DISTRIBUTION AGREEMENT
ALLIANCE INSTITUTIONAL RESERVES, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992 (as amended as
of June 29, 1998,
October 19, 2000 and
February 1, 2001)
Alliance Fund Distributors, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This is to confirm that, on the terms and conditions set
forth herein, we have agreed that you shall be, for the period of
this Distribution Agreement ("the Agreement"), a distributor, as
our agent, for the unsold portion of such number of shares of
common stock of our Fund (the "Shares") as may from time to time
be effectively registered under the Securities Act of 1933, as
amended (the "1933 Act").
1. We hereby agree to offer through you as our agent,
and to solicit, through you as our agent, offers to subscribe to,
the unsold balance of the Shares as shall then be effectively
registered under the 1933 Act, and you are appointed our agent
for such purpose. All subscriptions for Shares obtained by you
shall be directed to us for acceptance and shall not be binding
on us until accepted by us. You shall have no authority to make
binding subscriptions on our behalf. We reserve the right to
sell Shares through other distributors or directly to investors
through subscriptions received by us at our principal office in
New York, New York. The right given to you under this agreement
shall not apply to Shares issued in connection with (a) the
merger or consolidation of any other investment company with us,
(b) our acquisition by purchase or otherwise of all or
substantially all of the assets or stock of any other investment
company or (c) the reinvestment in Shares by our shareholders of
dividends or other distributions or any other offering of shares
to our shareholders.
2. You will use your best efforts to obtain
subscriptions to Shares upon the terms and conditions contained
herein and in the then current Prospectuses and Statements of
Additional Information, including the offering price. You will
send to us promptly all subscriptions placed with you. We shall
advise you of the approximate net asset value per share or net
asset value per share (as used in the Prospectuses and Statements
of Additional Information) on any date requested by you and at
such other times as it shall have been determined by us. We
shall furnish you from time to time, for use in connection with
the offering of Shares, such other information with respect to us
and the Shares as you may reasonably request. We shall supply
you with such copies of our current Prospectuses and Statements
of Additional Information in effect from time to time as you may
request. You are not authorized to give any information or to
make any representations, other than those contained in the
Registration Statement, Prospectuses and Statements of Additional
Information, as then in effect, filed under the 1933 Act covering
Shares or which we may authorize in writing. You may use
employees and agents at your cost and expense to assist you in
carrying out your obligations hereunder but no such employee or
agent shall be deemed to be our agent or have any rights under
this Agreement.
3. We reserve the right to suspend the offering of
Shares at any time, in the absolute discretion of our Board of
Directors, and upon notice of such suspension you shall cease to
offer Shares hereunder.
4. Both of us will cooperate with each other in taking
such action as may be necessary to qualify Shares for sale under
the securities laws of such states as we may designate. Pursuant
to our Advisory Agreement dated July 22, 1992 (as amended as of
June 29, 1998, October 19, 2000 and February 1, 2001) with
Alliance Capital Management L.P. (the "Adviser"), we will pay all
fees and expenses of registering Shares under the 1933 Act and of
qualification of Shares and our qualification under applicable
state securities laws. You shall pay all expenses relating to
your broker-dealer qualification.
5. We represent to you that our Registration
Statement, Prospectuses and Statements of Additional Information
(as in effect from time to time) under the 1933 Act have been or
will be, as the case may be, carefully prepared in conformity
with the requirements of the 1933 Act and the rules and
regulations of the Securities and Exchange Commission
thereunder. We represent and warrant to you that our
Registration Statement, Prospectuses and Statements of Additional
Information contain or will contain all statements required to be
stated therein in accordance with the 1933 Act and the rules and
regulations of said Commission, and that all statements of fact
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contained or to be contained therein are or will be true and
correct at the time indicated or the effective date as the case
may be; that none of our Registration Statement, our Prospectuses
or our Statements of Additional Information, when it shall become
effective or be authorized for use, will include an 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 to a purchaser of Shares. We will from
time to time file such amendment or amendments to our
Registration Statement, Prospectuses and Statements of Additional
Information as, in the light of future developments, shall, in
the opinion of our counsel, be necessary in order to have our
Registration Statement, Prospectuses and Statements of Additional
Information at all times contain all material facts required to
be stated therein or necessary to make any statements therein not
misleading to a purchaser of Shares, but, if we shall not file
such amendment or amendments within fifteen days after receipt by
us of a written request from you to do so, you may, at your
option, terminate this Agreement immediately. We shall not file
any amendment to our Registration Statement, Prospectuses or
Statements of Additional Information without giving you
reasonable notice thereof in advance; provided, however, that
nothing contained in this agreement shall in any way limit our
right to file at any time such amendments to our Registration
Statement, Prospectuses or Statements of Additional Information,
of whatever character, as we may deem advisable, such right being
in all respects absolute and unconditional. We represent and
warrant to you that any amendment to our Registration Statement,
Prospectuses or Statements of Additional Information hereafter
filed by us will, when it becomes effective, contain all
statements required to be stated therein in accordance with the
1933 Act and the rules and regulations of said Commission, that
all statements of fact contained therein will, when the same
shall become effective, be true and correct and that no such
amendment, when it becomes effective, will include an untrue
statement of a material fact or will omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares.
6. (a) It is understood that paragraphs 6, 11 and 15
together constitute a plan of distribution (the "Plan") within
the meaning of Rule 12b-1 ("Rule 12b-1") under the Investment
Company Act of 1940, as amended (the "1940 Act").
(b) Except as may be required by the Conduct Rules
of the National Association of Securities Dealers, Inc. (the
"NASD") and any interpretation thereof ("NASD rules and
interpretations"), we will pay you each month a distribution
services fee with respect to each Portfolio equal, on an
annualized basis, to .10% of the aggregate average daily net
assets of the Portfolio attributable to the Class B shares and
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.25% of the aggregate average daily net assets of the Portfolio
attributable to the Class C shares. You may spend such amounts
as you deem appropriate on any activities or expenses primarily
intended to result in the sale of shares of the Portfolio,
including, but not limited to, compensation of your employees,
compensation and expenses, including overhead and telephone and
other communication expenses, of you and other broker-dealers,
depository institutions and other financial intermediaries that
engage in or support the distribution of shares of the Portfolio,
the preparation, printing and distribution of Prospectuses,
Statements of Additional Information, sales literature and
advertising materials, and other promotional activities. You
may, if you wish, retain all or any portion of the distribution
services fees received pursuant hereto for your own purposes.
All or a portion of the distribution services fee may constitute
a service fee to be used by you for personal service and/or the
maintenance of shareholder accounts within the meaning of NASD
rules and interpretations.
(c) The Adviser may make payments from time to
time from its own resources for the purposes described in
paragraph 6(b).
(d) Payments to broker-dealers, depository
institutions and other financial intermediaries for the purposes
set forth in paragraph 6(b) are subject to the terms and
conditions of the written agreements between you and each broker-
dealer, depository institution or other financial intermediary.
Such agreements will be in a form satisfactory to our directors.
(e) Our Treasurer will prepare and furnish to our
directors, and our directors will review, at least quarterly, a
written report complying with the requirements of Rule 12b-1
setting forth all amounts expended hereunder and the purposes for
which such expenditures were made.
(f) We are not obligated to pay any distribution
expense in excess of the distribution services fee described in
paragraph 6(b). The amount of distribution services fees payable
by us with respect to each of the Class B shares and the Class C
shares is not related directly to the amount of expenses incurred
by you with respect to each such class in connection with
providing distribution services, which expenses may be greater or
less than such fees and we will not be obligated to reimburse you
for such expenses. The distribution services fee payable by us
with respect to each such class of shares may be paid in respect
of services rendered and expenses borne in the past in connection
with each such class of shares as to which, on account of the
limitations described in paragraph 6(b), no distribution services
fee was paid. The distribution services fees payable by us with
respect to each such class of shares are to be paid to you until
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either the Plan or this Agreement is terminated or is not
continued with respect to that class as provided in paragraph 11.
In the event this Agreement is terminated by either party or is
not continued with respect to a class of shares as provided in
paragraph 11 below: (i) no distribution services fees (other than
current amounts accrued but not yet paid) will be owed by us to
you with respect to that class, and (ii) we will not be obligated
to pay you for any amounts expended hereunder not previously
reimbursed by us from distribution services fees in respect of
shares of such class. The distribution services fee of a
particular class of shares may not be used to subsidize the sale
of shares of any other class.
7. (a) You shall have the right to enter into selected
dealer agreements with securities dealers of your choice
("selected dealers") and selected agent agreements with
depository institutions and other financial intermediaries of
your choice ("selected agents") for the sale of shares; provided,
that we shall approve the forms of agreements with selected
dealers and selected agents and the selected dealer and selected
agent compensation set forth therein. Shares sold to selected
dealers or through selected agents shall be for resale by such
selected dealers and for sale through such selected agents only
at the public offering price set forth in the Prospectuses and/or
Statements of Additional Information.
(b) Within the United States, you shall offer and
sell shares only to such selected dealers as are members in good
standing of the NASD.
8. We agree to indemnify, defend and hold you, and any
person who controls you within the meaning of Section 15 of the
1933 Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities
and any reasonable counsel fees incurred in connection therewith)
which you or any such controlling person may incur, under the
1933 Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact
contained in our Registration Statement, Prospectuses or
Statements of Additional Information in effect from time to time
under the 1933 Act or arising out of or based upon any alleged
omission to state a material fact required to be stated in any
one thereof or necessary to make the statements in any one
thereof not misleading; provided, however, that in no event shall
anything herein contained be so construed as to protect you
against any liability to us or our security holders to which you
would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence, in the performance of your duties, or
by reason of your reckless disregard of your obligations and
duties under this agreement. Our agreement to indemnify you and
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any such controlling person as aforesaid is expressly conditioned
upon our being notified of any action brought against you or any
such controlling person, such notification to be given by letter
or by telegram addressed to us at our principal office in New
York, New York, and sent to us by the person against whom such
action is brought within ten days after the summons or other
first legal process shall have been served. The failure to so
notify us of any such action shall not relieve us from any
liability which we may have to the person against whom such
action is brought by reason of any such alleged untrue statement
or omission otherwise than on account of our indemnity agreement
contained in this paragraph 8. We will be entitled to assume the
defense of any suit brought to enforce any such claim, and to
retain counsel of good standing chosen by us and approved by
you. In the event we do elect to assume the defense of any such
suit and retain counsel of good standing approved by you, the
defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but
in case we do not elect to assume the defense of any such suit,
or in case you do not approve of counsel chosen by us, we will
reimburse you or the controlling person or persons named as
defendant or defendants in such suit, for the fees and expenses
of any counsel retained by you or them. Our indemnification
agreement contained in this paragraph 8 and our representations
and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or
on behalf of you or any controlling person and shall survive the
sale of any of the Shares made pursuant to subscriptions obtained
by you. This agreement of indemnity will inure exclusively to
your benefit, to the benefit of your successors and assigns, and
to the benefit of any controlling persons and their successors
and assigns. We agree promptly to notify you of the commencement
of any litigation or processing against us in connection with the
issue and sale of any Shares.
9. You agree to indemnify, defend and hold us, our
several officers and directors, and any person who controls us
within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any reasonable
counsel fees incurred in connection therewith) which we, our
officers or directors, or any such controlling person may incur
under the 1933 Act or under common law or otherwise, but only to
the extent that such liability, or expense incurred by us, our
officers or directors or such controlling person resulting from
such claims or demands shall arise out of or be based upon any
alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our
Registration Statement, Prospectuses or Statements of Additional
Information in effect from time to time under the 1933 Act, or
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shall arise out of or be based upon any alleged omission to state
a material fact in connection with such information required to
be stated in the Registration Statement, Prospectuses or
Statements of Additional Information or necessary to make such
information not misleading. Your agreement to indemnify us, our
officers and directors, and any such controlling person as
aforesaid is expressly conditioned upon your being notified of
any action brought against us, our officers or directors or any
such controlling person, such notification to be given by letter
or telegram addressed to you at your principal office in New
York, New York, and sent to you by the person against whom such
action is brought, within ten days after the summons or other
first legal process shall have been served. You shall have a
right to control the defense of such action, with counsel of your
own choosing, satisfactory to us, if such action is based solely
upon such alleged misstatement or omission on your part, and in
any other event you and we, our officers or directors or such
controlling person shall each have the right to participate in
the defense or preparation of the defense of any such action.
The failure to so notify you of any such action shall not relieve
you from any liability which you may have to us, to our officers
or directors, or to such controlling person by reason of any such
untrue statement or omission on your part otherwise than on
account of your indemnity agreement contained in this
paragraph 9.
10. We agree to advise you immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to our Registration Statement,
Prospectuses or Statements of Additional Information or for
additional information,
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending the
effectiveness of our Registration Statement, Prospectuses or
Statements of Additional Information or the initiation of any
proceedings for that purpose,
(c) of the happening of any material event which
makes untrue any statement made in our Registration Statement,
Prospectuses or Statements of Additional Information or which
requires the making of a change in any one thereof in order to
make the statements therein not materially misleading, and
(d) of all action of the Securities and Exchange
Commission with respect to any amendments to our Registration
Statement, Prospectuses or Statements of Additional Information
which may from time to time be filed with the Securities and
Exchange Commission under the 1933 Act or the 1940 Act.
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11. (a) This Agreement shall become effective on the
date hereof, shall remain in effect until December 31, 2001 and
shall continue in effect thereafter with respect to a class of
shares of a Portfolio so long as its continuance with respect to
that class is specifically approved annually by our directors or
by vote of the holders of a majority of the outstanding voting
securities (as defined in the 0000 Xxx) of that class, and, in
either case, by a majority of our directors who are not parties
to this Agreement or interested persons (as defined in the 0000
Xxx) of any such party (other than as our directors) and who have
no direct or indirect financial interest in the operation of the
Plan or any agreement related thereto; provided, however, that if
the continuation of this Agreement is not approved as to a class
or a Portfolio, you may continue to render to such class or
Portfolio the services described herein in the manner and to the
extent permitted by the 1940 Act and the rules and regulations
thereunder. Upon effectiveness of this Agreement, it shall
supersede all previous agreements between the parties hereto
covering the subject matter hereof. This Agreement may be
terminated (i) by us with respect to any class or Portfolio at
any time, without the payment of any penalty, by the vote of a
majority of the outstanding voting securities (as defined in the
0000 Xxx) of such class or Portfolio, or by a vote of a majority
of our directors who are not interested persons (as defined in
the 0000 Xxx) of any such party (other than as our directors) and
have no direct and indirect financial interest in the operation
of the Plan or any agreement related thereto, in any such event
on sixty days' written notice to you; provided, however, that no
such notice shall be required if such termination is stated by us
to relate only to paragraphs 6 and 15 (in which event paragraphs
6 and 15 shall be deemed to have been severed herefrom and all
other provisions of this Agreement shall continue in full force
and effect), or (ii) by you with respect to any class or
Portfolio on sixty days' written notice to us.
(b) This Agreement may be amended at any time with
the approval of our directors, provided that (i) any material
amendments of the terms hereof will become effective only upon
approval as provided in the first sentence of paragraph 11(a),
and (ii) any amendment to increase materially the amount to be
expended for distribution services fees pursuant to paragraph
6(b) will be effective only upon the additional approval by a
vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the class or Portfolio affected.
12. This Agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged by either party
hereto, and this Agreement shall terminate automatically in the
event of any such transfer, assignment, sale, hypothecation or
pledge. The terms "transfer", "assignment", and "sale" as used
in this paragraph shall have the meanings ascribed thereto by
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governing law and any interpretation thereof contained in rules
or regulations promulgated by the Securities and Exchange
Commission thereunder.
13. Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your officers,
directors or employees who may also be a director, officer or
employee of ours, to engage in any other business or to devote
time and attention to the management or other aspects of any
other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm,
individual or association.
14. Notice is hereby given that this Agreement is
entered into on our behalf by an officer of our Fund in his
capacity as an officer and not individually and that the
obligations of or arising out of this Agreement are not binding
upon any of our directors, officers, shareholders, employees or
agents individually but are binding only upon the assets and
property of our Fund.
15. While this Agreement is in effect, the selection
and nomination of our directors who are not "interested persons"
(as defined in the 0000 Xxx) of our Fund will be committed to the
discretion of such disinterested directors.
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If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
ALLIANCE INSTITUTIONAL RESERVES, INC.
By : /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
President
Accepted as amended as of February 1, 2001
ALLIANCE FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
ALLIANCE CAPITAL MANAGEMENT L.P.
By Alliance Capital Management Corporation,
General Partner
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President & Chief Operating Officer
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00250072.BB4
