AGREEMENT AND
PLAN OF
ACQUISITION
AND LIQUIDATION
As of
September 1, 2000
This Agreement and Plan of Acquisition and
Liquidation (the "Plan") is made as of this
1st day of September, 2000, by and between
ACM Government Income Fund, Inc., a Maryland
corporation ("ACM I"), and ACM Government
Spectrum Fund, Inc., a Maryland corporation
("ACM III").
WHEREAS, ACM I and ACM III are closed-end
management investment companies registered
with the Securities and Exchange Commission
(the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and
the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and shares of
common stock of each Fund are currently
purchased and sold on the New York Stock
Exchange (the "NYSE");
WHEREAS, the parties desire that ACM I
acquire the assets and assume the
liabilities of ACM III in exchange for
shares of equal net asset value of ACM I
and the distribution of such shares of
ACM I to the stockholders of ACM III
(the "Acquisition") and that ACM III
thereafter liquidate and dissolve; and
WHEREAS, the parties intend that the
Acquisition qualify as a "reorganization"
within the meaning of section 368(a) of the
Internal Revenue Code of 1986, as amended
(the "Code"), and that with respect to the
Acquisition, ACM I and ACM III will each be
a "party to a reorganization" within the
meaning of section 368(b) of the Code;
Now, therefore, ACM I and ACM III agree
as follows:
1. Definitions
In addition to the terms elsewhere defined
herein, each of the following terms shall
have the meaning indicated for that term
as follows:
1933 Act Securities Act o
f 1933, as amended.
ACM I Share
A share of common stock of ACM I.
Assets
All assets of any kind and all interests,
rights, privileges and powers of or
attributable to ACM III or its shares, as
appropriate, whether or not determinable at
the appropriate Effective Time and wherever
located, including, without limitation, all
cash, cash equivalents, securities, claims
(whether absolute or contingent, known or
unknown, accrued or unaccrued or conditional
or unmatured), contract rights and receivables
(including dividend and interest receivables)
owned by ACM III or attributable to its shares
and any deferred or prepaid expense shown as
an asset on ACM III's books.
Closing Date
Such date prior to July 1, 2001 as the parties
agree to.
Effective Time
5:00 p.m. Eastern time on the Closing Date,
or such other time as the parties may agree
to in writing.
Financial Statements
The audited financial statements of the
relevant Fund for its most recently completed
fiscal year and, if applicable, the unaudited
financial statements of that Fund for its most
recently completed semi-annual period.
Fund
ACM I and/or ACM III, as the case may be.
Liabilities
All liabilities of ACM III, whether known or
unknown, accrued or unaccrued, absolute or
contingent or conditional or unmatured.
N-14 Registration Statement
The Registration Statement of ACM I on Form
N-14 under the 1940 Act that will register
the ACM I Shares to be issued in the Acquisition
and will include the proxy materials necessary
for the stockholders of each of the Funds to
approve the Acquisition.
Valuation Time
The close of regular session trading on the
NYSE on the Closing Date, when for purposes
of the Plan ACM I determines its net asset
value per ACM I Share and ACM III determines
the net value of the Assets.
2. Regulatory Filings.
ACM I shall promptly prepare and file the
N-14 Registration Statement with the SEC,
and ACM I and ACM III also shall make any
other required or appropriate filings with
respect to the actions contemplated hereby.
3. Stockholder Action
As soon as practicable after the
effective date of the N-14 Registration
Statement, each Fund shall hold a
stockholders meeting to consider and
approve the Acquisition and this Plan,
as applicable to that Fund, and such other
matters as the Board of Directors of the
Fund may determine. Such approval by the
stockholders of a Fund shall, to the
extent necessary to permit the consummation
of the transactions contemplated herein
without violating any investment objective,
policy or restriction of a Fund, be
deemed to constitute approval by the
stockholders of a temporary amendment
of any investment objective, policy
or restriction that would otherwise
be inconsistent with or violated upon
the consummation of such transactions
solely for the purpose of consummating
such transactions.
4. Transfer of ACM III's Assets. ACM I
and ACM III shall take the following steps with
respect to the Acquisition, as applicable:
(a) On or prior to the Closing Date,
ACM III shall pay or provide for the payment
of all of the Liabilities, expenses, costs
and charges of or attributable to ACM III
that are known to ACM III and that are due
and payable prior to or as of the Closing
Date.
(b) Prior to the Effective Time, ACM III
shall declare and pay to its stockholders on
its normal monthly schedule a dividend and/or
other distribution in an amount such that it
will have distributed substantially all of
its theretofore undistributed investment
company taxable income, if any (as defined
in Code section 852), and net capital gain,
if any (as defined in Code section 1222).
(c) At the Effective Time, pursuant to
Articles of Transfer accepted for record by
the State Department of Assessments and
Taxation of Maryland (the "SDAT"), ACM III
shall assign, transfer, deliver and convey
the Assets to ACM I, subject to the Liabilities.
ACM I shall then accept the Assets and assume
the Liabilities such that at and after the
Effective Time (i) the Assets at or after
the Effective Time shall become and be assets
of ACM I, and (ii) the Liabilities at the
Effective Time shall attach to ACM I,
enforceable against ACM I to the same extent as
if initially incurred by ACM I.
(d) Within a reasonable time prior to
the Closing Date, ACM III shall provide,
if requested, a list of the Assets to ACM I.
ACM III may sell any asset on such list
prior to the Effective Time. After ACM
III provides such list, ACM III will not
acquire any additional securities or permit
to exist any encumbrances, rights, restrictions
or claims not reflected on such list, without
the approval of ACM I. Within a reasonable
time after receipt of the list and prior to
the Closing Date, ACM I will advise ACM III
in writing of any investments shown on the
list that ACM I has determined to be
inconsistent with its investment objective,
policies and restrictions. ACM III will
dispose of any such securities prior to
the Closing Date to the extent practicable
and consistent with applicable legal
requirements, including ACM III's investment
objectives, policies and restrictions.
In addition, if ACM I determines that, as a
result of the Acquisition, ACM I would own an
aggregate amount of an investment that would
exceed a percentage limitation applicable to
ACM I, ACM I will advise ACM III in writing
of any such limitation and ACM III shall
dispose of a sufficient amount of such
investment as may be necessary to avoid the
limitation as of the Effective Time, to the
extent practicable and consistent with
applicable legal requirements, including
ACM III's investment objectives, policies
and restrictions.
(e) ACM III shall assign, transfer,
deliver and convey the Assets to ACM I
at the Effective Time on the following basis:
(1) The value of the Assets less
the Liabilities, both determined as
of the Valuation Time, shall be divided
by the then net asset value of one
ACM I Share, and, in exchange for
the transfer of the Assets, ACM I
shall simultaneously issue and
deliver to ACM III the number of
full ACM I Shares so determined
that are allocable to all shares
held by or for those stockholders
of ACM III on a stockholder by
stockholder basis plus fractional
ACM I Shares, rounded to the third
decimal place or such other decimal
place as the parties may agree to in
writing, allocable to those stockholders
of ACM III that at the Effective Time
participate in ACM III's Dividend
Reinvestment Plan ("DRP Stockholders"),
regardless of whether the shares of
ACM III with respect to which such
fractional ACM I Shares are to be
issued and delivered are held by or
for the DRP Stockholders directly or
in ACM III's Dividend Reinvestment Plan.
ACM I shall at the same time deliver to
ACM III cash in lieu of any fractional
ACM I Shares allocable to those
stockholders of ACM III that are not
DRP Stockholders.
(2) The net asset value of the
ACM I Shares to be delivered to ACM
III shall be determined as of the
Valuation Time in accordance with
ACM I's then applicable valuation
procedures, and the net value of
the Assets to be conveyed to ACM I
shall be determined as of the Valuation
Time in accordance with the then
applicable valuation procedures of
ACM III.
(3) ACM III shall deliver the
Assets with good and marketable
title to the custodian for the account
of ACM I. All cash shall be transferred
in the form of immediately available
funds.
(f) Promptly after the Closing Date,
ACM III will deliver to ACM I a Statement of
Assets and Liabilities of ACM III as of the
Closing Date.
5. Liquidation and Dissolution
of ACM III, Registration of ACM I
Shares and Access to Records. ACM III
and ACM I also shall take the following
steps, as applicable:
(a) At or as soon as reasonably practical
after the Effective Time, ACM III shall
liquidate and dissolve by transferring to
stockholders of record of ACM III the ACM I
Shares and cash it receives pursuant to
Section 4(e)(1) of this Plan. ACM I shall
record on its books the ownership by ACM III's
stockholders of the ACM I Shares so transferred
to such stockholders, and ACM III shall
simultaneously cancel on its books all of the
issued and outstanding shares of ACM III.
ACM I shall not issue certificates representing
ACM I Shares to replace certificates representing
ACM III shares unless ACM III share certificates
are first surrendered to ACM I. Following
distribution by ACM III to its stockholders
of all ACM I Shares delivered to ACM III,
ACM III shall wind up its affairs and shall
take all steps as are necessary and proper
to dissolve as soon as is reasonably possible
after the Effective Time, including filing
Articles of Dissolution with the SDAT.
(b) At and after the Closing Date, ACM
III shall provide ACM I and its transfer agent
with immediate access to: (i) all records
containing the names, addresses and taxpayer
identification numbers of all of ACM III's
stockholders and the number and percentage
ownership of the outstanding shares of
ACM III owned by stockholders as of the
Effective Time, and (ii) all original
documentation (including all applicable
Internal Revenue Service forms, certificates,
certifications and correspondence) relating
to ACM III stockholders' taxpayer identification
numbers and their liability for or exemption
from back-up withholding. ACM III shall
preserve and maintain, or shall direct its
service providers to preserve and maintain,
records with respect to ACM III as required
by Section 31 of, and Rules 31a-1 and 31a-2
under, the 1940 Act.
6. Certain Representations and Warranties
of ACM III. ACM III represents and warrants to
ACM I as follows:
(a) ACM III is a corporation duly incorporated,
validly existing and in good standing under the
laws of the State of Maryland. ACM III is
registered with the SEC as a closed-end management
investment company under the 1940 Act and is
duly registered with the SEC under the 1934 Act,
and such registrations will be in full force
and effect as of the Effective Time.
(b) ACM III has the power and all necessary
federal, state and local qualifications and
authorizations to own all of the Assets, to
carry on its business, to enter into this Plan
and to consummate the transactions
contemplated herein.
(c) The Board of Directors of ACM III has
duly authorized the execution and delivery of
this Plan and the transactions contemplated
herein. Duly authorized officers of ACM III
have executed and delivered the Plan. The Plan
represents a valid and binding contract,
enforceable in accordance with its terms,
subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement,
moratorium, and other similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles. The
execution and delivery of this Plan does not,
and, subject to the approval of its stockholders
referred to in Section 3 hereof, the consummation
of the transactions contemplated by this Plan
will not, violate ACM III's Charter, its By-Laws
or any material agreement to which ACM III is
subject. Except for the approval of its
stockholders, ACM III does not need to take
any other action to authorize its officers
to effectuate this Plan and the transactions
contemplated herein.
(d) ACM III has qualified as a regulated
investment company under Part I of Subchapter
M of Subtitle A, Chapter 1, of the Code, in
respect of each taxable year since the
commencement of its operations and intends
to continue to qualify as a regulated investment
company for its taxable year ending upon
its liquidation.
(e) The information pertaining to
ACM III included within the N-14 Registration
Statement when filed with the SEC, when
Part A of the N-14 Registration Statement
is distributed to stockholders, at the time
of the stockholders meeting of ACM III for
approval of the Acquisition and at the
Effective Time shall (i) comply in all
material respects with the applicable
provisions of the 1933 Act, the 1934 Act
and the 1940 Act, and the rules and regulations
thereunder and applicable state securities laws,
and (ii) not contain any untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary to
make the statements made therein not misleading.
(f) ACM III has duly authorized and validly
issued all of its issued and outstanding shares
of common stock, and all such shares are fully
paid and non-assessable and were offered for
sale and sold in conformity with the registration
requirements of all applicable federal and state
securities laws. There are no outstanding
options, warrants or other rights to subscribe
for or purchase any of the shares of ACM III,
nor are there any securities convertible into
shares of ACM III.
(g) ACM III shall operate its business in
the ordinary course between the date hereof
and the Effective Time. Such ordinary course
of business will include the declaration and
payment of customary dividends and distributions
and any other dividends and distributions
referred
to in Section 4(b) hereof.
(h) At the Effective Time, ACM III will
have good and marketable title to the Assets
and full right, power and authority to assign,
transfer, deliver and convey the Assets.
(i) The Financial Statements of ACM III,
a copy of which has been previously delivered
to ACM I, fairly present the financial position
of ACM III as of ACM III's most recent fiscal
year-end and the results of ACM III's
operations and changes in ACM III's net
assets for the periods indicated.
(j) To the knowledge of ACM III, ACM III
has no liabilities, whether or not determined
or determinable, other than the Liabilities
disclosed or provided for in its Financial
Statements or Liabilities incurred in the
ordinary course of business subsequent to
the date of the most recent Financial
Statement referencing Liabilities.
(k) ACM III does not know of any claims,
actions, suits, investigations or proceedings
of any type pending or threatened against
ACM III. There are no facts that ACM III
has reason to believe are likely to form
the basis for the institution of any such
claim, action, suit, investigation or
proceeding against ACM III. ACM III is
not a party to or subject to the provisions
of any order, decree or judgment of any court
or governmental body that adversely affects,
or is reasonably likely to adversely affect,
its financial condition, results of operations,
or the Assets or its ability to consummate the
transactions contemplated by the Plan.
(l) Except for agreements entered into or
granted in the ordinary course of its business,
in each case under which no material default
exists, ACM III is not a party to or subject
to any material contract, debt instrument,
employee benefit plan, lease, franchise,
license or permit of any kind or nature
whatsoever.
(m) ACM III has filed its federal
income tax returns, copies of which
have been previously made available
to ACM I, for all taxable years for
which such returns are due and has
paid all taxes payable pursuant to
such returns. No such return is
currently under audit and no unpaid
assessment has been asserted with
respect to such returns. ACM III
will timely file its federal income
tax return for each subsequent taxable
year including its current taxable year.
(n) Since the date of the Financial
Statements of ACM III, there has been no
material adverse change in its financial
condition, results of operations,
business, or Assets. For this purpose,
negative investment performance shall not
be considered a material adverse change.
7. Certain Representations and
Warranties of ACM I. ACM I represents
and warrants to ACM III as follows:
(a) ACM I is a corporation duly
incorporated, validly existing and in
good standing under the laws of the State
of Maryland. ACM I is registered with the
SEC as a closed-end management investment
company under the 1940 Act and is duly
registered with the SEC under the 1934 Act,
and such registrations will be in full force
and effect as of the Effective Time.
(b) ACM I has the power and all necessary
federal, state and local qualifications and
authorizations to own all of its assets, to
carry on its business, to enter into this
Plan and to consummate the transactions
contemplated herein.
(c) The Board of Directors of ACM I has
duly authorized execution and delivery of
this Plan and the transactions contemplated
herein. Duly authorized officers of ACM I
have executed and delivered the Plan. The
Plan represents a valid and binding contract,
enforceable in accordance with its terms,
subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement,
moratorium and other similar laws of general
applicability relating to or affecting
creditors' rights and to general equity
principles. The execution and delivery
of this Plan does not, and subject to the
approval of its stockholders referred to
in Section 3 hereof, the consummation of
the transactions contemplated by this Plan
will not, violate the Charter of ACM I, its
By-Laws or any material agreement to which
ACM I is subject. Except for the approval
of its stockholders, ACM I does not need to
take any other action to authorize its
officers to effectuate the Plan and the
transactions contemplated herein.
(d) ACM I has qualified as a regulated
investment company under Part I of Subchapter
M of Subtitle A, Chapter 1, of the Code,
in respect of each taxable year since the
commencement of its operations and qualifies
and intends to continue to qualify as a
regulated investment company for its current
taxable year.
(e) The N-14 Registration Statement,
when filed with the SEC, when Part A of the
N-14 Registration Statement is distributed
to stockholders, at the time of the
stockholder meeting of ACM I for approval
of the Acquisition and at the Effective Time,
insofar as it relates to ACM I shall (i)
comply in all material respects with the
applicable provisions of the 1933 Act, the
1934 Act and the 1940 Act, and the rules
and regulations thereunder and applicable
state securities laws and (ii) not contain
any untrue statement of a material fact or
omit to state a material fact required to
be stated therein or necessary to make the
statements made therein not misleading.
(f) ACM I has duly authorized and validly
issued all issued and outstanding ACM I Shares,
and all such shares are fully paid and
non-assessable and were offered for sale
and sold in conformity with the registration
requirements of all applicable federal and
state securities laws. ACM I has duly
authorized the ACM I Shares referred to
in Section 4(e) hereof to be issued and
delivered to ACM III as of the Effective
Time. When issued and delivered, such ACM
I Shares shall be validly issued, fully
paid and non-assessable, and no stockholder
of ACM I shall have any preemptive right
of subscription or purchase in respect of
any such share. There are no outstanding
options, warrants or other rights to subscribe
for or purchase any ACM I Shares, nor are
there any securities convertible into ACM
I Shares.
(g) ACM I does not know of any claims,
actions, suits, investigations or proceedings
of any type pending or threatened against
ACM I. There are no facts that ACM I
currently has reason to believe are likely
to form the basis for the institution of
any such claim, action, suit, investigation
or proceeding against ACM I. ACM I is
not a party to or subject to the provisions
of any order, decree or judgment of any
court or governmental body that adversely
affects, or is reasonably likely to adversely
affect, its financial condition, results of
operations, its assets or its ability to
consummate the transactions contemplated
by this Plan.
(h) Except for agreements entered into
or granted in the ordinary course of its
business, in each case under which no material
default exists, ACM I is not a party to or
subject to any material contract, debt
instrument, employee benefit plan, lease,
franchise, license or permit of any kind
or nature whatsoever.
(i) ACM I has filed its federal income
tax returns, copies of which have been
previously made available to ACM III, for
all taxable years for which such returns are
due and has paid all taxes payable pursuant
to such returns. No such return is currently
under audit and no unpaid assessment has been
asserted with respect to such returns. ACM I
will timely file its federal income tax
return for each subsequent taxable year
including its current taxable year.
(j) Since the date of the Financial
Statements of ACM I, there has been no
material adverse change in its financial
condition, results of operations, business
or assets. Negative investment performance
shall not be considered a material
adverse change.
8. Conditions to the Obligations of
ACM I and ACM III. The obligations of ACM I
and ACM III with respect to the Acquisition
shall be subject to the following conditions
precedent:
(a) The stockholders of ACM III shall
have approved the Acquisition in the manner
required by the Charter of ACM III, its By-Laws
and applicable law. The stockholders of ACM I
shall have approved the Acquisition as required
by the rules and regulations of the NYSE. If
stockholders of ACM III or ACM I fail to
approve the Acquisition as required, that
failure shall release the Funds of their
obligations under this Plan.
(b) ACM I and ACM III shall have delivered
to the other party a certificate dated as of
the Closing Date and executed in its name by
its Secretary or an Assistant Secretary, in
a form reasonably satisfactory to the receiving
party, stating that the representations and
warranties of ACM I or ACM III, as applicable,
in this Plan that apply to the Acquisition are
true and correct in all material respects at
and as of the Valuation Time.
(c) ACM I and ACM III shall have performed
and complied in all material respects with
each of its representations and warranties
required by this Plan to be performed or
complied with by it prior to or at the
Valuation Time and the Effective Time.
(d) There has been no material adverse
change in the financial condition, results
of operations, business, properties or
assets of ACM I or ACM III since June 30,
2000. Negative investment performance
shall not be considered a material adverse
change.
(e) ACM I and ACM III shall have
received an opinion of Xxxxxx & Xxxxxx LLP,
in form and substance reasonably satisfactory
to each of them, based upon representations
made in certificates provided by the Funds,
their affiliates and/or principal stockholders
and dated as of the Closing Date, substantially
to the effect that, based on facts and
assumptions stated therein, for federal
income tax purposes:
(1) the Acquisition will constitute a
"reorganization" within the meaning of section
368(a) of the Code and that ACM I and ACM III
will each be "a party to a reorganization" within
the meaning of section 368(b) of the Code;
(2) a stockholder of ACM III will recognize no
gain or loss on the exchange of the stockholder's
shares of ACM III solely for ACM I Shares, except
with respect to cash received in lieu of a
fractional share of ACM I in connection
with the Acquisition;
(3) neither ACM III nor ACM I will recognize
any gain or loss upon the transfer of all of
the Assets to ACM I in exchange for ACM I
Shares (plus cash in lieu of fractional shares)
and the assumption by ACM I of the Liabilities
pursuant to this Plan or upon the distribution
of ACM I Shares and cash to stockholders of
ACM III in exchange for their respective shares
of ACM III;
(4) the holding period and tax basis of the
Assets acquired by ACM I will be the same as
the holding period and tax basis that ACM III
had in such Assets immediately prior to the
Acquisition;
(5) the aggregate tax basis of ACM I Shares
received in connection with the Acquisition
by each stockholder of ACM III (including any
fractional share to which the stockholder may
be entitled) will be the same as the aggregate
tax basis of the shares of ACM III surrendered
in exchange therefor, decreased by any cash
received and increased by any gain recognized
on the exchange;
(6) the holding period of ACM I Shares received
in connection with the Acquisition by each
stockholder of ACM III (including any fractional
share to which the stockholder may be entitled)
will include the holding period of the shares of
ACM III surrendered in exchange therefor, provided
that such ACM III shares constitute capital
assets in the hands of the stockholder as of
the Closing Date;
(7) ACM I will succeed to the capital loss
carryovers of ACM III, if any, under section
381 of the Code, but the use by ACM I of any
such capital loss carryovers (and of capital
loss carryovers of ACM I) may be subject to
limitation under section 383 of the Code;
and
(8) any gain or loss realized by a stockholder
of ACM III upon the sale of a fractional share
of ACM I to which the stockholder is entitled
will be recognized to the stockholder and
measured by the difference between the amount
of cash received and the basis of the
fractional share and, provided that ACM III
shares surrendered constitute capital assets
in the hands of the stockholder, will be
capital gain or loss.
(f) The N-14 Registration Statement shall
have become effective under the 1933 Act as
to the ACM I Shares, and the SEC shall not
have instituted and to the knowledge of ACM I
is not contemplating instituting, any stop
order suspending the effectiveness of the
N-14 Registration Statement.
(g) No action, suit or other proceeding
shall be threatened or pending before any
court or governmental agency in which it is
sought to restrain or prohibit, or obtain
damages or other relief in connection with,
the Acquisition.
(h) The SEC shall not have issued any
unfavorable advisory report under Section
25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation
of the Acquisition under Section 25(c) of
the 1940 Act.
(i) Neither party shall have terminated
this Plan with respect to the Acquisition
pursuant to Section 12 of this Plan.
(j) The NYSE shall have approved, upon
official notice of issuance, the listing of
the ACM I Shares to be issued and delivered
to ACM III pursuant hereto.
9. Conditions to the Obligations
of ACM III. The obligations of ACM III
with respect to the Acquisition shall
be subject to the following conditions
precedent:
(a) ACM III shall have received an opinion
of Xxxxxx & Xxxxxx LLP, counsel to ACM I, in
form and substance reasonably satisfactory to
ACM III and dated as of the Closing Date,
substantially to the effect that:
(1) ACM I is a corporation duly incorporated,
validly existing and in good standing under
the laws of the State of Maryland and is a
closed-end, management investment company
registered under the 1940 Act and duly
registered under the 1934 Act;
(2) This Plan has been duly authorized,
executed and delivered by ACM I and, assuming
due authorization, execution and delivery of
this Plan by ACM III, represents a legal,
valid and binding contract, enforceable in
accordance with its terms, subject to the
effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and transfer and similar
laws relating to or affecting creditors'
rights generally and court decisions with
respect thereto, and further subject to the
application of equitable principles in any
proceeding, whether at law or in equity or
with respect to the enforcement of provisions
of the Plan and the effect of judicial decisions
which have held that certain provisions are
unenforceable when their enforcement would
violate an implied covenant of good faith
and fair dealing or would be commercially
unreasonable or when default under the Plan
is not material;
(3) The ACM I Shares to be delivered as
provided for by this Plan are duly authorized
and upon delivery will be validly issued,
fully paid and non-assessable by ACM I;
(4) The execution and delivery of this
Plan did not, and the consummation of the
Acquisition will not, violate the Charter
of ACM I, its By-Laws or any agreement of
ACM I known to such counsel, after
reasonable inquiry; and
(5) To the knowledge of such counsel, no
consent, approval, authorization or order
of any federal or state court or administrative
or regulatory agency, other than the acceptance
of record of Articles of Transfer by the SDAT,
is required for ACM I to enter into this Plan
or carry out its terms, except those that have
been obtained under the 1933 Act, the 1934 Act,
the 1940 Act and the rules and regulations under
those Acts or that may be required under state
securities laws or subsequent to the Effective
Time or when the failure to obtain the consent,
approval, authorization or order would not
have a material adverse effect on the
operation of ACM I.
In rendering such opinion, Xxxxxx & Xxxxxx LLP
may (i) rely on the opinion of other counsel
to the extent set forth in such opinion, (ii)
make assumptions regarding the authenticity,
genuineness and/or conformity of documents
and copies thereof without independent
verification thereof, (iii) limit such opinion
to applicable federal and state law, (iv) define
the word "knowledge" and related terms to mean
the knowledge of attorneys then with such firm
who have devoted substantive attention to matters
directly related to this Plan and (v) rely on
certificates of officers or directors of ACM I
as to factual matters.
10. Conditions to the Obligations of ACM I.
The obligations of ACM I with respect to the
Acquisition shall be subject to the following
conditions precedent:
(a) ACM I shall have received an opinion of
Xxxxxx & Xxxxxx LLP, counsel to ACM III, in
form and substance reasonably satisfactory to
ACM I and dated as of the Closing Date,
substantially to the effect that:
(1) ACM III is a corporation duly incorporated,
validly existing and in good standing under
the laws of the State of Maryland and is
a closed-end management investment company
registered under the 1940 act and duly
registered under the 1934 Act;
(2) This Plan has been duly authorized,
executed and delivered by ACM III and,
assuming due authorization, execution
and delivery of this Plan by ACM I,
represents a legal, valid and binding
contract, enforceable in accordance with
its terms, subject to the effect of
bankruptcy, insolvency, moratorium,
fraudulent conveyance and transfer
and similar laws relating to or affecting
creditors' rights generally and court
decisions with respect thereto, and further
subject to the application of equitable
principles in any proceeding, whether at
law or in equity or with respect to the
enforcement of provisions of the Plan and
the effect of judicial decisions which have
held that certain provisions are unenforceable
when their enforcement would violate an implied
covenant of good faith and fair dealing or
would be commercially unreasonable or when
default under the Plan is not material;
(3) The execution and delivery of this
Plan did not, and the consummation of
the Acquisition will not, violate the
Charter of ACM III, its By-Laws or any
agreement of ACM III known to such counsel,
after reasonable inquiry; and
(4) To the knowledge of such counsel, no
consent, approval, authorization or order
of any federal or state court or
administrative or regulatory agency, other
than the acceptance of record of Articles
of Transfer by the SDAT, is required for
ACM III to enter into the Plan or carry
out its terms, except those that have been
obtained under the 1933 Act, the 1934 Act,
the 1940 Act and the rules and regulations
under those Acts or that may be required
under state securities laws or subsequent
to the Effective Time or when the failure
to obtain the consent, approval, authorization
or order would not have a material adverse
effect on the operation of ACM III.
In rendering such opinion, Xxxxxx & Xxxxxx
LLP may (i) rely on the opinion of other
counsel to the extent set forth in such
opinion, (ii) make assumptions regarding
the authenticity, genuineness and/or
conformity of documents and copies thereof
without independent verification thereof,
(iii) limit such opinion to applicable
federal and state law, (iv) define the
word "knowledge" and related terms to
mean the knowledge of attorneys then
with such firm who have devoted substantive
attention to matters directly related to
this Plan and (v) rely on certificates of
officers or directors of ACM III as to
factual matters.
(b) Except to the extent prohibited
by Rule 19b-1 under the 1940 Act, ACM III
shall have declared a dividend or dividends
that, together with all previous such dividends
, shall have the effect of distributing to
the stockholders of ACM III substantially all
of its investment company taxable income,
if any (as defined in Code section 852),
and all of its net capital gain, if any,
(as defined in Code section 1222).
11. Survival of Representations and
Warranties. No representations, warranties
or covenants in or pursuant to this Plan
(including certificates of officers) hereto
shall survive the completion of the
transactions contemplated herein.
12. Termination of Plan. A majority
of either Fund's Board of Directors may
terminate this Plan with respect to that
Fund at any time before the applicable
Effective Time if: (i) the Fund's conditions
precedent set forth in Sections 8, 9 or 10
as appropriate, are not satisfied; or (ii)
the Board of Directors determines that the
consummation of the Acquisition is not in
the best interests of the Fund or its
stockholders and gives notice of such
termination to the other party.
13. Governing Law. This Plan and the
transactions contemplated hereby shall be
governed, construed and enforced in accordance
with the laws of the State of New York, except
to the extent preempted by federal law, without
regard to conflicts of law principles.
14. Brokerage Fees. Each party
represents and warrants that there
are no brokers or finders entitled
to receive any payments in connection
with the transactions provided for
in the Plan.
15. Amendments. The parties may, by
agreement in writing authorized by their
respective Board of Directors, amend this
Plan at any time before or after the
stockholders of ACM III or ACM I approve
the Acquisition. However, after stockholders
of either of ACM III or ACM I approve the
Acquisition, the parties may not amend this
Plan in a manner that materially alters the
obligations of either party. This Section
shall not preclude the parties from changing
the Closing Date or the Effective Time by
mutual agreement.
16. Waivers. At any time prior to the
Closing Date, either party may by written
instrument signed by it (i) waive the effect
of any inaccuracies in the representations
and warranties made to it contained herein
and (ii) waive compliance with any of the
agreements, covenants or conditions made
for its benefit contained herein. Any waiver
shall apply only to the particular inaccuracy
or requirement for compliance waived, and not
any other or future inaccuracy or lack of
compliance.
17. Indemnification of Directors.
ACM I will assume all obligations of
ACM III to exculpate and indemnify
its current and former directors and
officers, acting in their capacities
as such.
18. Other Matters. Pursuant to
Rule 145 under the 1933 Act, and in
connection with the issuance of any
shares to any person who at the time
of the Acquisition is, to ACM I's
knowledge, an affiliate of a party
to the Acquisition pursuant to Rule
145(c), ACM I will cause to be affixed
upon the certificate(s) issued to such
person (if any) a legend as follows:
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT TO ACM GOVERNMENT INCOME FUND, INC.
(OR ITS STATUTORY SUCCESSOR) UNLESS (I) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH
SHARES IS EFFECTIVE UNDER THE SECURITIES ACT
OF 1933 OR (II) IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE FUND, SUCH
REGISTRATION IS NOT REQUIRED.
19. Cooperation and Further Assurances.
Each party will cooperate with the other in
fulfilling its obligations under this Plan
and will provide such information and
documentation as is reasonably requested
by the other in carrying out the Plan's
terms. Each party will provide such further
assurances concerning the performance of
its obligations hereunder and execute all
documents for or in connection with the
consummation of the Acquisition as, with
respect to such assurances or documents,
the other shall deem necessary or
appropriate.
20. Updating of N-14 Registration
Statement. If at any time prior to the
Effective Time, a party becomes aware of
any untrue statement of a material fact
or omission to state a material fact required
to be stated therein or necessary to make the
statements made not misleading in the N-14
Registration Statement, the party discovering
the item shall notify the other party and the
parties shall cooperate in promptly preparing,
filing and clearing with the SEC and, if
appropriate, distributing to stockholders
appropriate disclosure with respect to
the item.
21. Limitation on Liabilities. The
obligations of ACM III and ACM I shall
not bind any of the directors, stockholders
, nominees, officers, agents, employees or
agents of ACM III or ACM I personally, but
shall bind only ACM III or ACM I, as appropriate.
The execution and delivery of this Plan by
an officer of either party shall not be
deemed to have been made by the officer
individually or to impose any liability
on the officer personally, but shall bind
only ACM III or ACM I, as appropriate.
22. Termination of ACM III.
If the parties complete the Acquisition,
ACM III shall terminate its registration
under the 1940 Act, the 1934 Act and
liquidate and dissolve.
23. Notices. Any notice, report, statement,
certificate or demand required or permitted by
any provision of the Plan shall be in writing
and shall be given in person or by telecopy,
certified mail or overnight express courier to:
For ACM III:
ACM Government Spectrum
Fund, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
For ACM I:
ACM Government Income
Fund, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
24. Expenses. The investment adviser
for the Funds and the other funds whose
assets are to be acquired by ACM I in the
acquisitions described in the N-14
Registration Statement in connection
with this Agreement has agreed to bear
25% of the expenses incurred in connection
with the acquisitions. The acquisition
expenses paid by the investment adviser
of the Funds and each such other fund
shall be allocated to ACM I initially,
representing its share of the total
acquisition expenses, with any residual
amount allocated to ACM Government
Securities Fund, Inc. The total remaining
acquisition expenses shall be paid
proportionately by ACM III and each
such other fund according to its
respective asset size as of the last
date that an acquisition of assets
by ACM I, as described in the N-14
Registration Statement, is considered
for approval by the stockholders of
ACM I, ACM III or any of the other
funds involved, whether or not the
acquisitions contemplated hereby and
each such other agreement and plan is
consummated.
25. General. This Plan supersedes all
prior agreements between the parties with
respect to the subject matter hereof and may
be amended only in writing signed by both parties.
The headings contained in this Plan are for
reference only and shall not affect in any
way the meaning or interpretation of this
Plan. Whenever the context so requires,
the use in the Plan of the singular will
be deemed to include the plural and vice
versa. Nothing in this Plan, expressed or
implied, confers upon any other person any
rights or remedies under or by reason of
this Plan. Neither party may assign or
transfer any right or obligation under
this Plan without the written consent
of the other party.
In Witness Whereof, the parties hereto
have executed this Plan as of the day
and year first above written.
ACM Government Spectrum Fund, Inc.
Attest:
By:
Name: Name:
Title: Title:
ACM Government Income Fund, Inc.
Attest:
By:
Name: Name:
Title: Title:
Accepted and agreed with respect
to Section 24 only:
Alliance Capital Management L.P.
By: Alliance Capital Management
Corporation, its General Partner
By: ___________________________
Name: ______________________
Title: _______________________
00250.236 #193225
19
17
