Exhibit (h)(16)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 11th day of September, 1998, by and between Xxxxxx Global/International
Series, Inc. (the "Xxxxxx Fund"), a Maryland corporation, with its principal
place of business at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 on
behalf of its Growth Fund of Spain series (the "Acquiring Fund") and The Growth
Fund of Spain, Inc., a Maryland corporation, with its principal place of
business at 000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Acquired
Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(F) the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Fund to the Acquiring Fund in exchange solely for Class A
shares of the Acquiring Fund (the "Acquiring Fund Shares"), the assumption by
the Acquiring Fund of all liabilities of the Acquired Fund, and the distribution
of the Acquiring Fund Shares to the shareholders of the Acquired Fund in
termination of the Acquired Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Xxxxxx Fund is a registered open-end, management
investment company and the Acquired Fund is currently a registered closed-end
management investment company and the Acquired Fund owns securities that
generally are assets of the character in which the Acquiring Fund is permitted
to invest;
WHEREAS, the Board of Directors of the Acquired Fund has recommended to
its shareholders that the Acquired Fund be converted to an open-end management
investment company, and intends to present a proposal for such conversion at a
meeting of the shareholders of the Acquired Fund scheduled for October 28, 1998
and to solicit approval of such proposal;
WHEREAS, the parties hereto intend that the Acquired Fund shall have
converted from being a closed-end to an open-end investment company prior to the
time of the Reorganization;
WHEREAS, the Xxxxxx Fund is authorized to issue its shares of
beneficial interest in separate series, including the Acquiring Fund, each of
which maintains a separate and distinct portfolio of assets;
WHEREAS, the shares of beneficial interest of the Xxxxxx Fund with
respect to the Acquiring Fund are authorized to be issued in multiple classes,
including classes designated "Class A shares", "Class B shares" and "Class C
shares";
WHEREAS, the Board of Directors of the Xxxxxx Fund, on behalf of the
Acquiring Fund, has determined that the exchange of all of the assets of the
Acquired Fund for Acquiring Fund Shares and the assumption of all liabilities of
the Acquired Fund by the Acquiring Fund is
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in the best interests of the Acquiring Fund and that the interests of the
existing shareholders of the Acquiring Fund would not be diluted as a result of
this transaction;
WHEREAS, the Board of Directors of the Acquired Fund has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of all liabilities of the Acquired Fund by the
Acquiring Fund is in the best interests of the Acquired Fund and that the
interests of the existing shareholders of the Acquired Fund would not be diluted
as a result of this transaction;
NOW, THEREFORE, 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 ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED
FUND LIABILITIES AND THE TERMINATION OF THE ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all its assets as set forth in paragraph 1.2 to the Acquiring
Fund, and the Xxxxxx Fund on behalf of the Acquiring Fund agrees in exchange
therefor --
(a) to deliver to the Acquired Fund the number of full and fractional
Acquiring Fund Shares equal in number to the number of Acquired Fund full and
fractional shares then outstanding.
(b) to assume all liabilities of the Acquired Fund, as set forth in
paragraph 1.3. Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all property, including, without limitation, all cash,
securities, commodities and futures interests, claims (whether absolute or
contingent, known or unknown, accrued or unaccrued) and dividends or interest
receivable which are owned by the Acquired Fund and any deferred expenses shown
as an asset on the books of the Acquired Fund (the "Acquired Fund Assets") on
the Closing Date provided in paragraph 3.1.
1.3 The Acquiring Fund shall assume all liabilities of the Acquired
Fund.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, the Acquired Fund will distribute pro rata to the Acquired Fund's
shareholders of record, determined as of the close of business on the Closing
Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by
the Acquired Fund pursuant to paragraph 1.1 and will terminate. Such
distribution will be accomplished by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund
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Shareholders and representing the respective pro rata number of the Acquiring
Fund Shares due such shareholders. All issued and outstanding shares of the
Acquired Fund will simultaneously be canceled on the books of the Acquired Fund,
although share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as determined
in accordance with Section 1.1. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent.
2. [Reserved]
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be December 11, 1998, or such other date as
the parties may agree to in writing. The time of the Closing shall be 5:00 p.m.
New York time on the Closing Date. All acts taking place at the Closing shall be
deemed to take place simultaneously as of 5:00 p.m. New York time.
3.2 (a) Chase Manhattan Bank, as custodian of all portfolio securities,
cash, and any other assets held outside of the United States for the Acquiring
Fund and the Acquired Fund (the "Foreign Custodian"), shall deliver at the
Closing a certificate of an authorized officer stating that: (a) the Acquired
Fund's portfolio securities, cash, and any other assets held outside of the
United States have been delivered in proper form to the Acquiring Fund on the
Closing Date; and (b) all necessary taxes, including all applicable transfer
stamps, if any, have been paid, or provision for payment has been made, in
conjunction with the delivery of portfolio securities. The Acquiring Fund may
waive compliance with this paragraph 3.2 (a) if in its sole discretion it
determines to do so.
(b) Investors Fiduciary Trust Company, as custodian of all
portfolio securities, cash and any other assets held within the United States
for the Acquiring Fund and the Acquired Fund (the "Domestic Custodian"), shall
deliver at the Closing a certificate of an authorized officer stating that: (i)
the Acquired Fund's portfolio securities, cash, and any other assets held within
the United States have been delivered in proper form to the Acquiring Fund on
the Closing Date; and (ii) all necessary taxes, including all applicable stock
transfer stamps, if any, have been paid, or provision for payment has been made,
in conjunction with the delivery of portfolio securities. The Acquiring Fund may
waive compliance with this paragraph 3.2(b) if in its sole discretion it
determines to do so.
3.3 In the event that on the Closing Date (a) a primary trading market
for portfolio securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereon shall be restricted, or (b) trading or the
reporting of trading in such market shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or the
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Acquired 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.
3.4 Xxxxxx Service Company ("KSC"), as transfer agent for the Acquiring
Fund and the Acquired Fund, shall deliver at the Closing a certificate of an
authorized officer stating that KSC's records contain the names and addresses of
the Acquired Fund Shareholders and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing. KSC, on behalf of the Acquiring Fund, shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the Secretary of the Acquired Fund or provide evidence satisfactory to
the Acquired Fund that such Acquiring Fund Shares have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. KSC shall issue and
deliver a confirmation that the Acquired Fund Shares credited on the books and
records of the Acquired Fund were subsequently credited to each shareholder of
record of the Acquired Fund in an amount equal to the number of shares of common
stock of the Acquired Fund held by such shareholder of record immediately prior
thereto. At the Closing each party shall deliver to the other such bills of
sale, checks, assignments, share certificates, if any, receipts or other
documents as such other party or its counsel may reasonably request.
3.5 Prior to Closing, the Xxxxxx Fund shall have authorized the
issuance of and the Xxxxxx Fund shall have issued three shares of common stock
of the Acquiring Fund, including one share each of Class A, Class B, and Class
C, to the Acquired Fund in consideration of the payment of $1.00 per share for
the purpose of enabling the Acquired Fund to vote to (a) approve the investment
management agreement between the Xxxxxx Fund, on behalf of the Acquiring Fund,
and Xxxxxxx Xxxxxx Investments, Inc.; (b) approve the plan of distribution
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act") with respect to the Class B and Class C shares of the Acquiring
Fund; (c) ratify the selection of Ernst & Young LLP as auditors for the
Acquiring Fund; and (d) ratify the election of directors of the Xxxxxx Fund.
Prior to the effective time of the Closing, each Acquiring Fund Class A, Class B
and Class C share issued pursuant to this paragraph 3.5 shall be redeemed by the
Xxxxxx Fund for $1.00.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Acquired Fund represents and warrants to the Acquiring Fund as
follows:
(a) The Acquired Fund is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland.
(b) The Acquired Fund is a registered closed-end management investment
company, and its shares are registered with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
("1933 Act").
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(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of the
Acquired Fund's Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquired Fund is a party or by which it is bound.
(d) The Acquired Fund has no material contracts or other material
commitments (other than this Agreement) which will be terminated with liability
to it prior to the Closing Date.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its knowledge
threatened against the Acquired Fund or any of its properties or assets which,
if adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Acquired 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 its business
or its ability to consummate the transactions herein contemplated.
(f) The statements of assets, liabilities and capital and a schedule of
investments of the Acquired Fund at November 30, 1996 and 1997 (copies of which
have been delivered by the Acquired Fund to the Acquiring Fund) have been
audited by Ernst & Young LLP, independent certified public accountants, and are
in accordance with generally accepted accounting principles consistently applied
("GAAP"), and such statements fairly reflect the financial condition of the
Acquired Fund as of such dates, and there are no known contingent liabilities of
the Acquired Fund as of such dates not disclosed therein.
(g) The Acquiring Fund has been furnished with an unaudited statement
of assets, liabilities and capital and a schedule of investments of the Acquired
Fund, each as of May 31, 1998. These statements are in accordance with GAAP and
present fairly, in all material respects, the financial position of the Acquired
Fund as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund as of such date not disclosed therein.
(h) Since May 31, 1998, there has not been any material adverse change
in the Acquired Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund. For the purposes of this subparagraph (h), a
decline in net asset value per share of the Acquired Fund shall not constitute a
material adverse change.
(i) The Acquired Fund has valued, and will continue to value, its
portfolio securities and other assets in accordance with applicable legal
requirements.
(j) All Federal and other tax returns and reports (including
information returns) of the Acquired Fund required by law to be filed shall have
been filed, and all Federal and other taxes
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shall have been paid so far as due, or provision shall have been made for the
payment thereof, and to the best of the Acquired Fund's knowledge no such return
is currently under audit and no assessment has been asserted with respect to
such returns.
(k) For each taxable year of its operation, (including the portion of
the current taxable year through the Closing Date), the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has elected to be treated as a regulated
investment company.
(l) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Acquired Fund. All of the issued and outstanding
shares of the Acquired Fund will, at the time of Closing, be held by the persons
and in the amounts set forth in the records of KSC, the transfer agent to the
Acquired Fund. The Acquired Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any of the Acquired Fund shares
(other than pursuant to the Acquired Fund's dividend reinvestment plan), nor is
there outstanding any security convertible into any of the Acquired Fund's
shares.
(m) All of the issued and outstanding shares of the Acquired Fund shall
have been offered for sale and sold in conformity with all applicable state
securities or blue sky laws (including any applicable exemptions therefrom) and,
to the extent that any audit of the records of the Acquired Fund or its transfer
agent by the Xxxxxx Fund or its agents shall have revealed otherwise, either (i)
the Acquired Fund shall have taken all actions that in the opinion of the Xxxxxx
Fund or its counsel are necessary to remedy any prior failure on the part of the
Acquired Fund to have offered for sale and sold such shares in conformity with
such laws or (ii) the Acquired Fund shall have furnished (or caused to be
furnished) surety, or deposited (or caused to be deposited) assets in escrow,
for the benefit of the Xxxxxx Fund, to indemnify the Xxxxxx Fund against any
expense, loss, claim, damage or liability whatsoever that may be asserted or
threatened by reason of such failure on the part of the Acquired Fund to have
offered and sold such shares in conformity with such laws.
(n) At the Closing Date, the Acquired Fund will have good and
marketable title to the Acquired 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, and upon delivery and
payment for such 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 the Acquiring Fund.
(o) The Acquired Fund has full power and authority to enter into and
perform its obligations under this Agreement. 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 Board of Directors of
the Acquired Fund, and, subject to such approval and the approval of the
Acquired Fund Shareholders, this Agreement constitutes a valid and binding
obligation of the Acquired Fund, enforceable in accordance with its terms,
subject as to enforcement to
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bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles.
(p) The Acquired Fund has the power to own all of its properties and
assets and, subject to the approval of Acquired Fund shareholders, to carry out
and consummate the transactions contemplated herein, and has all necessary
federal, state and local authorizations to carry on its business as now being
conducted and to consummate the transactions contemplated by this Agreement.
(q) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transaction contemplated by this Agreement, except such as may be required
under the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the 1940 Act, the rules and regulations under those Acts, or state
securities laws, all of which shall have been received prior to the Closing
Date, except for such consents, approvals, authorizations or orders as may be
required subsequent to the Closing Date.
(r) Insofar as the following relate to it, the proxy materials of the
Acquired Fund prepared in connection with the Meeting and filed with the SEC
pursuant to Section 14(a) of the 1934 Act and Section 20(a) of the 1940 Act with
respect to the transactions contemplated by this Agreement, and any supplement
or amendment thereto or the documents appended thereto (the "Reorganization
Proxy Materials"), from their effective and clearance dates with the Commission,
through the time of the Meeting and at the Closing Date: (i) shall comply in all
material respects with the provisions of the 1934 Act and the 1940 Act, the
rules and regulations thereunder, and applicable state securities laws, and (ii)
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Reorganization Proxy Materials made in reliance upon and in conformity with
information furnished by or on behalf of the Xxxxxx Fund or the Acquiring Fund
if furnished by its investment adviser, administrator, custodian or transfer
agent, acting in their capacity as such.
(s) The Acquired Fund shall not sell or otherwise dispose of any shares
of the Acquiring Fund to be received in the transactions contemplated herein,
except in distribution to its shareholders as contemplated herein.
(t) The Acquired Fund shall, as soon as practicable after satisfaction
of all conditions of the Reorganization: (i) file or cause to be filed, an
application pursuant to Section 8(f) of the 1940 Act for an order declaring that
the Acquired Fund has ceased to be a registered investment company; and (ii)
delist the Acquired Fund's shares on the New York Stock Exchange and the Chicago
Stock Exchange.
4.2 The Xxxxxx Fund on behalf of the Acquiring Fund represents and
warrants to the Acquired Fund as follows:
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(a) The Xxxxxx Fund is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland.
(b) The Xxxxxx Fund is a registered open-end management investment
company and its registration with the Commission as an investment company with
respect to each series of shares it offers, including those of the Acquiring
Fund, under the 1933 Act and the 1940 Act, is in full force and effect or will
be so in effect upon the Closing Date.
(c) Before the effective time of the Closing, the Acquiring Fund will
be a duly established and designated series of the Xxxxxx Fund, with fundamental
investment policies and restrictions that are substantially identical to those
of the Acquired Fund.
(d) The Acquiring Fund has not commenced operations and will not
commence operations until after the Closing.
(e) Prior to the effective time of the Closing, there will be no issued
and outstanding shares of the Acquiring Fund or any other securities issued by
the Acquiring Fund, except as provided in paragraph 3.5.
(f) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of the
Xxxxxx Fund's Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquiring Fund or the Xxxxxx Fund is a party or by which it is bound.
(g) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or threatened against
the Acquiring Fund or any of its properties or assets. 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 its business or its ability to consummate the transactions contemplated
herein.
(h) The Xxxxxx Fund shall file a post-effective amendment (the "N-1A
Post-Effective Amendment") to its registration statement on Form N-1A with the
Commission and with appropriate state securities commissions, as promptly as
practicable so that the Acquiring Fund and its shares are registered under the
1933 Act, the 1940 Act and applicable state securities laws.
(i) The prospectus and statement of additional information of the
Acquiring Fund will 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 will 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 are made, not materially misleading.
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(j) The Acquiring Fund intends to qualify as a regulated investment company
under Part I of Subchapter M of the Code.
(k) All issued and outstanding Acquiring Fund Shares are, and at the Closing
Date all issued and outstanding Acquiring Fund Shares 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 Acquiring Fund Shares (other than pursuant to
the Acquiring Fund's dividend reinvestment plan), nor is there outstanding any
security convertible into any Acquiring Fund Shares.
(l) The Xxxxxx Fund, on behalf of the Acquiring Fund, has full power and
authority to enter into and perform its obligations under this Agreement. 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
Directors of the Xxxxxx Fund, and, subject to such approval, 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.
(m) The Acquiring Fund has the power to own all of its properties and assets and
to consummate the transaction contemplated herein, and has all necessary
federal, state and local authorizations to carry on its business as now being
conducted and to consummate the transaction contemplated by this Agreement.
(n) 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 by this Agreement, except such as may be required
under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under
those Acts, or state securities laws, all of which shall have been received
prior to the Closing Date, except for such consents, approvals, authorizations
or orders as may be required subsequent to the Closing Date.
(o) The Acquiring Fund Shares to be issued and delivered to the Acquired Fund,
for the account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement will at the Closing Date have been duly authorized and, when so issued
and delivered, will be duly and validly issued shares of the Acquiring Fund, and
will be fully paid and non-assessable by the Acquiring Fund.
(p) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
applicable state securities laws in order to continue its operations after the
Closing Date.
5. COVENANTS OF THE ACQUIRED FUND AND THE XXXXXX FUND ON BEHALF OF THE
ACQUIRING FUND
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5.1 The Acquired Fund will be operated in the ordinary course of
business between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include customary dividends and
distributions, as well as such other distributions as may be deemed advisable.
5.2 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder to the Acquired Fund are not being acquired for the purpose of
making any distribution thereof other than in accordance with the terms of this
Agreement.
5.3 The Acquired Fund will assist the Xxxxxx Fund in obtaining such
information as the Xxxxxx Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares.
5.4 Each of the Acquired Fund and the Xxxxxx Fund on behalf of the
Acquiring Fund agrees to make such representations and warranties and take such
actions as may be necessary to assure that the Reorganization shall constitute a
tax-free reorganization.
5.5 The Xxxxxx Fund, on behalf of the Acquiring Fund, agrees that it
has no plan or intention to sell or otherwise dispose of the assets of the
Acquired Fund to be acquired in the Reorganization, except for sales and
dispositions made in the ordinary course of its business of investing and
reinvesting assets.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Xxxxxx Fund, on behalf of 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 further conditions:
6.1 All representations and warranties of the Xxxxxx Fund on behalf 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.
6.2 The Xxxxxx Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in a form reasonably satisfactory to the
Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Xxxxxx 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 Acquired Fund shall reasonably request.
6.3 The Xxxxxx Fund shall have performed and complied in all material
respects with each of its agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the Closing Date.
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6.4 The Acquired Fund shall have received on the Closing Date the
opinion of Dechert Price & Xxxxxx, counsel to the Xxxxxx Fund, dated as of the
Closing Date, covering the following points:
(a) The Xxxxxx Fund is a corporation duly organized, validly existing
and in good standing under the laws of the state of Maryland and has the power
to own all of its properties and assets, including those of the Acquiring Fund,
and to carry on its business, including that of the Acquiring Fund, as presently
conducted.
(b) The Agreement has been duly authorized, executed and delivered by
the Xxxxxx Fund on behalf of the Acquiring Fund and, assuming that the
Reorganization Proxy Materials comply with the 1933 Act, the 1934 Act and the
1940 act and the rules and regulations thereunder and, assuming due
authorization, execution and delivery of the Agreement by the Acquired Fund, is
a valid and binding obligation of the Xxxxxx Fund on behalf of the Acquiring
Fund enforceable against the Xxxxxx Fund in accordance with its terms, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to general
equity principles.
(c) The Acquiring Fund Shares to be issued to the Acquired Fund
Shareholders as provided by this Agreement are duly authorized, upon such
delivery will be validly issued and outstanding, and are fully paid and
non-assessable by the Acquiring Fund, and no shareholder of the Acquiring Fund
has any preemptive rights to subscription or purchase in respect thereof.
(d) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
material violation of the Xxxxxx Fund's Articles of Incorporation or By-Laws or
any provision of any agreement (known to such counsel) to which the Xxxxxx 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 Xxxxxx Fund is a party or by which
it is bound.
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the State of Maryland is required for the consummation by the
Acquiring Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act, and such as may be
required under state securities laws.
(f) The Xxxxxx Fund is registered as a management investment company
with respect to each series of shares it offers, including those of the
Acquiring Fund, under the 1940 Act, and its registration with the Commission as
a management investment company under the 1940 Act is in full force and effect.
(g) Shares of the Xxxxxx Fund, including those of the Acquiring Fund,
are registered under the 1933 Act, and such registration is in full force and
effect.
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(h) To the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Xxxxxx Fund or the Acquiring Fund or
any of their respective properties or assets and neither the Xxxxxx Fund nor the
Acquiring Fund is 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 its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXXX FUND ON BEHALF OF THE
ACQUIRING FUND
The obligations of the Xxxxxx Fund, on behalf of the Acquiring Fund, to
complete the transaction provided for herein shall be subject, at its election,
to the performance by the Acquired Fund of all of the obligations to be
performed by it hereunder on or before the Closing Date and, in addition
thereto, the following further conditions:
7.1 All representations and warranties of the Acquired 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 Acquired Fund shall have delivered to the Xxxxxx Fund a
statement of assets liabilities, and capital of the Acquired Fund, together with
a list of the portfolio securities of the Acquired Fund showing the tax costs of
such securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the President or Vice President and Treasurer or
Assistant Treasurer of the Acquired Fund as having been prepared in accordance
with GAAP, and certifying that there has been no material adverse change in its
financial position since May 31, 1998, other than changes in its portfolio
securities since that date or changes in the market value of its portfolio
securities.
7.3 The Acquired Fund shall have duly executed and delivered to the
Xxxxxx Fund such bills of sale, assignments, certificates and other instruments
of transfer ("Transfer Documents") as the Xxxxxx Fund may deem necessary or
desirable to transfer all of the Acquired Fund's right, title and interest in
and to the Acquired Fund's assets. The Acquired Fund's assets shall be
accompanied by all necessary state stock transfer stamps or cash for the
appropriate purchase price therefor.
7.4 The Acquired Fund shall have delivered to the Xxxxxx Fund on the
Closing Date a certificate executed in its name by its President or Vice
President and its Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Xxxxxx Fund and dated as of the Closing Date, to the effect
that the representations and warranties of the Acquired 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 Xxxxxx Fund shall reasonably request.
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7.5 The Acquired Fund shall have performed and complied in all material
respects with each of its agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the Closing Date.
7.6 The Xxxxxx Fund shall have received on the Closing Date the opinion
of Vedder, Price, Xxxxxxx & Kammholz, counsel to the Acquired Fund, covering the
following points:
(a) The Acquired Fund is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and has the power
to own all of its properties and assets, and to carry on its business, as
presently conducted.
(b) The Agreement has been duly authorized, executed and delivered by
the Acquired Fund, and, assuming due authorization, execution and delivery of
the Agreement by the Xxxxxx Fund, is a valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general equity principles.
(c) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
material violation of the Acquired Fund's Articles of Incorporation or By-Laws
or any provision of any agreement (known to such counsel) to which the Acquired
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 Acquired Fund is a party
or by which it is bound.
(d) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the State of Maryland is required for the consummation by the Acquired
Fund of the transaction contemplated herein, except such as have been obtained
under the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws.
(e) The descriptions in the Reorganization Proxy Materials of the
Acquired Fund and, only insofar as they relate to the Acquired Fund, of
statutes, legal and governmental proceedings and contracts and other documents,
if any, are accurate and fairly present the information required to be shown.
(f) The Acquired Fund is registered as a management investment company
under the 1940 Act and its registration with the Commission as an investment
company under the 1940 Act is in full force and effect.
(g) The Acquired Fund is subclassified as an open-end company under the
1940 Act, all necessary board of directors and shareholder approvals relating to
such subclassification have been obtained, and all necessary regulatory filings,
including amendments to the Acquired
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Fund's Articles of Incorporation and registration with the Commission, have been
duly made and are effective.
(h) To the knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to the Acquired Fund or any of its properties
or assets, and the Acquired Fund 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 its business.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Acquired Fund at
which the contents of the Reorganization Proxy Materials and related matters
were discussed and, although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Reorganization Proxy Materials (except to the extent indicated
in paragraph (e) of their opinion), on the basis of the foregoing (relying as to
materiality to a large extent upon the opinions of officers and other
representatives of the Acquired Fund), no facts have come to their attention
that lead them to believe that the Reorganization Proxy Materials as of their
respective dates, as of the date of the Shareholders Meeting, and as of the
Closing Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein regarding the Acquired Fund
or necessary to make the statements therein regarding the Acquired Fund, in
light of the circumstances under which they were made, not misleading. Such
opinion may state that such counsel does not express any opinion or belief as to
the information relating to the Xxxxxx Fund or the Acquiring Fund, contained in
Reorganization Proxy Materials and that such opinion is solely for the benefit
of the Acquiring Fund, its Directors and its officers. Such opinion shall also
include such other matters incident to the transaction contemplated hereby as
the Xxxxxx Fund may reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXXX FUND AND THE
ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date, either party to this Agreement shall, at its option, not be
required to consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Acquired Fund's
Articles of Incorporation and certified copies of the results of such vote
evidencing such approval shall have been delivered to the Xxxxxx Fund.
8.2 On the Closing Date no action, suit or other proceeding shall be
threatened or pending before any court or governmental agency which seeks to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
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8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Xxxxxx Fund or the Acquired Fund to permit consummation, in all material
respects, of the transaction 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
Acquiring Fund or the Acquired Fund.
8.4 The Xxxxxx Fund shall have received the opinion of Dechert Price &
Xxxxxx addressed to the Xxxxxx Fund substantially to the effect that for federal
income tax purposes:
(a) The transfer by the Acquired Fund of all of its assets to the
Acquiring Fund in exchange for Acquiring Fund Shares, and the distribution of
such shares to the Acquired Fund Shareholders, as provided in this Agreement,
will constitute a reorganization within the meaning of Section 368(a)(1)(F) of
the Code.
(b) In accordance with Sections 361(a), 361(c)(1) and 357(a) of the
Code, no gain or loss will be recognized by the Acquired Fund as a result of
such transactions.
(c) In accordance with Section 1032 of the Code, no gain or loss will
be recognized by the Acquiring Fund as a result of such transactions.
(d) In accordance with Section 354(a)(1) of the Code, no gain or loss
will be recognized by the shareholders of the Acquired Fund on the distribution
to them by the Acquired Fund of the Acquiring Fund Shares in exchange for their
shares of the Acquired Fund.
(e) In accordance with Section 358(a)(1) of the Code, the basis of the
Acquiring Fund Shares received by each shareholder of the Acquired Fund will be
the same as the basis of the shareholder's Acquired Fund shares immediately
prior to such transactions.
(f) In accordance with Section 362(b) of the Code, the basis of the
Acquired Fund Assets received by the Acquiring Fund will be the same as the
basis of such assets in the hands of the Acquired Fund immediately prior the
transactions.
(g) In accordance with Section 1223(1) of the Code, a shareholder's
holding period for the Acquiring Fund Shares will be determined by including the
period for which the shareholder held the shares of the Acquired Fund exchanged
therefor, provided that the shareholder held such shares of the Acquired Fund as
a capital asset.
(h) In accordance with Section 1223(2) of the Code, the holding period
of the Acquiring Fund with respect to the Acquired Fund Assets will include the
period for which such Assets were held by the Acquired Fund provided that the
Acquired Fund held such Assets as capital assets.
(i) In accordance with Section 381(a) of the Code, the Acquiring Fund
will succeed to the tax attributes of the Acquired Fund described in Section
381(c) of the Code.
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The delivery of such opinion shall be conditioned upon the receipt by
Dechert Price & Xxxxxx of such representations as it shall reasonably request of
the parties hereto.
8.5 The Acquired Fund shall have received the opinion of Vedder, Price,
Xxxxxxx & Kammholz addressed to the Acquired Fund substantially to the effect
that for federal income tax purposes:
(a) The transfer by the Acquired Fund of all of its assets to the
Acquiring Fund in exchange for Acquiring Fund Shares, and the distribution of
such shares to the Acquired Fund Shareholders, as provided in this Agreement,
will constitute a reorganization within the meaning of Section 368(a)(1)(F) of
the Code.
(b) In accordance with Sections 361(a), 361(c)(1) and 357(a) of the
Code, no gain or loss will be recognized by the Acquired Fund as a result of
such transactions.
(c) In accordance with Section 1032 of the Code, no gain or loss will
be recognized by the Acquiring Fund as a result of such transactions.
(d) In accordance with Section 354(a)(1) of the Code, no gain or loss
will be recognized by the shareholders of the Acquired Fund on the distribution
to them by the Acquired Fund of the Acquiring Fund Shares in exchange for their
shares of the Acquired Fund.
(e) In accordance with Section 358(a)(1) of the Code, the basis of the
Acquiring Fund Shares received by each shareholder of the Acquired Fund will be
the same as the basis of the shareholder's Acquired Fund shares immediately
prior to such transactions.
(f) In accordance with Section 362(b) of the Code, the basis of the
Acquired Fund Assets received by the Acquiring Fund will be the same as the
basis of such assets in the hands of the Acquired Fund immediately prior the
transactions.
(g) In accordance with Section 1223(1) of the Code, a shareholder's
holding period for the Acquiring Fund Shares will be determined by including the
period for which the shareholder held the shares of the Acquired Fund exchanged
therefor, provided that the shareholder held such shares of the Acquired Fund as
a capital asset.
(h) In accordance with Section 1223(2) of the Code, the holding period
of the Acquiring Fund with respect to the Acquired Fund Assets will include the
period for which such Assets were held by the Acquired Fund provided that the
Acquired Fund held such Assets as capital assets.
(i) In accordance with Section 381(a) of the Code, the Acquiring Fund
will succeed to the tax attributes of the Acquired Fund described in Section
381(c) of the Code.
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The delivery of such opinion shall be conditioned upon the receipt by
Vedder, Price, Xxxxxxx & Kammholz of such representations as it shall reasonably
request of the parties hereto.
8.6 No action, suit or other proceeding shall be 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.
8.7 The Commission shall not have issued any unfavorable advisory
report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking
to enjoin consummation of the transactions contemplated by this Agreement under
Section 25(c) of the 0000 Xxx.
8.8 Either party, at its option, may waive compliance by the other
party with any condition contained in this Section 8, other than the conditions
contained in Section 8.1.
9. BROKERAGE FEES
The Xxxxxx Fund, on behalf of the Acquiring Fund, and the Acquired 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.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Xxxxxx Fund and the Acquired Fund 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 survive the consummation of the transactions contemplated hereunder.
11. FURTHER ASSURANCES
Subject to the terms and conditions herein provided, each of the
parties hereto shall use its best efforts to take, or cause to be taken, such
action, to execute and deliver, or cause to be executed and delivered, such
additional documents and instruments and to do, or cause to be done, all things
necessary, proper or advisable under the provisions of this Agreement and under
applicable law to consummate and make effective the transactions contemplated by
this Agreement, including without limitation delivering and/or causing to be
delivered to the other party hereto each of the items required under this
Agreement as a condition to such party's obligations hereunder. In addition, the
Acquired Fund shall deliver or cause to be delivered to the Xxxxxx Fund or its
designees each account, book, record or other document of the Acquired Fund
required to be maintained by Section 31(a) of the 1940 Act and Rules 31a-1 to
31a-3 thereunder (regardless of whose possession they are in).
- 17 -
12. TERMINATION
This Agreement may be terminated by a party at or, in the case of
Subsection 12(c) below, at any time prior to, the Closing Date by a vote of a
majority of its Board of Directors as provided below:
(a) By the Acquired Fund if the conditions set forth in Sections 6
or 8 are not satisfied as specified in said Section;
(b) By the Xxxxxx Fund on behalf of the Acquiring Fund if the
conditions set forth in Sections 7 or 8 are not satisfied as
specified in said Section;
(c) By mutual consent.
13. 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
Acquired Fund and the Xxxxxx Fund; provided, however, that following the meeting
of the Acquired Fund Shareholders called by the Acquired Fund, no such amendment
may have the effect of changing the provisions for determining the number of the
Acquiring Fund Shares to be issued to the Acquired Fund Shareholders under this
Agreement to the detriment of such shareholders without their further approval.
14. 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 Xxxxxx Fund, 000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, with a
copy to Dechert Price & Xxxxxx, 0000 Xxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxx, or to the Acquired Fund, 000 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, with a copy to Vedder,
Price, Xxxxxxx & Kammholz, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000,
Attention: Xxxxx X. Xxxxxx.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION
OF LIABILITY
15.1 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.
15.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of laws.
- 18 -
15.4 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.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or a Vice President.
Attest: XXXXXX GLOBAL/INTERNATIONAL SERIES,
INC.
on behalf of the
GROWTH FUND OF SPAIN
/s/Xxxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxxxxxx
--------------------------------- ---------------------------------------
By: Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxxxxxx
Title: Secretary Title: Vice President
Attest: THE GROWTH FUND OF SPAIN, INC.
/s/Xxxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxxxxxx
--------------------------------- ---------------------------------------
By: Xxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxxxxxx
Title: Secretary Title: Vice President
- 19 -
