SUB-ITEM 77Q1(g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 8th day of May, 2002, by and between Xxxxxx Investment Portfolio
Trust (the "Trust"), a Delaware business trust, on behalf of each of the Xxxxxx
Mid Cap Growth Fund (the "Acquiring Fund"), and the Xxxxxx New Generation Fund
(the "Selling Fund" and, collectively with the Acquiring Fund, the "Funds").
This Agreement is intended to be, and is adopted as, a Plan of
Reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations promulgated thereunder. The reorganization will consist of: (i) the
transfer of all of the assets of the Selling Fund in exchange for shares of
beneficial interest, par value $.01 per share, of the Acquiring Fund ("Acquiring
Fund Shares"); (ii) the assumption by the Acquiring Fund of all liabilities of
the Selling Fund; and (iii) the distribution of the Acquiring Fund Shares to the
shareholders of the Selling Fund and the liquidation of the Selling Fund as
provided herein, all upon the terms and conditions set forth in this Agreement
(the "Reorganization").
WHEREAS, the Trust is an open-end, management investment company
registered under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Board of Trustees of the Trust has determined that the
Reorganization is in the best interests of the Acquiring Fund and that the
interests of the existing shareholders of the Acquiring Fund will not be diluted
as a result of the Reorganization; and
WHEREAS, the Board of Trustees of the Trust has determined that the
Reorganization is in the best interests of the Selling Fund and that the
interests of the existing shareholders of the Selling Fund will not be diluted
as a result of the Reorganization.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUND IN EXCHANGE FOR ACQUIRING
FUND SHARES AND LIQUIDATION OF THE SELLING FUND
1.1 THE EXCHANGE. The Selling Fund agrees to transfer all of its
assets, as set forth in Section 1.2, to the Acquiring Fund. In exchange, the
Acquiring Fund agrees: (i) to deliver to the Selling Fund the number of full and
fractional Acquiring Fund Shares computed in the manner set forth in Section
2.3; and (ii) to assume all of the liabilities of the Selling Fund, as set forth
in Section 1.3. Such transactions shall take place at the Closing Date provided
for in Section 3.1.
1.2 ASSETS TO BE TRANSFERRED. The Selling Fund shall transfer all of
its assets to the Acquiring Fund, including, without limitation, all cash,
securities, commodities, interests in futures and dividends or interest
receivables, owned by the Selling Fund and any
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deferred or prepaid expenses shown as an asset on the books of the Selling Fund
on the Closing Date.
1.3 LIABILITIES TO BE ASSUMED. The Selling Fund will endeavor to
discharge all of its known liabilities and obligations to the extent possible
before the Closing Date. Notwithstanding the foregoing, any liabilities not so
discharged shall be assumed by the Acquiring Fund, which assumed liabilities
shall include all of the Selling Fund's liabilities, debts, obligations, and
duties of whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business, whether or
not determinable at the Closing Date, and whether or not specifically referred
to in this Agreement.
1.4 LIQUIDATION AND DISTRIBUTION. Immediately after the transfer of
assets provided for in Section 1.1, the Selling Fund will liquidate and
distribute pro rata to its shareholders of record at the Effective Time on the
Closing Date (the "Selling Fund Shareholders") all of the Acquiring Fund Shares
received by the Selling Fund pursuant to Section 1.1. Such distribution will be
accomplished by the transfer of Acquiring Fund Shares credited to the account of
the Selling Fund on the books of the Acquiring Fund to open accounts on the
share records of the Acquiring Fund in the name of the Selling Fund
Shareholders, and representing the respective pro rata number of Acquiring Fund
Shares due such shareholders. All issued and outstanding shares of the Selling
Fund will simultaneously be canceled on the books of the Selling Fund. The
Acquiring Fund shall not issue certificates representing Acquiring Fund Shares
in connection with such transfer.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund's transfer agent. Shares of the
Acquiring Fund will be issued simultaneously to the Selling Fund, in an amount
equal in value to the aggregate net asset value of the Selling Fund's shares, to
be distributed to Selling Fund Shareholders.
1.6 SELLING FUND'S PORTFOLIO SECURITIES. The Selling Fund will, within
a reasonable period of time before the Closing Date, furnish the Acquiring Fund
with a list of the Selling Fund's portfolio securities and other investments.
The Acquiring Fund will, within a reasonable time before the Closing Date,
furnish the Selling Fund with a list of the securities, if any, on the Selling
Fund's list referred to above that do not conform to the Acquiring Fund's
investment objectives, policies, and restrictions. The Selling Fund, if
requested by the Acquiring Fund, will dispose of securities on the Acquiring
Fund's list before the Closing Date. In addition, if it is determined that the
portfolios of the Funds, when aggregated, would contain investments exceeding
certain percentage limitations imposed upon the Acquiring Fund with respect to
such investments, the Selling Fund, if requested by the Acquiring Fund, will
dispose of a sufficient amount of such investments as may be necessary to avoid
violating such limitations as of the Closing Date. Notwithstanding the
foregoing, nothing herein will require the Selling Fund to dispose of any
investments or securities if, in the reasonable judgment of the Selling Fund's
trustees or investment adviser, such disposition would adversely affect the
tax-free nature of the Reorganization or would violate their fiduciary duties to
the Selling Fund Shareholders.
1.7 TRANSFER TAXES. The registered shareholder shall be responsible for
paying all transfer taxes, including any transfer taxes payable upon the
issuance of Acquiring Fund
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Shares in a name other than the registered holder of the Selling Fund shares on
the books of the Selling Fund as of that time shall, as a condition of such
issuance and transfer.
1.8 TERMINATION. The Selling Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
Section 1.4.
1.9 BOOKS AND RECORDS. All books and records of the Selling Fund,
including all books and records required to be maintained under the 1940 Act,
and the rules and regulations thereunder, shall be available to the Acquiring
Fund from and after the Closing Date and shall be turned over to the Acquiring
Fund as soon as practicable following the Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Selling Fund's net assets
shall be the value of such assets at the Effective Time (as defined in Section
3.1), using the valuation procedures set forth in the Trust's Trust Instrument
and the Selling Fund's then current prospectus and statement of additional
information, or such other valuation procedures as shall be mutually agreed upon
by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of Acquiring
Fund Shares shall be the net asset value per share computed at the Effective
Time, using the valuation procedures set forth in the Trust's Trust Instrument
and the Acquiring Fund's then current prospectus and statement of additional
information, or such other valuation procedures as shall be mutually agreed upon
by the parties.
2.3 SHARES TO BE ISSUED. The number of Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Selling Fund's
net assets shall be determined by dividing the Selling Fund's net assets
determined in accordance with Section 2.1, by the Acquiring Fund's net asset
value per share determined in accordance with Section 2.2.
2.4 EFFECT OF SUSPENSION IN TRADING. In the event that on the Closing
Date, either: (a) the New York Stock Exchange (the "NYSE") or another primary
exchange on which the portfolio securities of the Acquiring Fund or the Selling
Fund are purchased or sold, shall be closed to trading or trading on such
exchange shall be restricted; or (b) trading or the reporting of trading on the
NYSE or elsewhere shall be disrupted so that accurate appraisal of the value of
the net assets of the Acquiring Fund or the Selling Fund is impracticable, the
Closing Date shall be postponed until the first business day after the day when
trading is fully resumed and reporting is restored.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The Closing Date shall be May 10, 2002, or such other
date as the parties may agree. All acts taking place at the Closing shall be
deemed to take place at the Effective Time otherwise provided. The Effective
Time shall be immediately after the close of
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trading of the regular trading session on the NYSE on the Closing Date, and the
Closing shall be held at the offices of Xxxxxx Financial Group LLC, 000
Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or at such other time
and/or place as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. The Selling Fund shall instruct State
Street Bank and Trust Company, in its capacity as custodian for the Selling
Fund, to deliver at the Closing a certificate of an authorized officer stating
that: (a) the Selling Fund's portfolio securities, cash, and any other assets
shall have been delivered in proper form to the Acquiring Fund on the Closing
Date; and (b) all necessary taxes including all applicable federal and state
stock transfer stamps, if any, shall have been paid, or provision for payment
shall have been made, in conjunction with the delivery of portfolio securities
by the Selling Fund.
3.3 TRANSFER AGENT'S CERTIFICATE. The Selling Fund shall instruct DST
Systems, Inc., in its capacity as transfer agent for the Selling Fund, to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of Selling Fund Shareholders, and the
number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall instruct
DST Systems, Inc., in its capacity as transfer agent of the Acquiring Fund, to
issue and deliver to the Selling Fund a confirmation evidencing Acquiring Fund
Shares to be credited to each Selling Fund Shareholder on the Closing Date to
the Selling Fund or provide evidence satisfactory to the Selling Fund that such
Acquiring Fund Shares have been credited to the Selling Fund's account on the
books of the Acquiring Fund. At the Closing, each Fund shall deliver to the
other such bills of sale, checks, assignments, share certificates, receipts and
other documents, if any, as the other Fund or its counsel may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE SELLING FUND. The Trust, on behalf of the
Selling Fund, represents and warrants as follows:
(a) The Trust is a voluntary association, duly organized,
validly existing, and in good standing under the laws of the State of Delaware
with the power to own all of its properties and assets and to carry on its
business as presently conducted.
(b) The Selling Fund is a separate series of the Trust duly
authorized in accordance with the application provisions of the Trust's Trust
Instrument.
(c) The Trust is registered as an open-end management
investment company under the 1940 Act, and such registration is in full force
and effect.
(d) The Selling Fund is not, and the execution, delivery, and
performance of this Agreement (subject to shareholder approval) will not, result
in the violation of any provision of the Trust's Trust Instrument or By-Laws or
of any material agreement, indenture, instrument, contract, lease, or other
undertaking to which the Selling Fund is a party or by which it is bound.
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(e) Except as otherwise designated in writing and accepted by
the Acquiring Fund, the Selling Fund has no material contracts or other
commitments (other than this Agreement) that will be terminated with liability
to it before the Closing Date.
(f) No litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or
assets, which, if adversely determined, would materially and adversely affect
its financial condition, the conduct of its business, or the ability of the
Selling Fund to carry out the transactions contemplated by this Agreement. The
Selling Fund knows of no facts that might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transactions
contemplated herein.
(g) The financial statements of the Selling Fund as of
September 30, 2001 and for the fiscal year then ended have been prepared in
accordance with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly reflect the
financial condition of the Selling Fund as of September 30, 2001 and there are
no known contingent liabilities of the Selling Fund as of such date that are not
disclosed in such statements.
(h) Since the date of the financial statements referred to in
subsection (g) above, there have been no material adverse changes in the Selling
Fund's financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business). For the purposes of this
subsection (h), a decline in the net asset value of the Selling Fund shall not
constitute a material adverse change.
(i) All federal and other tax returns and reports of the
Selling Fund required by law to be filed, have been filed, and all federal and
other taxes shown due on such returns and reports have been paid, or provision
shall have been made for the payment thereof. To the best of the Selling Fund's
knowledge, no such return is currently under audit, and no assessment has been
asserted with respect to such returns.
(j) All issued and outstanding shares of the Selling Fund are
duly and validly issued and outstanding, fully paid and non-assessable by the
Selling Fund. All of the issued and outstanding shares of the Selling Fund will,
at the time of the Closing Date, be held by the persons and in the amounts set
forth in the records of the Selling Fund's transfer agent as provided in Section
3.3. The Selling Fund has no outstanding options, warrants, or other rights to
subscribe for or purchase any of the Selling Fund shares, and has no outstanding
securities convertible into any of the Selling Fund shares.
(k) At the Closing Date, the Selling Fund will have good and
marketable title to the Selling Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2, and full right, power, and authority to sell,
assign, transfer, and deliver such assets hereunder, free of any lien or other
encumbrance, upon delivery and payment for such assets, the Acquiring Fund will
acquire good and marketable title thereto.
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(l) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of the Selling
Fund. Subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights and to general equity principles.
(m) The information to be furnished by the Selling Fund for
use in registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated herein shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations.
(n) From the effective date of the Registration Statement (as
defined in Section 5.7), through the time of the meeting of the Selling Fund
Shareholders and on the Closing Date, any written information furnished by the
Trust with respect to the Selling Fund for use in the Proxy Materials (as
defined in Section 5.7), or any other materials provided in connection with the
Reorganization, does not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated or necessary to make
the statements, in light of the circumstances under which such statements were
made, not misleading.
(o) For each taxable year of its operations, the Selling Fund
has elected to qualify and has qualified as a "regulated investment company"
under the Code (a "RIC").
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Trust, on behalf of the
Acquiring Fund, represents and warrants as follows:
(a) The Trust is a voluntary association, duly organized,
validly existing, and in good standing under the laws of the State of Delaware
with the power to own all of its properties and assets and to carry on its
business as presently conducted.
(b) The Acquiring Fund is a separate series of the Trust duly
authorized in accordance with the applicable provisions of the Trust's Trust
Instrument.
(c) The Trust is registered as an open-end management
investment company under the 1940 Act, and such registration is in full force
and effect.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not, result in a violation of the Acquiring
Fund's Articles of Incorporation or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which the
Acquiring Fund is a party or by which it is bound.
(e) No litigation, administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets, which, if adversely determined, would materially and adversely affect
its financial condition, the conduct of its business or the ability of the
Acquiring Fund to carry out the transactions contemplated by this Agreement. The
Acquiring Fund knows of no facts that might form the basis for the institution
of such
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proceedings and it is not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transaction
contemplated herein.
(f) The financial statements of the Acquiring Fund as of
September 30, 2001 and for the fiscal year then ended have been prepared in
accordance with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Selling Fund) fairly reflect the
financial condition of the Acquiring Fund as of September 30, 2001 and there are
no known contingent liabilities of the Acquiring Fund as of such date that are
not disclosed in such statements.
(g) Since the date of the financial statements referred to in
subsection (f) above, there have been no material adverse changes in the
Acquiring Fund's financial condition, assets, liabilities or business (other
than changes occurring in the ordinary course of business). For the purposes of
this subsection (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change.
(h) All federal and other tax returns and reports of the
Acquiring Fund required by law to be filed, have been filed. All federal and
other taxes shown due on such returns and reports have been paid or provision
shall have been made for their payment. To the best of the Acquiring Fund's
knowledge, no such return is currently under audit, and no assessment has been
asserted with respect to such returns.
(i) All issued and outstanding Acquiring Fund Shares are duly
and validly issued and outstanding, fully paid and non-assessable by the
Acquiring Fund. The Acquiring Fund has no outstanding options, warrants, or
other rights to subscribe for or purchase any Acquiring Fund Shares, and there
are no outstanding securities convertible into any Acquiring Fund Shares.
(j) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights and to general equity
principles.
(k) Acquiring Fund Shares to be issued and delivered to the
Selling Fund for the account of the Selling Fund Shareholders pursuant to the
terms of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable.
(l) The information to be furnished by the Acquiring Fund for
use in registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated herein shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations.
(m) From the effective date of the Registration Statement (as
defined in Section 5.7), through the time of the meeting of the Selling Fund
Shareholders and on the
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Closing Date, any written information furnished by the Acquiring Fund for use in
the Proxy Materials (as defined in Section 5.7), or any other materials provided
in connection with the Reorganization, will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated or
necessary to make the statements, in light of the circumstances under which such
statements were made, not misleading.
(n) For each taxable year of its operations, the Acquiring
Fund has elected to qualify, has qualified and shall continue to qualify as a
RIC under the Code.
(o) The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state securities laws as it may deem appropriate in order to continue
its operations after the Closing Date.
ARTICLE V
COVENANTS OF the FUNDs
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and the Selling
Fund will operate its respective business in the ordinary course between the
date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends and distributions,
any other distribution necessary or desirable to avoid federal income or excise
taxes, and shareholder purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of
Selling Fund Shareholders to consider and act upon this Agreement (or
transactions contemplated thereby) and to take all other appropriate action
necessary to obtain approval of the transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Selling Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Selling Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Selling Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, each
Fund will take or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including any actions
required to be taken after the applicable Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within 60 days after the Closing Date, the Selling Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Selling Fund for
federal income tax purposes that will be carried over by the Acquiring Fund as a
result of Section 381 of the Code, and which will be certified by the Trust's
Treasurer.
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5.7 PREPARATION OF REGISTRATION STATEMENT AND PROXY MATERIALS. The
Acquiring Fund will prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement on Form N-14 relating to the
Acquiring Fund Shares to be issued to shareholders of the Selling Fund (the
"Registration Statement"). The Registration Statement shall include a proxy
statement and a prospectus of the Acquiring Fund relating to the transaction
contemplated by this Agreement. The Registration Statement shall be in
compliance with the 1933 Act, the 1934 Act and the 1940 Act, as applicable. Each
party will provide the other party with the materials and information necessary
to prepare the proxy statement (the "Proxy Materials"), for inclusion therein,
in connection with the meeting of the Selling Fund Shareholders to consider the
approval of this Agreement and the transactions contemplated herein.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND
The obligations of the Selling Fund to consummate the transactions
provided for herein shall be subject to the following conditions:
6.1 All representations, covenants, and warranties of the Acquiring
Fund contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date, with the same force
and effect as if made on and as of that Closing Date. The Acquiring Fund shall
have delivered to the Selling Fund a certificate executed in the Acquiring
Fund's name by the Acquiring Fund's President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Selling Fund and dated as of the Closing Date, to such effect and as to such
other matters as the Selling Fund shall reasonably request.
6.2 The Acquiring Fund shall have delivered to the Selling Fund, a
certificate executed in the Acquiring Fund's name by the Acquiring Fund's
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Selling Fund and dated as of the Closing Date,
covering the following points:
(a) The Acquiring Fund is a legally designated, separate
series of the Trust, and the Trust is a voluntary association, duly organized
and validly existing under the laws of the State of Delaware, which has the
power to own all of its properties and assets and to carry on its business as
presently conducted.
(b) The Trust is registered as an open-end management
investment company under the 1940 Act, and such registration under the 1940 Act
is in full force and effect.
(c) This Agreement has been duly authorized, executed, and
delivered by the Trust, on behalf of the Acquiring Fund, and, assuming due
authorization, execution and delivery of this Agreement by the Trust, on behalf
of the Acquiring Fund, is a valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance with its terms, subject as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally
and to general equity principles.
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(d) Assuming that the Acquiring Fund Shares have been issued
in accordance with the terms of this Agreement, Acquiring Fund Shares to be
issued and delivered to each Selling Fund on behalf of the Selling Fund
Shareholders, as provided by this Agreement, are duly authorized and upon such
delivery will be legally issued and outstanding and fully paid and
non-assessable, and no shareholder of the Acquiring Fund has any preemptive
rights with respect to Acquiring Fund Shares.
(e) The Registration Statement has been declared effective by
the Commission and no stop order under the 1933 Act pertaining thereto has been
issued, and no consent, approval, authorization or order of any court or
governmental authority of the United States or the State of Maryland is required
for consummation by the Acquiring Fund of the transactions contemplated herein,
except as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act.
(f) The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated herein will not, result in a
violation of the Trust's Trust Instrument or By-Laws or any provision of any
material agreement, indenture, instrument, contract, lease or other undertaking
to which the Acquiring Fund is a party or by which it or any of its properties
may be bound.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF the aCQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject to the following conditions:
7.1 All representations, covenants, and warranties of the Selling Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of such Closing Date. The Selling Fund shall have delivered
to the Acquiring Fund a certificate executed in the Selling Fund's name by the
Trust's President or Vice President and the Treasurer or Assistant Treasurer, in
form and substance satisfactory to the Acquiring Fund and dated as of such
Closing Date, to such effect and as to such other matters as the Acquiring Fund
shall reasonably request.
7.2 The Selling Fund shall have delivered to the Acquiring Fund a
statement of the Selling Fund's assets and liabilities, together with a list of
the Selling Fund's portfolio securities showing the tax costs of such securities
by lot and the holding periods of such securities, as of the Closing Date,
certified by the Treasurer of the Trust.
7.3 The Selling Fund shall have delivered to the Acquiring Fund a
certificate executed in the Selling Fund's name by the Trust's President or Vice
President and the Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Acquiring Fund and dated as of such Closing Date, covering
the following points:
(a) The Selling Fund is a legally designated, separate series
of the Trust, and the Trust is a voluntary association, duly organized and
validly existing under the laws of
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the State of Delaware, which has the power to own all of its properties and
assets and to carry on its business as presently conducted.
(b) The Trust is registered as an open-end investment company
under the 1940 Act, and such registration under the 1940 Act is in full force
and effect.
(c) This Agreement has been duly authorized, executed and
delivered by the Trust on behalf of the Selling Fund and, assuming due
authorization, execution and delivery of this Agreement by the Trust on behalf
of the Acquiring Fund, is a valid and binding obligation of the Selling Fund
enforceable against the Selling Fund in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general equity principles.
(d) Assuming that consideration of not less than the net asset
value of Selling Fund Shares has been paid, and assuming that such shares were
issued in accordance with the terms of the Selling Fund's registration
statement, or any amendment thereto, in effect at the time of such issuance, all
issued and outstanding shares of the Selling Fund are legally issued and fully
paid and non-assessable, and no Selling Fund Shareholder has any preemptive
rights with respect to the Selling Fund's shares.
(e) No consent, approval, authorization or order of any court
or governmental authority of the United States or the State of Delaware is
required for consummation by the Selling Fund of the transactions contemplated
herein, except as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act.
(f) The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not, result in a
violation of the Trust's Trust Instrument (assuming shareholder approval has
been obtained) or By-laws, or any provision of any material agreement,
indenture, instrument, contract, lease or other undertaking to which the Selling
Fund is a party or by which it or any of its properties may be bound.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT
The obligations of the Selling Fund and the Acquiring Fund hereunder
shall also be subject to the following:
8.1 This Agreement and the transactions contemplated herein, with
respect to the Selling Fund, shall have been approved by the requisite vote of
the holders of the outstanding shares of the Selling Fund in accordance with
applicable law and the provisions of the Trust's Trust Instrument and By-Laws.
Notwithstanding anything herein to the contrary, neither Fund may waive the
conditions set forth in this Section 8.1.
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable advisory report under Section 25(b) of the 1940 Act, or instituted
any proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act. Furthermore,
no action, suit or other proceeding shall be
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threatened or pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in connection
with this Agreement or the transactions contemplated herein.
8.3 All required consents of other parties and all other consents,
orders, and permits of federal, state and local regulatory authorities
(including those of the Commission and of state securities authorities), to
permit consummation of the transactions contemplated herein shall have been
obtained.
8.4 The Registration Statement shall have become effective under the
1933 Act, and no stop order suspending the effectiveness thereof shall have been
issued. To the best knowledge of the parties to this Agreement, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 0000 Xxx.
8.5 The Selling Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to its shareholders all of the Selling Fund's net
investment company taxable income for all taxable periods ending on or before
the Closing Date (computed without regard to any deduction for dividends paid),
if any, plus the excess of its interest income, if any, excludible from gross
income under Section 103(a) of the Code over its deduction disallowed under
Sections 265 and 171(a)(2) of the Code for all taxable years ending on or before
such Closing Date and all of its net capital gains realized in all taxable
periods ending on or before such Closing Date (after reduction for any capital
loss carry forward).
8.6 The parties shall have received an opinion of
PricewaterhouseCoopers LLP substantially to the effect that for federal income
tax purposes:
(a) The transfer of all of the Selling Fund's assets in
exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of
all liabilities of the Selling Fund (followed by the distribution of Acquiring
Fund Shares to the Selling Fund Shareholders in dissolution and complete
liquidation of the Selling Fund) will constitute a "reorganization" within the
meaning of Section 368(a) of the Code and the Acquiring Fund and the Selling
Fund will each be a "party to a reorganization" within the meaning of Section
368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund
upon the receipt of the assets of the Selling Fund solely in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the identified
liabilities of the Selling Fund.
(c) No gain or loss will be recognized by the Selling Fund
upon the transfer of the Selling Fund's assets to the Acquiring Fund in exchange
for Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Selling Fund or upon the distribution of Acquiring Fund
Shares to Selling Fund Shareholders in exchange for such shareholders' shares of
the Selling Fund.
(d) No gain or loss will be recognized by the Selling Fund
Shareholders upon the exchange of their Selling Fund shares for Acquiring Fund
Shares in the Reorganization.
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(e) The aggregate tax basis for Acquiring Fund Shares received
by each Selling Fund Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Selling Fund shares exchanged therefor by such
shareholder. The holding period of Acquiring Fund Shares to be received by each
Selling Fund Shareholder will include the period during which the Selling Fund
shares exchanged therefor were held by such shareholder, provided the Selling
Fund shares are held as capital assets at the time of the Reorganization.
(f) The tax basis of the Selling Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the Selling
Fund immediately before the Reorganization. The holding period of the assets of
the Selling Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Selling Fund (except where investment
activities of the Acquiring Fund reduce or eliminate a holding period).
Such opinion shall be based on customary assumptions and such
representations as PricewaterhouseCoopers LLP may reasonably request, and each
Fund will cooperate to make and certify the accuracy of such representations.
Notwithstanding anything herein to the contrary, neither Fund may waive the
conditions set forth in this Section 8.6.
ARTICLE IX
FEES AND EXPENSES
9.1 Xxxxxx Financial Group LLC, the investment adviser and
administrator to the Funds, will pay all expenses associated with the
Reorganization. Such expenses shall include, without limitation, in connection
with the Reorganization: (a) expenses associated with the preparation and filing
of the Proxy Materials; (b) postage; (c) printing; (d) accounting fees; (e)
legal fees incurred by each Fund; (f) solicitation costs of the transaction; and
(g) other related administrative or operational costs. Neither Fund will pay any
of these expenses.
9.2 Each party represents and warrants to the other that there is no
person or entity entitled to receive any broker's fees or similar fees or
commission payments in connection with the transactions provided for herein.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The parties agree that neither party has made to the other party
any representation, warranty and/or covenant not set forth herein, and that this
Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties, and covenants contained in this
Agreement or in any document delivered pursuant to or in connection with this
Agreement shall not survive the consummation of the transactions contemplated
hereunder.
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ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Funds and such termination may be effected by the Funds' President or a Vice
President without further action by the Trust's Board of Trustees. In addition,
either Fund may at its option terminate this Agreement at or before the Closing
Date due to:
(a) a breach by the other of any representation, warranty, or
agreement contained herein to be performed at or before the Closing Date, if not
cured within 30 days;
(b) a condition precedent to the obligations of the
terminating party that has not been met and it reasonably appears that it will
not or cannot be met; or
(c) a determination by the Trust's Board that the consummation
of the transactions contemplated herein is not in the best interests of either
Fund, as appropriate, and notice given to the other party hereto.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either Fund, the
Trust, or their respective trustees or officers.
ARTICLE XII
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the officers of the
Acquiring Fund and the Selling Fund as specifically authorized by their
respective Boards; provided, however, that following the meeting of the Selling
Fund Shareholders called by the Trust's Board of Trustees pursuant to Section
5.2 of this Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Acquiring Fund Shares to be issued to
the Selling Fund Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
13.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
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13.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm, or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
13.5 It is expressly agreed that the obligations of the Funds hereunder
shall not be binding upon any of the trustees, shareholders, nominees, officers,
agents, or employees of the Trust personally, but shall bind only the respective
trust property of the Funds, as provided in the Trust Instrument of the Trust.
The execution and delivery of this Agreement have been authorized by the Board
of Trustees of the Trust on behalf of each Fund and signed by authorized
officers of the Trust, acting as such. Neither the authorization by such
trustees nor the execution and delivery by such officers shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the respective trust property of the Funds as
provided in the Trust's Trust Instrument.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
XXXXXX INVESTMENT PORTFOLIO TRUST
ON BEHALF OF XXXXXX MID CAP GROWTH FUND
By:
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
ACKNOWLEDGED:
By:
----------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: Vice President
-------------------------
XXXXXX INVESTMENT PORTFOLIO TRUST
ON BEHALF OF XXXXXX NEW GENERATION FUND
By:
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
ACKNOWLEDGED:
By:
----------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------
Title: Vice President
-------------------------
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