EXHIBIT 99.(E)(1)
DISTRIBUTION AGREEMENT
HOTCHKIS AND WILEY FUNDS
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
THIS AGREEMENT is made as of this 17th day of October, 2001, by and
between Hotchkis and Wiley Funds, a Delaware business trust (the "Trust"), and
Xxxxxxxx Inc., an Arkansas corporation (the "Distributor").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Distributor to render
distribution services to the Trust's investment portfolios listed on Appendix A
(individually, a "Fund" and collectively, the "Funds"), and the Distributor is
willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. As the Trust's agent, the Distributor shall be the exclusive
distributor for the shares of the Fund registered under the Securities Act of
1933 (the "1933 Act"). In addition to providing all share distribution services
for the Funds, the Distributor will maintain a service desk dedicated to the
Funds, and will maintain and preserve all applicable records of the Funds,
including financial and corporate records.
2. The Trust shall sell through the Distributor, as the Trust's
agent, and deliver, upon the terms set forth herein, Fund shares that the
Distributor orders from the Trust and for which the Distributor has received and
confirmed unconditional purchase orders. All orders from the Distributor shall
be subject to acceptance and confirmation by the Trust.
3. As the Trust's agent, the Distributor may sell and distribute
Fund shares in such manner not inconsistent with the provisions hereof as the
Distributor may determine from time to time. In that connection the Distributor
shall comply with all laws, rules and regulations applicable to it, including,
without limiting the generality of the foregoing, all applicable rules or
regulations under the 1933 Act, the 1940 Act and of any securities association
registered under the Securities Exchange Act of 1934 (the "1934 Act").
4. The Trust reserves the right to sell Fund shares to
purchasers to the extent that it or the transfer agent for Fund shares, or any
agent thereof, receives purchase applications therefor. The Distributor's right
to accept purchase orders for Fund shares or to make sales thereof shall not
apply to Fund shares that may be offered by the Trust to shareholders for the
reinvestment of cash distributed to shareholders by the Trust or Fund shares
that may otherwise be offered by the Trust to shareholders, unless the
Distributor is otherwise notified by the Trust.
5. All shares offered for sale and sold by the Distributor shall
be offered for sale and sold by the Distributor to or through securities dealers
or banks and other depository institutions having agreements with the
Distributor ("Selling Agents") upon the terms and conditions set forth in
paragraph 7(b) hereof or to investors at the price per share (the "offering
price", which is the net asset value per share plus the applicable sales charge,
if any) specified and determined as provided in the Prospectus (the
"Prospectus") included in the Trust's Registration Statement, as amended from
time to time, under the 1933 Act and the 1940 Act (the "Registration
Statement"), relating to the offering of its shares for sale. If the offering
price is not an exact multiple of one cent, it shall be adjusted to the nearest
full cent. The Trust shall determine and furnish promptly to the Distributor a
statement of the offering price at least once on each day on which the
Prospectus states the Trust is required to determine the Trust's net asset value
for the purpose of pricing purchase orders. Each offering price shall become
effective at the time and shall remain in effect during
the period specified in the statement. Each such statement shall show the basis
of its computation. For purposes of establishing the offering price, the Trust
shall consider a purchase order to have been presented to it at the time it was
originally entered by the Distributor for transmission to it, provided the
original purchase order and the Distributor's fulfilling order to the Trust are
appropriately time stamped or evidenced to show the time of original entry and
that the Distributor's fulfilling order to the Trust is received by the Trust
within a time deemed by it to be reasonable after the purchase order was
originally entered. Purchases of shares shall be made for full and fractional
shares, carried to the third decimal place.
6. Ownership of Fund shares sold hereunder shall be registered
in such names and denominations as are specified in writing to the Trust or to
its agent designated for the purpose. No certificates for shares of the Fund
will be issued.
7. (a) The Distributor shall from time to time employ or
associate with it such persons as it believes necessary to assist it in carrying
out its obligations under this agreement. The compensation of such persons shall
be paid by the Distributor.
(b) The Distributor shall have the right to enter into
selling agreements with Selling Agents of its choice for the sale or marketing
of Fund shares at the offering price and upon the terms and conditions set forth
in the Prospectus. The initial form of selling agreement is attached hereto as
Appendix B. The Distributor may amend those agreements, or modify the form of
agreement, or modify the form of agreement, only upon approval of the Trust.
(c) The Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under Federal or state
laws.
(d) The Distributor shall pay for all expenses incurred in
connection with (i) printing and distributing such number of copies of the
Prospectus as the Distributor deems necessary for use in connection with
offering Fund shares to prospective investors, (ii) preparing, printing and
distributing any other literature and advertising deemed appropriate by the
Distributor for use in connection with offering Fund shares for sale and (iii)
all other expenses incurred in connection with the sale of Fund shares as
contemplated by this agreement, except as otherwise specifically provided in
this agreement. In addition, it is understood and agreed that, so long as a plan
of distribution of the Trust adopted pursuant to Rule 12b-1 of the 1940 Act (the
"Plan") continues in effect, any expenses incurred by the Distributor hereunder
may be paid from amounts received by it from the applicable Fund under the Plan.
So long as the Plan continues in effect, the Distributor shall be entitled to
receive reimbursement from the Trust under the Plan for actual expenses incurred
in connection with the applicable Fund to the extent such expenses are
reimbursable under the Plan. The Treasurer of the Trust shall provide to the
Board of Trustees of the Trust and the Board of Trustees shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
(e) The Trust shall pay all expenses incurred in connection
with (i) the preparation, printing and distribution to shareholders of the
Prospectus and reports and other communications to Fund shareholders; (ii)
registrations of Fund shares under the 1933 Act and the Fund under the 1940 Act;
(iii) amendments to the Registration Statement; (iv) notice filings for Fund
shares for sale in jurisdictions designated by the Distributor; (v)
qualification of the Trust as a dealer or broker under the laws of jurisdictions
designated by the Distributor; (vi) qualification of the Trust as a foreign
corporation authorized to do business in any jurisdiction if the Distributor
determines that such qualification is necessary or desirable for the purpose of
facilitating sales of Fund shares; (vii) maintaining facilities for the issue
and transfer of Fund shares; (viii) supplying information, prices and other data
to be furnished by the Trust under this agreement; and (ix) original issue taxes
or transfer taxes applicable to the sale or delivery of Fund shares.
(f) The Trust shall execute all documents and furnish any
information which may be reasonably necessary in connection with the notice
filings for Fund shares for sale in a jurisdiction designated by the
Distributor.
Page 2 of 13
(g) The Trust shall pay to the Distributor the maximum amount
that is payable pursuant to, and in accordance with, the Distribution Plan
applicable to a Fund or class of shares of a Fund, or the maximum amount payable
under applicable laws, regulations and rules, whichever is less, unless the
parties hereto mutually agree, in writing, to a lesser amount. In addition, the
Distributor shall be entitled to receive applicable sales charges, including
front end sales loads and contingent deferred sales charges, on the basis set
forth in the Prospectus.
8. The Trust shall furnish the Distributor from time to time,
for use in connection with the sale of Fund shares, such written information
with respect to the Trust as the Distributor may reasonably request. In each
case such written information shall be signed by an authorized officer and shall
be true and correct. The Trust shall also furnish to the Distributor copies of
its reports to its shareholders and such additional information regarding the
Trust's financial condition as the Distributor may reasonably request from time
to time.
9. The Registration Statement and the Prospectus have been or
will be, as the case may be, prepared in conformity with the 1933 Act, the 1940
Act and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "SEC"). The Trust represents and
warrants to the Distributor that the Registration Statement and the Prospectus
contain or will contain all statements required to be stated therein in
accordance with the 1933 Act, the 1940 Act and the Rules and Regulations, that
all statements of fact contained or to be contained therein are or will be true
and correct at the time indicated or the effective date, as the case may be, and
that neither the Registration Statement nor the Prospectus, when it shall become
effective under the 1933 Act or be authorized for use, shall include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading to a
purchaser of Fund shares. The Trust shall from time to time file such amendment
or amendments to the Registration Statement and the Prospectus as, in the light
of future developments, shall, in the opinion of the Trust's counsel, be
necessary in order to have the Registration Statement and the Prospectus at all
times contain all material facts required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of Fund shares. If the
Trust shall not file such amendment or amendments within 15 days after receipt
by the Trust of a written request from the Distributor to do so, the Distributor
may, at its option, terminate this agreement immediately. The Trust shall not
file any amendment to the Registration Statement or the Prospectus without
giving the Distributor reasonable notice thereof in advance, provided that
nothing in this agreement shall in any way limit the Trust's right to file at
any time such amendments to the Registration Statement or the Prospectus as the
Trust may deem advisable. The Trust represents and warrants to the Distributor
that any amendment to the Registration Statement or the Prospectus filed
hereafter by the Trust will, when it becomes effective under the 1933 Act,
contain all statements required to be stated therein in accordance with the 1933
Act, the 1940 Act and the Rules and Regulations, that all statements of fact
contained therein will, when the same shall become effective, be true and
correct, and that no such amendment, when it becomes effective, will include an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading to a purchaser of Fund shares.
10. Subject to the provisions of paragraph 7, the Trust shall
prepare and furnish to the Distributor from time to time such number of copies
of the most recent effective Prospectus filed with the SEC as the Distributor
may reasonably request. The Trust authorizes the Distributor and Selling Agents
to use the Prospectus, in the form furnished to the Distributor from time to
time, in connection with the sale of Fund shares. The Trust shall indemnify,
defend and hold harmless the Distributor, its officers and directors and any
person who controls the Distributor within the meaning of the 1933 Act, from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers or directors or any such controlling person, may incur under the 1933
Act, the 1940 Act, other statutes, the common law or otherwise, arising out of
or based upon any alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading.
Notwithstanding the foregoing, this indemnity agreement, to the extent that it
might require indemnity of any person who is an officer or director of the
Distributor and who is also a Trustee of the Trust, shall not inure to the
benefit of such officer or director unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent, that
such
Page 3 of 13
result would not be against public policy as expressed in the 1933 Act or the
1940 Act, and in no event shall anything contained herein be so construed as to
protect the Distributor against any liability to the Trust or its shareholders
to which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of its reckless disregard or its obligations and duties under this
agreement. This indemnity agreement is expressly conditioned upon the Trust's
being notified of any action brought against the Distributor, its officers or
directors or any such controlling person, which notification shall be given by
letter or by telegram addressed to the Trust at its principal office in Los
Angeles, California, and sent to the Trust by the person against whom such
action is brought within ten days after the summons or other first legal process
shall have been served. The failure to notify the Trust of any such action shall
not relieve the Trust from any liability which it may have to the person against
whom such action is brought by reason of any such alleged untrue statement or
omission otherwise than on account of the indemnity agreement contained in this
paragraph. The Trust shall be entitled to assume the defense of any suit brought
to enforce any such claim, demand or liability, but, in such case, the defense
shall be conducted by counsel chosen by the Trust and approved by the
Distributor. If the Trust elects to assume the defense of any such suit and
retain counsel approved by the Distributor, the defendant or defendants in such
suit shall bear the fees and expenses of any additional counsel retained by any
of them, but in case the Trust does not elect to assume the defense of any such
suit, or in case the Distributor does not approve of counsel chosen by the
Trust, the Trust will reimburse the Distributor, its officers and directors or
the controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by the Distributor or them. In
addition, the Distributor shall have the right to employ separate counsel to
represent it, its officers and directors and any such controlling person who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the Distributor against the Trust hereunder if in the
reasonable judgment of the Distributor it is advisable because of existing or
potential differing interests between the Distributor, its officers and
directors or such controlling person and the Trust in the conduct of the defense
of such action, for the Distributor, its officers and directors or such
controlling person to be represented by separate counsel, in which event the
fees and expenses of such separate counsel shall be borne by the Trust. This
indemnity agreement and the Trust's representations and warranties in this
agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor, its officers and
directors or any such controlling person and shall survive the delivery of any
shares as provided in this agreement. This indemnity agreement shall inure
exclusively to the benefit of the Distributor and its successors, the
Distributor's officers and directors and their respective estates and any such
controlling persons and their successors and estates. The Trust shall promptly
notify the Distributor of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any Fund shares.
11. The Distributor agrees to indemnify, defend and hold
harmless the Trust, its officers and Trustees and any person who controls the
Trust within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Trust, its officers or Trustees or any such
controlling person, may incur under the 1933 Act, the 1940 Act, other statutes,
the common law or otherwise, but only to the extent that such liability or
expense incurred by the Trust, its officers or Trustees or such controlling
person resulting from such claims or demands shall arise out of or be based upon
(a) any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use in the
Registration Statement or the Prospectus or shall arise out of or be based upon
any alleged omission required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading, (b) any alleged
act or omission on the Distributor's part as the Trust's agent that has not been
expressly authorized by the Trust in writing, or (c) any alleged willful
misfeasance, bad faith or negligence in the performance of the Distributor's
obligations and duties under the Agreement or by reason of its alleged reckless
disregard thereof. This indemnity agreement is expressly conditioned upon the
Distributor's being notified of any action brought against the Trust, its
officers and Trustees or any such controlling person, which notification shall
be given by letter or telegram, addressed to the Distributor at its principal
office in Little Rock, Arkansas, and sent to the Distributor by the person
against whom such action is brought, within 10 days after the summons or other
first legal process shall have been served. The failure to notify the
Distributor of any such action shall not relieve the Distributor from any
liability which it may have to the Trust, its officers or Trustees or such
controlling person by reason of any such alleged misstatement or omission on
Page 4 of 13
the Distributor's part otherwise than on account of the indemnity agreement
contained in this paragraph. The Distributor shall have a right to control the
defense of such action with counsel of its own choosing and approved by the
Trust if such action is based solely upon such alleged misstatement or omission
on the Distributor's part, and in any other event the Trust, its officers and
Trustees or such controlling person shall each have the right to participate in
the defense or preparation of the defense of any such action at their own
expense.
12. No Fund shares shall be sold through the Distributor or by
the Trust under this agreement and no orders for the purchase of Fund shares
shall be confirmed or accepted by the Trust if and so long as the effectiveness
of the Registration Statement shall be suspended under any of the provisions of
the 1933 Act. Nothing contained in this paragraph 12 shall in any way restrict,
limit or have any application to or bearing upon the Trust's obligation to
redeem Fund shares from any shareholder in accordance with the provisions of its
Declaration of Trust. The Trust will use its best efforts at all times to have
Fund shares effectively registered under the 1933 Act.
13. The Trust agrees to advise the Distributor immediately:
(a) of any request by the SEC for amendments to the
Registration Statement, the Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or the
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event that makes
untrue any statement made in the Registration Statement or the Prospectus or
that requires the making of a change in either thereof in order to make the
statements therein not misleading; and
(d) of any action of the SEC with respect to any
amendments to the Registration Statement or the Prospectus that may from time to
time be filed with the SEC under the 1933 Act or the 1940 Act.
14. Insofar as they concern the Trust, the Trust shall comply
with all applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted pursuant
to the 1933 Act, the 1940 Act or by any securities association registered under
the 1934 Act.
15. The Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its obligations
under this agreement, but no such appointment or employment shall relieve the
Distributor of any of its responsibilities or obligations to the Trust under
this agreement.
16. The following provisions shall apply with respect to the
sale by Distributor of Class B or Class C Shares of any Fund, notwithstanding
any other provision herein to the contrary:
(a) Distributor shall have the obligation to pay all
applicable dealer allowances ("B or C Share Allowances") which Selling Agents
are entitled to receive in connection with the sale of Class B or Class C
Shares, including any such B or C Share Allowances, or portions thereof, which
registered representatives of Distributor are entitled to receive.
(b) The amounts that are payable under the Plan to
Distributor pursuant to Section 7(g) hereof with respect to the Class B or Class
C Shares of the Funds are the maximum amounts which are set forth in Appendix A
to the Plan for the Class B or Class C Shares. These amounts shall continue to
be the amounts payable with regard to the Class B or Class C Shares under the
Plan unless and until changed in accordance with the terms of such Plan or this
Agreement.
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(c) To the extent that Distributor engages and uses a
third-party to finance its obligation to pay B or C Share Allowances as set
forth in this section, Distributor shall have the right to assign to such
third-party all or any portion of Distributor's right hereunder to receive fees
in connection with the sale of Class B or C Shares and to direct the Trust, upon
written notice, to make direct payment of these fees to such party, free and
clear of any rights to offset or claims of the Trust or any Fund against
Distributor.
(d) The Trust acknowledges that, under the applicable
Distribution Plan for Class B or C Shares of the Funds, any payments that
Distributor is entitled to receive with respect to Class B or C Shares shall
continue, in accordance with, and subject to, the applicable terms relating to
the Class B or C Shares, regardless of whether Distributor is acting as the
principal underwriter for the Company (and affected Funds); provided that the
Distribution Plan for the Class B or C Shares have not been terminated or
modified in a way which affects the payment of such amounts.
17. Subject to the provisions of paragraph 9, this agreement
shall continue in effect until such time as there shall remain no shares
registered under the 1933 Act, provided that this agreement shall continue in
effect for a period of more than one year from the date hereof only so long as
such continuance is specifically approved at least annually in accordance with
the 1940 Act and the rules thereunder. This agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act). This
agreement may, in any event, be terminated at any time, without the payment of
any penalty, by the Trust upon 60 days' written notice to the Distributor or by
the Distributor at any time after the second anniversary of the effective date
of this agreement on 60 days' written notice to the Trust.
18. Nothing in this Agreement shall require the Trust to take
any action contrary to any provision of its Declaration of Trust or to any
applicable statute or regulation.
19. Miscellaneous.
(a) Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Trust or the
Distributor shall be sufficiently given if addressed to that party and received
by it at its office set forth below or at such other place as it may from time
to time designate in writing.
To the Trust:
Hotchkis and Wiley Funds
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
With a copy to:
Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
To the Distributor:
Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Vice President
(b) This Agreement shall extend to and be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be subject to assignment (as that term is
defined under the 1940 Act).
Page 6 of 13
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and which
collectively shall be deemed to constitute only one agreement.
(e) If any provision of this Agreement is declared to be
prohibited or unenforceable, the remaining provisions of this Agreement shall
continue to be valid and fully enforceable.
In witness whereof, the parties have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
HOTCHKIS AND WILEY FUNDS
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
President
XXXXXXXX INC.
By: /s/ Xxxxxxx X. Xxxxx Xx.
---------------------------------
Xxxxxxx X. Xxxxx, Xx.
Senior Vice President
Approved: September 11, 2001.
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APPENDIX A
Hotchkis and Wiley Funds covered by this Agreement
1. Large Cap Value Fund
2. Mid-Cap Value Fund
3. Small Cap Value Fund
4. Equity Fund For Insurance Companies
Page 8 of 00
XXXXXXXX X
FORM OF SELLING GROUP AGREEMENT
HOTCHKIS AND WILEY FUNDS
SELLING GROUP AGREEMENT
XXXXXXXX INC.
000 Xxxxxx Xxxxxx, Xxxxx 000
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 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
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fees to your customers for processing exchange or redemption
orders for Shares, provided you provide written disclosure
of the fees to your customers.
4. 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.
5. 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.
6. 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.
7. Shares purchased hereunder will not be issued in
certificated form.
8. 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.
9. 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.
10. 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.
11. 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
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of Additional 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. All communications to us shall be sent to us by mail or by
confirmed telefacsimile at 000 Xxxxxx Xxxxxx, Xxxxx 000,
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.
Page 11 of 13
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 one copy to
Xxxxxxxx Inc.
Page 12 of 13
SCHEDULE 1
HOTCHKIS AND WILEY FUNDS
Small Cap Value Fund
Class A
Class B
Class C
Class I
Mid-Cap Value Fund
Class A
Class B
Class C
Class I
Large Cap Value Fund
Class A
Class B
Class C
Class I
Equity Fund For Insurance Companies
Page 13 of 13
