DISTRIBUTION SERVICES AGREEMENT
ALLIANCE CAPITAL RESERVES
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992, as
amended as of January 1, 1998
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 Services Agreement (the "Agreement"), a
distributor, as our agent, for the unsold portion of such number
of shares of beneficial interest of our Trust, par value $.01 per
share (the "Trust Shares") as may from time to time be
effectively registered under the Securities Act of 1933, as
amended (the "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 Trust Shares as shall then be
effectively registered under the Act, and you are appointed our
agent for such purpose. All subscriptions for Trust 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 Trust 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 Trust 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 Trust
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 Trust Shares upon the terms and conditions
contained herein and in the then current Prospectus and Statement
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 Prospectus and Statement 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 Trust Shares, such other information with respect to
us and the Trust Shares as you may reasonably request. We shall
supply you with such copies of our current Prospectus and
Statement 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, Prospectus and Statement
of Additional Information, as then in effect, filed under the Act
covering Trust 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 Trust
Shares at any time, in the absolute discretion of our Board of
Trustees, and upon notice of such suspension you shall cease to
offer Trust Shares hereunder.
4. Both of us will cooperate with each other in taking
such action as may be necessary to qualify Trust Shares for sale
under the securities laws of such states as we may designate.
Pursuant to our Advisory Agreement dated July 22, 1992 with
Alliance Capital Management L.P. (the "Adviser"), we will pay all
fees and expenses of registering Trust Shares under the Act and
of qualification of Trust Shares and our qualification under
applicable state securities laws. You shall pay all expenses
relating to your broker-dealer qualification.
5. It is understood that paragraphs 5, 10 and 13 hereof
constitutes a plan of distribution (the "Plan") within the
meaning of Rule 12b-1 adopted by the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "1940
Act") and is a part of this Agreement. The material aspects of
the Plan are as follows:
(a) The Trust will pay to you each month a distribution
services fee with respect to each Portfolio of the Trust
("Portfolio") which will not exceed, on an annualized basis, .25
of 1% of the Trust's average daily net assets. You will use the
entire amount so received from the Trust (i) to you to compensate
broker-dealers or other persons for providing distribution
assistance, (ii) to make payments to compensate banks and other
institutions for providing administrative and accounting services
with respect to Trust shareholders and (iii) to otherwise promote
the sale of shares of the Trust, including paying for the
preparation, printing and distribution of prospectuses and sales
literature or other promotional activities.
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(b) The Adviser will as long as the Plan is in effect
make similar payments to you for distribution services performed
by you and for distribution assistance provided by broker-dealers
or other persons as described above and to banks or other
institutions for administrative and accounting services. These
payments will be made by the Adviser from its own resources,
which may include the management fee it receives from the Trust.
The Adviser may in its sole discretion increase or decrease the
amount of distribution assistance payments.
(c) Payments for distribution assistance or
administrative and accounting services are subject to the terms
and conditions of the written agreements between each broker-
dealer or other person and you. Such agreements will be in a form
satisfactory to the Trustees of the Trust.
(d) The Treasurer of the Trust will prepare and furnish
to the Trustees of the Trust at least quarterly a written report
complying with the requirements of Rule 12b-1 setting forth all
amounts expended under the Plan and the purposes for which such
expenditures were made.
(e) The Trust is not obligated to pay any distribution
expense in excess of the distribution services fee described in
subparagraph (a) hereof and any expenses of distribution of the
Trust's shares accrued by you in one fiscal year of the Trust may
not be paid from distribution services fees received from the
Trust in subsequent fiscal years of the Trust. Distribution
services fees received from the Trust also will not be used to
pay any interest expense, carrying charges or other financing
costs, or allocation of overhead.
(f) All agreements with any persons relating to the
implementation of the Plan will be subject to termination,
without penalty, upon not more than sixty days' written notice,
pursuant to the provisions of paragraph 10 hereof.
(g) You are not obligated by the Plan to execute
agreements with qualifying banks, broker-dealers or other persons
and any termination of an agreement with a particular financial
intermediary under the Plan will have no effect on similar
agreements between you and other participating banks, broker-
dealers or other persons pursuant to the Plan.
6. We represent to you that our Registration Statement,
Prospectus and Statement of Additional Information (as in effect
from time to time) under the Act have been or will be, as the
case may be, carefully prepared in conformity with the
requirements of the Act and the rules and regulations of the
Securities and Exchange Commission thereunder. We represent and
warrant to you that our Registration Statement, Prospectus and
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Statement of Additional Information contain or will contain all
statements required to be stated therein in accordance with the
Act and the rules and regulations of said Commission, and that
all statements of fact 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 Prospectus or our Statement 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 Trust Shares. We will from time to time file such
amendment or amendments to our Registration Statement, Prospectus
and Statement 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, Prospectus
and Statement 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 Trust
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, Prospectus or Statement of Additional Information
without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement contained shall
in any way limit our right to file at any such time such
amendments to our Registration Statement, Prospectus or Statement
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, Prospectus or Statement of
Additional Information hereafter filed by us will, when it
becomes effective, contain all statements required to be stated
therein in accordance with the 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
Trust Shares.
7. We agree to indemnify, defend and hold you, and any
person who controls you within the meaning of Section 15 of the
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
Act, or under common law or otherwise, arising out of or based
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upon any alleged untrue statement of a material fact contained in
our Registration Statement, Prospectus or Statement of Additional
Information in effect from time to time under the Act or arising
out of or based upon any alleged omission to state a material
fact required to be stated in either thereof or necessary to make
the statements in either thereof not misleading; provided,
however, that in no event shall anything herein contained be so
construed as to protect 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 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 7. 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 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 7 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 Trust 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 Trust Shares.
8. You agree to indemnify, defend and hold us, our
several officers and trustees, and any person who controls us
within the meaning of Section 15 of the Act, free and harmless
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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
trustees, or any such controlling person may incur under the Act
or under common law or otherwise, but only to the extent that
such liability, or expense incurred by us, our officers or
trustees or such controlling person resulting from such claims or
demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished
in writing by you to us for use in our Registration Statement or
Prospectus in effect from time to time under the Act, or shall
arise out of or be based upon any alleged omission to state a
material fact in connection with such information required to be
stated in the Registration Statement or Prospectus or necessary
to make such information not misleading. Your agreement to
indemnify us, our officers and trustees, and any such controlling
person as aforesaid is expressly conditioned upon you being
notified of any action brought against us, our officers or
trustees 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
trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any
such action. The failure 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 trustees, 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 8.
9. We agree to advise you immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to our Registration Statement or
Prospectus 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 or Prospectus 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 or
Prospectus or which requires the making of a change in either
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thereof in order to make the statements therein not misleading,
and
(d) of all action of the Securities and Exchange
Commission with respect to any amendments to our Registration
Statement or Prospectus which may from time to time be filed with
the Securities and Exchange Commission under the Act.
10. (a) This agreement shall become effective in respect
of each Portfolio of the Trust on the date hereof, shall remain
in effect until June 30, 1998, and shall continue in effect
thereafter for successive twelve-month periods (computed from
each July 1); provided, however, that such continuance is
specifically approved at least annually by the Trustees of the
Trust or by majority vote of the holders of the outstanding
voting securities (as defined in the 0000 Xxx) of the relevant
Portfolio of the Trust, and, in either case, by a majority of the
Trustees of the Trust who are not parties to this Agreement or
interested persons (as defined in the 0000 Xxx) of any such party
(other than as Trustees of the Trust) and who have no direct or
indirect financial interest in the operation of the Plan or any
agreement related thereto. Upon the effectiveness of this
Agreement, it shall supersede all previous agreements between the
parties hereto covering the subject matter hereof. This Agreement
may be terminated in respect of a Portfolio of the Trust (i) by
the Trust at any time, without the payment of any penalty, by the
vote of a majority of the outstanding voting securities (as so
defined) of such Portfolio, or by a vote of a majority of the
Trustees of the Trust who are not interested persons (as defined
in the 0000 Xxx) of the Trust and have no direct or indirect
financial interest in the operation of the Plan or any agreement
related thereto, in either event on sixty days written notice to
you; provided, however, that no such notice shall be required if
such termination is stated by the Trust to relate only to
paragraphs 5 and 13 hereof (in which event paragraphs 5 and 13
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 on sixty days written notice to the
Trust.
(b) This Agreement may be amended at any time with the
approval of the Trustees of the Trust; provided, however, that
(i) any material amendments of the terms hereof will become
effective with respect to a Portfolio only upon approval as
provided in the first proviso of paragraph 10(a) hereof, and (ii)
any amendment to increase materially the amount to be expended by
a Portfolio for distribution assistance, administrative and
accounting services and other activities designed to promote the
sale of shares of such Portfolio hereunder will be effective with
respect to a Portfolio only upon the additional approval by a
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vote of a majority of the outstanding voting securities of such
Portfolio as defined in the 1940 Act.
11. This Agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged by you and this
Agreement shall terminate automatically in the event of any such
transfer, assignment, sale, hypothecation or pledge. The terms
"transfer", "assignment", and "sale" as used in this paragraph
shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations
promulgated by the Securities and Exchange Commission thereunder.
12. Except to the extent necessary to perform your
obligation 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 trustee, 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.
13. While the Plan is in effect, the selection and
nomination of the trustees who are not "interested persons" of
the Trust (as defined in the 0000 Xxx) will be committed to the
discretion of such disinterested trustees.
14. Notice is hereby given that this Agreement is
entered into on our behalf by an officer of our Trust 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 Trustees, officers, shareholders, employees or
agents individually but are binding only upon the assets and
property of our Trust.
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 Capital Reserves
By \s\ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
President
Accepted: July 22, 1992, as amended
as of January 1, 1998
Alliance Fund Distributors, Inc.
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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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00250122.AK7
