HOTCHKIS AND WILEY FUNDS
SELLING GROUP AGREEMENT
XXXXXXXX INC.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We are the exclusive distributor of the shares of capital stock of the
several portfolios (each, a "Fund" and collectively, the "Funds") of Hotchkis
and Wiley Funds (the "Company"), a Delaware business trust, pursuant to the
terms of a Distribution Agreement between us and the Company. The Company is an
open-end management investment company registered under the Investment Company
Act of 1940 ("the Act"), as amended, and the shares being offered to the public
are registered under the Securities Act of 1933 ("1933 Act"), as amended. We
invite you to participate in the distribution of the shares of beneficial
interest of certain of the Funds (as identified to you on Schedule 1, as such
Schedule may be revised from time to time) ("Shares") on the following terms:
1. You represent and warrant that you are either (a) a registered broker or
dealer pursuant to the Securities Exchange Act of 1934 ("1934 Act"), and
a member of the National Association of Securities Dealers, Inc. (the
"NASD"), and that you will maintain such registration and membership and
abide by the Conduct Rules, the Constitution and By-Laws of the NASD and
all other rules and regulations that are now or may become applicable to
you and your activities hereunder; or (b) a bank exempt from
registration as a broker-dealer under the federal securities laws, and
that you will conduct your activities hereunder and otherwise in a
manner so as to remain exempt from such registration and in compliance
with the provisions of the Xxxxx-Xxxxxxxx Act and all other rules and
regulations that are now or may become applicable to you and your
activities hereunder. You agree that you will immediately advise us in
the event of your expulsion or suspension from the NASD.
2. You represent and warrant that you are registered or qualified to act as
a broker or dealer (or are exempt from being required to register or
qualify as such) in the states or other jurisdictions where you transact
business. You agree that you will maintain such registrations or
qualifications in full force and effect throughout the term of this
Agreement (and if an exemption becomes no longer available, to
immediately so qualify or register). You agree to comply with all
applicable federal, state and local laws, including, without limiting
the generality of the foregoing, the 1933 Act, the 1934 Act and the 1940
Act, and all applicable rules or regulations thereunder. You agree to
offer and sell Shares only in the states and other jurisdictions in
which we have indicated that such offers and sales can be made and in
which you are qualified to so act. You further agree not to offer or
sell Shares outside the several states, territories and possessions of
the United States.
3. You represent and warrant that you are a financial institution subject
to the International Money Laundering and Anti-Terrorist Financing Act
of 2001, enacted as part of the USA PATRIOT Act, [HR 3162, Pub. L. No.
107-56 (2001)] (the "PATRIOT Act"). You certify that you (i) have
established policies and procedures designed to prevent and detect money
laundering, including processes to meet the anti-money laundering
requirement of the PATRIOT Act and the rules and regulations promulgated
thereunder; (ii) have identified, and will continue to identify, the
customers for whom you act and the sources of funds for all customers
for whom you act and will retain all documentation necessary to identify
those customers and their sources of funds; (iii) do not believe, and
have no reason to believe, that any of the customers for whom you act
are engaged in money laundering activities or are associated with any
terrorist or other individuals, entities or organizations sanctioned by
the United States or the jurisdictions in which you do business; and
(iv) will notify us in the event you have reason to believe that any of
the customers for whom you act are engaged in money laundering
activities or are associated with any terrorist
1
or other individuals, entities or organizations sanctioned by the United
States or the jurisdictions in which you do business.
4. You agree to offer and sell Shares of the Funds to your customers only
at the applicable public offering price then in effect as described in
the respective Fund's then currently effective prospectus, including any
supplements or amendments thereto (each, a "Prospectus"). You may
establish and charge reasonable service fees to your customers for
processing exchange or redemption orders for Shares, provided you
provide written disclosure of the fees to your customers.
5. Purchase orders for Shares ("Purchase Orders") received from you and
accepted by us will be executed at the applicable public offering price
next determined after our receipt and acceptance of such Purchase Order,
in accordance with the Prospectuses. All Purchase Orders must meet the
applicable minimum initial and subsequent investment requirements as
described and set forth in the Prospectuses. You agree to date and time
stamp all orders received by you and to promptly forward all Purchase
Orders to us or the Company's Transfer Agent in time for processing at
the public offering price next determined after receipt by you. You
agree that you will not withhold Purchase Orders or purchase Shares in
anticipation of receiving Purchase Orders from customers. The procedures
applicable to the handling of Purchase Orders shall be subject to such
instructions as may be issued by us or the Company's Transfer Agent from
time to time.
6. All Purchase Orders are subject to acceptance by us and confirmation by
the Company or its Transfer Agent. We reserve the right in our sole
discretion to reject any Purchase Order, including contingent or
conditional Purchase Orders, in whole or in part. We also reserve the
right in our discretion without notice to you to suspend sales or
withdraw the offering of Shares, in whole or in part, or to cancel this
Agreement.
7. You agree to purchase Shares only through us or from your customers.
Purchases through us shall be made only for the purpose of covering
Purchase Orders already received from your customers or for your bona
fide investment. Purchases from your customers, if any, shall be at a
price that is not less than the applicable net asset value quoted by the
Company at the time of such purchase as determined in the manner set
forth in the Prospectuses. All transactions in Shares shall be subject
to the terms and provisions set forth in the Prospectuses.
8. Shares purchased hereunder will not be issued in certificated form.
9. If a customer's account with a Fund is established without the customer
signing an Account Application, you represent that the instructions
relating to the registration and shareholder options selected (whether
on the Account Application, in some other document or orally) are in
accordance with the customer's instructions, and you shall be
responsible to the Company, its Transfer Agent and us for any losses,
claims, damages or expenses resulting from acting upon such
instructions.
10. If payment for Shares purchased hereunder is not received or made within
the applicable time period specified in the governing Prospectus, or if
you cancel any order at any time after our acceptance of the Purchase
Order, we reserve the right to cancel the sale (or, at our option, to
redeem the Shares), in which case you shall be responsible to the
Company, its Transfer Agent and us for any losses, claims, damages or
expenses resulting from your failure to make payment or cancellation as
aforesaid.
11. You have no authority whatsoever to act as agent for, partner of or
participant in a joint venture with the Company or us or any other
member of the Selling Group, and nothing in this Agreement shall
constitute either of us the agent of the other or shall constitute you
or the Company the agent of each other. In all transactions in the
Shares, you are acting as principal or as agent for your customer and we
are acting as agent for the Company and not as principal. We are not
responsible for the issuance, form, validity, enforceability or value of
the Company's Shares.
12. No person is authorized to act for us or to make any representations
concerning the Company or its Shares except those contained in the
Prospectuses and the Statements of Additional
2
Information, and in sales literature issued by us supplemental to the
Prospectuses and Statements of Additional Information ("Sales
Literature"). In purchasing Shares through us, you shall rely solely
upon the representations contained in the Prospectuses, the Statements
of Additional Information and the Sales Literature. We will furnish you,
upon request, with a reasonable quantity of copies of the Prospectuses,
Statements of Additional Information, Sales Literature and amendments
and supplements thereto. You agree that if and when we supply you with
copies of any supplements to any Prospectus, you will affix copies of
such supplements to all such Prospectuses in your possession, that
thereafter you will distribute such Prospectuses only with such
supplements affixed, and that you will present Purchase Orders only from
persons who have received Prospectuses with such supplements affixed.
You agree not to use Sales Literature in connection with the
solicitation of Purchase Orders unless accompanied or preceded by the
relevant Prospectus.
13. As compensation for distribution-related or account maintenance services
performed by you in connection with the distribution of Shares of any of
the Funds which have distribution plans in effect under Rule 12b-1 under
the 1940 Act that provide for compensation for distribution-related or
account maintenance services, you may receive a periodic fee based upon
a percentage of the average daily net asset value of Shares of the
respective Funds attributable to you, in accordance with the applicable
Distribution Plans as disclosed in the governing Prospectus.
14. You agree to indemnify the Company, its Transfer Agent and us for any
losses, claims, damages or expenses arising out of or in connection with
any wrongful act or omission by you, your representatives, agents or
sub-agents not in accordance with this Agreement, provided that such
losses, claims, damages or expenses were not caused by the indemnitees'
willful misfeasance, bad faith or gross negligence.
15. You agree to comply with Regulation S-P of the Securities and Exchange
Commission promulgated under section 504 of the Xxxxx-Xxxxx-Xxxxxx Act
and will not disclose nonpublic personal information about a consumer
you receive from us to non-affiliated third parties except pursuant to
Subpart C, "Exceptions to the Regulation", or as otherwise provided by
law.
16. This Agreement shall become effective upon receipt by us of a signed
copy hereof, and shall cancel and supersede any and all prior Selling
Group Agreements or similar agreements or contracts between us relating
to the distribution of the Shares. Any amendments to this Agreement
shall be deemed accepted by you, and will take effect with respect to,
and on the date of, any orders placed by you after the date set forth in
any notice of amendment sent by us to you. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Arkansas.
17. This Agreement may be terminated upon written notice by either party at
any time, and shall automatically terminate upon its attempted
assignment by you, whether by operation of law or otherwise, or by us
otherwise than by operation of law. We reserve the right to cancel this
Agreement at any time without notice if any Shares are offered for sale
by you at less than the applicable public offering price as set forth in
the Prospectuses.
18. This Agreement is in all respects subject to statements regarding the
sale and repurchase or redemption of Shares made in the Prospectuses,
and to the NASD's Conduct Rules, which shall control and override any
provision to the contrary in this Agreement.
19. All communications to us shall be sent to us by confirmed telefacsimile
at 000-000-0000 or by mail at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000. Any notice to you shall be duly given if sent by
mail or by confirmed telefacsimile to you at your address as set forth
on the signature page hereof. Any party that changes its address shall
promptly notify the other party in accordance with the terms of this
paragraph.
3
XXXXXXXX INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
The undersigned, on behalf of the below-named institution, accepts this
invitation to become a member of the Selling Group and agrees to abide by the
foregoing terms and conditions.
Name of Institution:
-----------------------------------
Dated:
-----------------------------------
Address:
-----------------------------------
Telephone:
-----------------------------------
Telefacsimile:
-----------------------------------
By: By:
--------------------------- --------------------------
(Authorized Signature) (Authorized Signature)
Name: Name:
--------------------------- --------------------------
Title: Title:
--------------------------- --------------------------
Please execute this Agreement in duplicate and return both copies to
Xxxxxxxx Inc.
4
HOTCHKIS AND WILEY FUNDS
SELLING GROUP AGREEMENT
SCHEDULE 1
FUND NAME CUSIP NUMBER TICKER 12b-1 FEES
--------- ------------ ------ ----------
Hotchkis and Wiley Large Cap Value Fund Class A 00000X000 HWLAX 0.25%
Hotchkis and Wiley Large Cap Value Fund Class B 00000X000 HWLBX 1.00%
Hotchkis and Wiley Large Cap Value Fund Class C 00000X000 HWLCX 1.00%
Hotchkis and Wiley Large Cap Value Fund Class R 00000X000 TBD 0.50%
Hotchkis and Wiley Mid-Cap Value Fund Class A 00000X000 HWMAX 0.25%
Hotchkis and Wiley Mid-Cap Value Fund Class B 00000X000 HWMBX 1.00%
Hotchkis and Wiley Mid-Cap Value Fund Class C 00000X000 HWMCX 1.00%
Hotchkis and Wiley Mid-Cap Value Fund Class R 00000X000 TBD 0.50%
Hotchkis and Wiley Small Cap Value Fund Class A 00000X000 HWSAX 0.25%
Hotchkis and Wiley Small Cap Value Fund Class B 00000X000 HWSBX 1.00%
Hotchkis and Wiley Small Cap Value Fund Class C 00000X000 HWSCX 1.00%
Hotchkis and Wiley All Cap Value Fund Class A 00000X000 HWAAX 0.25%
Hotchkis and Wiley All Cap Value Fund Class C 00000X000 TBD 1.00%
TBD To be determined
5
