DISTRIBUTION AGREEMENT
ALLIANCE INSTITUTIONAL RESERVES, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 22, 1992 (as amended as
of [ ], 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 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 [ ], 1998) 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
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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 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").
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(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 .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 will constitute a service fee that will 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
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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 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
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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 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
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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 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:
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(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.
11. (a) This Agreement shall become effective on the
date hereof, shall remain in effect until December 31, 1998
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
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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 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.
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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.
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
Accepted as of [ ], 1998
ALLIANCE FUND DISTRIBUTORS, INC.
By
ALLIANCE CAPITAL MANAGEMENT L.P.
By Alliance Capital Management Corporation,
general partner
By
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00250072.AN6
