ACM INCOME FUND, INC.
55,002,812 Shares of Common Stock
Issuable Upon Exercise of Non-Transferable Rights
to Subscribe for Such Shares of Common Stock
DEALER MANAGER AGREEMENT
New York, New York
November __, 2001
XXXXXXX XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
UBS WARBURG LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ACM Income Fund, Inc., a Maryland corporation (the
"Company"), confirms its agreement with and appointment of each
of Xxxxxxx Xxxxx Xxxxxx Inc. and UBS Warburg LLC to act as dealer
manager (collectively, the "Dealer Manager") in connection with
the issuance by the Company to the holders of record at the close
of business on November __, 2001, or such other date as is
established as the record date for such purpose (each a "Holder"
and collectively the "Holders"), of 165,008,437 non-transferable
rights entitling such Holders to subscribe for 55,002,812 shares
(each a "Share" and collectively the "Shares") of common stock,
par value $0.01 per share (the "Common Stock"), of the Company
(the "Offer"). Pursuant to the terms of the Offer, the Company
is issuing each Holder one non-transferable right (each a "Right"
and collectively the "Rights") for each share of Common Stock
held by such Holder on the record date (the "Record Date") set
forth in the Prospectus (as defined herein). Such Rights entitle
Holders to acquire during the subscription period (the
"Subscription Period") set forth in the Prospectus, at the price
(the "Subscription Price") set forth in such Prospectus, one
Share for each three Rights exercised on the terms and conditions
set forth in such Prospectus. No fractional shares will be
issued. Any Holder who fully exercises all Rights initially
issued to such Holder will be entitled to subscribe for, subject
to allotment, additional Shares (the "Over-Subscription
Privilege"). Pursuant to the Over-Subscription Privilege, the
Company may, at its discretion, increase the number of Shares
subject to subscription by up to 25% or 13,750,703 Shares, for an
aggregate total of 68,753,515 Shares.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form N-
2 (File Nos. 333-71128 and 811-05207) and a related preliminary
prospectus and preliminary statement of additional information
for the registration of the Shares under the Securities Act of
1933, as amended (the "Securities Act"), the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and the
rules and regulations of the Commission under the Securities Act
and the Investment Company Act (the "Rules and Regulations"), and
has filed such amendments to such registration statement on Form
N-2, if any, and such amended preliminary prospectuses and
preliminary statements of additional information as may have been
required to the date hereof. If the registration statement has
not become effective, a further amendment to such registration
statement, including forms of a final prospectus and final
statement of additional information necessary to permit such
registration statement to become effective will promptly be filed
by the Company with the Commission. If the registration
statement has become effective and any prospectus or statement of
additional information constituting a part thereof omits certain
information at the time of effectiveness pursuant to Rule 430A of
the Rules and Regulations, a final prospectus and final statement
of additional information containing such omitted information
will promptly be filed by the Company with the Commission in
accordance with Rule 497(h) of the Rules and Regulations. The
term "Registration Statement" means the registration statement,
as amended (if applicable), at the time it becomes or became
effective, including financial statements and all exhibits and
all documents, if any, incorporated therein by reference, and any
information deemed to be included by Rule 430A. The term
"Prospectus" means the final prospectus and final statement of
additional information in the forms filed with the Commission
pursuant to Rule 497(c), (h) or (j) of the Rules and Regulations,
as the case may be, as from time to time amended or supplemented
pursuant to the Securities Act. The Prospectus and letters to
beneficial owners of the shares of Common Stock of the Company,
forms used to exercise rights, any letters from the Company to
securities dealers, commercial banks and other nominees and any
newspaper announcements, press releases and other offering
materials and information that the Company may use or approve or
authorize in writing for use in connection with the Offer are
collectively referred to hereinafter as the "Offering Materials".
1. Representations and Warranties. (a) The Company
represents and warrants to, and agrees with, the Dealer Manager
as of the date hereof (such date being hereinafter referred to as
the "Representation Date") and as of the Expiration Date (as
defined below) that:
(i) The Company meets the requirements for use
of Form N-2 under the Securities Act and the Investment
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Company Act and the Rules and Regulations. At the time
the Registration Statement becomes effective, the
Registration Statement will contain all statements
required to be stated therein in accordance with and
will comply in all material respects with the
requirements of the Securities Act, the Investment
Company Act and the Rules and Regulations and will 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 therein not
misleading. From the time the Registration Statement
becomes effective through the expiration date of the
Offer set forth in the Prospectus (the "Expiration
Date"), the Prospectus and the other Offering Materials
will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that
the representations and warranties in this subsection
shall not apply to statements in or omissions from the
Registration Statement, Prospectus or other Offering
Materials made in reliance upon and in conformity with
information furnished to the Company by the Dealer
Manager expressly for use in the Registration Statement,
Prospectus or other Offering Materials.
(ii) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Maryland, has full power
and authority (corporate and other) to conduct its
business as described in the Registration Statement and
the Prospectus, and is duly qualified to do business as
a foreign corporation in each jurisdiction wherein it
owns or leases real property or in which the conduct of
its business requires such qualification, except where
the failure to be so qualified would not result in a
material adverse effect upon the business, properties,
financial position or results of operations of the
Company (a "Material Adverse Effect"). The Company has
no subsidiaries.
(iii) The Company is registered with the
Commission under the Investment Company Act as a closed-
end, diversified management investment company; no order
of suspension or revocation of such registration has
been issued or proceedings therefor initiated or
threatened by the Commission; all required action has
been taken under the Securities Act and the Investment
Company Act to make the public offering and consummate
the issuance of the Rights and the issuance and sale of
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the Shares by the Company upon exercise of the Rights,
and the provisions of the Company's charter and by-laws
comply as to form in all material respects with the
requirements of the Investment Company Act.
(iv) Ernst & Young LLP, the accountants who
certified the financial statements of the Company set
forth or incorporated by reference in the Registration
Statement and the Prospectus, are independent public
accountants as required by the Securities Act, the
Investment Company Act and the Rules and Regulations.
(v) The financial statements of the Company, set
forth or incorporated by reference in the Registration
Statement and the Prospectus present fairly in all
material respects the assets and liabilities, results of
operations and changes in net assets of the Company as
of the dates or for the periods indicated in conformity
with generally accepted accounting principles applied on
a consistent basis; and the information relating to the
Company included in the Prospectus under the headings
"Expense Information," "Financial Highlights" and
"Trading and NAV Information" was prepared on a basis
consistent with such financial statements and the books
and records of the Company.
(vi) The Company has an authorized capitalization
as set forth in the Prospectus; the outstanding shares
of Common Stock have been duly authorized and are
validly issued, fully paid and non-assessable and
conform in all material respects to the description
thereof in the Prospectus under the heading "Common
Stock"; the Rights have been duly authorized by all
requisite action on the part of the Company for issuance
pursuant to the Offer; the Shares have been or, with
respect to the Shares to be issued pursuant to the Over-
Subscription Privilege, will be duly authorized by all
requisite action on the part of the Company for issuance
and sale pursuant to the terms of the Offer and, when
issued and delivered by the Company pursuant to the
terms of the Offer against payment of the consideration
set forth in the Prospectus, will be validly issued,
fully paid and non-assessable; the Shares and the Rights
conform in all material respects to all statements
relating thereto contained in the Registration
Statement, the Prospectus and the other Offering
Materials; and the issuance of each of the Rights and
the Shares is not subject to any preemptive rights.
(vii) Except as set forth in the Registration
Statement and Prospectus, subsequent to the respective
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date(s) as of which information is given in the
Registration Statement and the Prospectus, (A) the
Company has not incurred any liabilities or obligations,
direct or contingent, or entered into any transactions,
other than in the ordinary course of business, that are
material to the Company, (B) there has not been any
material change in the capital stock or material
increase in the short-term or long-term debt of the
Company, or any change that would result in a Material
Adverse Effect, or any development involving or which
may reasonably be expected to involve a prospective
change that would result in a Material Adverse Effect,
and (C) there have been no dividends or distributions
paid or declared in respect of the Company's capital
stock (other than the distribution with respect to
November 2001).
(viii) There is no pending or, to the knowledge of
the Company, threatened or contemplated action, suit or
proceeding affecting the Company or to which the Company
is a party before or by any court or governmental
agency, authority or body or any arbitrator, whether
foreign or domestic, which is likely to have a Material
Adverse Effect.
(ix) There are no contracts or other documents of
the Company required to be described in the Registration
Statement or the Prospectus, or to be filed or
incorporated by reference as exhibits which are not
described or filed or incorporated by reference therein
as permitted by the Securities Act, the Investment
Company Act or the Rules and Regulations.
(x) Each of this agreement (the "Agreement"),
the Subscription Agent Agreement (the "Subscription
Agent Agreement") dated as of _____________ between the
Company and EquiServe Trust Company, N.A. (the
"Subscription Agent"), the Information Agent Agreement
(the "Information Agent Agreement") dated as of
____________ between the Company and Xxxxxxxxx
Shareholder Communications (the "Information Agent"),
the Advisory Agreement (the "Advisory Agreement") dated
as of July 22, 1992 between the Company and Alliance
Capital Management L.P. (the "Investment Adviser"), the
Administrative and Accounting Agency Agreement (the
"Administration Agreement") dated as of August 28, 1987
between the Company and PaineWebber Incorporated, the
Custody Agreement (the "Custodian Agreement") dated as
of August 28, 1987 between the Company and State Street
Bank and Trust Company and the Registrar, Transfer
Agency and Service Agreement (the "Service Agreement")
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dated as of August 28, 1987, between the Company and
State Street Bank and Trust Company (the Subscription
Agent Agreement, Information Agent Agreement, the
Advisory Agreement, the Administration Agreement, the
Custodian Agreement and the Transfer Agent Agreement are
collectively referred to herein as the "Company
Agreements") has been duly authorized, executed and
delivered by the Company; each of this Agreement and the
Company Agreements complies in all material respects
with all applicable provisions of the Investment Company
Act and the Rules and Regulations thereunder; and,
assuming due authorization, execution and delivery by
the other parties thereto, each of this Agreement and
the Company Agreements constitutes a legal, valid,
binding and enforceable obligation of the Company,
subject to the qualification that the enforceability of
the Company's obligations hereunder and thereunder may
be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights, and to
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity
or at law) and except as enforcement of rights to
indemnity and contribution hereunder and thereunder may
be limited by federal or state securities laws or
principles of public policy.
(xi) Neither the issuance of the Rights, nor the
issuance and sale of the Shares, nor the performance and
consummation by the Company of any other of the
transactions contemplated in this Agreement and the
Company Agreements nor the consummation of the
transactions contemplated in the Registration Statement
will (A) result in a material breach or violation of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company under the charter or
by-laws of the Company, or the terms and provisions of
any agreement, indenture, mortgage, lease or other
instrument to which the Company is a party or by which
it may be bound or to which any of the property or
assets of the Company is subject, or (B) result in any
violation of any order, law, rule or regulation of any
court or governmental agency or body, whether foreign or
domestic, having jurisdiction over the Company or any of
its properties.
(xii) No consent, approval, authorization,
notification or order of, or any registration or filing
with, any court, regulatory body, administrative or
other governmental agency or body, whether foreign or
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domestic, is required for the consummation by the
Company of the transactions contemplated by this
Agreement, the Company Agreements or the Registration
Statement, except such as have been obtained, or if the
registration statement filed with respect to the Shares
is not effective under the Securities Act as of the time
of execution hereof, such as may be required (and shall
be obtained as provided in this Agreement) under the
Securities Act, Investment Company Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
and state securities laws.
(xiii) The Company owns or possesses all material
governmental licenses, permits, consents, orders,
approvals or other authorizations, whether foreign or
domestic, to enable the Company to continue to carry on
its business and to invest in securities as contemplated
in the Prospectus; the Company has fulfilled and
performed all its material obligations with respect to
such permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or
termination thereof or result in any other material
impairment of the rights of the Company under any such
permit, subject in each case to such qualification as
may be set forth in the Registration Statement.
(xiv) The Common Stock has been duly listed on the
New York Stock Exchange and prior to their issuance the
Shares will have been duly approved for listing, subject
to official notice of issuance, on the New York Stock
Exchange.
(xv) The Company (A) has not taken, directly or
indirectly, any action designed to cause or to result
in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or
manipulation of the price of any security of the Company
to facilitate the issuance of the Rights or the sale or
resale of the Shares, (B) has not since the filing of
the Registration Statement sold, bid for or purchased,
or paid anyone any compensation for soliciting purchases
of, shares of Common Stock of the Company and (C) will
not, until the later of the expiration of the Rights or
the completion of the distribution (within the meaning
of Regulation M under the Exchange Act) of the Shares,
sell, bid for or purchase, pay or agree to pay to any
person any compensation for soliciting another to
purchase any other securities of the Company (except for
the solicitation of the exercise of Rights and the Over-
Subscription Privilege pursuant to this Agreement);
provided, that any action in connection with the
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Company's dividend reinvestment plan will not be deemed
to be within the terms of this Section 1(a)(xv).
(xvi) The Company intends to direct the investment
of the proceeds of the offering described in the
Registration Statement and the Prospectus in such a
manner as to continue to comply with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as
amended ("Subchapter M of the Code"), and has at all
times since its inception qualified and intends to
continue to qualify as a regulated investment company
under Subchapter M of the Code.
(xvii) There are no material restrictions,
limitations or regulations with respect to the ability
of the Company to invest its assets as described in the
Prospectus other than as described therein.
(xviii) Neither the filing of the Registration
Statement nor the Offer as contemplated by this
Agreement and the Subscription Agency Agreement gives
rise to any rights, other than those which have been
waived or satisfied, for or relating to the registration
of any shares of Common Stock or other securities of the
Company.
(xix) The Company maintains a system of internal
accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in
accordance with management's general or specific
authorization and with the applicable requirements of
the Investment Company Act and the Rules and Regulations
thereunder and the Internal Revenue Code of 1986, as
amended (the "Code"); (B) transactions are recorded as
necessary to permit preparation of financial statements
in conformity with generally accepted accounting
principles and to maintain accountability for assets and
to maintain compliance with the books and records
requirements under the Investment Company Act and the
Rules and Regulations thereunder; (C) access to assets
is permitted only in accordance with management's
general or specific authorization; and (D) the recorded
accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xx) The Company, subject to the registration
statement having been declared effective and the filing
of the Prospectus under Rule 497 under the Securities
Act Rules and Regulations, has taken all required action
under the Securities Act, the Investment Company Act and
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the Rules and Regulations to make the public offering
and consummate the sale of the Shares as contemplated by
this Agreement.
(b) The Investment Adviser represents and warrants to,
and agrees with, the Dealer Manager as of the date hereof and as
of the Expiration Date that:
(i) The Investment Adviser has been duly formed
and is validly existing and in good standing under the
laws of Delaware, with power and authority (partnership
and other) to own its properties and conduct its
business as described in the Prospectus, and has been
duly qualified as a foreign partnership for the
transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to
require such qualification, other than where the failure
to be so qualified or in good standing would not have a
material adverse effect on the Investment Adviser and
its subsidiaries taken as a whole (an "Adviser Material
Adverse Effect").
(ii) The Investment Adviser is duly registered as
an investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act") and is not
prohibited by any provision of the Advisers Act or the
Investment Company Act, or the rules and regulations
under such Acts, from acting as an investment adviser
for the Company as contemplated in the Prospectus and
the Advisory Agreement. There does not exist to the
knowledge of the Investment Adviser any proceeding which
might materially adversely affect the registration of
the Investment Adviser with the Commission.
(iii) Each of this Agreement, the Advisory
Agreement and any other Company Agreement to which the
Investment Adviser is a party has been duly authorized,
executed and delivered by the Investment Adviser and
complies with all applicable provisions of the Advisers
Act, the Investment Company Act, and the rules and
regulations under such Acts.
(iv) Neither the execution, delivery or
performance by the Investment Adviser of its obligations
under this Agreement, the Advisory Agreement or any
other Company Agreement to which the Investment Adviser
is a party nor the consummation of the transactions
contemplated therein or in the Registration Statement
nor the fulfillment of the terms thereof will conflict
with or result in a breach of any of the terms or
9
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Investment
Adviser is a party or by which the Investment Adviser is
bound or to which any of the property or assets of the
Investment Adviser is subject, nor will any such action
result in any violation of the provisions of the
organizational documents of the Investment Adviser or
any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body
having jurisdiction over the Investment Adviser or any
of its properties.
(v) Other than as set forth in Part II, Item 1
of the Quarterly Report on Form 10-Q filed by the
Investment Adviser with the Securities and Exchange
Commission with respect to the quarterly periods ended
March 31, 2001, June 30, 2001 and September 30, 2001
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, there are no legal or
governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the
Investment Adviser, threatened against or affecting the
Investment Adviser or any of its subsidiaries or any of
their respective properties or to which the Investment
Adviser or any of its subsidiaries is or may be a party
or to which any property of the Investment Adviser or
any of its subsidiaries is or may be the subject which,
if determined adversely to the Investment Adviser or any
of its subsidiaries, would individually or in the
aggregate have, or reasonably be expected to have, an
Adviser Material Adverse Effect and, to the Investment
Adviser's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or
threatened by others.
(vi) No consent, approval, authorization, order,
license, registration or qualification of, or any filing
with, any court or governmental agency or body, whether
foreign or domestic, is required for the consummation by
the Investment Adviser of the transactions contemplated
by this Agreement.
(vii) The Investment Adviser owns or possesses all
material governmental licenses, permits, consents,
orders, approvals or other authorizations, whether
foreign or domestic, to enable the Investment Adviser to
perform its obligations under the Advisory Agreement.
(viii) The Investment Adviser (a) has not taken,
directly or indirectly, any action designed to cause or
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to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the
Company to facilitate the issuance of the Rights or the
sale or resale of the Shares, (b) has not since the
filing of the Registration Statement sold, bid for or
purchased, or paid anyone any compensation for
soliciting purchases of, shares of Common Stock of the
Company and (c) will not, until the later of the
expiration of the Rights or the completion of the
distribution (within the meaning of Regulation M under
the Exchange Act) of the Shares, sell, bid for or
purchase, pay or agree to pay any person any
compensation for soliciting another to purchase any
other securities of the Company (except for the
solicitation of the exercise of Rights and the Over-
Subscription Privilege pursuant to this Agreement).
(ix) The information regarding the Investment
Adviser in the Registration Statement and the Prospectus
complies in all material respects with the requirements
of Form N-2 and, as of the date of the Prospectus, such
information regarding the Investment Adviser did not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading.
(c) Any certificate required by Section 6 of this
Agreement that is signed by any officer of the Company or the
Investment Adviser and delivered to the Dealer Manager or counsel
for the Dealer Manager shall be deemed a representation and
warranty by the Company or the Investment Adviser, as the case
may be, to the Dealer Manager, as to the matters covered thereby.
2. Agreement to Act as Dealer Manager. (a) On the
basis of the representations and warranties contained herein, and
subject to the terms and conditions of the Offer:
(i) The Company appoints the Dealer Manager as
the exclusive dealer manager in connection with the
Offer and the Dealer Manager accepts such appointment.
The Company also authorizes the Dealer Manager to form
and manage a group of securities dealers (each, a
"Soliciting Dealer" and, collectively, the "Soliciting
Group") to solicit the exercise of Rights pursuant to a
Soliciting Dealer Agreement, in the form attached hereto
as Exhibit A. The Dealer Manager represents and
warrants that it is a broker-dealer registered under the
Exchange Act.
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(ii) The Dealer Manager agrees to (A) solicit, in
accordance with the Securities Act, the Investment
Company Act and the Exchange Act and the rules and
regulations thereunder and its customary practice, the
exercise of the Rights, subject to the terms and
conditions of this Agreement, the Subscription Agent
Agreement and the procedures described in the
Registration Statement; and (B) form and manage the
Soliciting Group to solicit, in accordance with the
Securities Act, the Investment Company Act and the
Exchange Act and the Rules and Regulations thereunder
and its customary practice, the exercise of the Rights,
subject to the terms and conditions of this Agreement,
the Subscription Agent Agreement and the procedures
described in the Registration Statement. No securities
dealer shall be considered a Soliciting Dealer until it
shall have entered into a Soliciting Dealer Agreement
with the Dealer Manager in the form of Exhibit A hereto.
(iii) The Company agrees to furnish, or cause to
be furnished, to the Dealer Manager, lists, or copies of
those lists, showing the names and addresses of, and
number of shares of Common Stock held by, Holders as of
the Record Date, and the Dealer Manager agrees to use
such information only in connection with the Offer and
not to furnish such information to any other person
except for securities brokers and dealers that have been
requested by the Dealer Manager to solicit exercises of
Rights.
(b) The Dealer Manager agrees to provide to the
Company, in addition to the services described in paragraph (a)
of this Section 2, financial advisory and marketing services in
connection with the Offer. No advisory fee, other than the fees
provided for in Section 3 of this Agreement and the reimbursement
of the Dealer Manager's out-of-pocket expenses as described in
Section 5 of this Agreement, will be payable by the Company to
the Dealer Manager in connection with the financial advisory and
marketing services provided by the Dealer Manager pursuant to
this Section 2(b).
(c) The Company and the Dealer Manager agree that the
Dealer Manager is an independent contractor with respect to the
solicitation of the exercise of Rights and the Over-Subscription
Privilege and the performance of financial advisory and marketing
services for the Company contemplated by this Agreement and the
Dealer Manager represents and warrants that it is acting on its
own behalf in entering into this Agreement and performing its
obligations hereunder.
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(d) The Dealer Manager agrees to perform those services
with respect to the Offer as are customarily performed by the
Dealer Manager in connection with offers of a like nature,
including (but not limited to) using its reasonable best efforts
to solicit the exercise of Rights pursuant to the Offer and in
communicating with the Soliciting Dealers. In rendering the
services contemplated by this Agreement, the Dealer Manager will
not be subject to any liability to the Company, the Investment
Adviser, any of their affiliates or any other person, for any act
or omission on the part of any soliciting broker or dealer
(except with respect to the Dealer Manager acting in such
capacity) or any other person, and the Dealer Manager will not be
liable for acts or omissions in performing its obligations under
this Agreement, except as otherwise set forth in Section 7 hereto
and except for any losses, claims, damages, liabilities and
expenses that are finally judicially determined to have resulted
primarily from the bad faith, willful misconduct or gross
negligence of the Dealer Manager or by reason of the reckless
disregard of the obligations and duties of the Dealer Manager
under this Agreement.
3. Dealer Manager and Solicitation Fees. In full
payment for the financial advisory and marketing services
rendered and to be rendered hereunder by the Dealer Manager, the
Company agrees to pay (i) to UBS Warburg LLC a fee equal to 1.00%
of the aggregate Subscription Price for the Shares issued
pursuant to the exercise of Rights and the Over-Subscription
Privilege by customers of UBS Warburg LLC and (ii) to Xxxxxxx
Xxxxx Xxxxxx Inc. a fee equal to (A) 1.25% of the aggregate
Subscription Price for the Shares issued pursuant to the exercise
of Rights and the Over-Subscription Privilege by all Holders
other than customers of UBS Warburg LLC plus (B) .25% of the
aggregate Subscription Price for the Shares issued pursuant to
the exercise of Rights and the Over-Subscription Privilege by
customers of UBS Warburg LLC (collectively, the "Dealer Manager
Fee"). The Company also agrees to pay Soliciting Dealers and the
Dealer Manager, in full payment for their soliciting efforts,
aggregate fees (the "Solicitation Fees") (such Solicitation Fees
paid to the Dealer Manager are in addition to the Dealer Manager
Fee) equal to 2.50% of the Subscription Price per Share for each
Share issued pursuant to the exercise of Rights and the Over-
Subscription Privilege in accordance with the next sentence. The
Company agrees to pay the Solicitation Fees to the broker-dealer
designated on the applicable portion of the form used by the
Holder to exercise Rights and the Over-Subscription Privilege,
and if no broker-dealer is so designated or a broker-dealer is
otherwise not entitled to receive compensation pursuant to the
terms of the Soliciting Dealer Agreement, then to pay Xxxxxxx
Xxxxx Xxxxxx Inc. the Solicitation Fee for such exercise of
Rights and the Over-Subscription Privilege. Payment to the
Dealer Manager by the Company will be in the form of a wire
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transfer of same day funds to an account or accounts identified
by the Dealer Manager. Such payment will be made on each date on
which the Company issues Shares. Payment to a Soliciting Dealer
will be made by the Company directly to such Soliciting Dealer by
check to an address identified by such Soliciting Dealer. Such
payments shall be made in next day funds on or before December
14, 2001; provided, however, that if the Expiration Date as set
forth in the Prospectus is extended by any number of days, then
such payment date shall be extended by the same number of days.
4. Other Agreements. (a) The Company covenants with
the Dealer Manager, and the Investment Manager covenants with the
Dealer Manager with respect to paragraphs (b) and (c), as
follows:
(i) The Company will use its best efforts to
cause the Registration Statement to become effective
under the Securities Act, and will advise the Dealer
Manager promptly as to the time at which the
Registration Statement and any amendments thereto
(including any post-effective amendment) becomes so
effective.
(ii) The Company will notify the Dealer Manager
immediately, and confirm the notice in writing, (A) of
the effectiveness of the Registration Statement and any
amendment thereto (including any post-effective
amendment), (B) of the receipt of any comments from the
Commission, (C) of any request by the Commission for any
amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional
information, (D) of the issuance by the Commission of
any stop order suspending the effectiveness of the
Registration Statement or the initiation of any
proceedings for that purpose, (E) of the suspension of
the qualification of the Shares or the Rights for
offering or sale in any jurisdiction, or (F) of the
occurrence of any event that necessitates the making of
any change in the Registration Statement or the
Prospectus in order to make any statement therein or
omission therefrom not misleading. The Company will
make every reasonable effort to prevent the issuance of
any stop order described in clause (D) hereunder and, if
any such stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(iii) The Company will timely file the requisite
copies of the Prospectus with the Commission pursuant to
Rule 497(c) or Rule 497(h) of the Securities Act Rules
and Regulations, whichever is applicable or, if
applicable, will timely file the certification permitted
14
by Rule 497(j) of the Securities Act Rules and
Regulations and will advise the Dealer Manager of the
time and manner of such filing.
(iv) The Company will give the Dealer Manager
notice of its intention to file any amendment to the
Registration Statement (including any post-effective
amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus which the
Company proposes for use by the Dealer Manager in
connection with the Offer, which differs from the
prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not
such revised prospectus is required to be filed pursuant
to Rule 497(c) or Rule 497(h) of the Rules and
Regulations), whether pursuant to the Investment Company
Act, the Securities Act, or otherwise, and will furnish
the Dealer Manager with copies of any such amendment or
supplement within a reasonable amount of time prior to
such proposed filing or use, as the case may be, and
will not file any such amendment or supplement to which
the Dealer Manager or counsel for the Dealer Manager
shall reasonably object.
(v) The Company will, without charge, deliver to
the Dealer Manager, as soon as practicable, the number
of copies of the Registration Statement as originally
filed and of each amendment thereto as it may reasonably
request, in each case with the exhibits filed therewith.
(vi) The Company will, without charge, furnish to
the Dealer Manager, from time to time during the period
when the Prospectus is required to be delivered under
the Securities Act, such number of copies of the
Prospectus (as amended or supplemented) as the Dealer
Manager may reasonably request for the purposes
contemplated by the Securities Act or the Rules and
Regulations thereunder. The Company consents to the use
of the Prospectus in accordance with the provisions of
the Securities Act and with the state securities or blue
sky laws of the jurisdictions in which the Shares are
offered by the Dealer Manager and by all Soliciting
Dealers in connection with the offering and sale of the
Shares and for such period of time thereafter as the
Prospectus is required by the Securities Act to be
delivered in connection therewith.
(vii) If any event shall occur as a result of
which it is necessary, in the judgment of the Company or
the reasonable opinion of counsel for the Dealer
Manager, to amend or supplement the Registration
15
Statement or the Prospectus in order to make the
Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a
Holder, the Company will forthwith amend or supplement
the Prospectus by preparing and filing with the
Commission (and furnishing to the Dealer Manager a
reasonable number of copies of) an amendment or
amendments of the Registration Statement or an amendment
or amendments of, or a supplement or supplements to, the
Prospectus (in form and substance satisfactory to
counsel for the Dealer Manager), at the Company's
expense, which will amend or supplement the Registration
Statement or the Prospectus so that the Prospectus will
not contain an untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in the light of the circumstances existing at
the time the Prospectus is delivered to a Holder, not
misleading; provided, however, that if the Company does
not promptly amend or supplement the Registration
Statement or the Prospectus in form and substance
satisfactory to counsel for the Dealer Manager, then the
Dealer Manager may terminate this Agreement pursuant to
Section 9(a)(vi) and the Company shall, at the Company's
expense, amend or supplement the Registration Statement
or the Prospectus to state that the Dealer Manager has
terminated this Agreement with respect to the Offer; and
provided, further, that any supplement or amendment of
the Registration Statement or Prospectus required in
order that the Registration Statement or Prospectus will
not contain an untrue statement of a material fact with
respect to the Dealer Manager or omit to state a
material fact with respect to the Dealer Manager shall
be made at the Dealer Manager's expense.
(viii) The Company will endeavor, in cooperation
with the Dealer Manager and its counsel, to assist such
counsel to qualify the Rights and the Shares for
offering and sale under the applicable securities laws
of such states and other jurisdictions of the United
States as the Dealer Manager may designate and maintain
such qualifications in effect for the duration of the
Offer; provided, however, that the Company will not be
obligated to qualify in any jurisdiction in which the
Company would be required to (x) file any general
consent to service of process, (y) qualify as a foreign
corporation or as a dealer in securities in any
jurisdiction in which it is not now so qualified, or (z)
be subject to taxation in such jurisdiction. The
Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the
16
Rights and the Shares have been qualified as above
provided.
(ix) The Company will make generally available to
its security holders as soon as practicable, but no
later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with
the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Rules and Regulations thereunder)
covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next
following the "effective" date (as defined in said Rule
158) of the Registration Statement.
(x) For a period of 180 days from the date of
this Agreement, the Company will not, without the prior
consent of the Dealer Manager, offer or sell, or enter
into any agreement to sell, any equity or equity-related
securities of the Company or securities convertible into
such securities, other than the Rights and the Shares or
Common Stock issued pursuant to the Company's dividend
reinvestment plan or to any distribution of dividends or
capital gains payable in Common Stock declared by the
Company or pursuant to a Common Stock split declared by
the Company.
(xi) The Company will apply the net proceeds from
the Offer as set forth under "Use of Proceeds" in the
Prospectus.
(xii) The Company will use its best efforts to
cause the Shares to be duly authorized for listing by
the New York Stock Exchange prior to the time the Shares
are issued.
(xiii) The Company will use its best efforts to
maintain its qualification as a regulated investment
company under Subchapter M of the Code.
(xiv) The Company will use its best efforts to
perform all of the agreements required of it and
discharge all conditions to closing as set forth in this
Agreement.
(xv) The Company will advise or cause the
Subscription Agent to advise the Dealer Manager and each
Soliciting Dealer from day to day during the period of,
and promptly after the termination of, the Offer, as to
the names and addresses of all Holders exercising
Rights, the total number of Rights exercised, and the
number of Shares, including Xxxxxx requested pursuant to
17
the Over-Subscription Privilege, related thereto by each
Holder during the immediately preceding day, indicating
the total number of Rights verified to be in proper form
for exercise, rejected for exercise, and being processed
and, for the Dealer Manager and each Soliciting Dealer,
the number of Rights exercised and the number of Shares,
including Shares requested pursuant to the Over-
Subscription Privilege, related thereto on subscription
certificates indicating the Dealer Manager or such
Soliciting Dealer, as the case may be, as the broker-
dealer with respect thereto, and as to such other
information as the Dealer Manager may reasonably
request; and will notify the Dealer Manager and each
Soliciting Dealer, not later than 5:00 P.M., New York
City time, on the first business day following the
expiration date of the Offer set forth in the Prospectus
(the "Expiration Date"), of the total number of Rights
exercised and the number of Shares, including Shares
requested pursuant to the Over-Subscription Privilege,
related thereto, the total number of Rights verified to
be in proper form for exercise, rejected for exercise,
and being processed and, for the Dealer Manager and each
Soliciting Dealer, the number of Rights exercised and
the number of Shares, including Shares requested
pursuant to the Over-Subscription Privilege, related
thereto on subscription certificates indicating the
Dealer Manager or such Soliciting Dealer, as the case
may be, as the broker-dealer with respect thereto, and
as to such other information as the Dealer Manager may
reasonably request.
(xvi) The Company will comply with the undertaking
contained in paragraph (b) of Item 33 in Part C of the
Registration Statement.
(xvii) In the event that at any time on or prior to
the final issuance and sale of Shares pursuant to the
Offer any of the representations, warranties or
agreements of the Company would not be true and correct
in all material respects as if given or made at such
time, the Company shall promptly notify the Dealer
Manager thereof. The Company shall also promptly notify
the Dealer Manager of its failure to perform any
obligation on its part required to be performed or to
satisfy any condition on its part required to be
satisfied on or before any of the date hereof, the
Expiration Date and any date of the issuance and sale of
Shares pursuant to the Offer.
(b) The Company and the Investment Adviser will not
take, directly or indirectly, any action designed to cause or to
18
result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the issuance
of the Rights or the sale or resale of the Shares.
(c) In the event that at any time on or prior to the
final issuance and sale of Shares pursuant to the Offer any of
the representations, warranties or agreements of the Investment
Adviser would not be true and correct in all material respects as
if given or made at such time, the Investment Adviser shall
promptly notify the Dealer Manager thereof. The Investment
Adviser shall also promptly notify the Dealer Manager of its
failure to perform any obligation on its part required to be
performed or to satisfy any condition on its part required to be
satisfied on or before any of the date hereof, the Expiration
Date and any date of issuance and sale of the Shares pursuant to
the Offer.
5. Payment of Expenses. (a) The Company will pay all
expenses incident to the performance of its obligations under
this Agreement, including, but not limited to, expenses relating
to (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificates for the
Shares and subscription certificates relating to the Rights,
(iii) the fees and disbursements of the Company's counsel
(including the fees and disbursements of local counsel) and
accountants, (iv) the qualification of the Rights and the Shares
under securities laws in accordance with the provisions of
Section 4(a)(vii) of this Agreement, including filing fees and
the preparation of the Blue Sky Survey by counsel to the Dealer
Manager, (v) the printing or other production and delivery to the
Dealer Manager of copies of the Registration Statement as
originally filed and of each amendment thereto and of the
Prospectus and any amendments or supplements thereto, except for
any amendments or supplements described in the second proviso of
Section 4(a)(vii), (vi) the printing and other production and
delivery of copies of the Blue Sky Survey, (vii) the fees and
expenses incurred with respect to filing with the National
Association of Securities Dealers, Inc. (the "NASD"), (viii) the
fees and expenses incurred in connection with the listing of the
Shares on the New York Stock Exchange, (ix) the printing or other
production, mailing and delivery expenses incurred in connection
with Offering Materials, and (x) the fees and expenses incurred
with respect to the Subscription Agent and Information Agent.
(b) In addition to any fees that may be payable to the
Dealer Manager under this Agreement, the Company agrees to
reimburse the Dealer Manager upon request made from time to time
for its reasonable expenses incurred in connection with its
activities under this Agreement, including the reasonable fees
19
and disbursements of its legal counsel (excluding Blue Sky and
NASD fees and expenses which are paid directly by the Company),
in an amount up to $100,000.
(c) If this Agreement is terminated by the Company for
any reason (other than a material breach by the Dealer Manager of
its duties hereunder) or by the Dealer Manager in accordance with
the provisions of Section 6 or Section 9(a)(i), 9(a)(ii) or
9(a)(iii), the Company agrees to reimburse the Dealer Manager for
all of its reasonable out-of-pocket expenses incurred in
connection with its performance hereunder, including the
reasonable fees and disbursements of counsel for the Dealer
Manager. In the event the transactions contemplated hereunder
are not consummated, the Company agrees to pay all of the costs
and expenses set forth in paragraph (a) of this Section 5 which
the Company would have paid if such transactions had been
consummated.
6. Conditions of the Dealer Manager's Obligations.
The obligations of the Dealer Manager hereunder are subject to
the accuracy of the respective representations and warranties of
the Company and the Investment Adviser contained herein on the
date hereof and as if made on each date up to and including the
final issuance and sale of Shares pursuant to the Offer, to the
performance by the Company and the Investment Adviser of their
respective obligations hereunder, and to the following further
conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the
date hereof, or at such later time and date as may be approved in
writing by the Dealer Manager; the Prospectus and any amendment
or supplement thereto shall have been filed with the Commission
in the manner and within the time period required by Rule 497(c),
(e) or (h), as the case may be, under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement
or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company, the Investment
Adviser or the Dealer Manager, shall be contemplated by the
Commission; and the Company shall have complied with any request
of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise).
(b) On the Representation Date and on the Expiration
Date, the Dealer Manager shall have received:
(1) The favorable opinion, dated the
Representation Date or the Expiration Date, as the case
may be, of Xxxxxx & Xxxxxx LLP, counsel for the Company,
in form and substance satisfactory to counsel for the
Dealer Manager, to the effect that:
20
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Maryland, has full
corporate power and authority to conduct its business as
described in the Registration Statement and Prospectus,
except that counsel need express no opinion as to
securities or "blue sky" laws of any state, and is duly
qualified to do business as a foreign corporation in
each jurisdiction wherein it owns or leases real
property or in which the conduct of its business
requires such qualification, except where the failure to
be so qualified would not result in a Material Adverse
Effect.
(ii) The Company is registered with the
Commission under the Investment Company Act as a closed-
end, diversified management investment company; to the
knowledge of such counsel, no order of suspension or
revocation of such registration has been issued or
proceedings therefor initiated or threatened by the
Commission; all required action has been taken under the
Securities Act and the Investment Company Act to make
the public offering and consummate the issuance of the
Rights and the issuance and sale of the Shares by the
Company upon exercise of the Rights, and the provisions
of the Company's charter and by-laws comply as to form
in all material respects with the requirements of the
Investment Company Act.
(iii) The Company has an authorized capitalization
as set forth in the Prospectus under the heading "Common
Stock"; the outstanding shares of Common Stock have been
duly authorized and are validly issued, fully paid and
non-assessable and conform in all material respects to
the description thereof in the Prospectus under the
heading "Common Stock"; the Rights have been duly
authorized by all requisite action on the part of the
Company for issuance pursuant to the Offer; the Shares
have been or, with respect to Shares to be issued
pursuant to the Over-Subscription Privilege, will be
duly authorized by all requisite action on the part of
the Company for issuance and sale pursuant to the terms
of the Offer and, when issued and delivered by the
Company pursuant to the terms of the Offer against
payment of the consideration set forth in the
Prospectus, will be validly issued, fully paid and non-
assessable; the Rights conform in all material respects
to all statements relating thereto contained in the
Prospectus under the heading "The Offer"; and, to the
knowledge of such counsel, the issuance of each of the
21
Rights and the Shares is not subject to any preemptive
rights.
(iv) To the knowledge of such counsel, there is
no pending or threatened action, suit or proceeding
affecting the Company or to which the Company is a party
before or by any court or governmental agency, authority
or body or any arbitrator, whether foreign or domestic
of a character required to be disclosed in the
Registration Statement or the Prospectus which is not
adequately disclosed therein.
(v) To the knowledge of such counsel, there are
no contracts or other documents of the Company required
to be described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference
as exhibits which are not described or filed or
incorporated by reference therein as permitted by the
Securities Act, the Investment Company Act or the Rules
and Regulations.
(vi) Each of this Agreement, the Subscription
Agent Agreement, the Information Agent Agreement and the
Advisory Agreement has been duly authorized, executed
and delivered by the Company; each of this Agreement,
the Subscription Agent Agreement, the Information Agent
Agreement and the Advisory Agreement complies in all
material respects with all applicable provisions of the
Investment Company Act, the Advisers Act and the rules
and regulations under such Acts; and, assuming due
authorization, execution and delivery by the other
parties thereto, each of this Agreement, the
Subscription Agent Agreement, the Information Agent
Agreement and the Advisory Agreement constitutes a
legal, valid, binding and enforceable obligation of the
Company, subject to the qualification that the
enforceability of the Company's obligations thereunder
may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights, and to general principles of equity (regardless
of whether enforceability is considered in a proceeding
in equity or at law) and subject to the qualification
that the right to indemnity may be limited by federal or
state laws.
(vii) Each of this Agreement and the Advisory
Agreement has been duly authorized, executed and
delivered by the Investment Adviser; each of this
Agreement and the Advisory Agreement complies in all
material respects with all applicable provisions of the
22
Investment Company Act, the Advisers Act and the rules
and regulations under such Acts; and, assuming due
authorization, execution and delivery by the other
parties thereto, each of this Agreement and the Advisory
Agreement constitutes a legal, valid, binding and
enforceable obligation of the Investment Adviser,
subject to the qualification that the enforceability of
the Investment Adviser's obligations thereunder may be
limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights, and to
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity
or at law).
(viii) Neither the issuance of the Rights, nor the
issuance and sale of the Shares, nor the consummation by
the Company of any other of the transactions
contemplated in this Agreement, the Subscription Agent
Agreement or the Information Agent Agreement nor the
consummation of the transactions contemplated in the
Registration Statement will result in a breach or
violation of, or constitute a default under, the charter
or by-laws of the Company, or, to the knowledge of such
counsel, result in a breach or violation of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company under the terms and
provisions of any material agreement, indenture,
mortgage, lease or other instrument to which the Company
is a party or by which it may be bound or to which any
of the property or assets of the Company is subject,
nor, to the knowledge of such counsel, will such action
result in any violation of any order, law, rule or
regulation of any court or governmental agency or body
under the laws of New York, federal law or the laws of
any other jurisdiction in the United States having
jurisdiction over the Company or any of its properties.
(ix) No consent, approval, authorization,
notification or order of, or any filing with, any court
or governmental agency or body is required under the
laws of New York, Delaware, federal law or, to such
counsel's knowledge, the laws of any other jurisdiction
in the United States for the consummation by the Company
or the Investment Adviser of the transactions
contemplated by this Agreement or the Registration
Statement, except (A) such as have been obtained and (B)
such as may be required under the blue sky laws of any
jurisdiction in connection with the transactions
contemplated hereby.
23
(x) The Common Stock has been duly listed on the
New York Stock Exchange and the Shares have been duly
approved for listing, subject to official notice of
issuance, on the New York Stock Exchange.
(xi) The Registration Statement has become
effective under the Securities Act; to the knowledge of
such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been instituted or
threatened; and the Registration Statement, the
Prospectus and each amendment thereof or supplement
thereto (other than the financial statements and the
notes thereto and the schedules and other financial and
statistical data contained therein, as to which such
counsel need express no opinion) comply as to form in
all material respects with the applicable requirements
of the Securities Act and the Investment Company Act and
the Rules and Regulations.
(xii) The statements in the Prospectus under the
heading "Taxation", insofar as such statements describe
or summarize United States tax laws, treaties, doctrines
or practices, provide an accurate description thereof as
of the date of Prospectus.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of the laws of Maryland to the
extent they deem proper and specified in such opinion, upon the
opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx LLP or upon the
opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for
the Dealer Manager, and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of the
Company and public officials.
Such counsel shall also have stated that, while they
have not themselves checked the accuracy and completeness of or
otherwise verified, and are not passing upon and assume no
responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement or the
Prospectus, in the course of their review and discussion of the
contents of the Registration Statement and Prospectus with
certain officers and employees of the Company and its independent
accountants, no facts have come to their attention which cause
them to believe that the Registration Statement (except as to
such financial statements or schedules or other financial or
statistical data included or incorporated by reference in the
Registration Statement or the Prospectus, as to which such
counsel expresses no belief), on the date it became effective,
contained any untrue statement of a material fact or omitted to
24
state any material fact required to be stated therein or
necessary to make the statements contained therein not misleading
or that the Prospectus, as of its date and on such Representation
Date or Expiration Date, contained any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(2) The favorable opinion, dated the Representation
Date or the Expiration Date, as the case may be, of Xxxxx X.
Xxxxxx, Xx., Senior Vice President and General Counsel of
Alliance Capital Management Corporation, in form and substance
satisfactory to counsel for the Dealer Manager, to the effect
that:
(i) The Investment Adviser has been duly formed
and is validly existing and in good standing under the
laws of Delaware, with power and authority (partnership
and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) The Investment Adviser has been duly
qualified as a foreign partnership for the transaction
of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require
such qualification, other than where the failure to be
so qualified or in good standing would not have an
Adviser Material Adverse Effect;
(iii) The Investment Adviser is duly registered as
an investment adviser under the Advisers Act and is not
prohibited by the Advisers Act, the Investment Company
Act, or the rules and regulations under such Acts, from
acting as an investment adviser for the Company as
contemplated in the Prospectus and the Advisory
Agreement.
(iv) Neither the performance by the Investment
Adviser of its obligations under this Agreement nor the
consummation of the transactions contemplated therein or
in the Registration Statement nor the fulfillment of the
terms thereof is, or with the giving of notice or lapse
of time or both would be, in violation of or constitute
a default under, the limited partnership agreement of
the Investment Adviser or any agreement known to such
counsel to which the Investment Adviser is a party or by
which it or any of its properties is bound, except for
violations and defaults which individually and in the
aggregate are not material to the Investment Adviser and
25
its subsidiaries taken as a whole; or, to the knowledge
of such counsel, the terms and provisions of any
agreement, to which the Investment Adviser is a party
or by which it may be bound or to which any of the
property or assets of the Investment Adviser is subject,
or any applicable order, law, rule or regulation of any
court or governmental agency or body under the laws of
Delaware, federal law or the laws of any other
jurisdiction in the United States having jurisdiction
over the Investment Adviser or any of its properties.
(v) Other than as set forth in Part II, Item 1
of the Quarterly Report on Form 10-Q filed by the
Investment Adviser with the Securities and Exchange
Commission with respect to the quarterly periods ended
March 31, 2001, June 30, 2001 and September 30, 2001
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, to the knowledge of
such counsel, there is no pending or threatened action,
suit or proceeding to which the Investment Adviser is a
party before or by any court or governmental agency,
authority or body or any arbitrator, whether foreign or
domestic, which reasonably might result in an Adviser
Material Adverse Effect or might materially and
adversely affect the ability of the Investment Adviser
to perform its obligations under the Advisory Agreement.
In rendering such opinion, Xx. Xxxxxx may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Investment Adviser and public
officials.
(c) The Dealer Manager shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Dealer Manager, such opinion,
dated the Representation Date or the Expiration Date, as the case
may be, with respect to the Offer, the Registration Statement,
the Prospectus and other related matters as the Dealer Manager
may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Dealer
Manager a certificate of the Company, signed by the Chairman of
the Board, the President or a Vice President of the Company,
dated the Representation Date or the Expiration Date, as the case
may be, to the effect that the signers of such certificate have
examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that, to the
best of their knowledge:
26
(i) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Representation Date
or the Expiration Date, as the case may be, and the
Company has complied with all the agreements and
satisfied all the conditions in this Agreement on its
part to be performed or satisfied at or prior to such
Representation Date or Expiration Date.
(ii) No stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened.
(iii) Since the date of the most recent balance
sheet included or incorporated by reference in the
Prospectus, there has been no material adverse change in
the condition (financial or other), earnings, business
or properties of the Company, whether or not arising
from transactions in the ordinary course of business,
except as set forth in or contemplated in the
Prospectus.
(e) The Investment Adviser shall have furnished to the
Dealer Manager a certificate, signed by a senior officer of
Alliance Capital Management Corporation, dated the Representation
Date or the Expiration Date, as the case may be, to the effect
that the signatory of such certificate has read the Registration
Statement, the Prospectus and this Agreement and, to the best
knowledge of such signatory, the representations and warranties
of the Investment Adviser in this Agreement are true and correct
in all material respects on and as of the Representation Date or
the Expiration Date, as the case may be, and the Investment
Adviser has complied with all the agreements and satisfied all
the conditions in this Agreement on its part to be performed or
satisfied at or prior to such Representation Date or Expiration
Date.
(f) Xxxxx & Young LLP shall have furnished to the
Dealer Manager a Letter, dated the Representation Date or the
Expiration Date, as the case may be, in form and substance
satisfactory to the Dealer Manager, and stating in effect that:
(i) They are independent accountants with
respect to the Company within the meaning of the
Securities Act and the Investment Company Act and the
applicable Rules and Regulations.
(ii) In their opinion, the audited financial
statements examined by them and included or incorporated
by reference in the Registration Statement comply as to
27
form in all material respects with the applicable
accounting requirements of the Securities Act and the
Investment Company Act and the respective Rules and
Regulations with respect to registration statements on
Form N-2.
(iii) They have performed specified procedures,
not constituting an audit, including a reading of the
latest available interim financial information of the
Company, a reading of the minute books of the Company,
inquiries of officials of the Company responsible for
financial or accounting matters and such other inquiries
and procedures which shall be specified in such letter,
and on the basis of such inquiries and procedures
nothing came to their attention that caused them to
believe that at the date of the latest available
financial information read by such accountants, or at a
subsequent specified date not more than five business
days prior to the Representation Date or the Expiration
Date, as the case may be, there was any change in the
capital stock, increase in long-term debt or decrease in
net assets of the Company as compared with amounts shown
in the most recent statement of assets and liabilities
included or incorporated by reference in the
Registration Statement, except as the Registration
Statement discloses has occurred or may occur or as
disclosed in their letter.
(iv) In addition to the procedures referred to in
clause (iii) above, they have performed other specified
procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and
financial information appearing in the Registration
Statement, which have previously been specified by the
Dealer Manager and which shall be specified in such
letter, and have compared such items with, and have
found such items to be in agreement with, the accounting
and financial records of the Company.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f)
of this Section 6, (ii) any change, or any development involving
a prospective change, in or affecting the business, condition
(financial or otherwise), properties, net assets or results of
operations of the Company, the effect of which, in any case
referred to in clause (i) or (ii) above, makes it, in the
reasonable judgment of the Dealer Manager, impractical or
inadvisable to proceed with the Offer as contemplated by the
Registration Statement and the Prospectus.
28
(h) Prior to the Representation Date or the Expiration
Date, as the case may be, the Company shall have furnished to the
Dealer Manager such further information, certificates and
documents as the Dealer Manager may reasonably request.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects satisfactory in form and
substance to the Dealer Manager and its counsel, this Agreement
and all obligations of the Dealer Manager hereunder may be
canceled on, or at any time prior to, the Expiration Date by the
Dealer Manager. Notice of such cancellation shall be given to
the Company in writing or by telephone or telegraph confirmed in
writing.
7. Indemnification and Contribution. (a) (i) The
Company will indemnify and hold harmless the Dealer Manager, the
directors, officers, employees and agents of the Dealer Manager
and each person, if any, who controls the Dealer Manager within
the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several (including any investigation, legal
and other expenses reasonably incurred in connection with, and
any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act, the
Investment Company Act, the Advisers Act or other statutory law
or regulation, at common law or otherwise, whether foreign or
domestic, insofar as such losses, claims, damages or liabilities
arise out of or are based on any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, the Prospectus or the Offering Materials, and any
amendment or supplement thereto, or the omission or alleged
omission to state in any or all such documents a material fact
required to be stated therein or necessary to make the statements
in it not misleading (in the case of the Prospectus, in light of
the circumstances under which such statements were made);
provided that the Company will not be liable to the extent that
such loss, claim, damage or liability arises from an untrue
statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information furnished
in writing to the Company by the Dealer Manager expressly for use
in the document. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to
the Dealer Manager or any controlling person of the Dealer
Manager.
(ii) The Investment Adviser will indemnify and hold
harmless the Dealer Manager, the directors, officers, employees
29
and agents of the Dealer Manager and each person, if any, who
controls the Dealer Manager within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several
(including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the
Securities Act, the Exchange Act, the Investment Company Act, the
Advisers Act or other statutory law or regulation, at common law
or otherwise, whether foreign or domestic, insofar as such
losses, claims, damages or liabilities arise out of or are based
on any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus or
the Offering Materials, and any amendment or supplement thereto,
or the omission or alleged omission to state in any or all such
documents a material fact required to be stated therein or
necessary to make the statements in it not misleading (in the
case of the Prospectus, in light of the circumstances under which
such statements were made); provided that the Investment Adviser
will not be liable to the extent that such loss, claim, damage or
liability arises from an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in
conformity with information furnished in writing to the Company
by the Dealer Manager expressly for use in the document; and
provided further, that the Investment Adviser will not be liable
to any such indemnified party in any such case except to the
extent that the Company has failed to indemnify and hold harmless
such indemnified party pursuant to paragraph (a)(i) in respect of
such losses, claims, damages or liabilities after such
indemnified party has made a claim of the Company. The foregoing
indemnity agreement is in addition to any liability which the
Investment Adviser may otherwise have to the Dealer Manager or
any controlling person of the Dealer Manager.
(b) The Dealer Manager will indemnify and hold harmless
the Company, the Investment Adviser, each director and officer of
the Company who signs the Registration Statement and each person,
if any, who controls the Company or the Investment Adviser within
the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity
from the Company or the Investment Adviser to the Dealer Manager,
but only insofar as losses, claims, damages or liabilities arise
out of or are based on any untrue statement or omission or
alleged untrue statement or omission made in reliance on and in
conformity with information furnished in writing to the Company
by the Dealer Manager expressly for use in preparation of the
documents in which the statement or omission is made or alleged
to be made. This indemnity agreement will be in addition to any
liability that the Dealer Manager might otherwise have.
30
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of
notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying
party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing
a copy of all papers served, but the omission to notify such
indemnifying party will not, except to the extent set forth
below, relieve it from liability that it may have to any
indemnified party. No indemnification provided for in Sections
7(a) and (b) hereof shall be available to any party who shall
fail to give notice as provided in this Section 7(c) if the party
to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the
failure to give such notice, but the omission to notify such
indemnifying party of such action shall not relieve it from any
liability that it may have to any indemnified party for
contribution or otherwise on account of the provisions in
Sections 7(a) or (b). If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to
participate in, and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel
reasonably satisfactory to the indemnified party, and, after
notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will
not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable
costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will
have the right to employ its counsel in any such action, but the
fees and expenses of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably
concluded that there may be legal defenses available to it or
other indemnified parties that are different from or in addition
to those available to the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (3) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases
the reasonable fees and expenses of counsel will be at the
expense of the indemnifying party or parties. All such fees and
expenses will be reimbursed promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent or, in
31
connection with any proceeding or related proceeding in the same
jurisdiction, for the fees and expenses of more than one separate
counsel for all indemnified parties except to the extent provided
herein.
(d) In no case shall the indemnification provided in
this Section 7 be available to protect any person against any
liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in
the performance of its or his obligations or duties hereunder, or
by reason of its or his reckless disregard of its or his
obligations and duties hereunder.
(e) If the indemnification provided for in this section
7 is unavailable to an indemnified party under paragraphs (a) or
(b) hereof in respect of any losses, claims, damages, liabilities
or expenses referred to therein, then an indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative
benefits received by the Company and the Investment Adviser on
the one hand (treated jointly for this purpose as one person) and
the Dealer Manager on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company
and the Investment Adviser on the one hand (treated jointly for
this purpose as one person) and of the Dealer Manager on the
other hand in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Investment
Adviser on the one hand (treated jointly for this purpose as one
person) and the Dealer Manager on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company as
set forth in the table on the cover page of the Prospectus bear
to the total payments received by the Dealer Manager with respect
to the Shares as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Investment
Adviser on the one hand (treated jointly for this purpose as one
person) and of the Dealer Manager on the other hand shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company and the Investment Adviser on
the one hand (treated jointly for this purpose as one person) or
by the Dealer Manager on the other hand and the parties' relative
32
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The Company, the Investment Adviser and the Dealer
Manager agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in
paragraph (e) above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (e) above shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with defending any such action, suit or proceeding.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(g) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement
of any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability from claimants on claims that are the subject matter of
such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be
paid by the indemnifying party to the indemnified party as such
losses, claims, damages, liabilities or expenses are incurred. A
successor to the Dealer Manager or to the Company, the Investment
Adviser or their trustees, directors or officers or any person
controlling any of them shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in
this Section 7.
(i) The Company and the Investment Adviser agree to
indemnify each Soliciting Dealer, the directors, officers,
employees and agents of each Soliciting Dealer and controlling
persons of each Soliciting Dealer to the same extent and subject
to the same conditions and to the same agreements, including with
respect to contribution, provided for in subsections (a), (b),
(c), (d), (e), (f), (g) and (h) of this Section 7.
(j) The Company and the Investment Adviser acknowledge
that the statements contained in the first two sentences of the
first paragraph and the last paragraph under the caption
33
"Distribution Arrangements" in the Prospectus constitute the only
information furnished in writing to the Company by the Dealer
Manager expressly for use in such document; and the Dealer
Manager confirms that such statements are correct.
8. Representations, Warranties and Agreements to
Survive Delivery. The respective agreements, representations,
warranties, indemnities and other statements of the Company or
its officers, of the Investment Adviser and of the Dealer Manager
set forth in or made pursuant to this Agreement shall survive the
Expiration Date and will remain in full force and effect,
regardless of any investigation made by or on behalf of the
Dealer Manager, the Company or the Investment Adviser or any of
the officers directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for
the Shares pursuant to the Offer. The provisions of Section 5
and 7 hereof shall survive the termination or cancellation of
this Agreement.
9. Termination of Agreement. (a) This Agreement
shall be subject to termination in the absolute discretion of the
Dealer Manager, by notice given to the Company prior to the
expiration of the Offer, if prior to such time (i) there has been
a material change in general economic, political, social or
financial conditions in the United States or the effect of
international conditions on the financial markets in the United
States such that, in the Dealer Manager's judgment, it is
impracticable or inadvisable to proceed with the Offer, (ii)
there has occurred any outbreak or material escalation of
hostilities or other calamity or crisis the effect of which, in
the Dealer Manager's judgment, renders it impracticable or
inadvisable to proceed with the Offer, (iii) trading in the
shares of Common Stock shall have been suspended by the
Commission or the New York Stock Exchange, (iv) trading in
securities generally on the New York Stock Exchange shall have
been suspended or limited, (v) a banking moratorium shall have
been declared either by Federal or New York State authorities or
(vi) the Company shall fail to amend or supplement the
Registration Statement or the Prospectus as provided in Section
4(a)(vi).
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party
to any other party except as provided in Section 5.
10. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to Xxxxxxx
Xxxxx Xxxxxx Inc. or UBS Warburg LLC, will be mailed, delivered
or telegraphed and confirmed to Xxxxxxx Xxxxx Xxxxxx Inc., Attn.:
Xxxxxxx X. Xxxxx, III, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; or if sent to the Company or the Investment Adviser, will
34
be mailed, delivered or telegraphed and confirmed to ACM Income
Fund, Inc., Attn: Xxxxxx X. Xxxxxx, Xx., c/o Alliance Capital
Management L.P., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or Alliance Capital Management L.P., Attn: Xxxxx X.
Xxxxxx, Xx., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, respectively.
11. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and will inure to the benefit of the
officers and directors and controlling persons referred to in
Section 7 hereof, and no other person will have any right or
obligation hereunder.
12. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New
York.
13. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
35
If the foregoing is in accordance with your
understanding of our agreement, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company, the Investment
Adviser and the Dealer Manager.
Very truly yours,
ACM INCOME FUND, INC.
By:______________________
Name:
Title:
ALLIANCE CAPITAL MANAGEMENT L.P.
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its
general partner
By:______________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX XXXXXX INC.
By: ___________________________
Name:
Title:
UBS WARBURG LLC
By: ___________________________
Name:
Title:
36
00250262.AC1
