DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of the 22nd day of July, 1992, between
ALLIANCE NEW EUROPE 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 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
offerings 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 term 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 or
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 current
Prospectus of the Fund (the "Prospectus") 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 without a sales charge to certain classes of persons
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 the Fund, as of the close
of the New York Stock Exchange on each Fund business day 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 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
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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 Section (3)(d) of ARTICLE FIFTH of
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 (unless such
selected dealer 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 business day 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 closed, when trading on
said Exchange is closed, when trading on said Exchange is
restricted, when an emergency exists as a result of which
disposal by the Fund or 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.
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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. With respect to each portfolio (the
"Portfolio"), 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 each Portfolio, 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 Portfolio's shareholders.
(c) Alliance Capital Management L.P., the Funds
investment adviser (the "Adviser"), may make payments from time
to time 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 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 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 of the Fund. 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
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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.
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 use its best efforts in all respects duly to conform with
the requirements of all federal and state laws relating to the
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sale of such securities. Neither the Underwriter nor any
selected dealer 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 (the
"Registration Statement"), as amended from time to time, under
the Securities Act and the Investment Company Act or 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, 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 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 with securities dealers of its choice
("selected dealers") for the sale of shares and fix therein the
portion of the sales charge which may be allocated to the
selected dealers; provided, that the Fund shall approve the forms
of agreements with dealers and the dealer 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 shall be
for resale by such dealers 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 selected dealers as are
members in good standing of the NASD.
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).
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(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 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 either
thereof or necessary to make the statements in either thereof not
misleading; provided, however, that in no event shall anything
herein contained be so construed as to protect the 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
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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 trustees, and any person who
controls the Fund 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
therewith) which the Fund, its officers or trustees, 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
trustees 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 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
trustees, 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 trustees 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
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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 trustees 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 so to 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 trustees, 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:
(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 either 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 continue in effect until December 31, 1992, and
thereafter for successive twelve-month periods (computed from
each January 1) with respect to each Portfolio; provided,
however, that such continuance is specifically approved at least
annually by the Directors of the Fund or by majority vote of the
holders of the outstanding voting securities (as defined in the
Investment Company Act) of the holders of Class A shares and
holders of Class B shares of such Portfolio, voting separately by
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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 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
majority of the outstanding voting securities (as so defined) of
such class or Portfolio, 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 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
with respect to any Portfolio 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 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 or Portfolio 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.
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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 given
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.
Section 16. Disinterested 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.
ALLIANCE NEW EUROPE FUND, INC.
By /s/ Xxxxx X. Xxxxxxx
________________________
Xxxxx X. Xxxxxxx
Chairman
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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