promises herein, the
parties to this Agreement, intending to be legally bound hereby, mutually agree as follows:
1.APPOINTMENT OF ADVISOR. The Trust hereby employs the Advisor and the
Advisor hereby accepts such employment, to provide management services and to render investment
advice and related services with respect to the assets of the Fund for the period and on the terms set forth
in this Agreement, subject to the supervision and direction of the Trust’s Board of Trustees.
2.DUTIES OF ADVISOR.
(a)GENERAL DUTIES. The Advisor shall act as investment adviser to the Fund
and shall supervise investments of the Fund on behalf of the Fund in accordance with the investment
objectives, policies and restrictions of the Fund as set forth in the Fund’s and Trust’s governing
documents, including, without limitation, the Trust’s Amended and Restated Agreement and Declaration
of Trust and By-Laws; the Trust’s prospectus, statement of additional information and undertakings; and
such other limitations, policies and procedures as the Trustees may impose from time to time in writing to
the Advisor. In providing such services, the Advisor shall at all times adhere to the provisions and
restrictions contained in the federal securities laws, applicable state securities laws, the Internal Revenue
Code, the Uniform Commercial Code and other applicable law.
Without limiting the generality of the foregoing, the Advisor shall: (i) furnish the Fund with
advice and recommendations with respect to the investment of the Fund’s assets and the purchase and sale
of portfolio securities for the Fund, including the taking of such steps as may be necessary to implement
such advice and recommendations (i.e., placing the orders); (ii) manage and oversee the investments of
the Fund, subject to the ultimate supervision and direction of the Trust’s Board of Trustees; (iii) vote
proxies for the Fund, file ownership reports under Section 13 of the Securities Exchange Act of 1934, as
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amended, for the Fund, and take other actions on behalf of the Fund; (iv) maintain the books and records
required to be maintained by the Fund except to the extent arrangements have been made for such books
and records to be maintained by the administrator or another agent of the Fund; (v) furnish reports,
statements and other data on securities, economic conditions and other matters related to the investment
of the Fund’s assets which the Fund’s administrator or distributor or the officers of the Trust may
reasonably request; and (vi) render to the Trust’s Board of Trustees such periodic and special reports with
respect to the Fund’s investment activities as the Board may reasonably request.
(b)BROKERAGE. The Advisor shall be responsible for decisions to buy and sell
securities for the Fund, for broker-dealer selection, and for negotiation of brokerage commission rates,
provided that the Advisor shall not direct orders to an affiliated person of the Advisor without general
prior authorization of the Trust’s Board of Trustees to use such affiliated broker or dealer. The Advisor’s
primary consideration in effecting a securities transaction will be execution at the most favorable price.
In selecting a broker-dealer to execute each particular transaction, the Advisor may take the following
into consideration: the best net price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value of the expected contribution
of the broker-dealer to the investment performance of the Fund on a continuing basis. The price to the
Fund in any transaction may be less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio execution services offered.
Subject to such policies as the Board of Trustees of the Trust may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, as amended, the Advisor shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Fund to pay a broker or dealer that provides (directly or indirectly)
brokerage or research services to the Advisor an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or dealer would have charged for
effecting that transaction, if the Advisor determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the Advisor’s overall responsibilities with
respect to the Trust. Subject to the same policies and legal provisions, the Advisor is further authorized to
allocate the orders placed by it on behalf of the Fund to such brokers or dealers who also provide research
or statistical material, or other services, to the Trust, the Advisor, or any affiliate of either. Such
allocation shall be in such amounts and proportions as the Advisor shall determine, and the Advisor shall
report on such allocations regularly to the Trust, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
On occasions when the Advisor deems the purchase or sale of a security to be in the best interest
of the Fund as well as of other clients, the Advisor, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and the most efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the
Advisor in the manner it considers to be the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients.
3.REPRESENTATIONS OF THE ADVISOR.
(a)The Advisor shall use its best judgment and efforts in rendering the advice and
services to the Fund as contemplated by this Agreement.
(b)The Advisor shall maintain all licenses and registrations necessary to perform its
duties hereunder in good order.
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(c)The Advisor shall conduct its operations at all times in conformance with the
Advisers Act, the Investment Company Act, and any other applicable state and/or self-regulatory
organization regulations.
(d)The Advisor shall maintain errors and omissions insurance in an amount at least
equal to that disclosed to the Board of Trustees in connection with their approval of this Agreement.
4.INDEPENDENT CONTRACTOR. The Advisor shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized to
do so, have no authority to act for or represent the Trust or the Fund in any way, or in any way be deemed
an agent for the Trust or for the Fund. It is expressly understood and agreed that the services to be
rendered by the Advisor to the Fund under the provisions of this Agreement are not to be deemed
exclusive, and the Advisor shall be free to render similar or different services to others so long as its
ability to render the services provided for in this Agreement shall not be impaired thereby.
5.ADVISOR’S PERSONNEL. The Advisor shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it shall from time to time
determine to be necessary to the performance of its obligations under this Agreement. Without limiting
the generality of the foregoing, the staff and personnel of the Advisor shall be deemed to include persons
employed or retained by the Advisor to furnish statistical information, research, and other factual
information, advice regarding economic factors and trends, information with respect to technical and
scientific developments, and such other information, advice and assistance as the Advisor or the Trust’s
Board of Trustees may desire and reasonably request and any compliance staff and personnel required by
the Advisor.
6.COMPENSATION.
(a)From the fee payable pursuant to section 7(b) below, the Advisor agrees to pay
all expenses incurred by the Fund (except for the unitary fee) pursuant to this Agreement, excluding
interest charges on any borrowings, dividends and other expenses on securities sold short, taxes,
brokerage commissions and other expenses incurred in placing orders for the purchase and sale of
securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax
liability, distribution fees and expenses paid by the Fund under any distribution plan adopted pursuant to
Rule 12b-1 under the Investment Company Act, and litigation expenses and other non-routine or
extraordinary expenses.
(b)The Fund shall pay to the Advisor, and the Advisor agrees to accept, as full
compensation for all services furnished or provided to the Fund pursuant to this Agreement, a unitary fee
at the rate set forth in Schedule A to this Agreement.
(c)The fee shall be accrued daily by the Fund and paid to the Advisor on the first
business day of the succeeding month.
(d)The fee under this Agreement shall be payable on the first business day of the
month. If this Agreement is terminated prior to the end of any month, the fee to the Advisor shall be
prorated for the portion of any month in which this Agreement is in effect which is not a complete month
according to the proportion which the number of calendar days in the month during which the Agreement
is in effect bears to the number of calendar days in the month, and shall be payable within ten (10) days
after the date of termination.
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(e)The Advisor voluntarily may reduce any portion of the compensation due to it
pursuant to this Agreement and may agree to make payments to limit the expenses which are the
responsibility of the Fund under this Agreement. Any such reduction or payment shall be applicable only
to such specific reduction or payment and shall not constitute an agreement to reduce any future
compensation or reimbursement due to the Advisor hereunder or to continue future payments. Any such
reduction will be agreed to prior to accrual of the related expense or fee and will be estimated daily and
reconciled and paid on a monthly basis.
7.CONFLICTS WITH TRUST’S GOVERNING DOCUMENTS AND APPLICABLE
LAWS. Nothing herein contained shall be deemed to require the Trust or the Fund to take any action
contrary to the Trust’s Agreement and Declaration of Trust, By-Laws, or any applicable statute or
regulation, or to relieve or deprive the Board of Trustees of the Trust of its responsibility for and control
of the conduct of the affairs of the Trust and Fund. In this connection, the Advisor acknowledges that the
Trustees retain ultimate plenary authority over the Fund and may take any and all actions necessary and
reasonable to protect the interests of shareholders.
8.REPORTS AND ACCESS. The Advisor agrees to supply such information to the
Fund’s administrator and to permit such compliance inspections by the Fund’s administrator as shall be
reasonably necessary to permit the administrator to satisfy its obligations and respond to the reasonable
requests of the Trustees.
9.ADVISOR’S LIABILITIES AND INDEMNIFICATION.
(a)In the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the obligations or duties hereunder on the part of the Advisor, the Advisor shall not be subject to
liability to the Trust or the Fund or to any shareholder of the Fund for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security by the Fund. Notwithstanding the foregoing, federal securities
laws and certain state laws impose liabilities under certain circumstances on persons who have acted in
good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights
which the Trust, the Fund or any shareholder of the Fund may have under any federal securities law or
state law.
(b)Each party to this Agreement shall indemnify and hold harmless the other party
and the shareholders, directors, officers and employees of the other party (any such person, an
“Indemnified Party”) against any loss, liability, claim, damage or expense (including the reasonable cost
of investigating and defending any alleged loss, liability, claim, damage or expenses and reasonable
counsel fees incurred in connection therewith) arising out of the Indemnified Party’s performance or non-
performance of any duties under this Agreement provided, however, that nothing herein shall be deemed
to protect any Indemnified Party against any liability to which such Indemnified Party would otherwise be
subject by reason of willful misfeasance, bad faith or negligence in the performance of duties hereunder
or by reason of reckless disregard of obligations and duties under this Agreement.
(c)No provision of this Agreement shall be construed to protect any Trustee or
officer of the Trust, or officer of the Advisor, from liability in violation of Sections 17(h) and (i) of the
Investment Company Act.
10.NON-EXCLUSIVITY; TRADING FOR ADVISOR’S OWN ACCOUNT. The
Trust’s employment of the Advisor is not an exclusive arrangement. The Trust may from time to time
employ other individuals or entities to furnish it with the services provided for herein. Likewise, the
Advisor may act as investment adviser for any other person, and shall not in any way be limited or
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restricted from buying, selling or trading any securities for its or their own accounts or the accounts of
others for whom it or they may be acting, provided, however, that the Advisor expressly represents that it
will undertake no activities which will adversely affect the performance of its obligations to the Fund
under this Agreement; and provided further that the Advisor will adhere to a code of ethics governing
employee trading and trading for proprietary accounts that conforms to the requirements of the
Investment Company Act and the Advisers Act and has been approved by the Trust’s Board of Trustees.
11.TERM.
(a)This Agreement shall become effective as of the date first written above, and
shall remain in effect for an initial period of two (2) years, unless sooner terminated as hereinafter
provided. This Agreement shall continue in effect thereafter for additional periods not exceeding one
(1) year so long as such continuation is approved for the Fund at least annually by (i) the Board of
Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund and
(ii) the vote of a majority of the Trustees of the Trust who are not parties to this Agreement nor interested
persons thereof, cast in person at a meeting called for the purpose of voting on such approval. The terms
“majority of the outstanding voting securities” and “interested persons” shall have the meanings as set
forth in the Investment Company Act.
(b)The Fund may use the names “▇▇▇▇▇▇▇▇ and Wiley” and ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇ Cap Diversified Value ETF or any name derived from or using the name “▇▇▇▇▇▇▇▇ and Wiley”
only for so long as this Agreement or any extension, renewal or amendment hereof remains in effect.
Within sixty (60) days from such time as this Agreement shall no longer be in effect, the Fund shall cease
to use such a name or any other name connected with the Advisor.
12.TERMINATION; NO ASSIGNMENT.
(a)This Agreement may be terminated by the Trust on behalf of the Fund at any time
without payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund, upon sixty (60) days’ written notice to the Advisor, and by the
Advisor upon sixty (60) days’ written notice to the Fund. In the event of a termination, the Advisor shall
cooperate in the orderly transfer of the Fund’s affairs and, at the request of the Board of Trustees transfer
any and all books and records of the Fund maintained by the Advisor on behalf of the Fund.
(b)This Agreement shall terminate automatically in the event of any assignment
thereof, as defined in the Investment Company Act.
13.NONPUBLIC PERSONAL INFORMATION. Notwithstanding any provision herein to
the contrary, the Advisor agrees on behalf of itself and its directors, trustees, shareholders, officers, and
employees (1) to treat confidentially and as proprietary information of the Trust (a) all records and other
information relative to the Fund’s prior, present, or potential shareholders (and clients of said
shareholders) and (b) any Nonpublic Personal Information, as defined under Section 248.3(t) of
Regulation S-P (“Regulation S-P”), promulgated under the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act (the “G-L-B Act”),
and (2) except after prior notification to and approval in writing by the Trust, not to use such records and
information for any purpose other than the performance of its responsibilities and duties hereunder, or as
otherwise permitted by Regulation S-P or the G-L-B Act, and if in compliance therewith, the privacy
policies adopted by the Trust and communicated in writing to the Advisor. Such written approval shall
not be unreasonably withheld by the Trust and may not be withheld where the Advisor may be exposed to
civil or criminal contempt or other proceedings for failure to comply after being requested to divulge such
information by duly constituted authorities.
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14.ANTI-MONEY LAUNDERING COMPLIANCE. The Advisor acknowledges that, in
compliance with the Bank Secrecy Act, as amended, the USA PATRIOT Act, and any implementing
regulations thereunder (together, “AML Laws”), the Trust has adopted an Anti-Money Laundering
Policy. The Advisor agrees to comply with the Trust’s Anti-Money Laundering Policy and the AML
Laws, as the same may apply to the Advisor, now and in the future. The Advisor further agrees to
provide to the Trust and/or the administrator such reports, certifications and contractual assurances as
may be reasonably requested by the Trust. The Trust may disclose information regarding the Advisor to
governmental and/or regulatory or self-regulatory authorities to the extent required by applicable law or
regulation and may file reports with such authorities as may be required by applicable law or regulation.
15.CERTIFICATIONS; DISCLOSURE CONTROLS AND PROCEDURES. The
Advisor acknowledges that, in compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the implementing
regulations promulgated thereunder, the Trust and the Fund are required to make certain certifications and
have adopted disclosure controls and procedures. To the extent reasonably requested by the Trust, the
Advisor agrees to use its best efforts to assist the Trust and the Fund in complying with the ▇▇▇▇▇▇▇▇-
▇▇▇▇▇ Act and implementing the Trust’s disclosure controls and procedures. The Advisor agrees to
inform the Trust of any material development related to the Fund that the Advisor reasonably believes is
relevant to the Fund’s certification obligations under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.
16.SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a
court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement
shall not be affected thereby.
17.CAPTIONS. The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise affect their construction or
effect.
18.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 conflict of laws principles thereof;
provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law,
regulation or rule, including the Investment Company Act and the Advisers Act and any rules and
regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their duly authorized officers, all on the day and year first above written.
HOTCHKIS AND WILEY FUNDS, on behalf of the Hotchkis and ▇▇▇▇▇ ▇▇▇▇ Cap Diversified Value Fund | HOTCHKIS AND WILEY CAPITAL MANAGEMENT, LLC |
By: /s/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇ Lopez Title: President | By:/s/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Title: Chief Operating Officer |
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SCHEDULE A
Unitary Fee: 0.55% of average net assets