DISTRIBUTION AGREEMENT
FOR
THE GABELLI UTILITIES FUND
DISTRIBUTION AGREEMENT, dated July __, 1999, between The Gabelli Utilities
Fund, a Delaware business trust (the "Fund"), and Gabelli & Company, Inc., a New
York corporation (the "Distributor"). The Fund is registered as an investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and an indefinite number of shares (the "Shares") of the Fund, par value $.001
per share (the "Shares"), have been registered under the Securities Act of 1933,
as amended (the "1933 Act") to be offered for sale to the public in a continuous
public offering in accordance with terms and conditions set forth in the
Prospectus and Statement of Additional Information (the "Prospectus") of the
Fund included in the Fund's Registration Statement on Form N-1A as such
documents may be amended from time to time.
In this connection, the Fund desires that the Distributor act as its
exclusive sales agent and distributor for the sale and distribution of Shares.
The Distributor has advised the Fund that it is willing to act in such
capacities, and it is accordingly agreed between them as follows:
1. The Fund hereby appoints the Distributor as exclusive sales agent
and distributor for the sale and distribution of Shares pursuant to
the aforesaid continuous public offering of Shares, and the Fund
further agrees from and after the commencement of such continuous
public offering that it will not, without the Distributor's
consent, sell or agree to sell any Shares otherwise than through
the Distributor, except the Fund may issue Shares in connection
with a merger, consolidation or acquisition of assets on such basis
as may be authorized or permitted under the 0000 Xxx.
2. The Distributor hereby accepts such appointment and agrees to use
its best efforts to sell such Shares; provided, however, that when
requested by the Fund at any time for any reason the Distributor
will suspend such efforts. The Fund may also withdraw the offering
of Shares at any time when required by the provisions of any
statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that the Distributor does not
undertake to sell all or any specific portion of the Shares of the
Fund. The Fund acknowledges that the Distributor will enter into
sales or servicing agreements with registered securities brokers
and banks and into servicing agreements with financial institutions
and other industry professionals, such as investment advisers,
accountants and estate planning firms. In entering into such
agreements, the Distributor shall act only on its own behalf as
principal underwriter and distributor. The Distributor shall not be
responsible for making any distribution plan or service fee
payments pursuant to any plans the Fund may adopt or agreements it
may enter into.
3. The Distributor represents that it is a member in good standing of
the National Association of Dealers, Inc. and agrees that it will
use all reasonable efforts to maintain such status and to abide by
the Rules of Fair Practice, the Constitution and the Bylaws of the
National Association of Securities Dealers, Inc., and all other
rules and regulations that are now or may become applicable to its
performance hereunder. The Distributor will undertake and discharge
its obligations hereunder as an independent contractor and it shall
have no authority or power to obligate or bind the Fund by its
actions, conduct or contracts except that it is authorized to
accept orders for the purchase or repurchase of Shares as the
Fund's agent and subject to its approval. The Fund reserves the
right to reject any order in whole or in part. The Distributor may
appoint sub-agents or distribute through dealers or otherwise as it
may determine from time to time pursuant to agreements approved by
the Fund, but this Agreement shall not be construed as authorizing
any dealer or other person to accept orders for sale or repurchase
of Shares on behalf of the Fund or
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otherwise act as the Fund's agent for any purpose. The Distributor
shall not utilize any materials in connection with the sale or
offering of Shares except the then current Prospectus and such
other materials as the Fund shall provide or approve in writing.
4. Shares may be sold by the Distributor only at prices and terms
described in the then current Prospectus relating to the Shares and
may be sold either through persons with whom it has selling
agreements in a form approved by the Fund's Board of Trustees or
directly to prospective purchasers. To facilitate sales, the Fund
will furnish the Distributor with the net asset value of its Shares
promptly after each calculation thereof.
5. The Fund has delivered to the Distributor a copy of the current
Prospectus for the Fund. It agrees that it will use its best
efforts to continue the effectiveness of its Registration Statement
filed under the 1933 Act and the 1940 Act. The Fund further agrees
to prepare and file any amendments to its Registration Statement as
may be necessary and any supplemental data in order to comply with
such Acts. The Fund will furnish the Distributor at the
Distributor's expense with a reasonable number of copies of the
Prospectus and any amended Prospectus for use in connection with
the sale of Shares.
6. At the Distributor's request, the Fund will take such steps at its
own expense as may be necessary and feasible to qualify Shares for
sale in states, territories or dependencies of the United States of
America and in the District of Columbia in accordance with the laws
thereof, and to renew or extend any such qualification; provided,
however, that the Fund shall not be required to qualify Shares or
to maintain the qualification of Shares in any state, territory,
dependency or district where it shall deem such qualification
disadvantageous to the Fund.
7. The Distributor agrees that:
(a) It will furnish to the Fund any pertinent information required
to be inserted with respect to the Distributor as exclusive
sales agent and distributor within the purview of Federal and
state securities laws in any reports or registrations required
to be filed with any government authority;
(b) It will not make any representations inconsistent with the
information contained in the Registration Statement or
Prospectus filed under the Securities Act of 1933, as in
effect from time to time;
(c) It will not use or distribute or authorize the use or
distribution of any statements other than those contained in
the Fund's then current Prospectus or in such supplemental
literature or advertising as may be authorized in writing by
the Fund; and
(d) Subject to Paragraph 9 below, the Distributor will bear the
costs and expenses of printing and distributing any copies of
any prospectuses and annual and interim reports of the Fund
(after such items have been prepared and set in type) which
are used in connection with the offering of Shares, and the
costs and expenses of preparing, printing and distributing any
other literature used by the Distributor or furnished by the
Distributor for use in connection with the offering of the
Shares and the costs and expenses incurred by the Distributor
in advertising, promoting and selling Shares of the Fund to
the public. The Fund has adopted a separate plan of
distribution (collectively, the "Plan") pursuant to the
provisions of rule 12b-1 of the 1940 Act on behalf of its
Class A, Class B, Class C and Class AAA shares, respectively,
each of which provides for the payment of administrative and
sales related expenses in connection with the distribution of
Fund shares and the Distributor agrees to take no action
inconsistent with said Plan.
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8. The Fund will pay its legal and auditing expenses and the cost of
composition of any prospectuses of annual or interim reports of the
Fund.
9. The Fund will pay the Distributor for costs and expenses incurred
by the Distributor in connection with distribution of Shares by the
Distributor in accordance with the terms of a Plan of Distribution
(the "Plan") adopted by the Fund pursuant to Rule 12b-1 under the
1940 Act as such Plan may be in effect from time to time; provided,
however, that no payments shall be due or paid to the Distributor
hereunder unless and until this Agreement shall have been approved
by Board Approval and Disinterested Board Approval (as such terms
are defined in such Plan). The Fund reserves the right to modify or
terminate such Plan at any time as specified in the Plan and Rule
12b-1, and this Section 9 shall thereupon be modified or terminated
to the same extent without further action of the parties. The
persons authorized to direct the payment of funds pursuant to this
Agreement and the Plan shall provide to the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly a
written report of the amounts so paid and the purposes for which
such expenditures were made.
10. The Fund agrees to indemnify, defend and hold the Distributor, its
officers, directors, employees and agents and any person who
controls the Distributor within the meaning of Section 15 of the
1933 Act (each, an "indemnitee"), free and harmless from any and
all liabilities and expenses, including costs of investigation or
defense (including reasonable counsel fees) incurred by such
indemnitee in connection with the defense or imposition of any
action, suit or other proceeding, whether civil or criminal, in
which such indemnitee may be or may have been involved as a party
or otherwise or with which he may be or may have been threatened,
while the Distributor was active in such capacity or by reason of
the Distributor having acted in any such capacity or arising out of
or based upon any untrue statement of a material fact contained in
the then-current Prospectus relating to the Shares or arising out
of or based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information
furnished in writing by the Distributor to the Fund expressly for
use in any such Prospectus; provided, however, that (1) no
indemnitee shall be indemnified thereunder against any liability to
the Fund or the shareholders of the Fund or any expense of such
indemnitee with respect to any matter as to which such indemnitee
shall have been adjudicated not to have acted in good faith in the
reasonable belief that its action was in the best interest of the
Fund or arising by reason of such indemnitee's willful misfeasance,
bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations under this
Agreement ("disabling conduct"), or (2) as to any matter disposed
of by settlement or a compromise payment by such indemnitee, no
indemnification shall be provided unless there has been a
determination that such settlement or compromise is in the best
interests of the Fund and that such indemnitee appears to have
acted in good faith in the reasonable belief that its action was in
the best interest of the Fund and did not involve disabling conduct
by such indemnitee. Notwithstanding the foregoing the Fund shall
not be obligated to provide any such indemnification to the extent
such provision would waive any right which the Fund cannot lawfully
waive.
The Distributor agrees to indemnify, defend and hold the Fund, its
Trustees, officers, employees and agents and any person who
controls the Fund within the meaning of Section 15 of the 1933 Act
(each, an "indemnitee"), free and armless from and against any and
all liabilities and expenses, including costs of investigation or
defense (including reasonable counsel fees) incurred by such
indemnitee, but only to the extent that such liability or expense
shall arise out of or be based upon any untrue or alleged untrue
statement of a material fact contained in information furnished in
writing by the Distributor of the Fund expressly for use in a
Prospectus or any alleged omission to state a material fact in
connection with such information required to be stated therein
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or necessary to make such information not misleading or arising by
reason of disabling conduct by such indemnitee or any person
selling Shares pursuant to an agreement with the Distributor.
The Fund shall make advance payments in connection with the
expenses of defending any action with respect to which
indemnification might be sought hereunder if the Fund receives a
written affirmation of the indemnitee's good faith belief that the
standard of conduct necessary for indemnification has been met and
a written undertaking to reimburse the Fund unless it is
subsequently determined that he is entitled to such indemnification
and if the trustees of the Fund determine that the facts then known
to them would not preclude indemnification. In addition, at least
one of the following conditions must be met: (A) the indemnitee
shall provide a security for his undertaking, (B) the Fund shall be
insured against losses arising by reason of any lawful advances, or
(C) a majority of a quorum of trustees of the Fund who are neither
"interested persons" of the Fund (as defined in Section 2(a)(19) of
the Act) nor parties to the proceeding ("Disinterested Non-Party
Trustees") or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
All determinations with respect to indemnification hereunder shall
be made (1) by a final decision on the merits by a court or other
body before whom the proceeding was brought that such indemnitee is
not liable by reason of disabling conduct or, (2) in the absence of
such a decision, by (i) a majority vote of a quorum of the
Disinterested Non-Party Trustees of the Fund, or (ii) if such a
quorum is not obtainable or even, if obtainable, if a majority vote
of such quorum so directs, independent legal counsel in a written
opinion.
11. This Agreement shall become effective on the date first set forth
above and shall remain in effect for up to two years from such date
(one year in the case of Section 9 and thereafter from year to year
provided such continuance is specifically approved at least
annually prior to each anniversary of such date by (a) Board
Approval or by vote at a meeting of shareholders of the Fund of the
lesser of (i) 67 per cent of the Shares present or represented by
proxy and (ii) 50 per cent of the outstanding Shares and (b) by
Disinterested Board Approval.
12. This Agreement may be terminated (a) by the Distributor at any time
without penalty by giving sixty (60) days' written notice to the
Fund which notice may be waived by the Fund; or (b) by the Fund at
any time without penalty upon sixty (60) days' written notice to
the Distributor (which notice may be waived by the Distributor);
provided, however, that any such termination by the Fund shall be
directed or approved in the same manner as required for continuance
of this Agreement by Section 11(a) (or, in the case of termination
of Section 9, by Section 11(b)).
13. This Agreement may not be amended or changed except in writing
signed by each of the parties hereto and approved in the same
manner as provided for continuance of this Agreement in Section
11(a) (or, in the case of amendment of Section 9, by Section
11(b)). Any such amendment or change shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors, but this Agreement shall not be assigned by
either party and shall automatically terminate upon assignment (as
such term is defined in the 1940 Act and the rules thereunder).
14. This Agreement shall be construed in accordance with the laws of
the State of New York applicable to agreements to be performed
entirely therein and in accordance with applicable provisions of
the 1940 Act.
15. If any provision of this Agreement shall be held or made invalid or
unenforceable by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected or impaired
thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
THE GABELLI UTILITIES FUND
BY: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
GABELLI & COMPANY, INC.
BY: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
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