BROKER/DEALER AGREEMENT
Keeley Investment Corp.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
We desire to enter into an Agreement with you for the sale of of those
series of shares of common stock in KEELEY Funds, Inc. (the "Corporation") as
set forth on Exhibit.A (each series is a "Fund", and collectively all of the
series are the "Funds") that are now or hereafter available for sale to our
customers. You are the principal underwriter (as such term is defined in the
Investment Company Act of 1940, as amended) of the offering of shares of the
Funds and the agent for the continuous distribution of such shares. As used
herein the term "Prospectus" means the prospectus of the Funds and, unless the
context otherwise requires, related Statement of Additional Information (the
"Statement of Additional Information") incorporated therein by reference, as the
same are amended and supplemented from time to time.
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. Customers of ours who purchase Fund shares are for all purposes our
customers and not customers of the Corporation. We shall be responsible for
opening, approving and monitoring customer accounts and for the review and
supervision of these accounts, all in accordance with the rules of the
Securities and Exchange Commission ("SEC") and National Association of
Securities Dealers, Inc. (the "NASD"). In no transaction involving Fund shares
shall we have any authority to act as agent for the Corporation or for you.
2. All orders for the purchase of any Fund shares shall be executed at
the then current public offering price per share (i e., the net asset value per
share plus the applicable sales load, if any) and all orders for the redemption
of Fund shares shall be executed at the net asset value share, in each case as
described in the Prospectus. The minimum initial purchase order shall be as set
forth in the Prospectus. The Corporation reserves the right to reject any
purchase order. Unless otherwise mutually agreed in writing, each transaction
shall be promptly confirmed in writing to the customer on a fully disclosed
basis. We agree that upon receipt of duplicate confirmations we will examine the
same and promptly notify the Corporation of any errors or discrepancies which we
discover and shall promptly bring to the attention of the Corporation any errors
in such confirmations claimed by our customers. The Corporation reserves the
right, at its discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of shares of the Funds.
3. In ordering shares of the Funds, we shall rely solely and conclusively
on the representations contained in the Prospectus. We agree that we shall not
offer or sell shares of the Funds except in compliance with all applicable
federal and state securities laws and the rules and regulations of applicable
regulatory agencies or authorities. In connection with offers to sell and sales
of shares of the Funds, we agree to deliver or cause to be delivered to each
person to whom any such offer or sale is made, at or prior to the time of such
offer or sale, a copy of the Prospectus, and upon request, the Statement of
Additional Information. We further agree to obtain for each customer to whom we
sell Fund shares any taxpayer identification number certification required under
Section 3406 of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder, and to provide you or your designee with
timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding in accordance with Section 3406 of the Code and the
regulations thereunder. Unless otherwise mutually agreed in writing, you shall
deliver or cause to be delivered to each customer who purchases shares of the
Funds through us copies of all annual and interim reports, proxy solicitation
materials and any other information and materials relating to the Funds and
prepared by or on behalf of you, the Funds or their investment adviser,
investment sub-adviser, custodian, transfer agent or dividend disbursing agent
for distribution to such customer. You agree to supply us with copies of the
Prospectus, Statement of Additional Information, annual reports, interim
reports, proxy solicitation materials and any such other information and
materials relating to the Funds in reasonable quantities upon request. We
acknowledge that any material or information that you furnish to us, other than
Prospectuses, annual and interim reports to stockholders
and proxy solicitation materials prepared by the Corporation, are your sole
responsibility and not the responsibility of the Corporation.
4. We shall not make any representations concerning Fund shares other than
those contained in the Prospectus or in any promotional materials or sales
literature furnished to us by you or the Corporation. We shall not furnish or
cause to be furnished to any person or display or publish any information or
materials relating to the Funds (including, without limitation, promotional
materials and sales literature, advertisements, press releases, announcements,
statements, posters, signs or other similar materials), except such information
and materials as may be furnished to us by you or the Corporation, and such
other information and materials as may be approved in writing by you.
5. In determining the amount of any dealer allowance or sales commission
payable to us hereunder, you reserve the right to exclude any sales which you
reasonably determine are not made in accordance with the terms of the Prospectus
and the provisions of this Agreement. Unless at the time of transmitting an
order we advise you or the transfer agent for the Corporation (the "Transfer
Agent") to the contrary, the shares ordered will be deemed to be the total
holdings of the specified investor.
6. a. In accordance with the terms of the Prospectus, a reduced sales load
may be available to customers that purchase shares of a Fund sold with
a sales load at the then-current public offering price per share
applicable to the total value (based on the higher of current net asset
value or the public offering price originally paid) of (i) current
purchases plus (ii) shares of that same Fund that are already
beneficially owned at the time of purchase by the customer on which a
sales load has been paid. Certain purchases made by a customer and
certain other persons (for example, a customer's spouse) as set forth
from time to time in the Prospectus may be combined for purposes of
qualifying for a reduced sales charge. In each case where a reduced
sales load is applicable, we agree to furnish to the Transfer Agent
sufficient information to permit confirmation of qualification for a
reduced sales load, and acceptance of the purchase order is subject to
such confirmation. Reduced sales charges may be modified or terminated
at any time at the sole discretion of the Corporation.
b. We acknowledge that certain classes of investors may be entitled
to purchase shares of a Fund at net asset value without a sales load
as from time to time provided in the Prospectus.
c. We agree to advise you promptly at your request as to the amount
of any and all sales by us qualifying for a reduced sales load or no
sales load.
7. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus and instructions received by us from you
or the Transfer Agent from time to time. No conditional orders will be accepted.
We agree that purchase orders placed by us will be made only for the purpose of
covering purchase orders already received from our customers and that we will
not make purchases for any other securities dealer or broker. Further, we shall
place purchase orders from customers with the Corporation immediately and shall
not withhold the placement of such orders so as to profit ourselves; provided,
however, that the foregoing shall not prevent the purchase of shares of the
Funds by us for our own bona fide investment. We agree that: (a) we shall not
effect any transactions (including, without limitation, any purchases and
redemptions) in Fund shares registered in the name of, or beneficially owned by,
any customer unless such customer has granted us full right, power and authority
to effect such transactions on his or her behalf, and (b) you, the Corporation,
the Transfer Agent and your and their respective officers, directors or
trustees, agents, employees and affiliates shall not be liable for, and shall be
fully indemnified and held harmless by us from and against, any and all claims,
demands, liabilities and expenses (including, without limitation, reasonable
attorneys' fees) which may be incurred by you or any of the foregoing persons
entitled to indemnification from us hereunder arising out of or in connection
with the execution of any transactions in Fund shares registered in the name of,
or beneficially owed by, any customer in reliance upon any oral or written
instructions believed to be genuine and to have been given by or on behalf of
us. The indemnification agreement contained in this Paragraph 7 shall survive
the termination of this Agreement.
8. a. We agree that payment for orders from us for the purchase of Fund
shares will be made in accordance with the terms of the Prospectus as
set forth on Exhibit A. On or before the settlement date of each
purchase order for shares of a Fund, we shall remit to an account
designated by you with the Transfer Agent an amount equal to the then
current public offering price of such Fund shares being purchased
without deduction of our dealer allowance, if any, with respect to such
purchase order as determined by you in accordance with the terms of the
Prospectus, in which case our dealer allowance, if any shall be payable
to us on at least a monthly basis. If we are a member of the National
Securities Clearing Corporation ("NSCC"), we shall place our orders and
settle the transactions through the NSCC in accordance with its rules
and regulations. If payment for any purchase order is not received in
accordance with the terms of the Prospectus, you reserve the right,
without notice, to cancel the sale and to hold us responsible for any
loss sustained as a result thereof.
b. If any Fund shares sold under the terms of this Agreement are sold
with a sales load and are redeemed by the Corporation or repurchased
for the account of the Corporation or are tendered for redemption
within seven (7) business days after confirmation of our purchase order
for such Fund shares: (i) we shall forthwith refund to you the full
dealer allowance received by us on the sale; and (ii) you shall
forthwith pay to the Corporation your portion of the sales load on the
sale which had been retained by you, if any, and shall also pay to the
Corporation the amount refunded by us.
c. In addition to the fees delineated above in paragraph 8(a), if
Exhibit A states that a Fund includes a distribution fee, you agree,
subject to the other terms and conditions of this Agreement, to pay
to us such distribution fee and we agree to accept as full payment
therefore, for distribution and marketing services in the promotion
of that Fund's shares. In the event that Exhibit A includes a
distribution fee with respect to any Fund, we acknowledge that such
distribution fee paid will be paid from monies received by you under
a Distribution Plan adopted pursuant to Rule 12b-1 (each a "Plan")
under the Investment Company Act of 1940, as amended (the "Act").
Under any Plan so adopted, the Corporation is authorized to make
expenditures of assets of a Fund for various distribution and
support services. Further, we understand and agree that (i) all
distribution fees are subject to the limitations contained in the
applicable Plan, which may be amended or discontinued at any time,
and (ii) our failure to provide services as agreed will render us
ineligible to receive distribution fees. We shall furnish to you and
the Corporation such information as you and the Corporation shall
reasonably request with respect to the fees and services hereunder.
9. We hereby represent and warrant that: (a) we are a corporation,
partnership or other entity duly organized and validly existing in good standing
under the laws of the jurisdiction in which we are organized; (b) the execution
and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all necessary action and all
other authorizations and approvals (if any) required for our lawful execution
and delivery of this Agreement and our performance hereunder have been obtained;
and (c) upon execution and delivery by us, and assuming due and valid execution
and delivery by you, this Agreement will constitute a valid and binding
agreement, enforceable against us in accordance with its terms.
10. We further represent and warrant that we are a member of the NASD and,
with respect to any sales in the United States, we agree to abide by all of the
rules and regulations of the NASD, including, without limitation, its Rules of
Fair Practice. We agree to comply with all applicable federal and state laws,
rules and regulations. You agree to inform us, upon our request, as to the
states in which you believe the shares of a Fund have been qualified for sale
under, or exempt from the requirements of, the respective securities laws of
such states, but you shall have no obligation or responsibility to make shares
of a Fund available for sale to our customers in any jurisdiction. We agree to
notify you immediately in the event of our expulsion or suspension from the
NASD. Our expulsion from the NASD will automatically terminate this Agreement
immediately without notice. Our suspension from the NASD will terminate this
Agreement effective immediately upon written notice of termination to us.
11. The names and addresses and other information concerning our customers
are and shall remain our sole property, and neither you nor your affiliates
shall use such name, addresses or other information for any purpose
except in connection with the performance of your duties and responsibilities
hereunder and except for servicing and informational mailings relating to the
Corporation. Notwithstanding the foregoing, this Paragraph 11 shall not prohibit
you or any of your affiliates from utilizing for any purpose the names,
addresses or other information concerning any of our customers if such names,
addresses or other information are obtained in any manner other than from us
pursuant to this Agreement. The provisions of this Paragraph 11 shall survive
the termination of this Agreement.
12. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an exclusive
arrangement, or to create a partnership, association or joint venture between
you and us. Neither party hereto shall be, act as, or represent itself as, the
agent or representative of the other, nor shall either party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, express or implied, against or in the name of, or on behalf of, the other
party. This Agreement is not intended to, and shall not, create any rights
against either party hereto by any third party solely on account of this
Agreement. Neither party hereto shall use the name of the other party in any
manner without the other party's prior written consent, except as required by an
applicable federal or state law, rule or regulation, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties hereto.
13. Except as otherwise specifically provided herein, all notices required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt requested, or by telex,
telegram or similar means of same day delivery (with confirming copy by mail as
provided herein). Unless otherwise notified in writing, all notices to you shall
be given or sent to you at your office, located at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, and all notices to us shall be given or
sent to us at our address shown below.
14. We represent and warrant that we have adopted an anti-money laundering
program ("AML Program") that complies with the Bank Secrecy Act, as amended by
the USA PATRIOT Act, and any future amendments (the "PATRIOT Act," and together
with the Bank Secrecy Act, the "Act"), the rules and regulations under the Act,
and the rules, regulations and regulatory guidance of the SEC, the NASD or any
other applicable self-regulatory organization (collectively, "AML Rules and
Regulations"). We further represent that our AML Program, at a minimum, (a)
designates a compliance officer to administer and oversee the AML Program, (b)
provides ongoing employee training, (c) includes an independent audit function
to test the effectiveness of the AML Program, (d) establishes internal policies,
procedures, and controls that are tailored to our particular business, (e) will
include a customer identification program consistent with the rules under
section 326 of the Act, (f) provides for the filing of all necessary anti-money
laundering reports including, but not limited to, currency transaction reports
and suspicious activity reports, (g) provides for screening all new and existing
customers against the Office of Foreign Asset Control ("OFAC") list and any
other government list that is or becomes required under the Act, and (h) allows
for appropriate regulators to examine our AML books and records.
15. This Agreement shall become effective only when accepted and signed by
you, and may be terminated at any time by either party hereto upon fifteen (15)
days' prior written notice to the other party. This Agreement may be amended
only by a written instrument signed by both of the parties hereto. This
Agreement will terminate automatically in the event if its assignment. This
Agreement constitutes the entire agreement and understanding between the parties
hereto relating to the subject matter hereof and supersedes any and all prior
agreements between the parties relating to said subject matter.
16. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Illinois, without giving effect to principles
of conflicts of laws.
Very truly yours,
--------------------------------------------
Name of Broker/Dealer (Please Print or Type)
--------------------------------------------
Firm
-------------------------------------
Address
Date: By:
------------ ----------------------
Authorized Officer
NOTE: Please sign and return both copies of this Agreement to Keeley
Investment Corp. Upon acceptance, one countersigned copy will be returned to
you for your files.
Accepted:
KEELEY INVESTMENT CORP.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Date: By:
------------ ----------------------
Authorized Officer
EXHIBIT A
Series: KEELEY Mid Cap Value Fund:
As a % of As a % of Dealers'
Offering Net Asset Reallowance
Price Value as a % of
Amount of Transaction Per Share Offering Price
Less than $50,000 4.50% 4.71% 4.00%
$ 50,000 but less than $100,000 4.00% 4.17% 3.50%
$100,000 but less than $250,000 3.00% 3.09% 2.50%
$250,000 but less than $500,000 2.50% 2.56% 2.00%
$500,000 and over 1.00% 1.01% 0.50%
Distribution Fee: distribution fee calculated daily and payable quarterly and
based on the average daily net assets of KEELEY Mid Cap Value Fund shares which
are owned of record by us as nominee for our customers or which are owned by
those customers of our firm whose records, as maintained by the Corporation or
its agent, designate us as the customer's dealer of record.
