AGREEMENT AND
PLAN OF
ACQUISITION
AND LIQUIDATION
As of
September 1, 2000
This Agreement and Plan of Acquisition and
Liquidation (the "Plan") is made as of this
1st day of September, 2000, by and between
ACM Government Income Fund, Inc., a Maryland
corporation ("ACM I"), and ACM Government
Securities Fund, Inc., a Maryland corporation
("ACM II").
WHEREAS, ACM I and ACM II are closed-end
management investment companies registered with
the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Securities
Exchange Act of 1934, as amended (the "1934 Act"),
and shares of common stock of each Fund are
currently purchased and sold on the New York
Stock Exchange (the "NYSE");
WHEREAS, the parties desire that ACM I acquire
the assets and assume the liabilities of ACM II
in exchange for shares of equal net asset value
of ACM I and the distribution of such shares of
ACM I to the stockholders of ACM II
(the "Acquisition") and that ACM II thereafter
liquidate and dissolve; and
WHEREAS, the parties intend that the Acquisition
qualify as a "reorganization" within the meaning
of section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"), and that with
respect to the Acquisition, ACM I and ACM II will
each be a "party to a reorganization" within the
meaning of section 368(b) of the Code;
Now, therefore, ACM I and ACM II agree as follows:
1. Definitions
In addition to the terms elsewhere defined herein,
each of the following terms shall have the meaning
indicated for that term as follows:
1933 Act Securities Act of 1933,
as amended.
ACM I Share
A share of common stock of ACM I.
Assets
All assets of any kind and all interests, rights,
privileges and powers of or attributable to ACM
II or its shares, as appropriate, whether or not
determinable at the appropriate Effective Time
and wherever located, including, without
limitation, all cash, cash equivalents,
securities, claims (whether absolute or
contingent, known or unknown, accrued or
unaccrued or conditional or unmatured), contract
rights and receivables (including dividend and
interest receivables) owned by ACM II or
attributable to its shares and any deferred
or prepaid expense shown as an asset on
ACM II's books.
Closing Date
Such date prior to July 1, 2001 as the
parties agree to.
Effective Time
5:00 p.m. Eastern time on the Closing Date,
or such other time as the parties may agree
to in writing.
Financial Statements
The audited financial statements of the
relevant Fund for its most recently completed
fiscal year and, if applicable, the unaudited
financial statements of that Fund for its most
recently completed semi-annual period.
Fund
ACM I and/or ACM II, as the case may be.
Liabilities
All liabilities of ACM II, whether known or
unknown, accrued or unaccrued, absolute or
contingent or conditional or unmatured.
N-14 Registration Statement
The Registration Statement of ACM I on Form
N-14 under the 1940 Act that will register
the ACM I Shares to be issued in the Acquisition
and will include the proxy materials necessary
for the stockholders of each of the Funds to
approve the Acquisition.
Valuation Time
The close of regular session trading on the
NYSE on the Closing Date, when for purposes of
the Plan ACM I determines its net asset value
per ACM I Share and ACM II determines the net
value of the Assets.
2. Regulatory Filings.
ACM I shall promptly prepare and file the N-14
Registration Statement with the SEC, and ACM I
and ACM II also shall make any other required
or appropriate filings with respect to the
actions contemplated hereby.
3. Stockholder Action
As soon as practicable after the effective
date of the N-14 Registration Statement,
each Fund shall hold a stockholders meeting
to consider and approve the Acquisition
and this Plan, as applicable to that Fund,
and such other matters as the Board of
Directors of the Fund may determine.
Such approval by the stockholders of a
Fund shall, to the extent necessary to
permit the consummation of the transactions
contemplated herein without violating any
investment objective, policy or restriction
of a Fund, be deemed to constitute approval
by the stockholders of a temporary amendment
of any investment objective, policy or
restriction that would otherwise be
inconsistent with or violated upon the
consummation of such transactions solely
for the purpose of consummating such
transactions.
4. Transfer of ACM II's Assets. ACM I and
ACM II shall take the following steps with respect
to the Acquisition, as applicable:
(a) On or prior to the Closing Date, ACM II
shall pay or provide for the payment of all of
the Liabilities, expenses, costs and charges of
or attributable to ACM II that are known to ACM
II and that are due and payable prior to or as
of the Closing Date.
(b) Prior to the Effective Time, ACM II shall
declare and pay to its stockholders on its normal
monthly schedule a dividend and/or other
distribution in an amount such that it will have
distributed substantially all of its theretofore
undistributed investment company taxable income,
if any (as defined in Code section 852), and net
capital gain, if any (as defined in Code
section 1222).
(c) At the Effective Time, pursuant to
Articles of Transfer accepted for record by
the State Department of Assessments and Taxation
of Maryland (the "SDAT"), ACM II shall assign,
transfer, deliver and convey the Assets to ACM I,
subject to the Liabilities. ACM I shall then
accept the Assets and assume the Liabilities
such that at and after the Effective Time (i)
the Assets at or after the Effective Time shall
become and be assets of ACM I, and (ii) the
Liabilities at the Effective Time shall attach
to ACM I, enforceable against ACM I to the same
extent as if initially incurred by ACM I.
(d) Within a reasonable time prior to the
Closing Date, ACM II shall provide, if requested,
a list of the Assets to ACM I. ACM II may sell
any asset on such list prior to the Effective Time.
After ACM II provides such list, ACM II will not
acquire any additional securities or permit to
exist any encumbrances, rights, restrictions or
claims not reflected on such list, without the
approval of ACM I. Within a reasonable time after
receipt of the list and prior to the Closing Date,
ACM I will advise ACM II in writing of any
investments shown on the list that ACM I has
determined to be inconsistent with its investment
objective, policies and restrictions. ACM II will
dispose of any such securities prior to the Closing
Date to the extent practicable and consistent with
applicable legal requirements, including ACM II's
investment objectives, policies and restrictions.
In addition, if ACM I determines that, as a result
of the Acquisition, ACM I would own an aggregate
amount of an investment that would exceed a
percentage limitation applicable to ACM I,
ACM I will advise ACM II in writing of any such
limitation and ACM II shall dispose of a sufficient
amount of such investment as may be necessary to
avoid the limitation as of the Effective Time, to
the extent practicable and consistent with
applicable legal requirements, including ACM II's
investment objectives, policies and restrictions.
(e) ACM II shall assign, transfer, deliver
and convey the Assets to ACM I at the Effective
Time on the following basis:
(1) The value of the Assets less the
Liabilities, both determined as of the
Valuation Time, shall be divided by the
then net asset value of one ACM I Share,
and, in exchange for the transfer of the
Assets, ACM I shall simultaneously issue
and deliver to ACM II the number of full
ACM I Shares so determined that are
allocable to all shares held by or for
those stockholders of ACM II on a
stockholder by stockholder basis plus
fractional ACM I Shares, rounded to the
third decimal place or such other decimal
place as the parties may agree to in
writing, allocable to those stockholders
of ACM II that at the Effective Time
participate in ACM II's Dividend
Reinvestment Plan ("DRP Stockholders"),
regardless of whether the shares of
ACM II with respect to which such
fractional ACM I Shares are to be issued
and delivered are held by or for the DRP
Stockholders directly or in ACM II's
Dividend Reinvestment Plan. ACM I shall
at the same time deliver to ACM II cash
in lieu of any fractional ACM I Shares
allocable to those stockholders of ACM
II that are not DRP Stockholders.
(2) The net asset value of the ACM I
Shares to be delivered to ACM II shall be
determined as of the Valuation Time in
accordance with ACM I's then applicable
valuation procedures, and the net value
of the Assets to be conveyed to ACM I
shall be determined as of the Valuation
Time in accordance with the then
applicable valuation procedures of ACM II.
(3) ACM II shall deliver the Assets
with good and marketable title to the
custodian for the account of ACM I.
All cash shall be transferred in the
form of immediately available funds.
(f) Promptly after the Closing Date, ACM II
will deliver to ACM I a Statement of Assets and
Liabilities of ACM II as of the Closing Date.
5. Liquidation and Dissolution of
ACM II, Registration of ACM I Shares and
Access to Records. ACM II and ACM I also
shall take the following steps, as
applicable:
(a) At or as soon as reasonably practical
after the Effective Time, ACM II shall liquidate
and dissolve by transferring to stockholders of
record of ACM II the ACM I Shares and cash it
receives pursuant to Section 4(e)(1) of this
Plan. ACM I shall record on its books the
ownership by ACM II's stockholders of the
ACM I Shares so transferred to such stockholders,
and ACM II shall simultaneously cancel on its
books all of the issued and outstanding shares
of ACM II. ACM I shall not issue certificates
representing ACM I Shares to replace certificates
representing ACM II shares unless ACM II share
certificates are first surrendered to ACM I.
Following distribution by ACM II to its
stockholders of all ACM I Shares delivered to
ACM II, ACM II shall wind up its affairs and
shall take all steps as are necessary and
proper to dissolve as soon as is reasonably
possible after the Effective Time, including
filing Articles of Dissolution with the SDAT.
(b) At and after the Closing Date, ACM II
shall provide ACM I and its transfer agent
with immediate access to: (i) all records
containing the names, addresses and taxpayer
identification numbers of all of ACM II's
stockholders and the number and percentage
ownership of the outstanding shares of ACM II
owned by stockholders as of the Effective Time,
and (ii) all original documentation (including
all applicable Internal Revenue Service forms,
certificates, certifications and correspondence)
relating to ACM II stockholders' taxpayer
identification numbers and their liability
for or exemption from back-up withholding.
ACM II shall preserve and maintain, or shall
direct its service providers to preserve and
maintain, records with respect to ACM II as
required by Section 31 of, and Rules 31a-1
and 31a-2 under, the 1940 Act.
6. Certain Representations and Warranties
of ACM II. ACM II represents and warrants to
ACM I as follows:
(a) ACM II is a corporation duly
incorporated, validly existing and in good
standing under the laws of the State of Maryland.
ACM II is registered with the SEC as a closed-end
management investment company under the 1940 Act
and is duly registered with the SEC under the
1934 Act, and such registrations will be in
full force and effect as of the Effective Time.
(b) ACM II has the power and all necessary
federal, state and local qualifications and
authorizations to own all of the Assets, to
carry on its business, to enter into this
Plan and to consummate the transactions
contemplated herein.
(c) The Board of Directors of ACM II
has duly authorized the execution and delivery
of this Plan and the transactions contemplated
herein. Duly authorized officers of ACM II
have executed and delivered the Plan. The Plan
represents a valid and binding contract,
enforceable in accordance with its terms,
subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement,
moratorium, and other similar laws of general
applicability relating to or affecting
creditors' rights and to general equity
principles. The execution and delivery of this
Plan does not, and, subject to the approval of
its stockholders referred to in Section 3 hereof,
the consummation of the transactions contemplated
by this Plan will not, violate ACM II's Charter,
its By-Laws or any material agreement to which
ACM II is subject. Except for the approval of
its stockholders, ACM II does not need to take
any other action to authorize its officers to
effectuate this Plan and the transactions
contemplated herein.
(d) ACM II has qualified as a regulated
investment company under Part I of Subchapter
M of Subtitle A, Chapter 1, of the Code, in
respect of each taxable year since the commencement
of its operations and intends to continue to
qualify as a regulated investment company for
its taxable year ending upon its liquidation.
(e) The information pertaining to ACM II
included within the N-14 Registration Statement
when filed with the SEC, when Part A of the N-14
Registration Statement is distributed to
stockholders, at the time of the stockholders
meeting of ACM II for approval of the Acquisition
and at the Effective Time shall (i) comply in
all material respects with the applicable
provisions of the 1933 Act, the 1934 Act and the
1940 Act, and the rules and regulations thereunder
and applicable state securities laws, and (ii) not
contain any untrue statement of a material fact or
omit to state a material fact required to be stated
therein or necessary to make the statements made
therein not misleading.
(f) ACM II has duly authorized and validly
issued all of its issued and outstanding shares
of common stock, and all such shares are fully
paid and non-assessable and were offered for
sale and sold in conformity with the registration
requirements of all applicable federal and
state securities laws. There are no outstanding
options, warrants or other rights to subscribe
for or purchase any of the shares of ACM II,
nor are there any securities convertible into
shares of ACM II.
(g) ACM II shall operate its business in
the ordinary course between the date hereof
and the Effective Time. Such ordinary course
of business will include the declaration and
payment of customary dividends and distributions
and any other dividends and distributions
referred to in Section 4(b) hereof.
(h) At the Effective Time, ACM II will have
good and marketable title to the Assets and full
right, power and authority to assign, transfer,
deliver and convey the Assets.
(i) The Financial Statements of ACM II, a
copy of which has been previously delivered to
ACM I, fairly present the financial position of
ACM II as of ACM II's most recent fiscal year-end
and the results of ACM II's operations and
changes in ACM II's net assets for the periods
indicated.
(j) To the knowledge of ACM II, ACM II has
no liabilities, whether or not determined or
determinable, other than the Liabilities disclosed
or provided for in its Financial Statements or
Liabilities incurred in the ordinary course of
business subsequent to the date of the most
recent Financial Statement referencing Liabilities.
(k) ACM II does not know of any claims,
actions, suits, investigations or proceedings
of any type pending or threatened against
ACM II. There are no facts that ACM II has
reason to believe are likely to form the basis
for the institution of any such claim, action,
suit, investigation or proceeding against ACM II.
ACM II is not a party to or subject to the
provisions of any order, decree or judgment
of any court or governmental body that adversely
affects, or is reasonably likely to adversely
affect, its financial condition, results of
operations, or the Assets or its ability to
consummate the transactions contemplated by
the Plan.
(l) Except for agreements entered into or
granted in the ordinary course of its business,
in each case under which no material default
exists, ACM II is not a party to or subject to
any material contract, debt instrument, employee
benefit plan, lease, franchise, license or
permit of any kind or nature whatsoever.
(m) ACM II has filed its federal income
tax returns, copies of which have been previously
made available to ACM I, for all taxable years
for which such returns are due and has paid all
taxes payable pursuant to such returns. No such
return is currently under audit and no unpaid
assessment has been asserted with respect to
such returns. ACM II will timely file its federal
income tax return for each subsequent taxable
year including its current taxable year.
(n) Since the date of the Financial
Statements of ACM II, there has been no
material adverse change in its financial
condition, results of operations, business,
or Assets. For this purpose, negative
investment performance shall not be considered
a material adverse change.
7. Certain Representations and Warranties
of ACM I. ACM I represents and warrants to
ACM II as follows:
(a) ACM I is a corporation duly incorporated,
validly existing and in good standing under the
laws of the State of Maryland. ACM I is registered
with the SEC as a closed-end management investment
company under the 1940 Act and is duly registered
with the SEC under the 1934 Act, and such
registrations will be in full force and
effect as of the Effective Time.
(b) ACM I has the power and all
necessary federal, state and local qualifications
and authorizations to own all of its assets, to
carry on its business, to enter into this Plan
and to consummate the transactions contemplated
herein.
(c) The Board of Directors of ACM I has
duly authorized execution and delivery of this
Plan and the transactions contemplated herein.
Duly authorized officers of ACM I have executed
and delivered the Plan. The Plan represents a
valid and binding contract, enforceable in
accordance with its terms, subject as to
enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium
and other similar laws of general applicability
relating to or affecting creditors' rights and
to general equity principles. The execution
and delivery of this Plan does not, and subject
to the approval of its stockholders referred to
in Section 3 hereof, the consummation of the
transactions contemplated by this Plan will not,
violate the Charter of ACM I, its By-Laws or
any material agreement to which ACM I is subject.
Except for the approval of its stockholders,
ACM I does not need to take any other action
to authorize its officers to effectuate the
Plan and the transactions contemplated herein.
(d) ACM I has qualified as a regulated
investment company under Part I of Subchapter
M of Subtitle A, Chapter 1, of the Code, in
respect of each taxable year since the
commencement of its operations and qualifies
and intends to continue to qualify as a regulated
investment company for its current taxable year.
(e) The N-14 Registration Statement, when
filed with the SEC, when Part A of the N-14
Registration Statement is distributed to
stockholders, at the time of the stockholder
meeting of ACM I for approval of the Acquisition
and at the Effective Time, insofar as it relates
to ACM I shall (i) comply in all material
respects with the applicable provisions of
the 1933 Act, the 1934 Act and the 1940 Act,
and the rules and regulations thereunder and
applicable state securities laws and (ii) not
contain any untrue statement of a material fact
or omit to state a material fact required to be
stated therein or necessary to make the statements
made therein not misleading.
(f) ACM I has duly authorized and validly
issued all issued and outstanding ACM I Shares,
and all such shares are fully paid and
non-assessable and were offered for sale and
sold in conformity with the registration
requirements of all applicable federal and
state securities laws. ACM I has duly
authorized the ACM I Shares referred to
in Section 4(e) hereof to be issued and
delivered to ACM II as of the Effective Time.
When issued and delivered, such ACM I Shares
shall be validly issued, fully paid and
non-assessable, and no stockholder of ACM I
shall have any preemptive right of subscription
or purchase in respect of any such share.
There are no outstanding options, warrants or
other rights to subscribe for or purchase any
ACM I Shares, nor are there any securities
convertible into ACM I Shares.
(g) ACM I does not know of any claims,
actions, suits, investigations or proceedings
of any type pending or threatened against ACM I.
There are no facts that ACM I currently has
reason to believe are likely to form the basis
for the institution of any such claim, action,
suit, investigation or proceeding against ACM I.
ACM I is not a party to or subject to the
provisions of any order, decree or judgment of
any court or governmental body that adversely
affects, or is reasonably likely to adversely
affect, its financial condition, results of
operations, its assets or its ability to consummate
the transactions contemplated by this Plan.
(h) Except for agreements entered into or
granted in the ordinary course of its business,
in each case under which no material default exists,
ACM I is not a party to or subject to any
material contract, debt instrument, employee
benefit plan, lease, franchise, license or
permit of any kind or nature whatsoever.
(i) ACM I has filed its federal income tax
returns, copies of which have been previously
made available to ACM II, for all taxable years
for which such returns are due and has paid all
taxes payable pursuant to such returns. No such
return is currently under audit and no unpaid
assessment has been asserted with respect to
such returns. ACM I will timely file its federal
income tax return for each subsequent taxable year
including its current taxable year.
(j) Since the date of the Financial Statements
of ACM I, there has been no material adverse change
in its financial condition, results of operations,
business or assets. Negative investment performance
shall not be considered a material adverse change.
8. Conditions to the Obligations of ACM I
and ACM II. The obligations of ACM I and ACM
II with respect to the Acquisition shall be
subject to the following conditions precedent:
(a) The stockholders of ACM II shall have
approved the Acquisition in the manner required
by the Charter of ACM II, its By-Laws and
applicable law. The stockholders of ACM I
shall have approved the Acquisition as required
by the rules and regulations of the NYSE. If
stockholders of ACM II or ACM I fail to approve
the Acquisition as required, that failure shall
release the Funds of their obligations under this
Plan.
(b) ACM I and ACM II shall have delivered to
the other party a certificate dated as of the
Closing Date and executed in its name by its
Secretary or an Assistant Secretary, in a
form reasonably satisfactory to the receiving
party, stating that the representations and
warranties of ACM I or ACM II, as applicable,
in this Plan that apply to the Acquisition are
true and correct in all material respects at
and as of the Valuation Time.
(c) ACM I and ACM II shall have performed
and complied in all material respects with each
of its representations and warranties required
by this Plan to be performed or complied with by
it prior to or at the Valuation Time and the
Effective Time.
(d) There has been no material adverse change
in the financial condition, results of operations,
business, properties or assets of ACM I or
ACM II since June 30, 2000. Negative investment
performance shall not be considered a
material adverse change.
(e) ACM I and ACM II shall have received
an opinion of Xxxxxx & Xxxxxx LLP, in form and
substance reasonably satisfactory to each of
them, based upon representations made in
certificates
provided by the Funds, their affiliates and/or
principal stockholders and dated as of the
Closing Date, substantially to the effect that,
based on facts and assumptions stated therein,
for federal income tax purposes:
(1) the Acquisition will constitute a
"reorganization" within the meaning of section
368(a) of the Code and that ACM I and ACM II
will each be "a party to a reorganization"
within the meaning of section 368(b) of the Code;
(2) a stockholder of ACM II will recognize no
gain or loss on the exchange of the stockholder's
shares of ACM II solely for ACM I Shares, except
with respect to cash received in lieu of a
fractional share of ACM I in connection with
the Acquisition;
(3) neither ACM II nor ACM I will recognize
any gain or loss upon the transfer of all of
the Assets to ACM I in exchange for ACM I Shares
(plus cash in lieu of fractional shares) and
the assumption by ACM I of the Liabilities
pursuant to this Plan or upon the distribution
of ACM I Shares and cash to stockholders of ACM
II in exchange for their respective shares of
ACM II;
(4) the holding period and tax basis of the
Assets acquired by ACM I will be the same as
the holding period and tax basis that ACM II
had in such Assets immediately prior to the
Acquisition;
(5) the aggregate tax basis of ACM I Shares
received in connection with the Acquisition
by each stockholder of ACM II (including any
fractional share to which the stockholder may
be entitled) will be the same as the aggregate
tax basis of the shares of ACM II surrendered
in exchange therefor, decreased by any cash
received and increased by any gain recognized
on the exchange;
(6) the holding period of ACM I Shares received
in connection with the Acquisition by each
stockholder of ACM II (including any fractional
share to which the stockholder may be entitled)
will include the holding period of the shares
of ACM II surrendered in exchange therefor,
provided that such ACM II shares constitute
capital assets in the hands of the stockholder
as of the Closing Date;
(7) ACM I will succeed to the capital loss
carryovers of ACM II, if any, under section
381 of the Code, but the use by ACM I of any
such capital loss carryovers (and of capital
loss carryovers of ACM I) may be subject to
limitation under section 383 of the Code; and
(8) any gain or loss realized by a stockholder
of ACM II upon the sale of a fractional share
of ACM I to which the stockholder is entitled
will be recognized to the stockholder and measured
by the difference between the amount of cash
received and the basis of the fractional share
and, provided that ACM II shares surrendered
constitute capital assets in the hands of the
stockholder, will be capital gain or loss.
(f) The N-14 Registration Statement shall
have become effective under the 1933 Act as to
the ACM I Shares, and the SEC shall not have
instituted and to the knowledge of ACM I is not
contemplating instituting, any stop order
suspending
the effectiveness of the N-14 Registration
Statement.
(g) No action, suit or other proceeding shall
be threatened or pending before any court or
governmental agency in which it is sought to
restrain or prohibit, or obtain damages or
other relief in connection with, the Acquisition.
(h) The SEC shall not have issued any
unfavorable advisory report under Section 25(b)
of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the Acquisition
under Section 25(c) of the 1940 Act.
(i) Neither party shall have terminated this
Plan with respect to the Acquisition pursuant to
Section 12 of this Plan.
(j) The NYSE shall have approved, upon
official notice of issuance, the listing of the
ACM I Shares to be issued and delivered to ACM
II pursuant hereto.
9. Conditions to the Obligations
of ACM II. The obligations of ACM II
with respect to the Acquisition shall
be subject to the following conditions
precedent:
(a) ACM II shall have received an opinion
of Xxxxxx & Xxxxxx LLP, counsel to ACM I, in
form and substance reasonably satisfactory to
ACM II and dated as of the Closing Date,
substantially to the effect that:
(1) ACM I is a corporation duly incorporated,
validly existing and in good standing under the
laws of the State of Maryland and is a closed-end,
management investment company registered under the
1940 Act and duly registered under the 1934 Act;
(2) This Plan has been duly authorized, executed
and delivered by ACM I and, assuming due
authorization, execution and delivery of this
Plan by ACM II, represents a legal, valid and
binding contract, enforceable in accordance with
its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance and
transfer and similar laws relating to or affecting
creditors' rights generally and court decisions
with respect thereto, and further subject to the
application of equitable principles in any
proceeding, whether at law or in equity or
with respect to the enforcement of provisions
of the Plan and the effect of judicial decisions
which have held that certain provisions are
unenforceable when their enforcement would violate
an implied covenant of good faith and fair
dealing or would be commercially unreasonable
or when default under the Plan is not material;
(3) The ACM I Shares to be delivered as provided
for by this Plan are duly authorized and upon
delivery will be validly issued, fully paid and
non-assessable by ACM I;
(4) The execution and delivery of this Plan did
not, and the consummation of the Acquisition wil
l not, violate the Charter of ACM I, its By-Laws
or any agreement of ACM I known to such counsel,
after reasonable inquiry; and
(5) To the knowledge of such counsel, no consent,
approval, authorization or order of any federal
or state court or administrative or regulatory
agency, other than the acceptance of record of
Articles of Transfer by the SDAT, is required
for ACM I to enter into this Plan or carry out
its terms, except those that have been obtained
under the 1933 Act, the 1934 Act, the 1940 Act
and the rules and regulations under those Acts
or that may be required under state securities
laws or subsequent to the Effective Time or when
the failure to obtain the consent, approval,
authorization or order would not have a material
adverse effect on the operation of ACM I.
In rendering such opinion, Xxxxxx & Xxxxxx LLP
may (i) rely on the opinion of other counsel to
the extent set forth in such opinion, (ii) make
assumptions regarding the authenticity, genuineness
and/or conformity of documents and copies
thereof without independent verification thereof,
(iii) limit such opinion to applicable federal
and state law, (iv) define the word "knowledge"
and related terms to mean the knowledge of
attorneys then with such firm who have devoted
substantive attention to matters directly
related to this Plan and (v) rely on certificates
of officers or directors of ACM I as to
factual matters.
10. Conditions to the Obligations of ACM I.
The obligations of ACM I with respect to the
Acquisition shall be subject to the following
conditions precedent:
(a) ACM I shall have received an opinion of
Xxxxxx & Xxxxxx LLP, counsel to ACM II, in form
and substance reasonably satisfactory to ACM I
and dated as of the Closing Date, substantially
to the effect that:
(1) ACM II is a corporation duly incorporated,
validly existing and in good standing under the
laws of the State of Maryland and is a closed-end
management investment company registered under
the 1940 act and duly registered under the 1934
Act;
(2) This Plan has been duly authorized,
executed and delivered by ACM II and, assuming
due authorization, execution and delivery of
this Plan by ACM I, represents a legal, valid
and binding contract, enforceable in accordance
with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance
and transfer and similar laws relating to or
affecting creditors' rights generally and court
decisions with respect thereto, and further
subject to the application of equitable
principles in any proceeding, whether at
law or in equity or with respect to the
enforcement of provisions of the Plan and
the effect of judicial decisions which have
held that certain provisions are unenforceable
when their enforcement would violate an implied
covenant of good faith and fair dealing or would
be commercially unreasonable or when default
under the Plan is not material;
(3) The execution and delivery of this Plan
did not, and the consummation of the Acquisition
will not, violate the Charter of ACM II, its
By-Laws or any agreement of ACM II known to
such counsel, after reasonable inquiry; and
(4) To the knowledge of such counsel, no consent,
approval, authorization or order of any federal
or state court or administrative or regulatory
agency, other than the acceptance of record of
Articles of Transfer by the SDAT, is required
for ACM II to enter into the Plan or carry out
its terms, except those that have been obtained
under the 1933 Act, the 1934 Act, the 1940 Act
and the rules and regulations under those Acts
or that may be required under state securities
laws or subsequent to the Effective Time or when
the failure to obtain the consent, approval,
authorization or order would not have a material
adverse effect on the operation of ACM II.
In rendering such opinion, Xxxxxx & Xxxxxx LLP
may (i) rely on the opinion of other counsel to
the extent set forth in such opinion, (ii) make
assumptions regarding the authenticity, genuineness
and/or conformity of documents and copies thereof
without independent verification thereof, (iii)
limit such opinion to applicable federal and state
law, (iv) define the word "knowledge" and related
terms to mean the knowledge of attorneys then
with such firm who have devoted substantive
attention to matters directly related to this
Plan and (v) rely on certificates of officers
or directors of ACM II as to factual matters.
(b) Except to the extent prohibited by Rule
19b-1 under the 1940 Act, ACM II shall have
declared a dividend or dividends that, together
with all previous such dividends, shall have the
effect of distributing to the stockholders of ACM
II substantially all of its investment company
taxable income, if any (as defined in Code section
852), and all of its net capital gain, if any,
(as defined in Code section 1222).
11. Survival of Representations and Warranties.
No representations, warranties or covenants in or
pursuant to this Plan (including certificates of
officers) hereto shall survive the completion of
the transactions contemplated herein.
12. Termination of Plan. A majority of either
Fund's Board of Directors may terminate this Plan
with respect to that Fund at any time before the
applicable Effective Time if: (i) the Fund's
conditions precedent set forth in Sections 8, 9
or 10 as appropriate, are not satisfied; or (ii)
the Board of Directors determines that the
consummation of the Acquisition is not in the
best interests of the Fund or its stockholders
and gives notice of such termination to the
other party.
13. Governing Law. This Plan and the
transactions contemplated hereby shall be
governed, construed and enforced in accordance
with the laws of the State of New York, except
to the extent preempted by federal law, without
regard to conflicts of law principles.
14. Brokerage Fees. Each party
represents and warrants that there
are no brokers or finders entitled
to receive any payments in connection
with the transactions provided for in
the Plan.
15. Amendments. The parties may, by
agreement in writing authorized by their
respective Board of Directors, amend
this Plan at any time before or
after the stockholders of ACM II or
ACM I approve
the Acquisition. However, after
stockholders of
either of ACM II or ACM I approve the
Acquisition, the parties may not amend
this Plan in a manner
that materially alters the obligations of
either
party. This Section shall not preclude the
parties from changing the Closing Date or the
Effective Time by mutual agreement.
16. Waivers. At any time prior to the
Closing Date, either party may by written
instrument signed by it (i) waive the effect
of any inaccuracies in the representations and
warranties made to it contained herein and (ii)
waive compliance with any of the agreements,
covenants or conditions made for its benefit
contained herein. Any waiver shall apply only
to the particular inaccuracy or requirement for
compliance waived, and not any other or future
inaccuracy or lack of compliance.
17. Indemnification of Directors.
ACM I will assume all obligations of
ACM II to exculpate and indemnify its
current and former directors and
officers,acting in their capacities
as such.
18. Other Matters. Pursuant to
Rule 145 under the 1933 Act, and in
connection with the issuance of any
shares to any person who at the time
of the Acquisition is, to ACM I's
knowledge, an affiliate of a party
to the Acquisition pursuant to Rule
145(c), ACM I will cause to be affixed
upon the certificate(s) issued to such
person (if any) a legend as follows:
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON
TRANSFER UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
TO ACM GOVERNMENT INCOME FUND, INC. (OR ITS
STATUTORY SUCCESSOR) UNLESS (I) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SHARES IS
EFFECTIVE UNDER THE SECURITIES ACT OF 1933
OR (II) IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE FUND, SUCH REGISTRATION
IS NOT REQUIRED.
19. Cooperation and Further Assurances.
Each party will cooperate with the other in
fulfilling its obligations under this Plan
and will provide such information and
documentation as is reasonably requested
by the other in carrying out the Plan's
terms. Each party will provide such further
assurances concerning the performance of its
obligations hereunder and execute all documents
for or in connection with the consummation of
the Acquisition as, with respect to such
assurances or documents, the other shall
deem necessary or appropriate.
20. Updating of N-14 Registration Statement.
If at any time prior to the Effective Time, a
party becomes aware of any untrue statement of
a material fact or omission to state a material
fact required to be stated therein or necessary
to make the statements made not misleading in
the N-14 Registration Statement, the party
discovering the item shall notify the other
party and the parties shall cooperate in
promptly preparing, filing and clearing
with the SEC and, if appropriate, distributing
to stockholders appropriate disclosure with
respect to the item.
21. Limitation on Liabilities. The
obligations of ACM II and ACM I shall not
bind any of the directors, stockholders,
nominees, officers, agents, employees or
agents of ACM II or ACM I personally, but
shall bind only ACM II or ACM I, as appropriate.
The execution and delivery of this Plan by an
officer of either party shall not be deemed to
have been made by the officer individually or
to impose any liability on the officer personally,
but shall bind only ACM II or ACM I, as
appropriate.
22. Termination of ACM II. If the
parties complete the Acquisition, ACM II
shall terminate its registration under
the 1940 Act, the 1934 Act and liquidate
and dissolve.
23. Notices. Any notice, report, statement,
certificate or demand required or permitted by
any provision of the Plan shall be in writing
and shall be given in person or by telecopy,
certified mail or overnight express courier to:
For ACM II:
ACM Government
Securities Fund, Inc.
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Secretary
For ACM I:
ACM Government Income
Fund, Inc.
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Secretary
24. Expenses. The investment
adviser for the Funds and the other
funds whose assets are to be acquired
by ACM I in the acquisitions described
in the N-14 Registration Statement in
connection with this Agreement has
agreed to bear 25% of the expenses
incurred in connection with the
acquisitions. The acquisition expenses
paid by the investment adviser of the
Funds and each such other fund shall
be allocated to ACM I initially,
representing its share of the total
acquisition expenses, with any residual
amount allocated to ACM Government
Securities Fund, Inc. The total
remaining acquisition expenses shall
be paid proportionately by ACM II
and each such other fund according
to its respective asset size as of
the last date that an acquisition
of assets by ACM I, as described
in the N-14 Registration Statement,
is considered for approval by the
stockholders of ACM I, ACM II or any
of the other funds involved, whether
or not the acquisitions contemplated
hereby and each such other agreement
and plan is consummated.
25. General. This Plan supersedes all
prior agreements between the parties with
respect to the subject matter hereof and
may be amended only in writing signed by
both parties. The headings contained in
this Plan are for reference only and shall
not affect in any way the meaning or
interpretation of this Plan. Whenever
the context so requires, the use in the
Plan of the singular will be deemed to
include the plural and vice versa.
Nothing in this Plan, expressed or implied,
confers upon any other person any rights or
remedies under or by reason of this Plan.
Neither party may assign or transfer any right
or obligation under this Plan without the
written consent of the other party.
In Witness Whereof, the parties hereto
have executed this Plan as of the day
and year first above written.
ACM Government Securities Fund, Inc.
Attest:
By:
Name: Name:
Title: Title:
ACM Government Income Fund, Inc.
Attest:
By:
Name: Name:
Title: Title:
Accepted and agreed with respect
to Section 24 only:
Alliance Capital Management L.P.
By: Alliance Capital Management
Corporation, its General Partner
By: ___________________________
Name: ______________________
Title: _______________________
00250.236 #193220
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