DISTRIBUTION AGREEMENT
Exhibit 28(e)
DISTRIBUTION AGREEMENT, dated August 1, 2011, between Gabelli Capital Series Funds, Inc., a Maryland corporation (the “Company”), and G.distributors, LLC, a Delaware limited liability company (the “Distributor”), relating to Gabelli Capital Asset Fund, a series of the Company (the “Fund”). The Company is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”), and an indefinite number of shares of the Fund, par value $.001 per share (the “Shares”), have been registered under the Securities Act of 1933 (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 (together, the “Prospectus”) of the Company included in the Company’s Registration Statement on Form N-1A, relating to the Fund, as such documents may be amended from time to time.
In this connection, the Company desires that the Distributor act as its exclusive sales agent and distributor for the sale and distribution of Shares to separate accounts of The Guardian Insurance & Annuity Company, Inc. (the “Separate Accounts”). The Distributor has advised the Company that it is willing to act in such capacities, and it is accordingly agreed between them as follows:
1. The Company 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 Company 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 Company 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 Company at any time for any reason the Distributor will suspend such efforts. The Company 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.
3. The Distributor represents that it is a member in good standing of the National Association of Securities 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 Company by its actions, conduct or contracts except that it is authorized to accept orders for the purchase or repurchase of Shares as the Company’s agent and subject to its approval. The Company reserves the right to reject any order in whole or in part. 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 Company 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. To facilitate sales, the Company will furnish the Distributor with the net asset value of its Shares promptly after each calculation thereof.
5. The Company has delivered to the Distributor a copy of its current Prospectus. 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 Company 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 Company 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 Company 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 Company 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 Company.
7. The Distributor agrees that:
(a) It will furnish to the Company 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; and
(c) It will not use or distribute or authorize the use or distribution of any statements other than those contained in the Company’s then current Prospectus or in such supplemental literature or advertising as may be authorized in writing by the Company.
8. The Company will pay its legal and auditing expenses and the cost of composition of any prospectuses and annual or interim reports of the Company.
9. The Company will neither pay the Distributor any compensation for its services hereunder nor pay the Distributor for costs and expenses incurred by the Distributor in connection with distribution of Shares by the Distributor.
10. The Company 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
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counsel fees) incurred by such indemnitee in connection with the defense or disposition 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 Company expressly for use in any such Prospectus; provided, however, that (1) no indemnitee shall be indemnified hereunder against any liability to the Company or its shareholders 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 Company 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 Company 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 Company and did not involve disabling conduct by such indemnitee. Notwithstanding the foregoing, the Company shall not be obligated to provide any such indemnification to the extent such provision would waive any right which the Company cannot lawfully waive.
The Distributor agrees to indemnify, defend and hold the Company, its Directors, officers, employees and agents and any person who controls the Company within the meaning of Section 15 of the 1933 Act (each, an “indemnitee”), free and harmless 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 Company 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.
The Company shall make advance payments in connection with the expenses of defending any action with respect to which indemnification might be sought hereunder if the Company 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 Company unless it is subsequently determined that he is entitled to such indemnification and if the directors of the Company 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 Company shall be insured against losses arising by reason of any lawful advances, or (C) a majority of a quorum of directors of the Company who are neither “interested persons” of the Company (as defined in Section 2(a)(19) of the Act) nor parties to the proceeding (“Disinterested Non-Party Directors”) or an independent
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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 Directors of the Company, 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, unless terminated pursuant to Section 12, for two years from such date and thereafter from year to year provided such continuance is specifically approved at least annually by (a) the Board of Directors of the Company or the 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) a majority of the directors of the Company who are not “interested persons” of the Company as defined in Section 2(a)(19) of the 1940 Act.
12. This Agreement may be terminated (a) by the Distributor at any time without penalty by giving sixty (60) days’ written notice to the Company which notice may be waived by the Company; or (b) by the Company 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 Company shall be directed or approved in the same manner as required for continuance of this Agreement by Section 11(a).
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). 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.
| GABELLI CAPITAL SERIES FUNDS, INC. | ||
| By: | /s/ Xxxxx Xxxxxx | |
| Name: Xxxxx Xxxxxx Title: President | ||
| G.DISTRIBUTORS, LLC | ||
| By: | /s/ Xxxxx Xxxxxxx | |
| Name: Xxxxx Xxxxxxx Title: CEO | ||
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