Exhibit (m.4)
DISTRIBUTION AGREEMENT
LEBENTHAL FUNDS, INC.
(the "Fund")
CLASS A SHARES OF
LEBENTHAL NEW YORK MUNICIPAL BOND FUND
(the "Portfolio")
New York, New York
June 8, 2002
Advest, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
1. In consideration of the agreements on your part herein contained
and of the payment by us to you of a sales charge as described in the
Portfolio's most recent prospectus filed with the Securities and Exchange
Commission and of an annual fee (the "Service Fee"), determined in accordance
with paragraph 11 herein and on the terms and conditions set forth herein, we
have agreed that you shall be, for the period of this agreement, a distributor,
as our agent, for the unsold portion of such number of Class A shares of the
Portfolio, $.001 par value per share, as may be effectively registered from time
to time under the Securities Act of 1933, as amended (the "1933 Act"). This
agreement is being entered into pursuant to the Distribution and Service Plan
(the "Plan") adopted by us in accordance with Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act").
2. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of Class A shares of the Portfolio as shall then be effectively
registered under the 0000 Xxx. All subscriptions for the Portfolio's Class A
shares obtained by you shall be directed to us for acceptance and shall not be
binding on us until accepted by us. You shall have no authority to make binding
subscriptions on our behalf. We reserve the right to sell Class A shares of the
Portfolio through other distributors or directly to investors through
subscriptions received by us at our principal office in New York, New York. The
right given to you under this agreement shall not apply to Class A shares of our
common stock issued in connection with (a) the merger or consolidation of any
other investment company with us, (b) our acquisition by purchase or otherwise
of all or substantially all of the
assets or stock of any other investment company, or (c) the reinvestment in the
Portfolio's Class A shares by our stockholders of dividends or other
distributions or any other offering by us of securities to our stockholders.
3. You will use your best efforts to obtain subscriptions to shares
of the Portfolio upon the terms and conditions contained herein and in our
Prospectus, as in effect from time to time. You will send to us promptly all
subscriptions placed with you. We shall furnish you from time to time, for use
in connection with the offering of Class A shares of the Portfolio, such other
information with respect to us and such shares as you may reasonably request. We
shall supply you with such copies of our Registration Statement and Prospectus,
as in effect from time to time, as you may request. Except as we may authorize
in writing, you are not authorized to give any information or to make any
representation that is not contained in the Registration Statement or
Prospectus, as then in effect. You may use employees, agents and other persons,
at your cost and expense, to assist you in carrying out your obligations
hereunder, but no such employee, agent or other person shall be deemed to be our
agent or have any rights under this agreement. You may sell the Portfolio's
Class A shares to or through qualified brokers, dealers and financial
institutions under selling and servicing agreements provided that no dealer,
financial institution or other person shall be appointed or authorized to act as
our agent without our written consent. You will arrange for organizations whose
customers or clients are shareholders of our corporation ("Participating
Organizations") to enter into agreements with you for providing assistance in
distributing the Portfolio's Class A shares.
4. You may make payments from time to time from your own resources,
which may include the Service Fee and past profits to defray the costs of, and
to compensate others, including Participating Organizations with whom you have
entered into written agreements, for performing shareholder servicing and
related administrative functions on behalf of the Portfolio.
You in your sole discretion, will determine the amount of such
payments, provided that such payments will not increase the amount which we are
required to pay for any fiscal year under the Management Contract or this
agreement. Such payments will be made only pursuant to written agreements
approved in form and substance by our Board of Directors to be entered into by
you and the Participating Organizations. It is recognized that we shall have no
obligation or liability to you or any Participating Organization for any such
payments under the agreements with Participating Organizations. Our obligation
is solely to make payments under the Management Contract and this agreement. All
sales of our shares effected through you will be made in compliance with all
applicable federal securities laws and regulations and the Constitution, rules
and regulations of the National Association of Securities Dealers, Inc.
("NASD").
5. We reserve the right to suspend the offering of Class A shares of
the Portfolio at any time, in the absolute discretion of our Board of Directors,
and upon notice of such suspension you shall cease to offer such shares
hereunder.
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6. Both of us will cooperate with each other in taking such action
as may be necessary to qualify the Portfolio's Class A shares for sale under the
securities laws of such states as we may designate, provided, that you shall not
be required to register as a broker-dealer or file a consent to service of
process in any such state where you are not now so registered. Pursuant to the
Management Contract in effect between us and Boston Advisors, Inc., as manager
of the Portfolio, we will pay all fees and expenses of registering the
Portfolio's shares under the 1933 Act and of qualification of such shares, and
to the extent necessary, our qualification under applicable state securities
laws. You will pay all expenses relating to your broker-dealer qualification.
7. We represent to you that our Registration Statement and
Prospectus have been carefully prepared to date in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder. We represent and
warrant to you, as of the date hereof, that our Registration Statement and
Prospectus contain all statements required to be stated therein in accordance
with the 1933 Act and the 1940 Act and the SEC's rules and regulations
thereunder; that all statements of fact contained therein are or will be true
and correct at the time indicated or the effective date as the case may be; and
that neither our Registration Statement nor our Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of shares
of our common stock. We will from time to time file such amendment or amendments
to our Registration Statement and Prospectus as, in the light of future
development, shall in the opinion of our counsel, be necessary in order to have
our Registration Statement and Prospectus at all times contain all material
facts required to be stated therein or necessary to make any statements therein
not misleading to a purchaser of shares of our common stock. If we shall not
file such amendment or amendments within fifteen days after our receipt of a
written request from you to do so, you may, at your option, terminate this
agreement immediately. We will not file any amendment to our Registration
Statement or Prospectus without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement shall in any way limit our
right to file such amendments to our Registration Statement or Prospectus, of
whatever character, as we may deem advisable, such right being in all respects
absolute and unconditional. We represent and warrant to you that any amendment
to our Registration Statement or Prospectus hereafter filed by us will be
carefully prepared in conformity within the requirements of the 1933 Act and the
1940 Act and the SEC's rules and regulations thereunder and will, when it
becomes effective, contain all statements required to be stated therein in
accordance with the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder; that all statements of fact contained therein will, when
the same shall become effective, be true and correct; and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
Class A shares.
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8. We agree to indemnify, defend and hold you, and any person who
controls you within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which you or any such controlling
person may incur, under the 1933 Act or the 1940 Act, or under common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in our Registration Statement or Prospectus in effect
from time to time or arising out of or based upon any alleged omission to state
a material fact required to be stated in either of them or necessary to make the
statements in either of them not misleading; provided, however, that in no event
shall anything herein contained be so construed as to protect you against any
liability to us or our security holders to which you would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties under this agreement. Our agreement to indemnify you and
any such controlling person is expressly conditioned upon our being notified of
any action brought against you or any such controlling person, such notification
to be given by letter or by telegram addressed to us at our principal office in
New York, New York, and sent to us by the person against whom such action is
brought within ten days after the summons or other first legal process shall
have been served. The failure so to notify us of any such action shall not
relieve us from any liability which we may have to the person against whom such
action is brought other than on account of our indemnity agreement contained in
this paragraph 8. We will be entitled to assume the defense of any suit brought
to enforce any such claim, and to retain counsel of good standing chosen by us
and approved by you. In the event we do elect to assume the defense of any such
suit and retain counsel of good standing approved by you, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case we do not elect to assume the
defense of any such suit, or in case you, in good faith, do not approve of
counsel chosen by us, we will reimburse you or the controlling person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by you or them. Our indemnification agreement contained in this
paragraph 8 and our representations and warranties in this agreement shall
remain in full force and affect regardless of any investigation made by or on
behalf of you or any controlling person and shall survive the sale of any Class
A shares of our common stock made pursuant to subscriptions obtained by you.
This agreement of indemnity will inure exclusively to your benefit, to the
benefit of your successors and assigns, and to the benefit of any of your
controlling persons and their successors and assigns. We agree promptly to
notify you of the commencement of any litigation or proceeding against us in
connection with the issue and sale of any Class A shares of our common stock.
9. You agree to indemnify, defend and hold us, our several officers
and directors, and any person who controls us within the meaning of Section 15
of the 1933 Act, free and harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which we, our officers or directors, or any such
controlling person may incur under the 1933 Act or under common law or
otherwise, but only to
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the extent that such liability or expense incurred by us, our officers or
directors or such controlling person shall arise out of or be based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by you to us for use in our Registration Statement or Prospectus as
in effect from time to time, or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or Prospectus or necessary to make
such information not misleading. Your agreement to indemnify us, our officers
and directors, and any such controlling person is expressly conditioned upon
your being notified of any action brought against us, our officers or directors
or any such controlling person, such notification to be given by letter or
telegram addressed to you at your principal office in New York, New York, and
sent to you by the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been served. You shall
have a right to control the defense of such action, with counsel of your own
choosing, satisfactory to us, if such action is based solely upon such alleged
misstatement or omission on your part, and in any other event you and we, our
officers or directors or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure to so notify you of any such action shall not relieve you from any
liability which you may have to us, to our officers or directors, or to such
controlling person other than on account of your indemnity agreement contained
in this paragraph 9.
10. We agree to advise you immediately:
(a) of any request by the SEC for amendments to our Registration
Statement or Prospectus or for additional information,
(b) of the issuance by the SEC of any stop order suspending the
effectiveness of our Registration Statement or Prospectus or the initiation of
any proceedings for that purpose,
(c) of the happening of any material event which makes untrue any
statement made in our Registration Statement or Prospectus or which requires the
making of a change in either of them in order to make the statements therein not
misleading, and
(d) of all action of the SEC with respect to any amendments to our
Registration Statement or Prospectus.
11. In consideration of the foregoing we will pay you a Service Fee
at the annual rate of one-quarter of one percent (0.25%) of average daily net
assets of the Portfolio. Your fee will be accrued by us daily, and will be
payable on the last day of each calendar month for services performed hereunder
during that month or as such other schedule as you shall request of us in
writing. You may waive your right to any fee to which you are entitled
hereunder, provided such waiver is delivered to us in writing.
12. This agreement will become effective on the date hereof and will
remain in
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effect until July 31, 2002 and thereafter for successive twelve-month periods
(computed from each August 1), provided that such continuation is specifically
approved at least annually by vote of our Board of Directors and of a majority
of those of our directors who are not interested persons (as defined in the 0000
Xxx) and have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan, cast in person at a meeting
called for the purpose of voting on this agreement. This agreement may be
terminated at any time, without the payment of any penalty, by vote of a
majority of our entire Board of Directors, or by a vote of a majority of our
Directors who are not interested persons (as defined in the 0000 Xxx) and who
have no direct or indirect financial interest in the operation of the Plan or in
any agreement related to the Plan, or by vote of a majority of our outstanding
voting securities (with each Class of the Portfolio voting separately), as
defined in the 1940 Act, on sixty days' written notice to you, or by you on
sixty days' written notice to us.
13. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the SEC thereunder.
14. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your directors, officers or employees, who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the 1940 Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to another
corporation, firm, individual or association.
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If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
LEBENTHAL FUNDS, INC.
Lebenthal New York Municipal Bond Fund
By:/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Accepted:
June 8, 2002
ADVEST, INC.
By:/s/ Xxxxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Senior Vice President
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