AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of June 9, 2009
(the "Agreement"), between XXXXX & STEERS EUROPEAN REALTY SHARES,
INC., a Maryland corporation (the "Fund"), and XXXXX & STEERS
INTERNATIONAL REALTY FUND, INC., a Maryland corporation
(the "Acquiring Fund").
This Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of the regulations under Section
368(a) of the United States Internal Revenue Code of 1986, as amended
(the "Code"). The reorganization will consist of the transfer of all
of the assets of the Fund to the Acquiring Fund in exchange solely for
the Acquiring Fund's Class A, Class C and Class I shares ("Acquiring
Fund Shares") of common stock, par value$.001 per share, and the
assumption by the Acquiring Fund of the liabilities of the Fund as
described herein, and the distribution, after the Closing Date hereinafter
referred to, of the Acquiring Fund Shares to the shareholders of the Fund
in liquidation of the Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement (the "Reorganization").
WHEREAS, the Fund is a registered, open-end management investment company,
and the Acquiring Fund is a registered, open-end management investment
company, and the Fund owns securities which are assets of the character
in which the Acquiring Fund is permitted to invest;
WHEREAS, both the Acquiring Fund and the Fund are authorized to issue
their shares of common stock;
WHEREAS, the Fund's Board has determined that the Reorganization is in
the best interests of the Fund and the Fund's shareholders and that
the interests of the Fund's existing shareholders will not be diluted
as a result of the Reorganization; and
WHEREAS, the Acquiring Fund's Board has determined that the Reorganization
is in the best interests of the Acquiring Fund and the Acquiring Fund's
shareholders and that the interests of the Acquiring Fund's existing
shareholders 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 agree as follows:
1. THE REORGANIZATION.
1.1 Subject to the terms and conditions contained herein and on
the basis of the representations and warranties contained herein, the
Fund agrees to assign, transfer and convey to the Acquiring Fund all of
the assets of the Fund, as set forth in paragraph 1.2, free and clear
of all liens, encumbrances and claims whatsoever. The Acquiring Fund
agrees in exchange therefor (a) to deliver to the Fund the number of
Acquiring Fund Shares, including fractional Acquiring Fund Shares,
determined as set forth in paragraph 2.3; and (b) to assume the stated
liabilities of the Fund, as set forth in paragraph 1.3. Such
transactions shall take place at the closing (the "Closing") as of
the close of business on the closing date (the "Closing Date"),
provided for in paragraph 3.1. In lieu of delivering certificates for
the Acquiring Fund Shares, the Acquiring Fund shall credit the
Acquiring Fund Shares to the Fund's account on the books of the
Acquiring Fund and shall deliver a confirmation thereof to the Fund.
1.2 The assets of the Fund to be acquired by the Acquiring Fund
shall consist of all assets, including, without limitation, all
portfolio securities, cash, cash equivalents, commodities, interests
in futures and other financial instruments, claims (whether absolute
or contingent, known or unknown), receivables (including dividends or
interest and other receivables) and other property belonging to the
Fund, and any deferred or prepaid expenses, reflected on an unaudited
statement of assets and liabilities of the Fund approved by Xxxxx &
Steers Capital Management, Inc. ("CSCM"), as of the Valuation Date
(as defined in paragraph 2.1), in accordance with U.S. generally
accepted accounting principles ("GAAP") consistently applied from
the Fund's prior audited period (the "Assets").
1.3 The Fund will endeavor to identify and, to the extent practicable,
discharge all of its known liabilities and obligations before the Closing
Date. The Acquiring Fund shall assume the liabilities, expenses, costs,
charges and reserves reflected on an unaudited statement of assets and
liabilities of the Fund approved by CSCM, as of the Valuation Date, in
accordance with GAAP consistently applied from the Fund's prior audited
period. The Acquiring Fund shall assume only those liabilities of the
Fund reflected in that unaudited statement of assets and liabilities and
shall not assume any other liabilities, whether absolute or contingent.
1.4 Delivery of the Fund's Assets shall be made on the Closing Date
and shall be delivered to State Street Bank and Trust Company, Xxx Xxxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000, the Acquiring Fund's custodian
(the "Custodian"), for the account of the Acquiring Fund, with all
securities not in bearer or book-entry form duly endorsed, or accompanied
by duly executed separate assignments or stock powers, in proper form for
transfer, with signatures guaranteed, and with all necessary stock
transfer stamps, sufficient to transfer good and marketable title
thereto (including all accrued interest and dividends and rights
pertaining thereto) to the Custodian for the account of the Acquiring
Fund free and clear of all liens, encumbrances, rights, restrictions
and claims. All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account
of the Acquiring Fund.
1.5 The Fund will pay or cause to be paid to the Acquiring Fund
any dividends and interest received on or after the Closing Date with
respect to Assets transferred to the Acquiring Fund hereunder.
The Fund will transfer to the Acquiring Fund any distributions, rights
or other assets received by the Fund after the Closing Date as
distributions on or with respect to the securities transferred.
Such assets shall be deemed included in the Assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately valued.
1.6 As soon after the Closing Date as is conveniently practicable,
the Fund will distribute pro rata to holders of record of the Fund's
Class A shares, Class C shares and Class I shares, determined as of the
close of business on the Closing Date ("Fund Shareholders"), Class A
shares, Class C shares and Class I shares, respectively, of the Acquiring
Fund received by the Fund pursuant to paragraph 1.1, and will completely
liquidate and, promptly thereafter, terminate and dissolve in accordance
with applicable laws of the State of Maryland and federal securities
laws. Such distribution and liquidation will be accomplished by the
transfer of the Acquiring Fund Shares then credited to the account of
the Fund on the books of the Acquiring Fund to open accounts on the
share records of the Acquiring Fund in the names of the Fund Shareholders
and representing the respective pro rata number of the applicable
Acquiring Fund Shares due such shareholders. All issued and outstanding
shares of the Fund simultaneously will be redeemed and canceled on the
books of the Fund and will be null and void. Acquiring Fund Shares
distributed to Fund Shareholders will be reflected on the books of the
Acquiring Fund as uncertificated, book-entry shares; the Acquiring Fund
will not issue share certificates in the Reorganization.
1.7 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued
in the manner described in the Acquiring Fund's then-current prospectus and
statement of additional information.
1.8 Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquiring Fund Shares on
the books of the Fund as of that time shall, as a condition of such issuance
and transfer, be paid by the person to whom such Acquiring Fund Shares are to
be issued and transferred.
1.9 Any reporting responsibility of the Fund, including the responsibility
for filing regulatory reports, tax returns, or other documents with the
Securities and Exchange Commission (the "Commission"), any state securities
commission, and any federal, state or local tax authorities or any other
relevant regulatory authority, is and shall remain the responsibility of the
Fund up to and including the Closing Date and such later date on which the
Fund's existence is terminated.
1.10 As soon as practicable after the Closing Date, the Fund shall provide
the Acquiring Fund with copies of all books and records that pertain to the
Fund that the Acquiring Fund is required to maintain under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules of the
Commission thereunder.
2. VALUATION.
2.1 The value of the Fund's Assets to be acquired, and the amount
of the Fund's liabilities to be assumed, by the Acquiring Fund hereunder
shall be computed as of the close of trading on the floor of the New
York Stock Exchange (usually 4:00 p.m., Eastern time) on the Closing Date
(such time and date being hereinafter called the "Valuation Date"),
using the valuation procedures set forth in the Acquiring Fund's Articles
of Incorporation, as amended (the "Acquiring Fund's Charter"), and the
then-current prospectus or statement of additional information of the
Acquiring Fund, which are and shall be consistent with the policies
currently in effect for the Fund, or such other valuation procedures
as shall be mutually agreed upon by the parties hereto.
2.2 The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of the Valuation Date, using the
valuation procedures set forth in the Acquiring Fund's Charter and the
then-current prospectus or statement of additional information of the
Acquiring Fund, which are and shall be consistent with the policies
currently in effect for the Fund.
2.3 The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Fund's net assets shall
be determined by dividing the value of the net assets of the applicable
class of the Fund determined using the same valuation procedures
referred to in paragraph 2.1 by the net asset value of one Acquiring
Fund Share of the corresponding class, determined in accordance with
paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of CSCM as fund accountant for the Fund and the
Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be [September 25], 2009, or such other
date as the parties, through their duly authorized officers, may
mutually agree. All acts taking place at the Closing shall be deemed to
take place simultaneously on the Closing Date unless otherwise provided.
The Closing shall be held at 5:00 p.m., Eastern time, at the offices of
CSCM, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or such other time and/or
place as the parties may mutually agree.
3.2 The Custodian shall deliver at the Closing a certificate of
an authorized officer stating that the Fund's Assets have been delivered
in proper form to the Acquiring Fund on the Closing Date. The Fund's
portfolio securities and instruments deposited with a securities depository
(as defined in Rule 17f-4 under the 0000 Xxx) or with a permitted
counterparty or futures commission merchant (as defined in Rule 17f-6
under the 0000 Xxx) shall be delivered to the Custodian as of the Closing
Date by book entry, in accordance with the customary practices of the
Custodian. The cash to be transferred by the Fund shall be delivered to
the Custodian for the account of the Acquiring Fund by wire transfer of
federal funds on the Closing Date.
3.3 If on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Fund or the
Fund shall be closed to trading or trading thereon shall be restricted, or
(b) trading or the reporting of trading on said Exchange or elsewhere shall
be disrupted so that accurate appraisal of the value of the net assets of
the Acquiring Fund or the 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 or such
other date as the parties hereto may agree.
3.4 The Fund's transfer agent shall deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of the Fund Shareholders and the number and percentage ownership
of outstanding shares owned by each such shareholder immediately prior
to the Closing. The Acquiring Fund's transfer agent shall issue and
deliver to the Fund's Secretary a confirmation evidencing the Acquiring
Fund Shares to be credited on the Closing Date, or provide evidence
satisfactory to the Fund that such Acquiring Fund Shares have been
credited to the Fund's account on the books of the Acquiring Fund.
3.5 At the Closing, each party shall deliver to the other such bills
of sale, checks, assignments, receipts or other documents as such other
party or its counsel may reasonably request.
3.6 If the Fund is unable to make delivery to the Custodian pursuant
to paragraph 3.2 of any of the Assets for the reason that any of such
Assets have not yet been delivered to the Fund by the Fund's broker,
dealer or other counterparty, then, in lieu of such delivery, the Fund
shall deliver with respect to said Assets executed copies of an
agreement of assignment and due bills executed on behalf of said broker,
dealer or other counterparty, together with such other documents as may
be required by the Acquiring Fund or the Custodian, including broker
confirmation slips.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Fund represents and warrants to the Acquiring Fund as follows:
(a) The Fund is a corporation duly organized and validly existing under
the laws of the State of Maryland, and has power to carry out its obligations
under this Agreement.
(b) The Fund is registered under the 1940 Act as an open-end management
investment company, and the Fund's shares are registered under the
Securities Act of 1933, as amended (the "1933 Act"), and such registrations
have not been revoked or rescinded and are in full force and effect. The
Fund is in compliance in all material respects with the 1940 Act and the
rules and regulations thereunder.
(c) The current prospectus and statement of additional information of the
Fund conform in all material respects to the applicable requirements of
the 1933 Act and the 1940 Act and the rules and regulations of the
Commission thereunder and do 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 materially misleading.
(d) The Fund is not, and the execution, delivery and performance of this
Agreement will not result, in material violation of the Fund's Articles
of Incorporation, as amended (the "Fund's Charter"), or its By-Laws or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which the Fund is a party or by which the Fund is bound,
nor will the execution, delivery and performance of this Agreement by
the Fund result in the acceleration of any obligation, or the imposition
of any penalty, under any agreement, indenture, instrument, contract,
lease or other undertaking to which the Fund is a party or by which
the Fund is bound.
(e) The Fund has no material contracts or other commitments that will
be terminated with liability to the Fund on or prior to the Closing Date.
(f) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Fund of
the transactions contemplated herein, except as may be required under
the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and the 1940 Act and by state securities laws.
(g) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to the
Fund's knowledge threatened against the Fund or any of the Fund's
properties or assets which, if adversely determined, would materially
and adversely affect the Fund's financial condition or the conduct of
the Fund's business. The Fund knows of no facts which 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 which materially and adversely affects the
Fund's business or the Fund's ability to consummate the transactions
contemplated herein.
(h) The Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets and Schedule of Portfolio Investments
(indicating their market values) of the Fund for each of the Fund's fiscal
years (or periods) ended December 31, 2008 since the inception of the
Fund have been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, and are in accordance with GAAP,
consistently applied, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition
of the Fund as of such dates, and there are no known contingent liabilities
of the Fund as of such dates not disclosed therein.
(i) Since December 31, 2008, there has not been any material adverse
change in the Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as disclosed on the
statement of assets and liabilities referred to in paragraphs
1.3 and 4.1(h) hereof.
(j) At the Closing Date, all federal and other tax returns and reports
of the Fund required by law then to be filed shall have been filed, and
all federal and other taxes shown as due on said returns and reports shall
have been paid so far as due, or provision shall have been made for the
payment thereof, and to the knowledge of the Fund no such return is
currently under audit and no assessment or deficiency has been asserted
with respect to such returns.
(k) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a
regulated investment company.
(l) All issued and outstanding shares of the Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Fund. All of the issued and outstanding
shares of the Fund will, at the time of Closing, be held by the persons
and in the amounts set forth in the records of its transfer agent as
provided in paragraph 3.4. The Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of
the Fund's shares, nor is there outstanding any security convertible
into any of the Fund's shares.
(m) On the Closing Date, the Fund will have good and marketable title
to the Assets and full right, power and authority to sell, assign,
transfer and deliver the Assets to be transferred by it hereunder
free of any liens or other encumbrances, and upon delivery and payment
for the Assets, the Acquiring Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the 1933 Act, other than
as disclosed to and accepted by the Acquiring Fund.
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action
on the part of the Fund's Board and does not require the approval or
consent of Fund Shareholders, and this Agreement will constitute the valid
and legally binding obligation of the Fund, enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto, and to general principles of equity and the discretion of the
court (regardless of whether the enforceability is considered in a
proceeding in equity or at law).
(o) The information to be furnished by the Fund for use in registration
statements, information statements and other documents filed or to be
filed with any federal, state or local regulatory authority (including
the Financial Industry Regulatory Authority), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate
and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations
applicable thereto.
(p) The Registration Statement on Form N-14 and the Prospectus/Information
Statement contained therein as amended or supplemented
(the "Registration Statement"), as of the effective date of the Registration
Statement and at all times subsequent thereto up to and including the
Closing Date, conform and will conform, as it relates to the Fund, in all
material respects to the requirements of the federal and state securities
laws and the rules and regulations thereunder and do not and will not
include, as it relates to the Fund, 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 such statements were made, not misleading.
4.2 The Acquiring Fund represents and warrants to the Fund as follows:
(a) The Acquiring Fund is a corporation duly organized and validly existing
under the laws of the State of Maryland, and has power to carry out its
obligations under this Agreement.
(b) The Acquiring Fund is registered under the 1940 Act as an open-end
management investment company, and the Acquiring Fund's shares are
registered under the 1933 Act, and such registrations have not been
revoked or rescinded and are in full force and effect. The Acquiring
Fund is in compliance in all material respects with the 1940 Act and
the rules and regulations thereunder.
(c) The current prospectus and statement of additional information of
the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do 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 materially
misleading.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in material violation
of the Acquiring Fund's Charter or its By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which
the Acquiring Fund is a party or by which the Acquiring Fund is bound,
nor will the execution, delivery and performance of this Agreement by
the Acquiring Fund result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a
party or by which the Acquiring Fund is bound.
(e) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated herein, except as may be required
under the 1933 Act, the 1934 Act and the 1940 Act and by state
securities laws.
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to the
Acquiring Fund's knowledge threatened against the Acquiring Fund or any
of the Acquiring Fund's properties or assets which, if adversely
determined, would materially and adversely affect the Acquiring Fund's
financial condition or the conduct of the Acquiring Fund's business.
The Acquiring Fund knows of no facts which 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 which materially and adversely affects the
Acquiring Fund's business or the Acquiring Fund's ability to
consummate the transactions contemplated herein.
(g) The Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets and Schedule of Portfolio Investments
(indicating their market values) of the Acquiring Fund for each of the
Acquiring Fund's five fiscal years ended December 31, 2008 have been
audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, and are in accordance with GAAP, consistently applied,
and such statements (copies of which have been furnished to the Fund)
fairly reflect the financial condition of the Acquiring Fund as of such dates.
(h) Since December 31, 2008, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of indebtedness
maturing more than one year from the date such indebtedness was incurred,
except as disclosed on the statement of assets and liabilities referred
to in paragraph 4.2(g) hereof.
(i) At the Closing Date, all federal and other tax returns and reports of
the Acquiring Fund required by law then to be filed shall have been filed,
and all federal and other taxes shown as due on said returns and reports
shall have been paid so far as due, or provision shall have been made for
the payment thereof, and to the knowledge of the Acquiring Fund no such
return is currently under audit and no assessment or deficiency has been
asserted with respect to such returns.
(j) For each taxable year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date (including the shares of the Acquiring Fund to be
issued pursuant to paragraph 1.1 of this Agreement) will be, duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquiring Fund. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the Acquiring
Fund Shares, nor is there outstanding any security convertible into any
Acquiring Fund Shares.
(l) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action
on the part of the Acquiring Fund's Board, and this Agreement will
constitute the valid and legally binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and other similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(m) The Registration Statement as of its effective date and at all times
subsequent thereto up to and including the Closing Date, conforms and will
conform, as it relates to the Acquiring Fund, in all material respects to
the requirements of the federal and state securities laws and the rules and
regulations thereunder and does not and will not include, as it relates to
the Acquiring Fund, 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 such
statements were made, not misleading. No representations and warranties
in this paragraph 4.2 shall apply to statements or omissions made in
reliance upon and in conformity with written information concerning the
Fund furnished to the Acquiring Fund by the Fund.
(n) No consideration other than the Acquiring Fund Shares (and the
Acquiring Fund's assumption of the Fund's stated liabilities) will be
issued in exchange for the Fund's assets in the Reorganization.
(o) The Acquiring Fund does not directly or indirectly own, nor on the
Closing Date will it directly or indirectly own, nor has it directly or
indirectly owned at any time during the past five years, any shares of
the Fund.
5. COVENANTS OF THE ACQUIRING FUND AND THE FUND.
5.1 The Acquiring Fund and the 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
payment of customary dividends and other distributions.
5.2 Subject to the provisions of this Agreement, the Fund and the
Acquiring 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 consummate and make effective the transactions
contemplated by this Agreement.
5.3 As promptly as practicable, but in any case within sixty days
after the Closing Date, the 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 Fund for federal
income tax purposes which will be carried over to the Acquiring Fund
as a result of Section 381 of the Code and which will be certified
by the Fund's President or its Vice President and Treasurer.
5.4 The Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Registration Statement.
5.5 The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act,
the 1940 Act and such of the state Blue Sky or securities laws as
it may deem appropriate in order to continue its operations after
the Closing Date.
5.6 The Fund covenants that the Fund is not acquiring the Acquiring
Fund Shares to be issued hereunder for the purpose of making any
distribution thereof, other than in accordance with the terms of this
Agreement.
5.7 As soon as is reasonably practicable after the Closing, the
Fund will make a liquidating distribution to the Fund's shareholders
consisting of the Acquiring Fund Shares received at the Closing.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the
performance by the Fund of all the obligations to be performed by
it hereunder on or before the Closing Date and, in addition
thereto, the following conditions:
6.1 All representations and warranties of the Fund contained
in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing Date.
6.2 The Fund shall have delivered to the Acquiring Fund a statement
of the Fund's assets and liabilities, together with a list of the Fund's
portfolio securities showing the tax basis of such securities by lot
and the holding periods of such securities, as of the Closing Date,
certified by the Fund's Treasurer.
6.3 The Fund shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in the Fund's name by the Fund's President or
Vice President and its Treasurer, in form and substance satisfactory to
the Acquiring Fund, to the effect that the representations and warranties
of the 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 as to such other matters as the
Acquiring Fund shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND.
The obligations of the Fund to consummate the transactions provided
for herein shall be subject, at its election, to the performance by
the Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
7.1 All representations 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, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date .
with the same force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Fund on the Closing
Date a certificate executed in the Acquiring Fund's name by the Acquiring
Fund's President or Vice President and its Treasurer, in form and substance
reasonably satisfactory to the Fund, to the effect that the representations
and warranties of the Acquiring 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 as to such other
matters as the Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND AND THE
ACQUIRING FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate
the transactions contemplated by this Agreement.
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the Boards of each of the Fund and the Acquiring Fund.
8.2 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 obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein.
8.3 All 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 Blue Sky and securities authorities)
deemed necessary by the Fund or the Acquiring Fund to permit consummation,
in all material respects, of the transactions contemplated hereby shall
have been obtained, except where 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 Fund or the Acquiring Fund, provided that
either party hereto may for itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted
or be pending, threatened or contemplated under the 0000 Xxx.
8.5 The Fund shall have declared and paid a dividend or dividends which,
together with all previous dividends, shall have the effect of distributing
to Fund shareholders all of the Fund's investment company taxable income
(within the meaning of Section 852(b)(2) of the Code) for all taxable years
or periods ending on or prior to the Closing Date (computed without regard
to any deduction for dividends paid); the excess of its interest income
excludable from gross income under Section 103(a) of the Code over its
disallowed deductions under Sections 265 and 171(a)(2) of the Code, for all
taxable years or periods; and all of its net capital gain
(as defined in Section 1222(11) of the Code) realized in all taxable years
or periods (after reduction for any capital loss carryforward).
8.6 The Fund and Acquiring Fund shall have received an opinion of Stroock
& Stroock & Xxxxx LLP substantially to the effect that based on the facts and
assumptions stated herein and conditioned on consummation of the
Reorganization in accordance with this Agreement, for federal income
tax purposes:
(a) The transfer of all of the Fund's assets to the Acquiring Fund in
exchange solely for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of certain identified liabilities of the Fund, followed
by the distribution by the Fund of those Acquiring Fund Shares to Fund
Shareholders in complete liquidation of the Fund, will qualify as a
"reorganization" within the meaning of Section 368(a) of the Code and
each of the Fund and the Acquiring Fund will be "a party to a
reorganization"; (b) no gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Fund in exchange
solely for Acquiring Fund Shares and the assumption by the Acquiring
Fund of certain identified liabilities of the Fund pursuant to the
Reorganization; (c) no gain or loss will be recognized by the Fund
upon the transfer of the Fund's assets to the Acquiring Fund in exchange
solely for Acquiring Fund Shares and the assumption by the Acquiring
Fund of certain identified liabilities of the Fund or upon the
distribution (whether actual or constructive) of those Acquiring
Fund Shares to Fund Shareholders in exchange for their shares of
the Fund in liquidation of the Fund pursuant to the Reorganization;
(d) no gain or loss will be recognized by Fund Shareholders upon
the exchange of their Fund shares for the Acquiring Fund Shares
pursuant to the Reorganization; (e) the aggregate tax basis for
the Acquiring Fund Shares received by each Fund Shareholder pursuant
to the Reorganization will be the same as the aggregate tax basis
of the Fund shares held by such Shareholder immediately prior to
the Reorganization, and the holding period of those Acquiring Fund
Shares received by each Fund Shareholder will include the period
during which the Fund shares exchanged therefor were held by such
Shareholder (provided the Fund shares were held as capital assets
on the date of the Reorganization); and (f) the tax basis of each
Fund asset acquired by the Acquiring Fund will be the same as the
tax basis of such asset to the Fund immediately prior to the
Reorganization, and the holding period of each asset of the Fund
in the hands of the Acquiring Fund will include the period during
which that asset was held by the Fund.
In rendering its opinion, counsel may rely as to factual matters,
exclusively and without independent verification, on the representations
and warranties made in this Agreement, which counsel may treat as
representations and warranties made to it, and in separate letters
addressed to counsel and the certificates delivered pursuant to this
Agreement.
No opinion will be expressed as to the effect of the Reorganization
on (i) the Fund or the Acquiring Fund with respect to any asset as
to which any unrealized gain or loss is required to be recognized for
federal income tax purposes at the end of a taxable year (or on the
termination or transfer thereof) under a xxxx-to-market system of
accounting, and (ii) any Fund Shareholder that is required to recognize
unrealized gains and losses for federal income tax purposes under a
xxxx-to-market system of accounting.
9. TERMINATION OF AGREEMENT; EXPENSES.
9.1 This Agreement and the transactions contemplated hereby may
be terminated and abandoned by resolution of the Board of the Acquiring
Fund or of the Fund, as the case may be, at any time prior to the
Closing Date if circumstances should develop that, in the opinion of
the party's Board, make proceeding with the Reorganization inadvisable.
9.2 If this Agreement is terminated and the transactions contemplated
hereby are abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability
on the part of any party hereto or the Board members or officers of the
Fund or the Acquiring Fund, or shareholders of the Fund or of the
Acquiring Fund, as the case may be, in respect of this Agreement.
9.3 Each party acknowledges that all expenses directly incurred in
connection with the Reorganization will be borne by CSCM; provided however,
that expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of
such expenses would result in the disqualification of such party as a
"regulated investment company" within the meaning of Section 851 of the Code.
10. WAIVER.
At any time prior to the Closing Date, except as otherwise expressly
provided, any of the foregoing conditions may be waived by the Board of
the Fund or of the Acquiring Fund if, in the judgment of either, such
waiver will not have a material adverse effect on the benefits intended
under this Agreement to the shareholders of the Fund or of the
Acquiring Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided
for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be, on or subsequent to the date
hereof, set forth in a writing signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accord
ance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws; provided, however, that the
due authorization, execution and delivery of this Agreement by the
Acquiring Fund and the Fund shall be governed and construed in
accordance with the internal laws of the State of Maryland, without
giving effect to principles of conflict of laws; provided that, in the
case of any conflict between those laws and the federal securities
laws, the latter shall govern.
11.4 This Agreement may be amended only by a signed writing between
the parties.
11.5 This Agreement may be executed in counterparts, each of which,
when executed and delivered, shall be deemed to be an original.
11.6 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.
11.7 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Board members or officers of the Fund
or the Acquiring Fund, or shareholders, nominees, agents, or employees of
the Fund or the Acquiring Fund personally, but shall bind only the property
of the Fund or the Acquiring Fund, as the case may be, as provided in the
Fund's Charter or the Acquiring Fund's Charter, respectively. The execution
and delivery of this Agreement by such officers shall not 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 property of the Fund or
the Acquiring Fund, as the case may be.
IN WITNESS WHEREOF, the Fund and the Acquiring Fund have caused this
Agreement and Plan of Reorganization to be executed and attested on
its behalf by its duly authorized representatives as of the date first
above written.
XXXXX & STEERS EUROPEAN REALTY SHARES, INC.
By: /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
President
ATTEST: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Assistant Secretary
XXXXX & STEERS INTERNATIONAL REALTY FUND, INC.
By: /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
President
ATTEST: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Assistant Secretary
