AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as
of January 23, 2009 is by and between Pax World Funds Series Trust I, a
Massachusetts business trust (the "Trust"), on behalf of its Pax World Value
Fund series (the "Value Fund"), and the Trust, on behalf of its Pax World
Balanced Fund series (the "Balanced Fund").
The reorganization will consist of the transfer of all of the assets of
the Value Fund attributable to each class of its shares to the Balanced Fund in
exchange for shares of the corresponding class of the Balanced Fund (the
"Acquisition Shares"), cash and the assumption by the Balanced Fund of certain
of the liabilities of the Value Fund, and the distribution by the Value Fund of
the Acquisition Shares to the shareholders of the Value Fund, all in
liquidation of the Value Fund, all upon the terms and conditions set forth in
this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE VALUE FUND IN EXCHANGE
FOR ASSUMPTION OF LIABILITIES, CASH AND ACQUISITION
SHARES AND LIQUIDATION OF THE VALUE FUND.
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein,
1.1.1. The Value Fund will sell, assign, convey, transfer and
deliver to the Balanced Fund, and the Balanced Fund
will acquire all of the assets of the Value Fund as set
forth in paragraph 1.2;
1.1.2. The Balanced Fund will assume all of the Value
Fund's liabilities and obligations of any kind
whatsoever, whether absolute, accrued, contingent or
otherwise, in existence on the Closing Date (as
defined in paragraph 1.2 hereof) (collectively, the
"Obligations"), excluding those liabilities and
obligations set forth on Schedule 1.1.2 hereto
(collectively, the "Excluded Obligations");
1.1.3. The Balanced Fund will pay to the Value Fund an
amount of cash (the "Cash Amount") equal to
$6,000; and
1.1.4. The Balanced Fund will issue and deliver to the
Value Fund in exchange for the net assets attributable
to each class of its shares a number of Acquisition
Shares of the corresponding class (including
fractional shares, if any) determined by dividing the
value of such net assets, computed in the manner and
as of the time and date set forth in paragraph 2.1, by
the net asset value of one Acquisition Share of the
corresponding class computed in the manner and as
of the time and date set forth in paragraph 2.2. Such
transactions shall take place at the closing provided
for in paragraph 3.1 (the "Closing").
1.2. The assets of the Value Fund to be sold, assigned, transferred
and delivered to and acquired by the Balanced Fund shall
consist of all assets and property of every kind and nature of
the Value Fund, including, without limitation, cash, securities,
dividends and interest receivable, receivables for shares sold
and other rights that are owned by the Value Fund on the
closing date provided in paragraph 3.1 (the "Closing Date")
and any deferred or prepaid expenses, other than unamortized
organizational expenses, shown as an asset on the books of the
Value Fund on the Closing Date.
1.3. At least 15 business days prior to the Valuation Date (as
defined in paragraph 2.1), the Value Fund will provide the
Balanced Fund with a schedule of securities and other assets
of the Value Fund.
1.3.1. At least 10 business days prior to the Valuation Date,
the Balanced Fund will advise the Value Fund in
writing of any investments of the Value Fund shown
on such schedule that the Balanced Fund does not
believe would be desirable for the Balanced Fund.
Under such circumstances, the Value Fund will, to
the extent permissible, practicable and consistent
with the Value Fund's investment objective and
policies, dispose of such investments prior to the
Valuation Date. Notwithstanding the foregoing,
nothing herein will require the Value Fund to dispose
of portfolio securities or other assets if, in the
reasonable judgment of the Trust's board of trustees
or the Value Fund's investment adviser, such
disposition would not be in the best interests of the
Value Fund.
1.3.2. At least 5 business days prior to the Valuation Date,
the Balanced Fund will advise the Value Fund in
writing of securities that the Balanced Fund believes
would be desirable to acquire. The Value Fund will,
to the extent permissible, practicable and consistent
with the Value Fund's investment objective and
policies, purchase such securities, with an aggregate
value equal to at least 30% of the net asset value of
the Value Fund (calculated on the Valuation Date),
on or prior to the Valuation Date in transactions that
will settle after the Closing Date. Notwithstanding
the foregoing, nothing herein will require the Value
Fund to acquire investments if, in the reasonable
judgment of the Trust's board of trustees or the Value
Fund's investment adviser, such acquisition or
disposition would not be in the best interests of the
Value Fund.
1.4. As provided in paragraph 3.4, as soon after the Closing Date
as is conveniently practicable (the "Liquidation Date"), the
Value Fund will liquidate and distribute pro rata to its
shareholders of record of each class of its shares, determined
as of the close of business on the Valuation Date (as defined in
paragraph 2.1), the Acquisition Shares of the corresponding
class received by the Value Fund pursuant to paragraph 1.1.
Such liquidation and distribution will be accomplished by (a)
the satisfaction by the Value Fund of the Excluded Obligations
and (b) the transfer of the Acquisition Shares then credited to
the account of the Value Fund on the books of the Balanced
Fund to open accounts on the share records of the Balanced
Fund in the names of the Value Fund's shareholders and
representing the respective pro rata number of Acquisition
Shares due such shareholders. The Balanced Fund shall not be
obligated to issue certificates representing Acquisition Shares
in connection with such exchange.
1.5. With respect to Acquisition Shares distributable pursuant to
paragraph 1.4 to a Value Fund shareholder holding a
certificate or certificates for shares of the Value Fund, if any,
on the Valuation Date, the Balanced Fund will not permit such
shareholder to receive Acquisition Share certificates therefor,
exchange such Acquisition Shares for shares of other
investment companies, effect an account transfer of such
Acquisition Shares or pledge or redeem such Acquisition
Shares until such Value Fund shareholder has surrendered all
his or her outstanding certificates for Value Fund shares or, in
the event of lost certificates, posted adequate bond.
1.6. As soon as practicable after the Closing Date, the Value Fund
shall make all filings and take all other steps as shall be
necessary and proper to effect its complete dissolution under
Massachusetts law. After the Closing Date, the Value Fund
shall not conduct any business except in connection with its
dissolution.
2. VALUATION.
2.1. For the purpose of article 1, the value of the Value Fund's net
assets to be acquired by the Balanced Fund in exchange for
Acquisition Shares hereunder shall be the value of such net
assets computed as of the close of regular trading on the New
York Stock Exchange on the business day next preceding the
Closing (such time and date being herein called the "Valuation
Date") using the valuation procedures set forth in the
organizational documents of the Balanced Fund and the then
current prospectus or prospectuses or statement or statements
of additional information of the Balanced Fund (collectively,
as amended or supplemented from time to time, the "Balanced
Fund Prospectus"), plus the positive amount of the Excluded
Obligations, less the Cash Amount, and shall be certified by
the Value Fund.
2.2. For the purpose of paragraph 2.1, the net asset value of an
Acquisition Share of each class of the Balanced Fund shall be
the net asset value per share computed as of the close of
regular trading on the New York Stock Exchange on the
Valuation Date, using the valuation procedures set forth in the
organizational documents of the Balanced Fund and the
Balanced Fund Prospectus.
3. CLOSING AND CLOSING DATE.
3.1. The Closing Date shall be February 23, 2009, or such other
date as the parties may agree. The Closing shall be held at the
offices of Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (or such other place as the
parties may agree), at such time as the parties may agree.
3.2. The portfolio securities of the Value Fund shall be made
available by the Value Fund to the custodian for the Balanced
Fund (the "Custodian") for examination no later than the fifth
business day preceding the Valuation Date. On the Closing
Date, such portfolio securities and all the Value Fund's cash
shall be delivered by the Value Fund to the Custodian for the
account of the Balanced Fund, such portfolio securities to be
duly endorsed in proper form for transfer in such manner and
condition as to constitute good delivery thereof in accordance
with the custom of brokers or, in the case of portfolio
securities held in the U.S. Treasury Department's book-entry
system or by the Depository Trust Company, Participants
Trust Company or other third party depositories, by transfer to
the account of the Custodian in accordance with Rule 17f-4,
Rule 17f-5 or Rule 17f-7, as the case may be, under the
Investment Company Act of 1940 (the "1940 Act") and
accompanied by all necessary federal and state stock transfer
stamps or a check for the appropriate purchase price thereof.
The cash delivered shall be in the form of currency or certified
or official bank checks, payable to the order of "State Street
Bank and Trust Company, custodian for Pax World Balanced
Fund."
3.3. The cash delivered by the Balanced Fund pursuant to
paragraph 1.1.3 shall be in the form of currency, wire or
certified or official bank checks, payable to the order of "State
Street Bank and Trust Company, custodian for Pax World
Value Fund."
3.4. In the event that on the Valuation Date (a) the New York
Stock Exchange or other primary trading market for portfolio
securities of the Value Fund (each, an "Exchange") shall be
closed to trading or trading thereon shall be restricted, or (b)
trading or the reporting of trading on such Exchange or
elsewhere shall be disrupted so that accurate appraisal of the
value of the net assets of the Value Fund or the Balanced Fund
is impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been
fully resumed and reporting shall have been restored; provided
that if trading shall not be fully resumed and reporting restored
within three business days after the Valuation Date, this
Agreement may be terminated by either the Value Fund or the
Balanced Fund upon the giving of written notice to the other
party.
3.5. At the Closing, the Value Fund or its transfer agent shall
deliver to the Balanced Fund or its designated agent a list of
the names and addresses of the Value Fund's shareholders and
the number of outstanding shares of each class of the Value
Fund owned by each Value Fund shareholder, all as of the
close of business on the Valuation Date, certified by any Vice
President, Secretary or Assistant Secretary of the Value Fund.
The Balanced Fund will provide to the Value Fund evidence
satisfactory to the Value Fund that the Acquisition Shares
issuable pursuant to paragraph 1.1 have been credited to the
Value Fund's account on the books of the Balanced Fund. On
the Liquidation Date, the Balanced Fund will provide to the
Value Fund evidence satisfactory to the Value Fund that such
Acquisition Shares have been credited pro rata to open
accounts in the names of the Value Fund's shareholders as
provided in paragraph 1.4.
3.6. At the Closing, each party shall deliver to the other such bills
of sale, instruments of assumption of liabilities, checks,
assignments, stock certificates, receipts or other documents as
such other party or its counsel may reasonably request in
connection with the transfer of assets, assumption of liabilities
and dissolution contemplated by article 1.
4. REPRESENTATIONS AND WARRANTIES.
4.1. The Trust, on behalf of the Value Fund, represents and
warrants the following as of the date hereof and agrees to
confirm the continuing accuracy and completeness in all
material respects of the following on the Closing Date:
4.1.1. The Trust is a Massachusetts business trust that is
duly organized, validly existing and in good standing
under the laws of the Commonwealth of
Massachusetts;
4.1.2. The Trust is a duly registered investment company
classified as a management company of the open-end
type and its registration with the Securities and
Exchange Commission as an investment company
under the 1940 Act is in full force and effect, and the
Value Fund is a separate series thereof duly
designated in accordance with the applicable
provisions of the Declaration of Trust of the Trust
and the 1940 Act;
4.1.3. The Trust is not in violation in any material respect
of any provision of its organizational documents or of
any agreement, indenture, instrument, contract, lease
or other undertaking to which the Trust, on behalf of
the Value Fund, is a party or by which the Trust, on
behalf of the Value Fund, is bound, and the
execution, delivery and performance of this
Agreement will not result in any such violation;
4.1.4. The Value Fund has no material contracts or other
commitments (other than this Agreement and such
other contracts as may be entered into in the ordinary
course of its business) that if terminated may result in
material liability to the Value Fund or under which
(whether or not terminated) any material payments
for periods subsequent to the Closing Date will be
due from the Value Fund other than (i) payments in
respect of Excluded Obligations and (ii) payments
relating to the acquisition of securities pursuant to
paragraph 1.3 hereof;
4.1.5. To the knowledge of the Trust, except as has been
disclosed in writing to the Balanced Fund, no
litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to the
Value Fund, any of its properties or assets, or any
person whom the Value Fund may be obligated to
indemnify in connection with such litigation,
proceeding or investigation, 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
hereby;
4.1.6. The statement of assets and liabilities, the statement
of operations, the statement of changes in net assets,
and the schedule of investments of the Value Fund,
as of the last day of and for its most recently
completed fiscal year, audited by Ernst & Young,
LLP, and an unaudited statement of assets and
liabilities, statement of operations, statement of
changes in net assets and schedule of investments for
the semiannual period following the most recently
completed fiscal year, copies of which have been
furnished to the Balanced Fund, fairly reflect the
financial condition and results of operations of the
Value Fund as of such dates and for the periods then
ended in accordance with generally accepted
accounting principles consistently applied, and the
Value Fund has no known liabilities of a material
amount, contingent or otherwise, other than those
shown on the statements of assets and liabilities
referred to above, those incurred in the ordinary
course of its business since the last day of such fiscal
year or those incurred in connection with the
acquisition of securities pursuant to paragraph 1.3
hereof;
4.1.7. Since the last day of the Value Fund's most recently
completed fiscal year, there has not been any material
adverse change in the Value Fund's financial
condition, assets, liabilities or business (other than
changes occurring in the ordinary course of
business), or any incurrence by the Value Fund of
indebtedness, except as disclosed in writing to the
Balanced Fund. For the purposes of this paragraph
4.1.7, distributions of net investment income and net
realized capital gains, changes in portfolio securities,
changes in the market value of portfolio securities or
net redemptions shall be deemed to be in the ordinary
course of business;
4.1.8. As of the Closing Date, all federal and other tax
returns and reports of the Value Fund required by law
to have been filed by such date (giving effect to
extensions) shall have been filed, and all federal and
other taxes shown to be due on such returns and
reports or on any assessment received shall have been
paid, or provisions shall have been made for the
payment thereof, except for amounts that alone and in
the aggregate would not reasonably be expected to
have a material adverse effect. All of the Value
Fund's tax liabilities will have been adequately
provided for on its books. To the best of the Value
Fund's knowledge, the Value Fund will not have had
any tax deficiency or liability asserted against it or
question with respect thereto raised, and the Value
Fund will not be under audit by the Internal Revenue
Service or by any state or local tax authority for taxes
in excess of those already paid;
4.1.9. The Value Fund meets the requirements of
subchapter M of the Code for treatment as a
"regulated investment company" within the meaning
of Section 851 of the Code, and will continue
meeting such requirements at all times through the
Closing Date. The Value Fund has not at any time
since its inception been liable for, and is not now
liable for, any material income or excise tax pursuant
to Section 852 or 4982 of the Code. The Value Fund
is in compliance in all material respects with
applicable regulations of the Internal Revenue
Service pertaining to the reporting of dividends and
other distributions on and redemptions of its shares of
beneficial interest and to withholding in respect of
dividends and other distributions to shareholders, and
is not liable for any material penalties that could be
imposed thereunder;
4.1.10. All issued and outstanding shares of the Value Fund
are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and non-assessable
(except as set forth in the Value Fund's then current
prospectus or prospectuses or statement or statements
of additional information (collectively, as amended or
supplemented from time to time, the "Value Fund
Prospectus")) by the Value Fund and will have been
issued in compliance with all applicable registration
or qualification requirements of federal and state
securities laws. No options, warrants or other rights
to subscribe for or purchase, or securities convertible
into, any shares of beneficial interest of the Value
Fund are outstanding and none will be outstanding on
the Closing Date;
4.1.11. The Value Fund's investment operations from
inception to the date hereof have been in compliance
in all material respects with the investment policies
and investment restrictions set forth in the Value
Fund Prospectus, except as previously disclosed in
writing to the Balanced Fund;
4.1.12. The execution, delivery and performance of this
Agreement has been duly authorized by the Trustees
of the Trust, and this Agreement will constitute the
valid and binding obligation of the Trust, on behalf of
the Value Fund, enforceable in accordance with its
terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors'
rights generally and other equitable principles;
4.1.13. The Acquisition Shares to be issued to the Value
Fund pursuant to article 1 will not be acquired for the
purpose of making any distribution thereof other than
to the Value Fund's shareholders as provided in
paragraph 1.4;
4.1.14. No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Value Fund of the transactions
contemplated by this Agreement, except such as may
be required under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange
Act of 1934, as amended (the "1934 Act"), the 1940
Act and state securities or "Blue Sky" laws (which
terms used herein shall include the laws of the
District of Columbia and of Puerto Rico);
4.1.15. At the Closing Date, the Value Fund will have good
and marketable title to its assets to be transferred to
the Balanced Fund pursuant to paragraph 1.1 and will
have full right, power and authority to sell, assign,
convey, transfer and deliver the Investments (as
defined below) and any other assets and liabilities of
the Value Fund to be transferred to the Balanced
Fund pursuant to this Agreement. At the Closing
Date, subject only to the delivery of the Investments
and any such other assets and liabilities and payment
therefor as contemplated by this Agreement, the
Balanced Fund will acquire good and marketable title
thereto and will acquire the Investments and any such
other assets and liabilities subject to no
encumbrances, liens or security interests whatsoever
and without any restrictions upon the transfer thereof,
except as previously disclosed to the Balanced Fund.
As used in this Agreement, the term "Investments"
shall mean the Value Fund's investments shown on
the schedule of its investments as of the date of its
most recently completed fiscal year, referred to in
subparagraph 4.1.6 hereof, as supplemented with
such changes in the portfolio as the Value Fund shall
make, and changes resulting from stock dividends,
stock split-ups, mergers and similar corporate actions
through the Closing Date; and
4.1.16. No registration of any of the Investments would be
required if they were, as of the time of such transfer,
the subject of a public distribution by either of the
Balanced Fund or the Value Fund, except as
previously disclosed by the Value Fund to the
Balanced Fund.
4.2. The Trust, on behalf of the Balanced Fund, represents and
warrants the following as of the date hereof and agrees to
confirm the continuing accuracy and completeness in all
material respects of the following on the Closing Date:
4.2.1. The Trust is a Massachusetts business trust that is
duly organized, validly existing and in good standing
under the laws of the Commonwealth of
Massachusetts;
4.2.2. The Trust is a duly registered investment company
classified as a management company of the open-end
type and its registration with the Securities and
Exchange Commission as an investment company
under the 1940 Act is in full force and effect, and the
Balanced Fund is a separate series thereof duly
designated in accordance with the applicable
provisions of the Declaration of Trust of the Trust
and the 1940 Act;
4.2.3. The Balanced Fund Prospectus conforms in all
material respects to the applicable requirements of
the 1933 Act and the rules and regulations of the
Securities and Exchange Commission thereunder and
does not include any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading, and there are no
material contracts to which the Balanced Fund is a
party that are not referred to in such Prospectus or in
the registration statement of which it is a part;
4.2.4. At the Closing Date, the Balanced Fund will have
good and marketable title to its assets;
4.2.5. To the knowledge of the Trust, except as has been
disclosed in writing to the Value Fund, no litigation
or administrative proceeding or investigation of or
before any court or governmental body is presently
pending or threatened as to the Balanced Fund, any
of its properties or assets, or any person whom the
Balanced Fund may be obligated to indemnify in
connection with such litigation, proceeding or
investigation, and the Balanced Fund 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
hereby;
4.2.6. The statement of assets and liabilities, the statement
of operations, the statement of changes in net assets,
and the schedule of investments of the Balanced
Fund, as of the last day of and for its most recently
completed fiscal year, audited by Ernst & Young,
LLP, and an unaudited statement of assets and
liabilities, statement of operations, statement of
changes in net assets and schedule of investments for
the semiannual period following the most recently
completed fiscal year, copies of which have been
furnished to the Value Fund, fairly reflect the
financial condition and results of operations of the
Balanced Fund as of such dates and for the periods
then ended in accordance with generally accepted
accounting principles consistently applied, and the
Balanced Fund has no known liabilities of a material
amount, contingent or otherwise, other than those
shown on the statements of assets referred to above
or those incurred in the ordinary course of its
business since the last day of the Balanced Fund's
most recently completed fiscal year;
4.2.7. Since the last day of the Balanced Fund's most
recently completed fiscal year, there has not been any
material adverse change in the Balanced Fund's
financial condition, assets, liabilities or business
(other than changes occurring in the ordinary course
of business), or any incurrence by the Balanced Fund
of indebtedness, except as disclosed in writing to the
Value Fund. For the purposes of this paragraph 4.2.7,
distributions of net investment income and net
realized capital gains, changes in portfolio securities,
changes in the market value of portfolio securities or
net redemptions shall be deemed to be in the ordinary
course of business;
4.2.8. As of the Closing Date, all federal and other tax
returns and reports of the Balanced Fund required by
law to have been filed by such date (giving effect to
extensions) shall have been filed, and all federal and
other taxes shown to be due on such returns and
reports or any assessments received shall have been
paid, or provisions shall have been made for the
payment thereof. All of the Balanced Fund's tax
liabilities will have been adequately provided for on
its books. To the best of the Balanced Fund's
knowledge, it will not have had any tax deficiency or
liability asserted against it or question with respect
thereto raised, and it will not be under audit by the
Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid;
4.2.9. The Balanced Fund has met the requirements of
subchapter M of the Code for treatment as a
"regulated investment company" within the meaning
of Section 851 of the Code in respect of each taxable
year since the commencement of operations, and will
continue to meet such requirements at all times
through the Closing Date. The Balanced Fund has not
at any time since its inception been liable for, nor is it
now liable for, any material income or excise tax
pursuant to Section 852 or 4982 of the Code. The
Balanced Fund is in compliance in all material
respects with applicable regulations of the Internal
Revenue Service pertaining to the reporting of
dividends and other distributions on and redemptions
of its capital stock and to withholding in respect of
dividends and other distributions to shareholders, and
is not liable for any material penalties that could be
imposed thereunder;
4.2.10. The authorized capital of the Balanced Fund consists
of an unlimited number of shares of beneficial
interest. All issued and outstanding shares of the
Balanced Fund are, and at the Closing Date will be,
duly and validly issued and outstanding, fully paid
and non-assessable (except as set forth in the
Balanced Fund Prospectus) by the Balanced Fund
and will have been issued in compliance with all
applicable registration or qualification requirements
of federal and state securities laws. No options,
warrants or other rights to subscribe for or purchase,
or securities convertible into, any shares of beneficial
interest of the Balanced Fund are outstanding and
none will be outstanding on the Closing Date;
4.2.11. The Balanced Fund's investment operations from
inception to the date hereof have been in compliance
in all material respects with the investment policies
and investment restrictions set forth in the Balanced
Fund Prospectus;
4.2.12. The execution, delivery and performance of this
Agreement have been duly authorized by all
necessary action on the part of the Balanced Fund,
and this Agreement constitutes the valid and binding
obligation of the Balanced Fund enforceable in
accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of
creditors' rights generally and other equitable
principles;
4.2.13. The Acquisition Shares to be issued and delivered to
the Value Fund pursuant to the terms of this
Agreement will on the Closing Date have been duly
authorized and, when so issued and delivered, will be
duly and validly issued shares of the Balanced Fund,
and will be fully paid and non-assessable (except as
set forth in the Balanced Fund Prospectus) by the
Balanced Fund, and no shareholder of the Balanced
Fund will have any preemptive right of subscription
or purchase in respect thereof; and
4.2.14. No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Balanced Fund of the
transactions contemplated by this Agreement, except
such as may be required under the 1933 Act, the 1934
Act, the 1940 Act and state securities or "Blue Sky"
laws (which term as used herein shall include the
laws of the District of Columbia and of Puerto Rico).
5. COVENANTS OF THE VALUE FUND AND THE BALANCED
FUND.
The Value Fund and the Balanced Fund hereby covenant and agree as
follows:
5.1. The Value Fund and the Balanced Fund each will operate its
business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary
course of business will include regular and customary periodic
dividends and distributions and any other distribution that may
be advisable.
5.2. The Balanced Fund will advise the Value Fund promptly if at
any time prior to the Closing Date the assets of the Value
Fund include any securities that the Balanced Fund is not
permitted to acquire.
5.3. Subject to the provisions of this Agreement, the Value Fund
and the Balanced Fund will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably
necessary, proper or advisable to cause the conditions to the
other party's obligations to consummate the transactions
contemplated hereby to be met or fulfilled and otherwise to
consummate and make effective such transactions.
5.4. The Balanced Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state securities or "Blue Sky" laws
as it may deem appropriate in order to continue its operations
after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE VALUE
FUND.
The obligation of the Value Fund to consummate the transactions
provided for herein shall be subject,
at its election, to the performance by the Balanced Fund of all the obligations
to be performed by it hereunder on or before the Closing Date and, in addition
thereto, to the following further conditions:
6.1. The Balanced Fund shall have delivered to the Value Fund a
certificate executed in its name by its President or a Vice
President and its Treasurer or an Assistant Treasurer, in form
and substance satisfactory to the Value Fund and dated as of
the Closing Date, to the effect that the representations and
warranties of the Balanced Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they
may be affected by the transactions contemplated by this
Agreement, and that the Balanced Fund has complied with all
the covenants and agreements and satisfied all of the
conditions on its part to be performed or satisfied under this
Agreement at or prior to the Closing Date.
6.2. The Value Fund shall have received a favorable opinion of
Ropes & Xxxx LLP, dated the Closing Date and in a form
satisfactory to the Value Fund, to the following effect:
6.2.1. The Trust is a Massachusetts business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts and has power to
own all of its properties and assets and to carry on its
business as presently conducted, and the Balanced
Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940
Act and the Declaration of Trust and Bylaws of the
Trust;
6.2.2. This Agreement has been duly authorized, executed
and delivered on behalf of the Balanced Fund and,
assuming the due authorization, execution and
delivery of this Agreement by the Trust, on behalf of
the Value Fund, is the valid and binding obligation of
the Balanced Fund enforceable against the Balanced
Fund in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other
equitable principles;
6.2.3. The Balanced Fund has the power to assume the
liabilities to be assumed by it hereunder and upon
consummation of the transactions contemplated
hereby the Balanced Fund will have duly assumed
such liabilities;
6.2.4. The Acquisition Shares to be issued for transfer to the
Value Fund's shareholders as provided by this
Agreement are duly authorized and upon such
transfer and delivery will be validly issued and
outstanding and fully paid and nonassessable shares
in the Balanced Fund, and no shareholder of the
Balanced Fund has any preemptive right of
subscription or purchase in respect thereof;
6.2.5. The execution and delivery of this Agreement did
not, and the performance by the Balanced Fund of its
obligations hereunder will not, violate the Balanced
Fund's organizational documents, or any provision of
any agreement known to such counsel to which the
Balanced Fund is a party or by which it is bound or,
to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of
any penalty under any agreement, judgment or decree
to which the Balanced Fund is a party or by which it
is bound;
6.2.6. To the knowledge of such counsel, no consent,
approval, authorization or order of any court or
governmental authority is required for the
consummation by the Balanced Fund of the
transactions contemplated by this Agreement except
such as may be required under state securities or
"Blue Sky" laws or such as have been obtained;
6.2.7. The Trust is registered with the Securities and
Exchange Commission as an investment company
under the 1940 Act; and
6.2.8. To the knowledge of such counsel, except as has
been disclosed in writing to the Value Fund, no
litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to the
Balanced Fund or any of its properties or assets or
any person whom the Value Fund may be obligated
to indemnify in connection with such litigation,
proceeding or investigation, and the Balanced Fund 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 hereby.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
BALANCED FUND.
The obligations of the Balanced Fund to complete the transactions
provided for herein shall be subject, at
its election, to the performance by the Value Fund of all the obligations to
be performed by it hereunder on or before the Closing Date and, in addition
thereto, to the following further conditions:
7.1. The Value Fund shall have delivered to the Balanced Fund a
certificate executed in its name by its President or a Vice
President and its Treasurer or an Assistant Treasurer, in form
and substance satisfactory to the Balanced Fund and dated as
of the Closing Date, to the effect that the representations and
warranties of the Value Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may
be affected by the transactions contemplated by this
Agreement, and that the Value Fund has complied with all the
covenants and agreements and satisfied all of the conditions
on its part to be performed or satisfied under this Agreement at
or prior to the Closing Date.
7.2. The Balanced Fund shall have received a favorable opinion of
Ropes & Xxxx LLP dated the Closing Date and in a form
satisfactory to the Balanced Fund, to the following effect:
7.2.1. The Trust is a Massachusetts business trust duly
organized and validly existing under the laws of the
Commonwealth of Massachusetts and has power to
own all of its properties and assets and to carry on its
business as presently conducted, and the Value Fund
is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940
Act and the Declaration of Trust and Bylaws of the
Trust;
7.2.2. This Agreement has been duly authorized, executed
and delivered on behalf of the Value Fund and,
assuming the due authorization, execution and
delivery of this Agreement by the Trust, on behalf of
the Balanced Fund, is the valid and binding
obligation of the Value Fund enforceable against the
Value Fund in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other
equitable principles;
7.2.3. The Value Fund has the power to sell, assign,
convey, transfer and deliver the assets to be
transferred by it hereunder, and, upon consummation
of the transactions contemplated hereby, the Value
Fund will have duly transferred such assets to the
Balanced Fund;
7.2.4. The execution and delivery of this Agreement did
not, and the performance by the Value Fund of its
obligations hereunder will not, violate the Value
Fund's organizational documents or any provision of
any agreement known to such counsel to which the
Value Fund is a party or by which it is bound or, to
the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of
any penalty under any agreement, judgment or decree
to which the Value Fund is a party or by which it is
bound;
7.2.5. To the knowledge of such counsel, no consent,
approval, authorization or order of any court or
governmental authority is required for the
consummation by the Value Fund of the transactions
contemplated by this Agreement, except such as have
been obtained;
7.2.6. The Trust is registered with the Securities and
Exchange Commission as an investment company
under the 1940 Act; and
7.2.7. To the knowledge of such counsel, except as has
been disclosed in writing to the Balanced Fund, no
litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to the
Value Fund or any of its properties or assets or any
person whom the Balanced Fund may be obligated to
indemnify in connection with such litigation,
proceeding or investigation, and the Value Fund 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 thereby.
7.3. The custodian of the Value Fund shall have delivered to the
Balanced Fund a certificate identifying all of the assets of the
Value Fund held by such custodian as of the Valuation Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE VALUE FUND AND THE BALANCED FUND.
The respective obligations of the Value Fund and the Balanced Fund
hereunder are subject to the further conditions that on or before the
Closing Date:
8.1. On the Closing Date no action, suit or other proceeding shall
be pending before any court or governmental agency in which
it is sought to restrain or prohibit, or to obtain damages or
other relief in connection with, this Agreement or the
transactions contemplated hereby.
8.2. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission
and of state "Blue Sky" and securities authorities) deemed
necessary by the Value Fund or the Balanced Fund to permit
consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except when
failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Value Fund or the Balanced Fund.
8.3. At any time prior to the Closing, any of the foregoing
conditions of this Agreement may be waived by the board of
trustees of the Trust if, in its judgment, such waiver will not
have a material adverse effect on the interests of the
shareholders of the Value Fund or the Balanced Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1. The Value Fund and the Balanced Fund each represents and
warrants to the other that there are no brokers or finders
entitled to receive any payments in connection with the
transactions provided for herein.
9.2. All expenses of the transactions contemplated by this
Agreement and incurred by a Fund shall be borne by that
Fund.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
10.1. The Value Fund and the Balanced Fund each agree that
neither party has made any representation, warranty 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 hereto
or in connection herewith shall not survive the consummation
of the transactions contemplated hereunder except paragraphs
1.1, 1.2, 1.4, 1.5, 1.6, 3.4, 5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1. This Agreement may be terminated at any time by the Trust.
11.2. If for any reason the transactions contemplated by this
Agreement are not consummated, no party shall be liable to
any other party for any damages resulting therefrom, including
without limitation consequential damages.
12. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the authorized officers
of the Value Fund and Balanced Fund.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to the Value Fund
or the Balanced Fund at 00 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000,
Attention: Secretary.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW;
ASSIGNMENT; NON- RECOURSE.
14.1. 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.
14.2. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of the
Commonwealth of Massachusetts, without giving effect to any
choice or conflicts of law rule or provision that would result in
the application of the domestic substantive laws of any other
jurisdiction.
14.4. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but
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.
14.5. A copy of the Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that no trustee, officer, agent or
employee of the Trust shall have any personal liability under
this Agreement, and that this Agreement is binding only upon
the assets and properties of the applicable Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President, a Vice
President or Treasurer and attested by its Secretary or Assistant Secretary.
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Value
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Secretary
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Balanced
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Secretary
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President, a Vice
President or Treasurer and attested by its Secretary or Assistant Secretary.
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Value
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Secretary
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Balanced
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as a sealed instrument by its President, a Vice President or
Treasurer and attested by its Secretary or Assistant Secretary.
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Value
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Secretary
PAX WORLD FUNDS
SERIES TRUST I,
on behalf of the Balanced
Fund
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: President
ATTEST:
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Schedule 1.1.2
Excluded Obligations
1. Transfer agency fees in the amount of $4,379.84, payable to PNC
Global Investment Servicing.
2. Investment advisory fees in the amount of $1,620.16, payable to Pax
World Management Corp.
-2-
58
