DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of the 22nd day of July, 1992,
between ALLIANCE QUASAR 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 an open-end management 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 companies
either directly to purchasers or through other securities
dealers;
WHEREAS, the Fund and the Underwriter wish to enter
into an 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") and its
Class B Common Stock (the "Class B shares") (the Class A
shares and the Class B shares being collectively referred to
herein as the "shares") and hereby agrees during the terms
of this Agreement to sell shares of the Fund 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 shareholders 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, securities dealers or depository institutions
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 or depository
institutions 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(s) of the shares,
i.e., the price per share at which the Underwriter or
selected dealers or agents may sell shares to the public,
shall be the public offering price determined in accordance
with the then currently effective Prospectus of the Fund
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 Class A shares, a
sales charge equal to a specified percentage or percentages
of the public offering price of the Class A shares as set
forth in the current Prospectus of the Fund. Class A shares
may be sold to certain classes of persons at reduced sales
charges or without a sales charge as from time to time set
forth in the current Prospectus and Statement of Additional
Information of the Fund. 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 Fund, 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 Directors.
(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
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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 thereof, 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 current Prospectus of the Fund. 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 agent, unless such selected dealer or
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 deferred sales charges, if any,
as defined in the above paragraph pursuant to the
instructions of the Underwriter in New York Clearing House
funds on or before the seventh calendar year subsequent to
its having 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
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closed, when trading on said Exchange 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.
(b) The Fund will pay to the Underwriter each month
a distribution services fee which will not exceed, on an
annualized basis, .30 of 1% of the aggregate average daily
net assets of the Fund attributable to the class A shares
and 1.00% of the aggregate average daily net assets of the
Fund attributable to the Class B shares. Such distribution
services fees will be used in their entirety by the
Underwriter to make payments (i) to compensate broker-
dealers or other persons for providing distribution
assistance, (ii) to otherwise promote the sale of shares of
the Fund, including payment for the preparation, printing
and distribution of prospectuses and sales literature or
other promotional activities, and (iii) to compensate banks
and other institutions for providing administrative and
accounting services with respect to each Fund shareholders.
(c) Alliance Capital Management L.P., the Fund's
Adviser, may make from time to time payments from its own
resources for the purposes described in Section 5(b) hereof.
(d) Payments for distribution assistance or
administrative and accounting services are subject to the
terms and conditions of the written agreements between each
broker-dealer or other person and the Underwriter. Such
agreements will be in a form satisfactory to the Directors
of the Fund.
(e) The Treasurer of the Fund will prepare and
furnish to the Directors of the Fund, and the Directors will
review, at least quarterly, a written report complying with
the requirements of Rule 12b-I setting forth all amounts
expended hereunder and the purposes for which such
expenditures were made.
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(f) The Fund is not obligated to pay any
distribution expense in excess of the distribution services
fee described in sub-paragraph (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 subsequent fiscal years. No
portion of the distribution services fees received from the
assets 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 fee of a particular class may not be
used to subsidize the sale of shares of the other class.
Section 6. Duties of the Fund.
(a) The Fund shall furnish to the Underwriter
copies of all information, financial statements and other
papers which 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 shall take, from time to time, but
subject to the necessary approval of its shareholders, all
necessary action to fix the number of authorized shares and
such steps as may be necessary to register the same under
the Securities Act, to the end that there will be available
for sale such number of shares as the Underwriter reasonably
may be expected to sell.
(C) The Fund shall use its best efforts to qualify
and maintain the qualification of an appropriate number of
its shares under the securities laws of such states as the
Underwriter and the Fund may approve. Any such qualification
may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 9(b) hereof,
the expense of qualification and maintenance of
qualification shall be borne by the Fund. The Underwriter
shall furnish such information and other material relating
to its affairs and activities as may be required by the Fund
in connection with such qualification.
(d) The Fund will furnish, in reasonable quantities
upon request by the Underwriter, copies of annual and
interim reports of the Fund.
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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 herein contained shall
prevent the Underwriter from entering into like arrangements
with other investment companies so long as the performance
of its obligations hereunder is not impaired thereby.
(b) In selling shares of the Fund, the Underwriter
shall conform with the requirements of all federal and state
laws relating to the sale of such securities. Neither the
Underwriter, nor any selected dealer or 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 Prospectus and Statement of Additional
Information as from time to time in effect, or 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 or
agents, the collection of amounts payable by investors and
selected dealers or agents on such sales, and the
cancellation of unsettled transactions, as may be necessary
to comply with the requirements of the National Association
of securities Dealers, Inc. (the "NASD"), as such
requirements may from time to time exist.
Section 8. Selected Dealer Agreements.
(a) The Underwriter shall have the right to enter
into selected dealer agreements or selected agent agreements
with securities dealers or depository institutions,
respectively, of its choice for the sale of shares and fix
therein the portion of the sales charge which may be
allocated to the selected dealers or agents, provided, that
the Fund shall approve the forms of agreements with such
dealers or agents and the 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 of the Fund shall
be for resale by such dealers or agents only at the public
offering price(s) set forth in the Prospectus and Statement
of Additional Information.
(b) Within the United States, the Underwriter shall
offer and sell shares only to such securities 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 shareholders
(including but not limited to the expense of setting in type
any such registration statements, prospectuses, annual or
interim reports or proxy materials).
(b) The Fund shall bear the cost of expenses of
qualification of shares for sale, and, if necessary or
advisable in connection therewith, of qualifying the Fund
(but not the Underwriter) as an issuer or as a broker or
dealer, in such states of the United States or other
jurisdiction 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 until the Fund decides to discontinue
such qualification pursuant to Section 6(c) hereof.
Section 10. Indemnification.
(a) The Fund agrees to indemnify, defend and hold
the Underwriter, and any person who controls the Underwriter
within the meaning of Section 15 of the Securities 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 counsel fees incurred in connection
therewith) which the Underwriter or any such controlling
person may incur, under the Securities Act, or under common
law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Fund's
Registration Statement or Prospectus or Statement of
Additional Information in effect from time to time under the
Securities Act or arising out of or based upon any alleged
omission to state a material fact required to be stated in
any thereof or necessary to make the statements in any
thereof 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
Underwriter to the Fund for use in the Fund's Registration
Statement, Prospectus or Statement of Additional
Information; provided, however, that in no event shall
anything herein contained be so construed as to protect the
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Underwriter against any liability to the Fund or its
security holders to which the Underwriter would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
the Underwriter's reckless disregard of its obligations and
duties under this agreement. The Fund's agreement to
indemnify the Underwriter and any such controlling person as
aforesaid is expressly conditioned upon the Fund's being
notified of the commencement of any action brought against
the Underwriter or any such controlling person, such
notification to be given by letter or by telegram addressed
to the Fund at its principal office in New York, New York,
and sent to the Fund 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 to so
notify the Fund of the commencement of any such action shall
not relieve the Fund from any liability which it may have to
the person against whom such action is brought by reason of
any such alleged untrue statement or omission otherwise than
on account of the indemnity agreement contained in this
Section 10. The Fund 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 the Fund and approved by
the Underwriter. In the event the Fund does not elect to
assume the defense of any such suit and retain counsel of
good standing approved by the Underwriter, 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
the Fund does not elect to assume the defense of any such
suit, or in case the Underwriter does not approve of counsel
chosen by the Fund, the Fund will reimburse the underwriter
or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any
counsel retained by the Underwriter or such persons. The
indemnification agreement contained in this Section 10 shall
remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Underwriter or
any controlling person and shall survive the sale of any of
the Fund's shares made pursuant to subscriptions obtained by
the Underwriter. This agreement of indemnity will inure
exclusively to the benefit of the Underwriter, to the
benefit of its successors and assigns, and to the benefit of
any controlling persons and their successors and assigns.
The Fund agrees promptly to notify the Underwriter of the
commencement of any litigation or proceeding against the
Fund in connection with the issue and sale of any of its
shares.
(b) The Underwriter agrees to indemnify, defend and
hold the Fund, its several officers and directors, and any
person who controls the Fund within the meaning of Section
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15 of the Securities 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 counsel fees incurred
in connection therewith) which the Fund, its officers or
directors, or any such controlling person may incur under
the Securities Act or under common law or otherwise, but
only to the extent that such liability, or expense incurred
by the Fund, its officers and directors or such controlling
person resulting from such claims or demands shall arise out
of or be based upon any alleged untrue statement of a
material fact contained in information furnished in writing
by the Underwriter to the Fund for use in its Registration
Statement or Prospectus or Statement of Additional
Information in effect from time to time under the Securities
Act, 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, Prospectus or Statement of Additional Information
or necessary to make such information not misleading. The
Underwriter's agreement to indemnify the Fund, its officers
and directors, and any such controlling person as aforesaid
is expressly conditioned upon the Underwriter being notified
of the commencement of any action brought against the Fund,
its officers or directors or any such controlling person,
such notification to be given by letter or telegram
addressed to the Underwriter at its principal office in New
York, and sent to the Underwriter 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
Underwriter shall have a right to control the defense of
such action, with counsel of its own choosing, satisfactory
to the Fund, if such action is based solely upon such
alleged misstatement or omission on its part, and in any
other event the Underwriter and the Fund, and their officers
and 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 the
Underwriter of the commencement of any such action shall not
relieve the Underwriter from any liability which it may have
to the Fund, to its officers and directors, or to such
controlling person by reason of any such untrue statement or
omission on the part of the Underwriter otherwise than on
account of the indemnity agreement contained in this Section
10.
Section 11. Notification by the Fund.
The Fund agrees to advise the Underwriter
immediately:
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(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 thereof in
order to make the statements therein not misleading, and
(d) of all actions 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 remain in effect until September 30,
1992; and thereafter for successive twelve-month periods
with respect to each class (computed from each October 1);
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 each class, and, in either case, by a majority of the
Directors of the Fund 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, the Underwriter may
continue to render to such class 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 the parties hereto covering the
subject matter hereof. This agreement may be terminated (i)
by the Fund with respect to any class at any time, without
the payment of any penalty, by the vote of a majority of the
outstanding voting securities (as so defined) of such class,
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or by a vote of a majority of the Directors of the Fund who
are not interested persons, as defined in the Investment
Company Act, of the Fund and have no direct and indirect
financial interest in the operation of the Plan or any
agreement related thereto; in either 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 sixty days' written notice to the
Fund.
(b) This agreement may be amended at any time with
the approval of the Directors of the Fund; provided,
however, that (i) any material amendments of the terms
hereof will become effective only upon approval as provided
in the first proviso of Section 12(a) hereof, and (ii) any
amendment to increase materially the amount to be expended
for distribution assistance, administrative and accounting
services and other activities designed to promote the sale
of shares of the Fund hereunder will be effective only upon
the additional approval by a vote of a majority of the
outstanding voting securities of that class as defined in
the Investment Company Act.
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 Plan 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.
ALLIANCE QUASAR FUND,INC.
By /s/ Xxxx X. Xxxxxx
_________________________
Xxxx X. Xxxxxx
President
ALLIANCE FUND DISTRIBUTORS,
INC.
By /s/ Xxxxxx X. Xxxxxx
_________________________
Xxxxxx X. Xxxxxx
President
Accepted as to
Sections 5, 12, and 16:
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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00250150.AT0
