DISTRIBUTION AGREEMENT
FOR
THE GABELLI BLUE CHIP VALUE FUND
DISTRIBUTION AGREEMENT, dated July __, 1999, between The Gabelli Blue
Chip Value 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 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.
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 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.
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 BLUE CHIP VALUE 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
