DISTRIBUTION AGREEMENT, dated as of February 28, 2017, between KEELEY FUNDS, INC. (the “Company”) and
dated as of February 28, 2017, between
(the “Company”) and
G.distributors, LLC (the “Distributor”)
W I T N E S S E T H:
WHEREAS, the Company, a Maryland corporation, is registered as an investment company under the Investment Company Act of 1940 (the “1940 Act”) currently consisting of the series set forth on Exhibit A hereto, as such Exhibit may be revised from time to time (each, a “Fund”), and common shares of beneficial interest (hereinafter referred to as “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 the terms and conditions set forth in the Company’s Prospectuses (collectively, the “Prospectus”) and Statement of Additional Information (“SAI”) included in the Company’s Registration Statement as they may be amended from time to time; and
WHEREAS, the Company desires that the Distributor act as general distributor and as agent of the Company for the sale and distribution of shares which have been registered as described above and of any additional shares which may become registered during the term of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:
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1.
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The Company hereby appoints the Distributor as its general distributor and exclusive agent for the sale of its shares pursuant to the aforesaid continuous public offering of its shares. From and after the date of this Agreement, the Company agrees that it will not, without the Distributor’s consent, sell or agree to sell any shares otherwise than through the Distributor, except that the Company may (a) sell shares as an investment to its officers, Directors, bona fide full-time employees, its investment adviser and the affiliates thereof; (b) issue shares in lieu of the cash payments of dividends and distributions; and (c) 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.
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2.
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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 because of market or other economic considerations or abnormal circumstances of any kind, it will suspend such efforts. The Company may also withdraw the offering of the 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 Company. The Company acknowledges that the Distributor may 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 Company may adopt or agreements it may enter into.
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3.
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The 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 Company’s Board of Directors or directly to prospective purchasers. The Company shall furnish the Distributor, with all possible promptness, a computation of net asset value. The Distributor shall have the right to accept or reject orders for the purchase of shares of a Fund. Any consideration which the Distributor may receive in connection with a rejected purchase order shall be returned promptly.
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4.
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The Distributor agrees promptly to issue, or arrange for the issuance of, confirmations of all accepted purchase orders and to transmit a copy of such confirmations to the Company, or, if so directed, to any duly appointed transfer or shareholder servicing agent of the Company. The net asset value of all shares sold pursuant to the provisions hereof shall be paid promptly after receipt of payment from the originating dealer or purchaser and not later than eleven business days after such confirmation even if the Distributor has not actually received payment from the originating dealer or purchaser. If the originating dealer or purchaser shall fail to make timely settlement of its purchase order in accordance with the rules of the Financial Industry Regulatory Authority, Inc., then the Distributor shall have the right to cancel such purchase order and, at its account and risk, to hold responsible the originating dealer or purchaser. The Distributor agrees promptly to reimburse the Company for any amount by which the Company’s losses, attributable to any such cancellation or to errors on the Distributor’s part in relation to the effective date of accepted purchase orders, exceed contemporaneous gains realized by the Company for either of such reasons in respect to other purchase orders.
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5.
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The Company shall register or cause to be registered all shares sold pursuant to the provisions hereof in such name or names and amounts as the Distributor may request from time to time and the Company shall issue or cause to be issued certificates evidencing such shares for delivery to the Distributor or pursuant to the Distributor’s direction if and to the extent that the shareholder account in question contemplates the issuance of such share certificates. All shares of the Company, when so issued and paid for, shall be fully non-assessable.
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6.
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The Company has delivered to the Distributor a copy of its current Prospectus and SAI. The Company agrees that it will use its best efforts to continue the effectiveness of its Registration Statement filed under the 0000 Xxx. 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 the 1933 Act. The Company will furnish to the Distributor, at the Distributor’s expense, a reasonable number of copies of the Prospectus and SAI and any amended Prospectus and SAI for use in connection with the sale of shares.
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7.
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The Company has already registered under the 1940 Act as an investment company, and it will use its best efforts to maintain such registration and to comply with the requirements of the 1940 Act.
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8.
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The Distributor agrees that:
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(a)
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neither it nor any of its officers shall take any long or short position in the shares of any Fund; provided, however, that this subsection (a) shall not prevent the Distributor or its officers from acquiring shares of any Fund for investment purposes only;
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(b)
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it shall furnish to the Company any pertinent information required to be inserted, with respect to it as Distributor within the purview of the 1933 Act, in any reports or registration required to be filed with any governmental authority; and
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(c)
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it shall not make any representations inconsistent with the information contained in the Registration Statement of the Company filed under the 1933 Act, as in effect from time to time.
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9.
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The Company shall pay its legal and auditing expenses and the cost of composition, printing and mailing of sufficient copies of its Prospectus and SAI as shall be required for annual distribution to shareholders and the expense of registering shares for sale under federal securities laws. The Distributor shall pay the expenses normally attributable to such sales as it may make, including advertising and the cost of printing and mailing of the Company’s Prospectus and SAI other than those furnished to existing shareholders. The Company 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 Series shares 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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10.
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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 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 the shareholders of the Company 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.
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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 or any person selling shares pursuant to an agreement with the Distributor.
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)(l9) of the 0000 Xxx) nor parties to this Agreement (“Disinterested Non-Party Directors”) 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 Directors, 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.
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11.
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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 that such continuance shall be specifically approved at least annually (a) by the Company’s Board of Directors, including a vote of a majority of the Disinterested Non-Party Directors, cast in person at a meeting called for the purpose of voting on such approval or (b) by the vote of the holders of a majority of the outstanding voting securities of the Company and by a vote of the Board of Directors.
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12.
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This Agreement may be terminated (a) by the Distributor at any time without penalty by giving sixty days’ written notice (which notice may be waived by the Company), or (b) by the Company at any time without penalty upon sixty days’ written notice to the Distributor (which notice may be waived by the Distributor), provided that such termination by the Company shall be directed or approved in the same manner as required for continuance of this Agreement by Section 1l(a) (or, in the case of termination of Section 9, by Section 1l (b)).
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13.
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This Agreement may not be amended or changed except in writing and 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.
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14.
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The Distributor understands and agrees that the obligations of the Company under this Agreement are not binding upon any shareholder of the Company personally, but only the Company’s property; the Distributor represents that it has notice of the provisions of the Articles of incorporation of the Company disclaiming shareholder liability for acts or obligations of the Company.
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IN WITNESS WHEREOF, the parties have executed and delivered this Distribution Agreement as of the date first above written.
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Treasurer and Secretary
G.distributors, LLC
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: CEO
EXHIBIT A
Below are listed the Company’s separate series of shares (the “Funds”) under which this Agreement is to be performed as of the date hereof:
Keeley Funds, Inc.
KEELEY All Cap Value Fund
KEELEY Mid Cap Dividend Value Fund
KEELEY Small Cap Dividend Value Fund
KEELEY Small Cap Value Fund
KEELEY Small-Mid Cap Value Fund
