DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of July 22, 1992, as amended as of
April 30, 1993, between THE ALLIANCE FUND, INC., a Maryland
corporation (the "Fund"), and ALLIANCE FUND DISTRIBUTORS, INC., a
Delaware corporation (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"),
as a diversified open-end investment company and it is in the
interest of the Fund to offer its shares for sale continuously;
WHEREAS, the Underwriter is a securities firm engaged in
the business of selling shares of investment companies either
directly to purchasers or through other securities dealers; and
WHEREAS, the Fund and the Underwriter wish to enter into
an amended agreement with each other with respect to the
continuous offering of the Fund's shares in order to promote the
growth of the Fund and facilitate the distribution of its shares;
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Underwriter. The Fund
hereby appoints the Underwriter as the principal underwriter and
distributor of the Fund to sell to the public shares of its Class
A Common Stock (the "Class A shares"), Class B Common Stock (the
"Class B shares") and Class C Common Stock (the "Class C shares")
(the Class A shares, Class B shares and Class C shares being
collectively referred to as the "shares") and hereby agrees
during the term of this Agreement to sell shares to the
Underwriter upon the terms and conditions herein set forth.
Section 2. Exclusive Nature of Duties. The Underwriter
shall be the exclusive representative of the Fund to act as
principal underwriter and distributor except that the rights
given under this Agreement to the Underwriter shall not apply to
shares issued in connection with (a) the merger or consolidation
of any other investment company with the Fund, (b) the Fund's
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 shares by the Fund's stockholders of dividends or
other distributions.
Section 3. Purchase of Shares from the Fund.
(a) The Underwriter shall have the right to buy from the
Fund the shares needed to fill unconditional orders for shares of
the Fund placed with the Underwriter by investors or securities
dealers, depository institutions or other financial
intermediaries acting as agent for their customers. The price
which the Underwriter shall pay for the shares so purchased from
the Fund shall be the net asset value, determined as set forth in
Section 3(d) hereof, used in determining the public offering
price on which such orders are based.
(b) The shares are to be resold by the Underwriter to
investors at a public offering price, as set forth in Section
3(c) hereof, or to securities dealers, depository institutions or
other financial intermediaries acting as agent for their
customers having agreements with the Underwriter upon the terms
and conditions set forth in Section 8 hereof.
(c) The public offering price of the shares, i.e., the
price per share at which the Underwriter or selected dealers or
selected agents (each as defined in Section 8(a) below) may sell
shares to the public, shall be the public offering price in
accordance with the then current Prospectus and Statement of
Additional Information of the Fund (the "Prospectus" and
"Statement of Additional Information," respectively) under the
Securities Act of 1933, as amended (the "Securities Act"),
relating to such shares, but not to exceed the net asset value at
which the Underwriter is to purchase such shares, plus, in the
case of the Class A shares, a sales charge not to exceed 8.5% of
the public offering price of the Class A shares, subject to
reductions for volume purchases. Class A shares may be sold
without a sales charge to (i) certain officers, directors and
full-time employees of the Fund, the Underwriter and Alliance
Capital Management L.P. (the Fund's manager), (ii) certain tax-
qualified employee benefit plans, (iii) certain tax-exempt
charitable, educational, religious or other organizations and
(iv) certain other purchasers, in each case upon the terms and
conditions set forth in the Prospectus. If the public offering
price does not equal an even cent, the public offering price may
be adjusted to the nearest cent. All payments to the Fund
hereunder shall be made in the manner set forth in Section 3(f)
hereof.
(d) The net asset value of shares of the Fund shall be
determined by the Fund, or any agent of the Fund, as of the close
of regular trading on the New York Stock Exchange on each
business day on which said Exchange is open, in accordance with
the method set forth in the Prospectus and Statement of
Additional Information and guidelines established by the
Directors of the Fund.
(e) The Fund reserves the right to suspend the offering
of its shares at any time in the absolute discretion of its Board
of Directors.
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(f) The Fund, or any agent of the Fund designated in
writing to the Underwriter by the Fund, shall be promptly advised
by the Underwriter of all purchase orders for shares received by
the Underwriter. Any order may be rejected by the Fund; provided,
however, that the Fund will not arbitrarily or without reasonable
cause refuse to accept or confirm orders for the purchase of
shares. The Fund (or its agent) will confirm orders upon their
receipt, will make appropriate book entries and upon receipt by
the Fund (or its agent) of payment therefor, will deliver deposit
receipts or certificates for such shares pursuant to the
instructions of the Underwriter. Payment shall be made to the
Fund in New York Clearing House funds. The Underwriter agrees to
cause such Payment and such instructions to be delivered promptly
to the Fund (or its agent).
Section 4. Repurchase or Redemption
of Shares by the Fund.
(a) Any of the outstanding shares may be tendered for
redemption at any time, and the Fund agrees to redeem or
repurchase the shares so tendered in accordance with its
obligations as set forth in its Articles of Incorporation and in
accordance with the applicable provisions set forth in the
Prospectus and Statement of Additional Information. The price to
be paid to redeem or repurchase the shares shall be equal to the
net asset value calculated in accordance with the provisions of
Section 3(d) hereof less, in the case of Class B shares, a
deferred sales charge equal to a specified percentage or
percentages of the net asset value of the Class B shares or their
cost, whichever is less. Class B shares that have been
outstanding for a specified period of time may be redeemed
without payment of a deferred sales charge as from time to time
set forth in the Prospectus. All payments by the Fund hereunder
shall be made in the manner set forth below. The redemption or
repurchase by the Fund of any of the Class A shares purchased by
or through the Underwriter will not affect the sales charge
secured by the Underwriter, or any selected dealer or
compensation paid to any selected agent (unless such selected
dealer or selected agent has otherwise agreed with the
Underwriter), in the course of the original sale, regardless of
the length of the time period between purchase by an investor and
his tendering for redemption or repurchase.
The Fund (or its agent) shall pay the total amount of
the redemption price and, except as may be otherwise required by
the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") and any interpretations
thereof ("NASD rules and interpretations"), the deferred sales
charges, if any, as defined in the above paragraph, pursuant to
the instructions of the Underwriter in New York Clearing House
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funds on or before the seventh business day subsequent to its
having received the notice of redemption in proper form.
(b) Redemption of shares or payment may be suspended at
times when the New York Stock Exchange is closed, when trading
thereon is closed, when trading thereon is restricted, when an
emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund fairly to determine the value
of its net assets, or during any other period when the Securities
and Exchange Commission, by order, so permits.
Section 5. Plan of Distribution.
(a) It is understood that Sections 5, 12 and 16 hereof
together constitute a plan of distribution (the "Plan") within
the meaning of Rule 12b-1 adopted by the Securities and Exchange
Commission under the Investment Company Act ("Rule 12b-1").
(b) Except as may be required by NASD rules and
interpretations, the Fund will pay to the Underwriter each month
a distribution services fee with respect to each portfolio of the
Fund ("Portfolio") that will not exceed, on an annualized basis,
.30% of the aggregate average daily net assets of the Fund
attributable to the Class A shares, 1.00% of the aggregate
average daily net assets of the Fund attributable to the Class B
shares and 1.00% of the aggregate average daily net assets of the
Fund attributable to the Class C shares. With respect to each
Portfolio, the distribution services fee will be used in its
entirety by the Underwriter to make payments (i) to compensate
broker-dealers or other persons for providing distribution
assistance with respect to assets invested in the Fund, (ii) to
otherwise promote the sale of shares of each Portfolio, including
payment for the preparation, printing and distribution of
prospectuses and sales literature or other promotional
activities, and (iii) to compensate brokers-dealers, depository
institutions and other financial intermediaries for providing
administrative, accounting and other services with respect to
each Portfolio's shareholders. A portion of the distribution
services fee that will not exceed, on an annualized basis, .25%
of the aggregate average daily net assets of the Fund
attributable to each of the Class A shares, Class B shares and
Class C shares will constitute a service fee that will be used by
the Underwriter for personal service and/or the maintenance of
shareholder accounts within the meaning of NASD rules and
interpretations.
(c) Alliance Capital Management L.P., the Fund's manager
(the "Manager"), may, as long as the Plan is in effect, from time
to time make similar payments to the Underwriter for distribution
services performed by the Underwriter and for distribution
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assistance provided by broker-dealers or other persons and to
broker-dealers, depository institutions and other financial
intermediaries for providing administrative, accounting and other
services with respect to Fund shareholders as described in
Section 5(b) above. These payments may be made by the Manager
from its own resources, which may include the management fee it
receives from the Fund. The Manager may in its sole discretion
increase or decrease the amount of distribution assistance
payments it makes to the Underwriter.
(d) Payments to broker-dealers, depository institutions
and other financial intermediaries for the purposes set forth in
Section 5(b) are subject to the terms and conditions of the
written agreements between the Underwriter and each broker-
dealer, depository institution and other financial intermediary.
Such agreements will be in a form satisfactory to the Board of
Directors of the Fund.
(e) The Treasurer of the Fund will prepare and furnish
to the Fund's Directors, and the Directors will review at least
quarterly, a written report complying with the requirements of
Rule 12b-1 setting forth all amounts expended hereunder and the
purposes for which such expenditures were made.
(f) The Fund is not obligated to pay any distribution
expense in excess of the distribution services fees described
above in Section 5(b) hereof. Any expenses of distribution of the
Fund's Class A shares accrued by the Underwriter in one fiscal
year of the Fund may not be paid from distribution services fees
received from the Fund in respect of Class A shares in another
fiscal year. Any expenses of distribution of the Fund's Class B
shares or Class C shares accrued by the Underwriter in one fiscal
year of the Fund may be carried forward and paid from
distribution services fees received from the Fund in respect of
such class of shares in another fiscal year. No portion of the
distribution services fees received from the Fund in respect of
Class A shares may be used to pay any interest expense, carrying
charges or other financing costs, or allocation of overhead of
the Underwriter. The distribution services fees received from the
Fund in respect of Class B shares and Class C shares may be used
to pay interest expenses, carrying charges and other financing
costs or allocation of overhead of the Underwriter to the extent
permitted by Securities and Exchange Commission rules,
regulations or Securities and Exchange Commission staff no-
action or interpretative positions in effect from time to time.
In the event this Agreement is terminated by either party or is
not continued with respect to a class as provided in Section 12
below: no distribution services fees (other than current amounts
accrued but not yet paid) will be owed by the Fund to the
Underwriter with respect to that class, and (ii) the Fund will
not be obligated to pay the Underwriter for any amounts expended
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hereunder not previously reimbursed by the Fund from distribution
services fees in respect of shares of such class or recovered
through deferred sales charges described in Section 4(a) above.
The distribution services fee of a particular class may not be
used to subsidize the sale of shares of any other class.
(g) The Fund acknowledges and agrees that payments by
the Fund pursuant to Section 5(b) hereof may be used to pay
certain expenses otherwise payable by the Underwriter pursuant to
the terms of Section 9 hereof.
(h) Neither the Manager nor the Underwriter is obligated
hereunder to execute agreements with qualifying broker-dealers,
depository institutions or other financial intermediaries and any
termination of an agreement with a particular financial
intermediary under the Plan will have no effect on similar
agreements between the Manager or the Underwriter and other
participating broker-dealers, depository institutions or other
financial intermediaries pursuant to the Plan.
Section 6. Duties of the Fund.
(a) Subject to Sections 9(b) and 10 hereof, the Fund
shall furnish to the Underwriter copies of all information,
financial statements and other papers that the Underwriter may
reasonably request for use in connection with the distribution of
shares of the Fund, and this shall include one certified copy,
upon request by the Underwriter, of all financial statements
prepared for the Fund by independent public accountants. The Fund
shall make available to the Underwriter such number of copies of
the Prospectus as the Underwriter shall reasonably request.
(b) The Fund will cooperate with the Underwriter in
qualifying and maintaining the qualification of an appropriate
number of its shares for sale under the securities laws of such
states as the Underwriter may request. As provided in Section
9(c) hereof, the expense of qualification and maintenance of
qualification shall be borne by the Underwriter.
(c) Subject to Sections 9(b) and 10 hereof, the Fund
will furnish, in reasonable quantities upon request by the
Underwriter, copies of annual and interim reports of the Fund.
Section 7. Duties of the Underwriter.
(a) The Underwriter shall devote reasonable time and
effort to effect sales of shares of the Fund, but shall not be
obligated to sell any specific number of shares. The services of
the Underwriter to the Fund hereunder are not to be deemed
exclusive and nothing in this Agreement shall prevent the
Underwriter from entering into like arrangements with other
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investment companies so long as the performance of its
obligations hereunder is not impaired thereby.
(b) In selling the shares of the Fund, the Underwriter
shall use its best efforts in all material respects duly to
conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither the Underwriter,
any selected dealer, any selected agent nor any other person is
authorized by the Fund to give any information or to make any
representations, other than those contained in the Fund's
Registration Statement, as amended from time to time, under the
Securities Act and the Investment Company Act (the "Registration
Statement") or the Prospectus and Statement of Additional
Information and any sales literature specifically approved in
writing by the Fund.
(c) The Underwriter shall adopt and follow procedures,
as approved by the officers of the Fund, for the confirmation of
sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales,
and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the NASD, as such
requirements may from time to time exist.
Section 8. Selected Dealer and Agent Agreements.
(a) The Underwriter shall have the right to enter into
selected dealer agreements with securities dealers of its choice
("selected dealers") and selected agent agreements with
depository institutions and other financial intermediaries of its
choice ("selected agents") for the sale of shares and fix therein
the portion of the sales charge that may be allocated to the
selected dealers and selected agents; provided, that the Fund
shall approve the forms of agreements with selected dealers and
selected agents and the selected dealer and selected agent
compensation set forth therein and shall evidence such approval
by filing said forms and amendments thereto as exhibits to its
then currently effective Registration Statement. Shares sold to
selected dealers or through selected agents shall be for resale
by such selected dealers and selected agents only at the public
offering price set forth in the Prospectus and Statement of
Additional Information. The form of agreement with selected
dealers and selected agents to be used in the continuous offering
of the shares of the Fund shall be substantially in the form
attached hereto.
(b) Within the United States, the Underwriter shall
offer and sell shares only to such selected dealers as are
members in good standing of the NASD.
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Section 9. Payment of Expenses.
(a) The Fund shall bear all costs and expenses of the
Fund, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of its
Registration Statement and Prospectus and Statement of Additional
Information, and all amendments and supplements thereto, and
preparing and mailing annual and interim reports and proxy
materials to stockholders (including but not limited to the
expense of setting in type any such registration statements,
prospectuses, annual or interim reports or proxy materials).
(b) After the prospectuses and annual and interim
reports have been prepared and set in type, the Underwriter shall
bear the costs and expenses of printing and distributing any
copies thereof which are to be used in connection with the
offering of shares to selected dealers, selected agents or
investors. The Underwriter shall bear the costs and expenses of
other literature used by the Underwriter or furnished by it for
use by selected dealers or selected agents in connection with the
offering of shares for sale to the public and any expenses of
advertising in connection with such offering.
(c) The Underwriter shall bear the costs of expenses of
qualification of shares for sale (except expenses of any action
by the Fund relating to its Articles of Incorporation or other
matters in which the Fund has a direct concern) in such states of
the United States or other jurisdictions as shall be selected by
the Fund and the Underwriter pursuant to Section 6(c) hereof and
the cost and expenses payable to each such state for continuing
qualification therein.
Section 10. Responsibility. The Fund and the Underwriter
recognize and agree that, subject to the overall supervision of
the Board of Directors of the Fund, the preparation of
registration statements, prospectuses, annual and interim reports
and proxy materials of the Fund is the responsibility of the
Manager, an affiliated person of the Underwriter, under its
Management Agreement with the Fund. Accordingly, the Fund and its
directors, officers and employees shall have no responsibility
hereunder to the Underwriter with respect to the accuracy,
completeness or fairness of any such registration statement,
prospectus, annual or interim report or proxy material. Nothing
herein contained, however, shall be deemed a condition,
stipulation or provision binding any persons to waive compliance
with any provision of the Federal securities laws, or of the
rules and regulations of the Securities and Exchange Commission,
or to relieve any person from any liability arising under the
Federal securities laws.
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Section 11. Notification by the Fund. The Fund agrees to
advise the Underwriter immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to the Fund's Registration Statement,
Prospectus or Statement of Additional Information or for
additional information,
(b) in the event of the issuance by the Securities and
Exchange Commission of any stop order suspending the
effectiveness of the Fund's Registration Statement, Prospectus or
Statement of Additional Information or the initiation of any
proceeding for that purpose.
(c) of the happening of any material event which makes
untrue any statement made in the Fund's Registration Statement,
Prospectus or Statement of Additional Information or which
requires the making of a change in any one thereof in order to
make the statements therein not misleading, and
(d) of all action of the Securities and Exchange
Commission with respect to any amendments to the Fund's
Registration Statement, Prospectus or Statement of Additional
Information which may from time to time be filed with the
Securities and Exchange Commission under the Securities Act.
Section 12. Term of Agreement.
(a) This Agreement shall become effective on the date
hereof and shall continue in effect until July 31, 1993, and
thereafter automatically for successive twelve-month periods with
respect to each class (computed from each August 1) with respect
to each class; provided, however, that such continuance is
specifically approved at least annually by the Directors of the
Fund or by vote of the holders of a majority of the outstanding
voting securities (as defined in the Investment Company Act) of
that class, and, in either case, by a majority of the Fund's
Directors who are not parties to this Agreement or interested
persons, as defined in the Investment Company Act, of any such
party (other than as directors of the Fund) and who have no
direct or indirect financial interest in the operation of the
Plan or any agreement related thereto; provided further, however,
that if the continuation of this Agreement is not approved as to
a class or a Portfolio, the Underwriter may continue to render to
such class or Portfolio the services described herein in the
manner and to the extent permitted by the Act and the rules and
regulations thereunder. Upon effectiveness of this Agreement, it
shall supersede all previous agreements between the parties
hereto covering the subject matter hereof. This Agreement may be
terminated (i) by the Fund with respect to any class or Portfolio
at any time, without the payment of any penalty, by the vote of a
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majority of the outstanding voting securities (as so defined) of
such class or Portfolio, or by a vote of a majority of the Fund's
Directors, who are not interested persons, as defined in the
Investment Company Act, of the Fund (other than as directors of
the Fund) and have no direct or indirect financial interest in
the operation of the Plan or any agreement related thereto; in
any such event on sixty days' written notice to the Underwriter,
provided, however, that no such notice shall be required if such
termination is stated by the Fund to relate only to Sections 5
and 16 hereof (in which event Sections 5 and 16 shall be deemed
to have been severed herefrom and all other provisions of this
Agreement shall continue in full force and effect), or (ii) by
the Underwriter, on any August 1, commencing August 1, 1993, on
written notice given not less than sixty days prior to such
August 1 to the Fund.
(b) This Agreement may be amended at any time with the
approval of the Directors of the Fund; provided, that (i) any
material amendments of the terms hereof will become effective
only upon approval as provided in the first proviso of the first
sentence of Section 12(a) hereof, and (ii) any amendment to
increase materially the amount to be expended for distribution
services fees pursuant to Section 5(b) hereof will be effective
only upon the additional approval by a vote of a majority of the
outstanding voting securities of the Fund as defined in the
Investment Company Act of the class or Portfolio affected.
Section 13. No Assignment. This Agreement may not be
transferred, assigned, sold or in any manner hypothecated or
pledged by either party hereto and this Agreement shall terminate
automatically in the event of any such transfer, assignment,
sale, hypothecation or pledge. The terms "transfer",
"assignment", and "sale" as used in this paragraph shall have the
meanings ascribed thereto by governing law and any interpretation
thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
Section 14. Notices. Any notice required or permitted to
be given hereunder by either party to the other shall be deemed
sufficiently given if sent by registered mail, postage prepaid,
addressed by the party giving such notice to the other party at
the last address furnished by such other party to the party
giving notice, and unless and until changed pursuant to the
foregoing provisions hereof addressed to the Fund or the
Underwriter.
Section 15. Governing Law. The provisions of this
Agreement shall be, to the extent applicable, construed and
interpreted in accordance with the laws of the State of New York.
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Section 16. Non-interested Directors of the Fund. While
the Agreement is in effect, the selection and nomination of the
Directors who are not "interested persons" of the Fund (as
defined in the Investment Company Act) will be committed to the
discretion of such disinterested Directors.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
THE ALLIANCE FUND, INC.
/s/ Xxxxx X. Xxxxxxx
_______________________
Xxxxx X. Xxxxxxx
Chairman
ALLIANCE FUND DISTRIBUTORS, INC.
/s/ Xxxxxx X. Xxxxxx
_______________________
Xxxxxx X. Xxxxxx
President
Accepted as to Sections 5, 12 and
16: as of July 22, 1992, as amended
as of April 30, 1993
ALLIANCE CAPITAL MANAGEMENT L.P.
By Alliance Capital Management
Corporation General Partner
By /s/ Xxxx X. Xxxxxx
______________________
Xxxx X. Xxxxxx
Executive Vice President
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00250430.AN0
