SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
NOTICE OF REDEMPTION PURSUANT TO
RULE 23c-2 UNDER THE
INVESTMENT COMPANY ACT OF 1940
Lernoult Investment Fund, Inc. (the "Company"), a closed-end
investment company registered under the Investment Company Act of 1940
(file no. 811-08711), hereby notifies the Securities and Exchange
Commission of its intention to redeem immediately all the outstanding
shares of each of its Auction Market Preferred Stock, Series A, Series B
and Series C (the "AMPS"), upon the occurrence on any date more than 30
days hereafter of any event specified in Section 4.2 of the Articles
Supplementary of the Company, dated March 1, 1998, relating to the Series A
AMPS, the Series B AMPS and the Series C AMPS. A copy of Section 4.2, which
obligates the Company to make mandatory redemptions of the AMPS in the
events set forth therein, is attached.
LERNOULT INVESTMENT FUND, INC.
By: /s/ James A. McIntosh
--------------------------------
Name: James A. McIntosh
Title: President
4.2. Mandatory Redemption. To the extent permitted under the
1940 Act and Maryland Law and not withstanding that a No-Call Period may be
in effect pursuant to a Specific Redemption Provision, the Shares of each
Series of AMPS are subject to mandatory redemp tion in whole or in part in
the event of a Mandatory Redemption Event.
The occurrence of any of the following will be a "Mandatory
Redemption Event":
(a) (i) if both Moody's and S&P are rating the AMPS at the
request of the Corporation, either (A) the aggregate Adjusted Value of all
Moody's Eligible Assets held by the Corporation as of the close of business
on any Business Day is less than the Moody's Required Asset Coverage as of
such Business Day and such deficiency continues to exist as of 1:00 p.m.
(New York time) on the applicable Cure Date or (B) the aggregate Adjusted
Value of all S&P Eligible Assets held by the Corporation as of the close of
business on any Business Day is less than the S&P Required Asset Coverage
as of such Business Day and such deficiency continues to exist as of 1:00
p.m. (New York time) on the applicable Cure Date or (ii) if Moody's and not
S&P is rating the AMPS at the request of the Corporation, clause (A) above
shall be operative and the state of affairs described therein shall exist
and clause (B) above shall not be operative or (iii) if S&P and not Moody's
is rating the AMPS at the request of the Corporation, clause (B) above
shall be operative and the state of affairs described therein shall exist
and clause (A) above shall not be operative;
(b) (i) the aggregate Fair Market Value of the Securities and
other assets of the Corporation is less than 130% of the sum of the
aggregate AMPS Redemption Amount for all Shares of AMPS then Outstanding
and the aggregate AMPS Redemption Amount (as defined in the applicable
articles supplementary relating to any other Preferred Stock issued by the
Corporation and rated by the Rating Agencies) applicable to any other
Preferred Stock of the Corporation then outstanding, and such aggregate
Fair Market Value remains less than 130% of such aggregate AMPS Redemption
Amount through the close of business on the applicable Cure Date;
(c) the Corporation ceases to qualify as a "regulated
investment company" within the meaning of the Code; or
(d) Merrill Lynch, Pierce, Fenner & Smith Incorporated ceases
to be the Broker-Dealer.
