R&W DRAFT - 6/17/99
ALLIANCE ALL-MARKET ADVANTAGE FUND, INC.
845,600 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
June 21, 1999
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Alliance All-Market Advantage Fund, Inc., a Maryland
corporation (the "Company"), and Alliance Capital Management L.P.
("Alliance") each confirms its agreement with and appointment of
PaineWebber Incorporated to act as dealer manager (the "Dealer
Manager") in connection with the issuance by the Company to the
holders of record at the close of business on June 21, 1999 or
such other date as is established as the record date for such
purpose (the "Holders"), of the shares of common stock, par value
$.01 per share, of the Company (the "Common Stock"), of non-
transferable rights entitling such Holders to subscribe for an
aggregate of 845,600 shares (each a "Share" and, collectively,
the "Shares") of Common Stock (the "Offer"). Pursuant to the
over-subscription privilege in connection with the Offer (the
"Over-Subscription Privilege"), the Company may, at the
discretion of the Board of Directors, increase the number of
Shares subject to subscription by up to 25%. Pursuant to the
terms of the Offer, the Company is issuing each Holder one
nontransferable right (each a "Right" and, collectively, the
"Rights") for each whole share of Common Stock held by such
Holder on the record date set forth in the Prospectus (as defined
herein) (the "Record Date"). The Rights entitle Holders to
acquire during the subscription period set forth in the
Prospectus (as defined herein) (the "Subscription Period"), at
the price set forth in the Prospectus (the "Subscription Price"),
one Share for each three Rights exercised on the terms and
conditions set forth in such Prospectus. No fractional Shares
will be issued.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, on Form
N-2 (Nos. 333-77839 and 811-8702) and a related preliminary
prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations of the Commission thereunder (the
"Securities Act Rules and Regulations"), and has filed such
amendments to such registration statement on Form N-2, if any,
and such amended preliminary prospectuses as may have been
required to the date hereof. The Company will prepare and file
such additional amendments thereto and such amended prospectuses
as may hereafter be required. The registration statement (as
amended, if applicable) and the prospectus constituting a part
thereof, as from time to time amended or supplemented pursuant to
the Securities Act, are herein referred to as the "Registration
Statement" and such prospectus is referred to herein as the
"Prospectus", except that if any revised prospectus shall be
provided to the Dealer Manager by the Company for use in
connection with the Offer which differs from the Prospectus on
file at the Commission at the time the Registration Statement
becomes effective (whether such revised prospectus is required to
be filed by the Company pursuant to Rule 497(b) or Rule 497(h) of
the Securities Act Rules and Regulations), the term "Prospectus"
shall refer to each such revised prospectus from and after the
time it is first provided to the Dealer Manager for such use.
Any 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, approve, prepare 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 and as of the date
of the commencement of the Offer (such later 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, the Securities Act
Rules and Regulations, the Investment Company Act of
1940, as amended (the "Investment Company Act"), and the
rules and regulations of the Commission under the
Investment Company Act, (the "Investment Company Act
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
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Securities Act, the Investment Company Act, the
Securities Act Rules and Regulations and the Investment
Company Act Rules and Regulations (the Securities Act
Rules and Regulations and the Investment Company Act
Rules and Regulations will together hereinafter be
referred to as the "Rules and Regulations") and will not
include 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 (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Dealer Manager by the Company for use in connection with
the Offer which differs from the Prospectus on file with
the Commission at the time the Registration Statement
becomes effective, in which case at the time such
prospectus is first provided to the Dealer Manager for
such use) and the Offering Materials then authorized by
the Company for use will not include an untrue statement
of a material fact or omit to state a material fact
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 or Prospectus made in reliance
upon and in conformity with information relating to the
Dealer Manager furnished to the Company in writing by
the Dealer Manager expressly for use in the Registration
Statement or Prospectus.
(ii) The Company is registered with the Commission
under the Investment Company Act as a closed-end, non-
diversified, management investment company, and 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, the Investment
Company Act and any state securities laws 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 articles of incorporation and bylaws
comply as to form in all material respects with the
requirements of the Investment Company Act and the
Investment Company Act Rules and Regulations.
(iii) PricewaterhouseCoopers LLP, the accountants
who certified the financial statements of the Company
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set forth or incorporated by reference in the
Registration Statement and the Prospectus, are
independent public accountants as required by the
Securities Act and the Securities Act Rules and
Regulations.
(iv) The financial statements of the Company set
forth or incorporated by reference in the Registration
Statement and the Prospectus fairly present in all
material respects the financial condition of the Company
as of the dates indicated in conformity with generally
accepted accounting principles; and the information set
forth in the Prospectus under the headings "Fee Table"
and "Financial Highlights" each presents fairly in all
material respects the information stated therein.
(v) 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 in each
jurisdiction in which 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. The Company has
no subsidiaries.
(vi) The Company's authorized capitalization is as
set forth in the Prospectus; the outstanding shares of
Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable and conform
in all material respects to the description thereof in
the Prospectus under the heading "Description of Capital
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 and
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
and the Prospectus; and the issuance of each of the
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Rights and the Shares is not subject to any preemptive
rights.
(vii) Except as set forth in the Prospectus,
subsequent to the respective dates 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 of the Company, or any material
adverse change, or to the Company's knowledge any
development involving a prospective material adverse
change, in the condition (financial or otherwise),
business, prospects, net worth or results of operations
of the Company, (C) there has been no dividend or
distribution paid or declared in respect of the
Company's capital stock (other than the distribution
with respect to the fiscal quarter ending June 30,
1999)and (D) the Company has no outstanding long-term
debt.
(viii) Except as set forth in the Prospectus, there
is not pending or, to the knowledge of the Company,
threatened, any action, suit or proceeding affecting the
Company or to which the Company is a party before or by
any court or governmental agency or body, which might
result in any material adverse change in the condition
(financial or otherwise), business, prospects, net worth
or results of operations of the Company, or which might
materially and adversely affect the properties or assets
thereof.
(ix) There are no franchises, contracts or other
documents of the Company that are required to be filed
as exhibits to the Registration Statement by the
Securities Act or the Investment Company Act or by the
Rules and Regulations that have not been so filed or
incorporated by reference therein as permitted by the
Rules and Regulations.
(x) This Agreement, the Subscription Rights Agency
Agreement (the "Subscription Agency Agreement") between
the Company and The Bank of New York (the "Subscription
Agent"), the Investment Advisory Agreement between the
Company and Alliance (the "Investment Advisory
Agreement"), the Administration Agreement between the
Company and Alliance (the "Administration Agreement"),
the Custodian Agreement between the Company and The Bank
of New York (the "Custodian Agreement"), the Transfer
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Agency Agreement between the Company and The Bank of New
York (the "Transfer Agency Agreement"), the Shareholder
Inquiry Agency Agreement between the Company and
Alliance Fund Services, Inc. (the "Shareholder Inquiry
Agency Agreement"), the Shareholder Servicing Agreement
between the Company and PaineWebber Incorporated (the
"Shareholder Servicing Agreement") (collectively, all
the foregoing are the "Company Agreements") have been
duly authorized, executed and delivered by the Company;
the Company Agreements are, assuming due authorization,
execution and delivery by the other parties thereto,
legal, valid, binding and enforceable obligations of the
Company subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other 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 may be limited by Federal or state securities
laws or principles of public policy, and the performance
of the Company's obligations under the Company
Agreements and the consummation of the transactions
contemplated therein or in the Registration Statement
will not result in a material breach or violation of any
of the terms and provisions of, 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 pursuant to 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 will such action
result in any violation of the Company's charter or
bylaws, or any order, law, rule or regulation of any
court or governmental agency or body having jurisdiction
over the Company or any of its properties; no consent,
approval, authorization, notification or order of, or
filing with, any court or governmental agency or body is
required for the consummation by the Company of the
transactions contemplated by 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 Investment Company Act, the
Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and state securities laws.
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(xi) Each of the Company Agreements complies in all
material respects with all applicable provisions of the
Investment Company Act.
(xii) The Common Stock has been duly listed on the
New York Stock Exchange and prior to their issuance the
Shares will have been approved for listing, subject to
official notice of issuance.
(xiii) The Company owns or possesses or has obtained
all material governmental licenses, permits, consents,
orders or approvals and other authorizations necessary
to lease or own, as the case may be, and to operate its
properties and to carry on its business as contemplated
in the Prospectus.
(xiv) 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 Rule 10b-6 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 exercises of Rights pursuant to
this Agreement); provided that any action in connection
with the Company's dividend reinvestment plan will not
be deemed to be within the terms of this Section
1(a)(xiv).
(xv) The Company has complied in all previous tax
years, and intends to direct the investment of the
proceeds of the Offer 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 is qualified and
intends to continue to qualify as a regulated investment
company under Subchapter M of the Code.
(xvi) The Prospectus and the Offering Materials
complied and comply with the requirements of the
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Securities Act, the Investment Company Act and the Rules
and Regulations.
(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.
(b) Alliance represents and warrants to, and agrees
with, the Dealer Manager as of the date hereof, as of the
Representation Date and as of the Expiration Date that:
(i) It has been duly organized and is validly
existing as a limited partnership under the laws of the
State of Delaware, with partnership power and authority
to own its properties and conduct its business as
described in the Prospectus, and is duly licensed or
qualified as a foreign entity and in good standing to do
business in each other jurisdiction in which its
ownership of property or the conduct of its business
requires such qualification or license, except where the
failure to be so qualified would not have a material
adverse effect on Alliance.
(ii) It is duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and is not prohibited by the
Advisers Act or the Investment Company Act, or the rules
and regulations under such Acts, from acting under the
Investment Advisory Agreement for the Company as
contemplated by the Prospectus.
(iii) Each of this Agreement and the Investment
Advisory Agreement has been duly authorized, executed
and delivered by Alliance; the Investment Advisory
Agreement is, assuming due authorization, execution and
delivery by the other parties thereto, a legal, valid,
binding and enforceable obligation of Alliance, subject
as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other 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 the performance by Alliance of
its obligations under such agreements and the
consummation of the transactions therein contemplated to
be consummated by Alliance will not result in a breach
or violation of any of the terms and provisions of, or
constitute a default under, any statute, any material
agreement or instrument to which Alliance is a party or
and by which it is bound or to which any of the property
8
of Alliance is subject, the Agreement of Limited
Partnership of Alliance, or any order, rule or
regulation of any court or governmental agency or body,
stock exchange or securities association having
jurisdiction over Alliance or any of its properties or
operations.
(iv) Except as set forth in the Prospectus, there
is not pending or, to the knowledge of Alliance,
threatened, any action, suit or proceeding to which
Alliance is a party before or by any court or
governmental agency or body, which is likely to have a
material adverse effect upon the Company or upon the
ability of Alliance to perform its obligations under the
Investment Advisory Agreement.
(v) Alliance (i) 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, (ii) 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 (iii) will
not, until the later of the expiration of the Rights or
the completion of the distribution (within the meaning
of Rule 10b-6 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 exercises of Rights pursuant to this
Agreement); provided that any action in connection with
the Company's dividend reinvestment plan will not be
deemed to be within the terms of this Section 1(b)(v).
(vi) Alliance owns, possesses or has obtained and
currently maintains all material governmental licenses,
permits, consents, orders, approvals and other
authorizations ("Authorizations") as are necessary for
Alliance to carry on its business as set forth in and
contemplated by the Prospectus except where the failure
to obtain such Authorizations would not have a material
adverse effect on the ability of Alliance to perform its
obligations under the Investment Advisory Agreement.
(vii) The description of Alliance and its businesses
in the Registration Statement and the Prospectus
complies with the requirements of the Registration
Statement on Form N-2, the Securities Act, the
9
Investment Company Act and the Rules and Regulations as
they relate to the Offer and does not contain any untrue
statement of a material fact or omit to state any
material fact required by the foregoing to be stated
therein or necessary in order to make the statements
therein not misleading in light of the circumstances
under which they were made.
(viii) 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 may be described therein.
(c) Any certificate required by this Agreement that is
signed by any officer of the Company, Alliance Capital Management
Corporation, the General Partner of Alliance (the "General
Partner"), and delivered to the Dealer Manager or counsel for the
Dealer Manager shall be deemed a representation and warranty by
the Company or 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 hereby appoints the Dealer Manager
and other soliciting dealers entering into a Soliciting
Dealer Agreement, in the form attached hereto as Exhibit
A, with the Dealer Manager (the "Soliciting Dealers"),
to solicit, in accordance with the Securities Act, the
Investment Company Act and the Exchange Act, and their
customary practice, the exercise of the Rights, subject
to the terms and conditions of this Agreement, the
procedures described in the Registration Statement and,
where applicable, the terms and conditions of such
Soliciting Dealer Agreement; and
(ii) 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 the information to any other person
except for securities brokers and dealers that have been
requested by the Dealer Manager to solicit exercises of
Rights.
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(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 performance of
financial advisory and marketing services to the Company
contemplated by this Agreement.
(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 soliciting the
exercise of Rights, (i) the Dealer Manager shall not be deemed to
be acting as the agent of the Company other than pursuant to this
Agreement or as the agent of any Soliciting Dealer and (ii) no
Soliciting Dealer shall be deemed to be acting as the agent of
the Dealer Manager. It is understood that the Dealer Manager is
being engaged hereunder solely to provide the services described
above on behalf of the Company and that the Dealer Manager is not
acting as an agent or fiduciary of, and shall have no duties or
liability to, the equity holders of the Company or any other
third party in connection with its engagement hereunder, all of
which are hereby expressly waived.
(e) In rendering the services contemplated by this
Agreement, neither the Dealer Manager nor any affiliate thereof
will be subject to any liability to the Company or Alliance or
any of their affiliates, for any losses, claims, damages,
liabilities or expenses arising from any act or omission on the
part of any securities 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 or otherwise
in connection with the Offer, except for any losses, claims,
damages, liabilities and expenses that are finally judicially
determined to have resulted primarily from the willful
misfeasance, bad faith 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.
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3. Dealer Manager and Solicitation Fees. In full payment
for the financial advisory, marketing, and soliciting services
rendered and to be rendered hereunder by the Dealer Manager, the
Company agrees to pay the Dealer Manager a fee (the "Dealer
Manager Fee") equal to 3.75% of the aggregate Subscription Price
per Share for each Share issued pursuant to the exercise of
Rights and the Over-Subscription Privilege. In full payment for
the soliciting efforts to be rendered, the Dealer Manager agrees
to reallow soliciting fees (the "Soliciting Fees") to Soliciting
Dealers 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. The Dealer Manager agrees to pay
the Soliciting Fees to the broker dealers 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 pursuant to the terms of the Soliciting
Dealer Agreement, then the Dealer Manager shall retain such
Soliciting Fees for Shares issued pursuant to the exercise of
Rights and Over-Subscription Privilege. Payment to the Dealer
Manager by the Company will be in the form of a wire 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 after the Expiration Date. Payment to a
Soliciting Dealer will be made by check to an address identified
by such broker-dealer. Such payments shall be made on or before
the tenth business day following each date on which the Company
issues Shares after the Expiration Date.
4. Covenants of the Company and Alliance.
(a) The Company covenants with the Dealer Manager 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
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proceedings for that purpose, (E) of the suspension of
the qualification of the Shares or the Rights for
offering or sale in any jurisdiction. The Company will
make every reasonable effort to prevent the issuance of
any stop order described in subsection (D) hereunder
and, if any such stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(iii) 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 such
revised prospectus is required to be filed pursuant to
Rule 497(b) or Rule 497(h) of the Securities Act 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 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.
(iv) The Company will, without charge, deliver to
the Dealer Manager, as soon as practicable, the number
of copies (one of which is manually executed) 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.
(v) 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 Securities Act
Rules and Regulations.
(vi) If any event shall occur as a result of which
it is necessary, in the reasonable opinion of counsel
for the Dealer Manager, to amend or supplement the
Registration 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
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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 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.
(vii) 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 file any general consent to service of
process, or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is
not now so qualified. The Company will file such
statements and reports as may be required by the laws of
each jurisdiction in which the Rights and the Shares
have been qualified as above provided.
(viii) 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 Rule 158 of the Securities Act Rules
and Regulations) covering a twelve-month period
beginning not later than the first day of the Company's
second fiscal quarter following the "effective" date (as
defined in said Rule 158) of the Registration Statement.
(ix) For a period of 180 days from the date of this
Agreement, the Company will not, without the prior
consent of the Dealer Manager, directly or indirectly
sell, offer to sell, enter into any agreement to sell,
or otherwise dispose of, any equity or equity related
securities of the Company or securities convertible into
such securities, other than the Shares and the Common
Stock issued in reinvestment of dividends or
distributions.
14
(x) The Company will apply the net proceeds from
the Offer as set forth under "Use of Proceeds" in the
Prospectus.
(xi) 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.
(xii) The Company will use its best efforts to
maintain its qualification as a regulated investment
company under Subchapter M of the Code.
(xiii) 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 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 on exercise forms
indicating the Dealer Manager or such Soliciting Dealer,
as the case may be, as the broker-dealer with respect to
such exercise, 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 total
number of Rights exercised and Shares 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 on exercise forms
indicating the Dealer Manager or such Soliciting Dealer,
as the case may be, as the broker-dealer with respect to
such exercise, and as to such other information as the
Dealer Manager may reasonably request.
(b) The Company and Alliance will not take, 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; provided that any action in
connection with the Company's dividend reinvestment plan will not
be deemed to be within the meaning of this Section 4(b).
15
(c) The Company and Alliance agree that, except as
required by applicable law, any reference to the Dealer Manager
in any Offering Materials or any other document or communication
prepared, approved or authorized by the Company or Alliance in
connection with the Offer is subject to the prior approval of the
Dealer Manager, provided that if such reference to the Dealer
Manager is required by applicable law, the Company or Alliance
agrees to notify the Dealer Manager within a reasonable time
prior to such use.
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 exercise forms
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 Letter 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, (vi)
the printing and other production and delivery of copies of the
Blue Sky Letter, (vii) the fees and expenses incurred with
respect to filing with the National Association of Securities
Dealers, Inc., (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 the Prospectus and
the Offering Materials, (x) the fees and expenses incurred with
respect to the Subscription Agent and the Information Agent, (xi)
all fees, if any, payable to the Dealer Manager and Soliciting
Dealers as reimbursement for their customary mailing and handling
expenses in forwarding materials related to the Offer to their
customers, (xii) all advertising charges, including the
announcement, if any, of the Offer in The Wall Street Journal, in
connection with the Offer.
(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
and disbursements of its legal counsel (excluding Blue Sky fees
16
and expenses which are paid directly by the Company), in an
amount up to $100,000.
(c) If this Agreement is terminated 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 paragraphs (a) and (b) of
this Section 5 which the Company would have paid if such
transactions had been consummated.
6. Conditions of Dealer Manager's Obligations. The
obligations of the Dealer Manager hereunder are subject to the
accuracy of the representations and warranties of the Company and
Alliance contained herein, to the performance by the Company and
Alliance 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., on the Representation Date,
or at such later time and date as may be approved 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(b), (d) 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 and Alliance 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 the Expiration Date,
the Dealer Manager shall have received:
(1) The favorable opinion, dated the Representation
Date and the Expiration Date, of Xxxxxx & Xxxxxx LLP, counsel
for the Company and special counsel for Alliance, in form and
substance satisfactory to counsel for the Dealer Manager, to
the effect that:
(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
17
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 material
properties or conducts material business, except where
the failure to be so qualified, considering all such
cases in the aggregate, does not involve a material
adverse risk to the business, properties, financial
position or results of operations of the Company;
(ii) the Company's authorized capitalization is as
set forth in the Prospectus; the outstanding shares of
Common Stock have been duly authorized and validly
issued and are fully paid and non-assessable and conform
in all material respects to the description thereof in
the Prospectus under the heading "Description of Capital
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 and
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
and the Prospectus; and the issuance of each of the
Rights and the Shares is not subject to any preemptive
rights under the charter or bylaws of the Company or, to
such counsel's knowledge, otherwise. The outstanding
Common Stock has been duly listed on the New York Stock
Exchange and the Shares have been duly authorized for
listing subject to official notice of issuance, on the
New York Stock Exchange;
(iii) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company of a
character required to be disclosed in the Registration
Statement or the Prospectus which is not adequately
disclosed therein, and there is no franchise, contract
or other document of a character required to be
described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference
as an exhibit which is not described or filed or
incorporated by reference as required;
18
(iv) 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 the Prospectus;
(v) the Registration Statement has become
effective under the Securities Act; any required filing
of the Prospectus or any supplement thereto pursuant to
Rule 497(b), (d) or (h) required to be made to the date
hereof has been made in the manner and within the time
period required by Rule 497(b), (d) or (h), as the case
may be; to the best 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 other financial and statistical
information 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;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other
parties hereto, is a legal, valid, binding and
enforceable obligation of the Company, subject to the
qualification that the enforceability of the Company's
obligations hereunder 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) subject to the
qualification that the right to indemnity and
contribution thereunder may be limited by Federal or
state laws; the Subscription Agency Agreement, the
Investment Advisory Agreement, the Administration
Agreement, the Custodian Agreement, the Transfer Agency
Agreement, the Shareholder Inquiry Agency Agreement and
the Shareholder Servicing Agreement have been duly
authorized, executed and delivered by the Company,
comply in all material respects with all applicable
provisions of the Investment Company Act and, assuming
due authorization, execution and delivery by the other
parties thereto, are legal, valid, binding and
enforceable obligations of the Company, subject to the
qualification that the enforceability of the Company's
19
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);
(vii) no consent, approval, authorization or order
of any court or governmental agency or body is required
under Maryland corporate law, the laws of New York or
Federal law or, to the best of such counsel's knowledge,
the laws of any other jurisdiction in the United States,
for the consummation by the Company of the transactions
contemplated in the Company Agreements, except (A) such
as have been obtained under the Securities Act, the
Exchange Act, the Investment Company Act, or from the
New York Stock Exchange, (B) such as may be required
under the blue sky laws of any jurisdiction in
connection with the transactions contemplated hereby and
(C) such other approvals as have been obtained or the
failure to have obtained will not have a material
adverse effect on the Company or its ability to perform
its obligations under the Company Agreements;
(viii) neither the issuance of the Rights, nor the
issuance and sale of the Shares by the Company, nor the
consummation by the Company of any other of the
transactions contemplated in the Company Agreements or
the Prospectus nor the fulfillment by the Company of the
terms of the Company Agreements will conflict with,
result in a breach of, or constitute a default under, or
result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the
Company pursuant to the charter or bylaws of the Company
or, to the knowledge of such counsel, the terms of any
material agreement, indenture, mortgage, lease or other
instrument to which the Company is a party or bound or
to which any of the property or assets of the Company is
subject, or any order of which such counsel has
knowledge, law, rule or regulation applicable to the
Company of any United States court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
properties; and
(ix) the Company is registered with the Commission
under the Investment Company Act as a closed-end, non-
diversified management investment company, all required
action has been taken under the Securities Act and the
Investment Company Act to make the Offer and consummate
the issuance of the Rights and the issuance and sale of
20
the Shares by the Company upon exercise of the Rights,
and the provisions of the Company's charter and bylaws
comply as to form in all material respects with the
requirements of the Investment Company Act and the
Investment Company Act Rules and Regulations.
(x) the Investment Advisory Agreement complies
with all applicable provisions of the Advisers Act and
the Investment Company Act.
(xi) to the knowledge of such counsel, except as
set forth in the Prospectus, there is not pending or
threatened, any action, suit or proceeding to which
Alliance is a party before or by any court or
governmental agency or body or any arbitrator, which is
likely to have a material adverse effect upon the
Company or upon the ability of Alliance to perform its
obligations under the Investment Advisory Agreement;
(xii) the description of Alliance and its business
in the Registration Statement and the Prospectus
complies with the requirements of the Registration
Statement on Form N-2, the Securities Act, the
Investment Company Act, and the Rules and Regulations as
they relate to the Offer and, to the knowledge of such
counsel, does not contain any untrue statement of a
material fact or omit to state any material fact
required by the foregoing to be stated therein or
necessary in order to make the statements therein not
misleading in light of the circumstances under which
they were made.
In rendering such opinion, Xxxxxx & Xxxxxx LLP may rely (A) as to
matters involving the application of the laws of the State of
Maryland, on the opinion of Xxxxxxx, Xxxxxxx and Xxxxxx LLP,
Maryland counsel for the Company, (B) as to matters involving the
application of laws of any jurisdiction other than the States of
New York or Maryland or the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the Dealer Manager, (C)
as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials and (D) as to certain matters relating to Alliance, to
the extent they deem proper, on an opinion or certificate of
Xxxxx X. Xxxxxx, Xx., Senior Vice President and General Counsel
of Alliance Capital Management Corporation.
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
21
responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement or the
Prospectus, except to the limited extent stated in paragraphs
(ii) and (iv) above, 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 and others, no facts have come to their attention
which cause them to believe that the Registration Statement as of
the effective date thereof or the Prospectus, as of the effective
date thereof and as of the Representation Date and Expiration
Date, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements contained therein not
misleading, or, if there has been any supplement to the
Prospectus made by the Company, that any such supplement, at the
date of such supplement and on the Representation Date and
Expiration Date, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements contained therein, in the light of the circumstances
under which they were made, not misleading (except that such
counsel need express no opinion or belief as to financial
statements, schedules or other financial data included therein or
excluded therefrom).
(2) The favorable opinion, dated the Representation
Date and the Expiration Date, 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) Alliance has been duly organized and is
validly existing as a limited partnership under the laws
of the State of Delaware, with partnership power and
authority to own its properties and conduct its business
as described in the Prospectus, and is duly licensed or
qualified as a foreign entity and in good standing to do
business in each other jurisdiction in which its
ownership of property or the conduct of its business
requires such qualification or license, except where the
failure to be so qualified, considering all such cases
in the aggregate, would not have a material adverse
effect on Alliance;
(ii) Alliance is duly registered as an investment
adviser under the Advisers Act and is not prohibited by
the Advisers Act or the Investment Company Act, or the
rules and regulations under such Acts, from acting as an
investment manager for the Company as contemplated in
the Prospectus and the Investment Advisory Agreement;
22
(iii) this Agreement and the Investment Advisory
Agreement have each been duly authorized, executed and
delivered by Alliance and is, assuming due
authorization, execution and delivery by the other
parties thereto, a legal, valid, binding and enforceable
obligation of Alliance, subject to the qualification
that the enforceability of Alliance's obligations
thereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and other 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);
(iv) neither the performance by Alliance of its
obligations under this Agreement or the Investment
Advisory Agreement nor the consummation of the
transactions contemplated herein or therein nor the
fulfillment of the terms hereof or thereof will conflict
with, or result in a breach of, or constitute a default
under the Agreement of Limited Partnership of Alliance
or, to the knowledge of such counsel, the terms of any
material agreement or instrument to which Alliance is a
party or is bound or to which any of its property is
subject, which conflict, breach or default would have a
material adverse effect on the ability of Alliance to
carry out its obligations under such Agreements, or any
law, order of which such counsel has knowledge, rule or
regulation applicable to Alliance of any United States
court, regulatory body, administrative agency,
governmental body, stock exchange or securities
association having jurisdiction over Alliance or its
properties or operations;
(v) to the knowledge of such counsel, Alliance
owns, possesses or has obtained and currently maintains
all material Authorizations under New York, Delaware or
United States law as are necessary for Alliance to
perform its obligations under the Investment Advisory
Agreement as set forth in and contemplated by the
Prospectus except where the failure to obtain such
Authorizations would not have a material adverse effect
on Alliance; and
In rendering such opinion, Xx. Xxxxxx may rely (A) as to matters
involving the application of laws of any jurisdiction other than
the State of New York or the United States to the extent such
counsel deems proper and specified in such opinion, 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
23
such counsel deems proper, on certificates of responsible
officers of Alliance and public officials.
(3) The favorable opinion, dated the Representation
Date and the Expiration Date, of Xxxxxx X. Xxxxxx, Xx.,
Assistant General Counsel of Alliance Capital Management
Corporation, in form and substance satisfactory to counsel
for the Dealer Manager, to the effect that:
the Offering Materials comply as to form in all material
respects with the requirements of the Securities Act,
the Investment Company Act and the Rules and
Regulations.
(c) The Dealer Manager shall have received from Xxxxxx
& Xxxxx LLP, counsel for the Dealer Manager, such opinion or
opinions, dated the Representation Date and the Expiration Date,
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 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 and the Expiration Date, to the
effect that the signer of such certificate has carefully examined
the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that, to the best of his
knowledge:
(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, with the
same effect as if made on the Representation Date or the
Expiration Date and the Company has complied with all
the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the
Representation Date or the Expiration Date, as the case
may be; and
(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
24
the condition (financial or other), earnings, business,
prospects, net worth or results of operations of the
Company (excluding fluctuations in the Company's net
asset value due to investment activities in the ordinary
course of business), except as set forth in or
contemplated in the Prospectus.
(e) Alliance shall have furnished to the Dealer Manager
a certificate, signed by the Chairman or other senior officer of
its general partner, dated the Representation Date and the
Expiration Date, to the effect that the signer of such
certificate has read the Registration Statement, the Prospectus,
any supplement to the Prospectus and this Agreement and, to the
best knowledge of such signer, (i) the representations and
warranties of Alliance 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, with the same effect as if
made on the Representation Date or the Expiration Date, (ii)
Alliance has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Representation Date or the Expiration Date and (iii)
as of the Representation Date or the Expiration Date, as the case
may be, the Registration Statement did not include any untrue
statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and on such Representation Date
or the Expiration Date, the Prospectus and any Offering Materials
did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and,
since the date of the Prospectus, no event has occurred which
should have been set forth in a supplement to, or amendment of,
the Prospectus which has not been set forth in such a supplement
or amendment.
(f) PricewaterhouseCoopers LLP shall have furnished to
the Dealer Manager a letter, dated the Representation Date and
the Expiration Date, 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 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
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;
25
(iii) they have performed specified procedures, not
constituting an audit, including a reading of the latest
available interim financial statements 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 as may 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 statements
read by such accountants, or at a subsequent specified
date not more than five days prior to the Representation
Date or the Expiration Date, as the case may be, there
was any change in the capital stock, net assets or
absence of long-term debt of the Company as compared
with amounts shown on the audited financial statements
included or incorporated by reference in the Prospectus,
except as the Prospectus 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, financial
information and financial statements 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, or (ii) any change, or any development
involving a prospective change, in or affecting the business or
properties of the Company, the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of
the Dealer Manager, so material and adverse as to make it
impractical or inadvisable to proceed with the Offer as
contemplated by the Registration Statement and the Prospectus.
(h) Prior to the Representation Date and the Expiration
Date, 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
26
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably 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 at, or at any time prior to, the Representation 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) Each of the Company and Alliance, jointly and
severally, 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 and
Section 20 of the Exchange Act from and against any and all
losses, claims, liabilities, expenses and damages (including, but
not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred to which
the Dealer Manager, or any such person, may become subject under
the Securities Act, the Exchange Act, the Investment Company Act,
the Advisers Act or other federal or state statutory law or
regulation, at common law or otherwise insofar as such losses,
claims, liabilities, expenses or damages arise out of or are
based on (i) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, the
Prospectus or Offering Materials, or any amendment or supplement
to the Registration Statement, the Prospectus or Offering
Materials, or in any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Registration
Statement, the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on
written information furnished by or on behalf of the Company
filed with the Commission, (ii) the omission or alleged omission
to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or
(iii) any act or failure to act or any alleged act or failure to
act by the Dealer Manager in connection with, or relating in any
manner to, the Rights or the Shares or the offering contemplated
hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based
upon matters covered by clause (i) or (ii) above (provided that
neither the Company nor Alliance shall be liable under this
clause (iii) to the extent it is finally judicially determined by
a court of competent jurisdiction that such loss, claim,
liability, expense or damage resulted directly from any such acts
27
or failures to act undertaken or omitted to be taken by such
Dealer Manager through its bad faith, willful misconduct, gross
negligence, or violation of any applicable rules and regulations
or intentional failure to perform substantially the obligations
and duties of the Dealer Manager under this Agreement); provided
that neither the Company or Alliance will be liable to the extent
that such loss, claim, liability, expense or damage arises from
the sale of the Shares in the public offering to any person by
the Dealer Manager and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to the Dealer
Manager furnished in writing to the Company by the Dealer Manager
expressly for inclusion in the Registration Statement or the
Prospectus. This indemnity agreement will be in addition to any
liability that the Company or Alliance might otherwise have.
(b) The Dealer Manager will indemnify and hold harmless
the Company and Alliance, each person, if any, who controls the
Company or Alliance within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director
of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing
indemnity from the Company or Alliance to the Dealer Manager, but
only insofar as losses, claims, liabilities, expenses or damages
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 relating to the Dealer Manager
furnished in writing to the Company by the Dealer Manager
expressly for use in the Registration Statement or Prospectus,
such information being as set forth in Section 7(h) hereof. This
indemnity will be in addition to any liability that the Dealer
Manager might otherwise have; provided, however, that in no case
shall the Dealer Manager be liable or responsible for any amount
in excess of the fees and commissions received by the Dealer
Manager.
(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 so notify such
indemnifying party will not relieve it from any liability that it
may have to any indemnified party under the foregoing provision
of this Section 7 unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. 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
28
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 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 own counsel in any such action, but
the fees, disbursements and other charges 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 (based on the advice
of counsel) 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, (3) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and 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 (4) 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,
disbursements and other charges of counsel will be at the expense
of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees, disbursements and other charges
of more than one separate firm admitted to practice in such
jurisdiction (in addition to local counsel) at any one time for
all such indemnified party or parties. All such fees,
disbursements and other charges will be reimbursed by the
indemnifying party 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 (which
consent will not be unreasonably withheld). No indemnifying
party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 7
(whether or not any indemnified party is a party thereto), unless
such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 7(c), if at
any time an indemnified party shall have requested an
29
indemnifying party to reimburse the indemnified party for fees,
disbursements and other charges of counsel, such indemnifying
party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall have
received notice of terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in the foregoing paragraph of this Section 7 is
applicable in accordance with its terms but for any reason is
held to be unavailable from the Company, Alliance or the Dealer
Manager, the Company, Alliance and the Dealer Manager will
contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, 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, but after deducting any contribution received by the
Company and the Investment Manger from persons other than the
Dealer Manager, such as persons who control the Company or
Alliance within the meaning of the Securities Act or the Exchange
Act, officers of the Company who signed the Registration
Statement and directors of the Company, who may also be liable
for contribution) to which the Company, Alliance and the Dealer
Manager may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and
Alliance on the one hand and the Dealer Manager on the other.
The relative benefits received by the Company and Alliance
(treated jointly for this purpose as one person) on the one hand
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 bear to the
total fees received by the Dealer Manager, in each case as set
forth on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only such
relative benefits referred to in the foregoing sentence but also
the relative fault of the Company and Alliance (treated jointly
for this purpose as one person) on the one hand and the Dealer
Manager on the other hand with respect to the statements or
omissions which resulted in such loss, claim, liability, expense
or damage in respect thereof, as well as any other relevant
equitable considerations with respect to the Offering. Such
relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact
30
or the omission or alleged omission to state a material fact
relates to information supplied by the Company, Alliance or the
Dealer Manager, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, Alliance and
the Dealer Manager agree that it would not be just and equitable
if contributions pursuant to this Section 7(d) were to be
determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to in
this Section 7(d) shall be deemed to include, for purposes of
this Section 7(d) any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), the Dealer Manager shall not be
required to contribute any amount in excess of the fees received
by it and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section
7(d), any person who controls a party to this Agreement within
the meaning of the Securities Act will have the same rights to
contribution as that party, and each director of the Company and
each officer of the Company who signed the Registration Statement
will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim for
contribution may be made under this Section 7(d), will notify
such party or parties from whom contribution may be sought, but
the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it
or they may have under this Section 7(d). Except for a
settlement entered into pursuant to the last sentence of Section
7(c) hereof, no party will be liable for contribution with
respect to any action or claim settled without its written
consent (which consent shall not be unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the
Company and Alliance contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Dealer Manager, (ii)
acceptance of Shares and payment therefor or (iii) any
termination of this Agreement.
(f) Notwithstanding any other provisions in this
Section 7, no party shall be entitled to indemnification or
contribution under this Agreement against any loss, claim,
31
liability, expense or damage arising by reason of such person's
willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of such
person's intentional failure to perform such person's obligations
and duties hereunder.
(g) The Company and Alliance agree to indemnify each
Soliciting Dealer and controlling persons to the same extent and
subject to the same conditions and to the same agreements,
including with respect to contribution, provided for in
subsections 7(a), 7(b), 7(c), 7(d), 7(e) and 7(f).
(h) The Company and Alliance acknowledge that the
statements under the caption "THE OFFER--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 in all material
respects.
8. Representations, Warranties and Agreements to Survive
Delivery. The respective agreements, representations,
warranties, indemnities and other statements of the Company or
its officers, of Alliance and of the Dealer Manager set forth in
or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of
Dealer Manager, Alliance or the Company 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; provided, however, that following delivery and
payment for the Shares, the remedies against Alliance for breach
of its representations and warranties shall, in the absence of
fraudulent misrepresentation by Alliance not include fraudulent
misrepresentation attributed to Alliance solely by virtue of and
in the event of its being a controlling person of the Company, be
limited to those available pursuant to Section 7 hereof. The
provisions of Sections 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) financial, political, economic, currency or banking
conditions in the United States shall have undergone any material
change the effect of which on the financial markets makes it, in
the Dealer Manager's judgment, impracticable 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 on the financial markets of the United States is such as
32
to make it, in the Dealer Manager's judgment, impracticable 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 or (v) a
banking moratorium shall have been declared either by Federal, or
New York State authorities.
(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 the Dealer
Manager, will be mailed, delivered or telegraphed and confirmed
to PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; or if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or if sent to Alliance,
will be mailed, delivered or telegraphed and confirmed to it at
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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
without reference to choice of law principles thereof.
13. Consent to Jurisdiction; Waiver of Jury Trial. The
Company and Alliance hereby irrevocably submit to the
jurisdiction of any state or federal court sitting in the borough
of Manhattan, State of New York in respect of any such action,
proceeding or counterclaim and irrevocably agree that all claims
and defenses in respect of any such suit, action or proceeding
may be heard and determined in any such court. The Company and
Alliance, and the Dealer Manager each hereby irrevocably waive
any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement.
14. 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.
33
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, Alliance and
the Dealer Manager.
Very truly yours,
Alliance All-Market Advantage 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.
PaineWebber Incorporated
as Dealer Manager
By:_____________________________
Name:
Title:
34
00250205.AT6
