EXHIBIT 4
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this ____ day of _________, 2006, by and between [Acquiring Investment Company]
(the "Company"), on behalf of its series, [ ] Portfolio (the "Acquiring
Portfolio"), and [Disappearing Investment Company] (the "Trust"), on behalf of
its series, [ ] Portfolio (the "Disappearing Portfolio").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of 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 Disappearing Portfolio to the Acquiring Portfolio in exchange
solely for I Class ("Class I") voting shares of beneficial interest of the
Acquiring Portfolio (the "Acquiring Portfolio Shares"), the assumption by the
Acquiring Portfolio of all known liabilities of the Disappearing Portfolio
described in paragraph 1.3, and the distribution of the Acquiring Portfolio
Shares to the shareholders of the Disappearing Portfolio in complete liquidation
of the Disappearing Portfolio as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Disappearing Portfolio and the Acquiring Portfolio are series
of open-end, registered investment companies of the management type and the
Disappearing Portfolio owns securities which generally are assets of the
character in which the Acquiring Portfolio is permitted to invest; and
WHEREAS, the Board of Directors of the Company has determined that the
exchange of all of the assets of the Disappearing Portfolio for Acquiring
Portfolio Shares and the assumption of all known liabilities of the Disappearing
Portfolio described in paragraph 1.3 by the Acquiring Portfolio is in the best
interests of the Acquiring Portfolio and its shareholders and that the interests
of the existing shareholders of the Acquiring Portfolio would not be diluted as
a result of this transaction; and
WHEREAS, the Board of Trustees of the Trust has determined that the
exchange of all of the assets of the Disappearing Portfolio for Acquiring
Portfolio Shares and the assumption of all known liabilities described in
paragraph 1.3 of the Disappearing Portfolio by the Acquiring Portfolio is in the
best interests of the Disappearing Portfolio and its shareholders and that the
interests of the existing shareholders of the Disappearing Portfolio 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 DISAPPEARING PORTFOLIO TO THE ACQUIRING
PORTFOLIO IN EXCHANGE FOR THE ACQUIRING PORTFOLIO SHARES, THE ASSUMPTION
OF ALL DISAPPEARING PORTFOLIO KNOWN LIABILITIES AND THE LIQUIDATION OF THE
DISAPPEARING PORTFOLIO
1.1 Subject to the requisite approval of the Disappearing Portfolio
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Disappearing
Portfolio agrees to transfer all of the Disappearing Portfolio's assets, as set
forth in paragraph 1.2, to the Acquiring Portfolio, and the Acquiring Portfolio
agrees in exchange therefor: (i) to deliver to the Disappearing Portfolio the
number of full and fractional Class I Acquiring Portfolio Shares determined by
dividing the value of the Disappearing Portfolio's net assets, computed in the
manner and as of the time and date set forth in paragraph 2.1, by the net asset
value of one Class I Acquiring Portfolio Share, computed in the manner and as of
the time and date set forth in paragraph 2.2; and (ii) to assume all known
liabilities of the Disappearing Portfolio, 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 Disappearing Portfolio to be acquired by the
Acquiring Portfolio shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by the Disappearing Portfolio
and any
deferred or prepaid expenses shown as an asset on the books of the
Disappearing Portfolio on the closing date provided for in paragraph 3.1 (the
"Closing Date") (collectively, "Assets").
1.3. The Disappearing Portfolio will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date. The Acquiring
Portfolio shall assume all known liabilities of the Disappearing Portfolio set
forth in the Disappearing Portfolio's statement of assets and liabilities as of
the Closing Date delivered by the Trust, on behalf of the Disappearing
Portfolio, to the Company, on behalf of the Acquiring Portfolio, pursuant to
paragraph 7.2 hereof. On or as soon as practicable prior to the Closing Date,
the Disappearing Portfolio will declare and pay to its shareholders of record
one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income (computed without regard to any deduction for dividends
paid) and realized net capital gain, if any, for the current taxable year
through the Closing Date.
1.4. Immediately after the transfer of assets provided for in paragraph
1.1, the Disappearing Portfolio will distribute to the Disappearing Portfolio's
shareholders of record, determined as of immediately after the close of business
on the Closing Date (the "Disappearing Portfolio Shareholders"), on a pro rata
basis, the Class I Acquiring Portfolio Shares received by the Disappearing
Portfolio pursuant to paragraph 1.1, and will completely liquidate. Such
distribution and liquidation will be accomplished, with respect to the
Disappearing Portfolio's shares, by the transfer of the Acquiring Portfolio
Shares then credited to the account of the Disappearing Portfolio on the books
of the Acquiring Portfolio to open accounts on the share records of the
Acquiring Portfolio in the names of the Disappearing Portfolio Shareholders. The
aggregate net asset value of Class I Acquiring Portfolio Shares to be so
credited to Disappearing Portfolio Shareholders shall be equal to the aggregate
net asset value of the Disappearing Portfolio shares owned by such shareholders
on the Closing Date. All issued and outstanding shares of the Disappearing
Portfolio will simultaneously be canceled on the books of the Disappearing
Portfolio, although share certificates representing interests in shares of the
Disappearing Portfolio will represent a number of the Class I Acquiring
Portfolio Shares after the Closing Date, as determined in accordance with
Section 2.3. The Acquiring Portfolio shall not issue certificates representing
the Class I Acquiring Portfolio Shares in connection with such exchange.
1.5 Ownership of Acquiring Portfolio Shares will be shown on the books of
the Acquiring Portfolio's transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Disappearing Portfolio including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. 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 Disappearing Portfolio.
2. VALUATION
2.1. The value of the Assets shall be the value computed as of immediately
after the close of business of the New York Stock Exchange and after the
declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures in the
then-current prospectus and statement of additional information with respect to
the Acquiring Portfolio, and valuation procedures established by the Acquiring
Portfolio's Board of Directors.
2.2. The net asset value of a Class I Acquiring Portfolio Share shall be
the net asset value per share computed with respect to that class as of the
Valuation Date, using the valuation procedures set forth in the Acquiring
Portfolio's then-current prospectus and statement of additional information and
valuation procedures established by the Acquiring Portfolio's Board of
Directors.
2.3 The number of the Class I Acquiring Portfolio Shares to be issued
(including fractional shares, if any) in exchange for the Disappearing
Portfolio's assets shall be determined by dividing the value of the net assets
with respect to shares of the Disappearing Portfolio, determined using the same
valuation
procedures referred to in paragraph 2.1, by the net asset value of an
Acquiring Portfolio Share, determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made by the Disappearing
Portfolio's designated record keeping agent and shall be subject to review by
Acquiring Portfolio's record keeping agent and by each Portfolio's respective
independent accountants.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be April 29, 2006, or such other date as the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of immediately after the close of business on the
Closing Date unless otherwise agreed to by the parties. The close of business on
the Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing shall be
held at the offices of the Acquiring Portfolio or at such other time and/or
place as the parties may agree.
3.2 The Disappearing Portfolio shall direct the Bank of New York Company,
Inc., as custodian for the Disappearing Portfolio (the "Custodian"), to deliver,
at the Closing, a certificate of an authorized officer stating that (i) the
Assets shall have been delivered in proper form to the Acquiring Portfolio
within two business days prior to or on the Closing Date, and (ii) all necessary
taxes in connection with the delivery of the Assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. The Disappearing Portfolio's portfolio securities
represented by a certificate or other written instrument shall be presented for
examination by the Disappearing Portfolio Custodian to the custodian for the
Acquiring Portfolio no later than five business days preceding the Closing Date,
and shall be transferred and delivered by the Disappearing Portfolio as of the
Closing Date for the account of the Acquiring Portfolio duly endorsed in proper
form for transfer in such condition as to constitute good delivery thereof. The
Custodian shall deliver as of the Closing Date by book entry, in accordance with
the customary practices of the Custodian and any securities depository (as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the
"1940 Act")) in which the Disappearing Portfolio's Assets are deposited, the
Disappearing Portfolio's portfolio securities and instruments deposited with
such depositories. The cash to be transferred by the Disappearing Portfolio
shall be delivered by wire transfer of federal funds on the Closing Date.
3.3 The Disappearing Portfolio shall direct [Transfer Agent] (the
"Transfer Agent"), on behalf of the Disappearing Portfolio, to deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Disappearing Portfolio Shareholders and the
number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Portfolio shall
issue and deliver a confirmation evidencing the Acquiring Portfolio Shares to be
credited on the Closing Date to the Secretary of the Acquiring Portfolio, or
provide evidence satisfactory to the Disappearing Portfolio that such Acquiring
Portfolio Shares have been credited to the Disappearing Portfolio's account on
the books of the Acquiring Portfolio. 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.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Portfolio or the Disappearing Portfolio shall be closed to trading or
trading thereupon shall be restricted, or (b) trading or the reporting of
trading on such Exchange or elsewhere shall be disrupted so that, in the
judgment of the Board of Trustees of the Disappearing Portfolio or the Board of
Directors of the Acquiring Portfolio, accurate appraisal of the value of the net
assets of the Acquiring Portfolio or the Disappearing Portfolio 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.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as has been disclosed to the Acquiring Portfolio in a written
instrument executed by an officer of the Trust, the Trust, on behalf of the
Disappearing Portfolio, represents and warrants to the Company as follows:
(a) The Disappearing Portfolio is duly organized as a series of the
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the [Relevant State], with power under the Trust's
Declaration of Trust to own all of its properties and assets and to carry on its
business as it is now being conducted;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and the registration of
shares of the Disappearing Portfolio under the Securities Act of 1933, as
amended ("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Disappearing
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information
of the Disappearing Portfolio and each prospectus and statement of additional
information of the Disappearing Portfolio used during the three years previous
to the date of this Agreement conforms or conformed at the time of its use 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 does
not, or did not at the time of its use, 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;
(e) On the Closing Date, the Disappearing Portfolio will have good
and marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring
Portfolio 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 Portfolio;
(f) The Disappearing Portfolio is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Trust, on behalf of the Disappearing Portfolio, is a party or by which it is
bound; or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Trust, on behalf of the Disappearing Portfolio, is a
party or by which it is bound;
(g) All material contracts or other commitments of the Disappearing
Portfolio (other than this Agreement and certain investment contracts including
options, futures and forward contracts) will terminate without liability to the
Disappearing Portfolio prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Company, on behalf of the Acquiring Portfolio, 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 Disappearing
Portfolio or any of its properties or assets that, if adversely determined,
would materially and adversely affect its financial condition or the conduct of
its business. The Trust, on behalf of the Disappearing Portfolio, 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;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Disappearing Portfolio at ______, 2005 have been audited
by [Auditor], independent accountants, and are in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and such
statements (copies of which have been furnished to the Acquiring Portfolio)
present fairly, in all material respects, the financial condition of the
Disappearing Portfolio as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Disappearing Portfolio required to be
reflected on a balance sheet (including the notes thereto) in accordance with
GAAP as of such date not disclosed therein;
(j) Since _______, 2005 there has not been any material adverse
change in the Disappearing Portfolio's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Disappearing Portfolio of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Portfolio. For the purposes of this
subparagraph (j), a decline in net asset value per share of the Disappearing
Portfolio due to declines in market values of securities in the Disappearing
Portfolio's portfolio, the discharge of Disappearing Portfolio known
liabilities, or the redemption of Disappearing Portfolio Shares by shareholders
of the Disappearing Portfolio shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Disappearing Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Disappearing Portfolio's knowledge,
no such return is currently under audit and no assessment has been asserted with
respect to such returns;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Disappearing Portfolio has met (and will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (and will be) eligible to and has
computed (and will compute) its federal income tax under Section 852 of the
Code, and will have distributed all of its investment company taxable income and
net capital gain (as defined in the Code) that has accrued through the Closing
Date, and before the Closing Date will have declared dividends sufficient to
distribute all of its investment company taxable income and net capital gain for
the period ending on the Closing Date;
(m) All issued and outstanding shares of the Disappearing Portfolio
are, and on the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable, and have been offered and sold in every state and
the District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Disappearing Portfolio will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Disappearing Portfolio, as provided in
paragraph 3.3. The Disappearing Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Disappearing Portfolio, nor is there outstanding any security convertible into
any of the Disappearing Portfolio shares;
(n) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action, if
any, on the part of the Trustees of the Trust, on behalf of the Disappearing
Portfolio, and, subject to the approval of the shareholders of the Disappearing
Portfolio, this Agreement will constitute a valid and binding obligation of the
Disappearing Portfolio, 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;
(o) The information to be furnished by the Disappearing Portfolio
for use in registration statements, proxy materials and other documents filed or
to be filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), 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 thereunder applicable thereto; and
(p) The proxy statement of the Disappearing Portfolio (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Disappearing Portfolio, will, on the
effective date of the Registration Statement and on the Closing Date (i) 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, in
light of the circumstances under which such statements were made, not materially
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquiring Portfolio for use therein,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act and the rules and regulations thereunder.
4.2 Except as has been disclosed to the Disappearing Portfolio in a
written instrument executed by an officer of the Company, the Company, on behalf
of the Acquiring Portfolio, represents and warrants to the Trust as follows:
(a) The Acquiring Portfolio is duly organized as a series of the
Company, which is a corporation duly organized, validly existing and in good
standing under the laws of the [Relevant State], with power under the Company's
Articles of Incorporation to own all of its properties and assets and to carry
on its business as it is now being conducted;
(b) The Company is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration of
the shares of the Acquiring Portfolio under the 1933 Act, is in full force and
effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Portfolio 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 by state securities laws;
(d) The current prospectus and statement of additional information
of the Acquiring Portfolio and each prospectus and statement of additional
information of the Acquiring Portfolio used during the three years previous to
the date of this Agreement conforms or conformed at the time of its use 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 does not or
did not at the time of its use 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;
(e) On the Closing Date, the Acquiring Portfolio will have good and
marketable title to the Acquiring Portfolio's assets, free of any liens of other
encumbrances, except those liens or encumbrances as to which the Disappearing
Portfolio has received notice and necessary documentation at or prior to the
Closing;
(f) The Acquiring Portfolio is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Company's Articles of Incorporation or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which the Company, on behalf of the Acquiring Portfolio, is a party or by which
it is bound; or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Company, on behalf of the Acquiring Portfolio,
is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Disappearing Portfolio, 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 Company, on
behalf of the Acquiring Portfolio, or any of the Acquiring Portfolio's
properties or assets that, if adversely determined, would materially and
adversely affect the Acquiring Portfolio's financial condition or the conduct of
the Acquiring Portfolio's business. The Company, on behalf of the Acquiring
Portfolio, 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;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Acquiring Portfolio at ______, 2005 have been audited by [Auditor], independent
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Disappearing Portfolio)
present fairly, in all material respects, the financial condition of the
Acquiring Portfolio as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquiring Portfolio required to be reflected
on a balance sheet (including the notes thereto) in accordance with GAAP as of
such date not disclosed therein;
(i) Since ________, 2005, there has not been any material adverse
change in the Acquiring Portfolio's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Disappearing Portfolio. For purposes of this subparagraph
(i), a decline in net asset value per share of the Acquiring Portfolio due to
declines in market values of securities in the Acquiring Portfolio's portfolio,
the discharge of Acquiring Portfolio liabilities, or the redemption of Acquiring
Portfolio Shares by shareholders of the Acquiring Portfolio, shall not
constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquiring Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Portfolio'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 taxable
year that includes the Closing Date), the Acquiring Portfolio has met (and will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been eligible to (and will be eligible to) and
has computed (and will compute) its federal income tax under Section 852 of the
Code;
(l) All issued and outstanding shares of the Acquiring Portfolio
are, and on the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable by the Company and have been offered and sold in
every state and the District of Columbia in compliance in all material respects
with applicable registration requirements of the 1933 Act and state securities
laws. The Acquiring Portfolio does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquiring Portfolio Shares, nor is
there outstanding any security convertible into any Acquiring Portfolio Shares;
(m) The execution, delivery and performance of this Agreement will
have been fully authorized prior to the Closing Date by all necessary action, if
any, on the part of the Directors of the Company, on behalf of the Acquiring
Portfolio, and this Agreement will constitute a valid and binding obligation of
the Acquiring Portfolio, 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;
(n) Class I Acquiring Portfolio Shares to be issued and delivered to
the Disappearing Portfolio, for the account of the Disappearing Portfolio
Shareholders, pursuant to the terms of this Agreement, will on the Closing Date
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Portfolio Shares, and will be fully paid and
non-assessable;
(o) The information to be furnished by the Company for use in the
registration statements, proxy materials and other documents that 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; and
(p) That insofar as it relates to the Acquiring Portfolio, the
Registration Statement relating to the Acquiring Portfolio Shares issuable
hereunder, and the proxy materials of the Disappearing Portfolio to be included
in the Registration Statement, and any amendment or supplement to the foregoing,
will, from the effective date of the Registration Statement through the date of
the meeting of shareholders of the Disappearing Portfolio contemplated therein
(i) 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, in light of the circumstances under which such statements were made,
not misleading, provided, however, that the representations and warranties in
this subparagraph (p) shall not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Disappearing Portfolio for use therein, and (ii)
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder.
5. COVENANTS OF THE ACQUIRING PORTFOLIO AND THE DISAPPEARING PORTFOLIO
5.1 The Acquiring Portfolio and the Disappearing Portfolio 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 the declaration and payment of customary dividends and distributions,
and any other distribution that may be advisable.
5.2 The Disappearing Portfolio will call a meeting of the shareholders of
the Disappearing Portfolio to consider and act upon this Agreement and to take
all other action necessary to obtain approval of the transactions contemplated
herein.
5.3 The Disappearing Portfolio covenants that the Class I Acquiring
Portfolio Shares to be issued hereunder are not being acquired for the purpose
of making any distribution thereof, other than in accordance with the terms of
this Agreement.
5.4 The Disappearing Portfolio will assist the Acquiring Portfolio in
obtaining such information as the Acquiring Portfolio reasonably requests
concerning the beneficial ownership of the Disappearing Portfolio shares.
5.5 Subject to the provisions of this Agreement, the Acquiring Portfolio
and the Disappearing Portfolio 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.
5.6 The Disappearing Portfolio will provide the Acquiring Portfolio with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement referred to in paragraph
4.1(p), all to be included in a Registration Statement on Form N-14 of the
Acquiring Portfolio (the "Registration Statement"), in compliance with the 1933
Act, the 1934 Act and the 1940 Act, in connection with the meeting of the
shareholders of the Disappearing Portfolio to consider approval of this
Agreement and the transactions contemplated herein.
5.7 As soon as is reasonably practicable after the Closing, the
Disappearing Portfolio will make a liquidating distribution to its shareholders
consisting of the Class I Acquiring Portfolio Shares received at the Closing.
5.8 The Acquiring Portfolio and the Disappearing Portfolio shall each use
its reasonable best efforts to fulfill or obtain the fulfillment of the
conditions precedent to effect the transactions contemplated by this Agreement
as promptly as practicable.
5.9 The Trust, on behalf of the Disappearing Portfolio, covenants that the
Trust will, from time to time, as and when reasonably requested by the Acquiring
Portfolio, execute and deliver or cause to be executed and delivered all such
assignments and other instruments, and will take or cause to be taken such
further action as the Company, on behalf of the Acquiring Portfolio, may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Trust's, on behalf of the Disappearing Portfolio's, title to and possession of
the Acquiring Portfolio's Shares to be delivered hereunder, and (b) the
Company's, on behalf of the Acquiring Portfolio's, title to and possession of
all the assets and otherwise to carry out the intent and purpose of this
Agreement.
5.10 The Acquiring Portfolio will 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 may be necessary in order to continue
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE DISAPPEARING PORTFOLIO
The obligations of the Trust, on behalf of the Disappearing Portfolio, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Company, on behalf of the Acquiring
Portfolio, 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 Company, on behalf of the
Acquiring Portfolio, 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 Company shall have delivered to the Trust 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 Trust and dated as of the
Closing Date, to the effect that the representations and warranties of the
Company, on behalf of the Acquiring Portfolio, 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
Trust shall reasonably request;
6.3 The Company, on behalf of the Acquiring Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Company, on behalf of
the Acquiring Portfolio, on or before the Closing Date; and
6.4 The Disappearing Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Class I Acquiring Portfolio Shares
of to be issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Company, on behalf of the Acquiring Portfolio, to
complete the transactions provided for herein shall be subject, at the Company's
election, to the performance by the Trust, on behalf of the Disappearing
Portfolio, of all of 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 Trust, on behalf of the
Disappearing Portfolio, 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 Trust shall have delivered to the Acquiring Portfolio a statement
of the Disappearing Portfolio's assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Trust;
7.3 The Trust shall have delivered to the Acquiring Portfolio 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 Company and dated as of the Closing Date, to the effect that
the representations and warranties of the Trust, on behalf of the Disappearing
Portfolio, 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 Company shall reasonably request;
7.4 The Trust, on behalf of the Disappearing Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Trust, on behalf of
the Disappearing Portfolio, on or before the Closing Date;
7.5 The Disappearing Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Class I Acquiring Portfolio Shares
to be issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1; and
7.6 The Disappearing Portfolio shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to the extent not
otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO AND
THE DISAPPEARING PORTFOLIO
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Disappearing
Portfolio, or the Company, on behalf of the Acquiring Portfolio, the other 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
Disappearing Portfolio in accordance with the provisions of the Trust's
Declaration of Trust, By-Laws, applicable Massachusetts law and the 1940 Act,
and certified copies of the resolutions evidencing such approval shall have been
delivered to the Acquiring Portfolio. Notwithstanding anything herein to the
contrary, neither the Company nor the Trust may waive the conditions set forth
in this paragraph 8.1;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened 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 deemed necessary by
the Company or the Trust 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 Acquiring Portfolio or the Disappearing
Portfolio, 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 1933 Act; and
8.5 The parties shall have received the opinion of [Counsel] addressed to
the Trust and the Company substantially to the effect that, based upon certain
facts, assumptions, and representations, the transaction contemplated by this
Agreement shall constitute a tax-free reorganization for Federal income tax
purposes. The delivery of such opinion is conditioned upon receipt by [Counsel]
of representations it shall request of the Company and the Trust.
Notwithstanding anything herein to the contrary, neither the Company nor the
Trust may waive the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust, on behalf of the Disappearing Portfolio, and the Company,
on behalf of the Acquiring Portfolio, represent and warrant to each other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization will be borne by
the investment adviser to the Acquiring Portfolio. The costs of the
Reorganization shall include, but not be limited to, costs associated with
obtaining any necessary order of exemption from the 1940 Act, preparation of the
Registration Statement, printing and distributing the Acquiring Portfolio's
prospectus and the Disappearing Portfolio's proxy materials, legal fees,
accounting fees, securities registration fees, and expenses of holding
shareholders' meetings. Notwithstanding any of the foregoing, 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. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Company and the Trust 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. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by either party by (i) mutual agreement of the parties, or (ii)
by either party if the Closing shall not have occurred on or before __________,
2006, unless such date is extended by mutual agreement of the parties, or (iii)
by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or Directors or
officers, except for any such material breach or intentional misrepresentation,
as to each of which all remedies at law or in equity of the party adversely
affected shall survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be deemed necessary or advisable by the authorized officers of the Trust and
the Company; provided, however, that following the meeting of the shareholders
of the Disappearing Portfolio called by the Trust pursuant to paragraph 5.2 of
this Agreement, no such amendment may have the effect of changing the provisions
for determining the number of the Class I Acquiring Portfolio Shares to be
issued to the Disappearing Portfolio Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to the
Company or the Trust, 0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx
00000-0000, attn: [ ], in each case with a copy to [Counsel].
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland without regard to its principles of conflicts
of laws.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents, or employees of the Trust personally, but shall bind only the trust
property of the Disappearing Portfolio, as provided in the Declaration of Trust
of the Trust. The execution and delivery 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 trust property of such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President and its seal to be affixed thereto
and attested by its Secretary or Assistant Secretary.
Attest: [ACQUIRING INVESTMENT COMPANY] on behalf of its
[ACQUIRING PORTFOLIO] series
________________________ By: _____________________________________________
SECRETARY
Its: _____________________________________________
Attest: [DISAPPEARING INVESTMENT COMPANY] on behalf of its
[DISAPPEARING PORTFOLIO] series
________________________ By: _____________________________________________
SECRETARY
Its: _____________________________________________
