Exhibit 5
ADVISORY AGREEMENT
Alliance Mortgage Strategy Trust, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We, the undersigned Alliance Mortgage Strategy Trust,
Inc. herewith confirm our agreement with you as follows:
1. We are an, open-end, non-diversified management
investment company registered under the Investment Company Act of
1940 (the "Act"). We are currently authorized to issue separate
classes of shares and our Directors are authorized to reclassify
and issue any unissued shares to any number of additional classes
or series (portfolios) each having its own investment objective,
policies and restrictions, all as more fully described in the
prospectus and the statement of additional information
constituting parts of the Registration Statement filed on our
behalf under the Securities Act of 1933 and the Act. We propose
to engage in the business of investing and reinvesting the assets
of each of our portfolios in securities ("the portfolio assets")
of the type and in accordance with the limitations specified in
our Articles of Incorporation, By-Laws, Registration Statement
filed with the Securities and Exchange Commission under the
Securities Act of 1933 and the Act, and any representations made
in our prospectus and statement of additional information, all in
such manner and to such extent as may from time to time be
authorized by our Board of Directors. We enclose copies of the
documents listed above and will from time to time furnish you
with any amendments thereof.
2. (a) We hereby employ you to manage the investment
and reinvestment of the portfolio assets as above specified and,
without limiting the generality of the foregoing, to provide
management and other services specified below.
(b) You will make decisions with respect to all
purchases and sales of the portfolio assets. To carry out such
decisions, you are hereby authorized, as our agent and attorney-
in-fact, for our account and at our risk and in our name, to
place orders for the investment and reinvestment of the portfolio
assets. In all purchases, sales and other transactions in the
portfolio assets you are authorized to exercise full discretion
and act for us in the same manner and with the same force and
effect as we might or could do with respect to such purchases,
sales or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions.
(c) You will report to our Board of Directors at
each meeting thereof all changes in the portfolio assets since
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the prior report, and will also keep us in touch with important
developments affecting the portfolio assets and on your own
initiative will furnish us from time to time with such
information as you may believe appropriate for this purpose,
whether concerning the individual issuers whose securities are
included in the portfolio assets, the industries in which they
engage, or the conditions prevailing in the economy generally.
You will also furnish us with such statistical and analytical
information with respect to the portfolio assets as you may
believe appropriate or as we reasonably may request. In making
such purchases and sales of the portfolio assets, you will bear
in mind the policies set from time to time by our Board of
Directors as well as the limitations imposed by our Articles of
Incorporation and in our Registration Statement under the Act and
the Securities Act of 1933, the limitations in the Act and of the
Internal Revenue Code of 1986, as amended, in respect of
regulated investment companies and the investment objective,
policies and restrictions applicable to each of our portfolios.
(d) It is understood that you will from time to
time employ or associate with yourselves such persons as you
believe to be particularly fitted to assist you in the execution
of your duties hereunder, the cost of performance of such duties
to be borne and paid by you. No obligation may be incurred on
our behalf in any such respect. During the continuance of this
agreement at our request you will provide us persons satisfactory
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to our Board of Directors to serve as our officers. You or your
affiliates will also provide persons, who may be our officers, to
render such clerical, accounting and other services to us as we
may from time to time request of you. Such personnel may be
employees of you or your affiliates. We will pay to you or your
affiliates the cost of such personnel for rendering such services
to us, provided that all time devoted to the investment or
reinvestment of the portfolio assets shall be for your account.
Nothing contained herein shall be construed to restrict our right
to hire our own employees or to contract for services to be
performed by third parties. Furthermore, you or your affiliates
shall furnish us without charge with such management supervision
and assistance and such office facilities as you may believe
appropriate or as we may reasonably request subject to the
requirements of any regulatory authority to which you may be
subject. You or your affiliates shall also be responsible for
the payment of any expenses incurred in promoting the sale of our
shares (other than the portion of the promotional expenses to be
borne by us in accordance with an effective plan pursuant to Rule
12b-1 under the Act and the costs of printing our prospectuses
and other reports to stockholders and fees related to
registration with the Securities and Exchange Commission and with
state regulatory authorities).
3. It is further agreed that you shall be responsible
for the portion of the net expenses of each of our portfolios
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(except interest, taxes, brokerage, fees paid in accordance with
an effective plan pursuant to Rule 12b-1 under the Act,
expenditures which are capitalized in accordance with generally
accepted accounting principles and extraordinary expenses, all to
the extent permitted by applicable state law and regulation)
incurred by us during each of our fiscal years or portion thereof
that this agreement is in effect between us which, as to a
portfolio, in any such year exceeds the limits applicable to such
portfolio under the laws or regulations of any state in which our
shares are qualified for sale (reduced pro rata for any portion
of less than a year). We hereby confirm that, subject to the
foregoing, we shall be responsible and hereby assume the
obligation for payment of all our other expenses, including:
(a) payment of the fee payable to you under paragraph 5 hereof;
(b) custody, transfer, and dividend disbursing expenses; (c) fees
of directors who are not your affiliated persons; (d) legal and
auditing expenses; (e) clerical, accounting and other office
costs; (f) the cost of personnel providing services to us, as
provided in subparagraph (d) of paragraph 2 above; (g) costs of
printing our prospectuses and stockholder reports; (h) cost of
maintenance of corporate existence; (i) interest charges, taxes,
brokerage fees and commissions; (j) costs of stationery and
supplies; (k) expenses and fees related to registration and
filing with the Securities and Exchange Commission and with state
regulatory authorities; and (l) such promotional expenses as may
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be contemplated by an effective plan pursuant to Rule 12b-1 under
the Act provided, however, that our payment of such promotional
expenses shall be in the amounts, and in accordance with the
procedures, set forth in such plan.
4. We shall expect of you, and you will give us the
benefit of, your best judgment and efforts in rendering these
services to us, and we agree as an inducement to your undertaking
these services that you shall not be liable hereunder for any
mistake of judgment or in any event whatsoever, except for lack
of good faith, provided that nothing herein shall be deemed to
protect, or purport to protect, you against any liability to us
or to 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 hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder.
5. In consideration of the foregoing we will pay you a
monthly fee at an annualized rate of .65 of 1% of our average
daily net assets. Such fee shall be payable in arrears on the
last day of each calendar month for services performed hereunder
during such month. If our initial Registration Statement is
declared effective by the Securities and Exchange Commission
after the beginning of a month or this agreement terminates prior
to the end of a month, such fee shall be prorated according to
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the proportion which such portion of the month bears to the full
month.
6. This agreement shall become effective on the date
hereof, and shall remain in effect until the first meeting of our
shareholders and, if approved by the vote of a majority of the
outstanding voting securities, as defined in the Act, at such
meeting, continue in effect until November 30, 1993 and may be
continued for successive twelve-month periods (computed from each
December 1) with respect to each portfolio provided that such
continuance is specifically approved at least annually by the
Board of Directors or by majority vote of the holders of the
outstanding voting securities of such portfolio (as defined in
the Act), and, in either case, by a majority of the Board of
Directors who are not interested persons, as defined in the Act,
of any party to this agreement (other than as Directors of our
corporation), provided further, however, that if the continuation
of this agreement is not approved as to a portfolio, you may
continue to render to such portfolio the services described
herein in the manner and to the extent permitted by the Act and
the rules and regulations thereunder. Upon the effectiveness of
this agreement, it shall supersede all previous agreements
between us covering the subject matter hereof. This agreement
may be terminated with respect to any portfolio at any time,
without the payment of any penalty, by vote of a majority of the
outstanding voting securities (as so defined) of such portfolio,
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or by a vote of the Board of Directors on 60 days' written notice
to you, or by you with respect to any portfolio on 60 days'
written notice to us.
7. 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
term "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed hereto by governing
law and any interpretation thereof contained in rules or
regulations promulgated by the Securities and Exchange Commission
thereunder.
8. (a) 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 employees, or
any of the officers or directors of Alliance Capital Management
Corporation, your general partner, who may also be a Director,
officer or employee of ours, or persons otherwise affiliated with
us (within the meaning of the 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 any other
trust, corporation, firm, individual or association.
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(b) You will notify us of any change in the general
partners of your partnership within a reasonable time after such
change.
9. If you cease to act as our investment adviser, or,
in any event, if you so request in writing, we agree to take all
necessary action to change our name to a name not including the
term "Alliance". You may from time to time make available
without charge to us for our use such marks or symbols owned by
you, including marks or symbols containing the term "Alliance" or
any variation thereof, as you may consider appropriate. Any such
marks or symbols so made available will remain your property and
you shall have the right, upon notice in writing, to require us
to cease the use of such xxxx or symbol at any time.
10. This Agreement shall be construed in accordance
with the laws of the State of New York, provided, however, that
nothing herein shall be construed as being inconsistent with the
Act.
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,
ALLIANCE MORTGAGE STRATEGY
TRUST, INC.
By /s/Xxxxx Xxxxxxx
_____________________
Name: Xxxxx Xxxxxxx
Title: Chairman
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Agreed to and accepted
as of the date first set forth above
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT CORPORATION,
its general partner
By /s/Xxxx X. Xxxxxx
______________________
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
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00250110.AW8
