EX.99.(4)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the 'AGREEMENT') is made as
of this ___ day of ______, 2002 among (i) BT Investment Funds (the 'BT TRUST'),
a business trust organized under the laws of the Commonwealth of Massachusetts
with its principal place of business at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, on behalf of Small Cap Fund (the 'ACQUIRING FUND'), a series of the BT
Trust, and (ii) The SMALLCap Fund, Inc., a corporation organized under the laws
of the State of Maryland with its principal place of business at Xxx Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the 'ACQUIRED FUND').
This Agreement is intended to be and is adopted as a plan of
reorganization 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 (i) the transfer of all of the assets of
the Acquired Fund to the Acquiring Fund in exchange for (a) the issuance of
Merger shares of beneficial interest of the Acquiring Fund (the 'ACQUIRING FUND
SHARES') to the Acquired Fund, and (b) the assumption by the Acquiring Fund of
certain scheduled liabilities of the Acquired Fund, and (ii) the distribution by
the Acquired Fund, on the Closing Date herein referred to or as soon thereafter
as conveniently practicable, of the Acquiring Fund Shares to the stockholders of
the Acquired Fund in liquidation and the dissolution of the Acquired Fund, all
upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Reorganization is intended to qualify as a reorganization
within the meaning of Section 368(a) of the Code;
WHEREAS, the Acquired Fund is a registered closed-end management
investment company and the BT Trust is a registered open-end management
investment company;
WHEREAS, the Acquired Fund owns securities that generally are assets of
the character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the BT Trust has determined that the
exchange of all of the assets of the Acquired Fund for shares of the Acquiring
Fund and the assumption by the Acquiring Fund of certain scheduled liabilities
of the Acquired Fund is in the best interests of the Acquiring Fund shareholders
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 shares of the
Acquiring Fund and the assumption of certain scheduled liabilities of the
Acquired Fund is advisable and in the best interests of the Acquired Fund
stockholders and that the interests of the existing stockholders of the Acquired
Fund would not be diluted as a result of this transaction.
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR MERGER CLASS
SHARES OF THE ACQUIRING FUND AND ASSUMPTION OF THE ACQUIRED FUND'S
SCHEDULED LIABILITIES AND LIQUIDATION AND DISSOLUTION 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 of its assets to the Acquiring Fund as set forth in
paragraph 1.2 free and clear of all liens and encumbrances, and the Acquiring
Fund agrees in exchange therefor: (a) to issue and deliver to the Acquired Fund
the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares,
determined by dividing the value of the Acquired Fund's net assets transferred
to the Acquiring Fund, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one Acquiring Fund Share,
computed in the manner as of the time and date set forth in paragraph 2.2; and
(b) to assume certain scheduled liabilities of the Acquired Fund, as set forth
in paragraph 1.3. Such transactions shall take place at the closing on the
Closing date provided for in paragraph 3.1 (the 'CLOSING' and the 'CLOSING
DATE', respectively).
1.2. (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all the property of the Acquired Fund,
including, without limitation, all good will, all interests in the name of the
Acquired Fund, all other intangible property and all books and records of the
Acquired Fund.
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(b) The Acquired Fund has provided the Acquiring Fund with a
list of all of the Acquired Fund's assets as of the date of execution of this
Agreement. The Acquired Fund reserves the right to sell any of these securities
in the ordinary course of its business (except to the extent sales may be
limited by representations made in connection with the issuance of the tax
opinion described in paragraph 7.6 hereof) but will not, without the prior
approval of the Acquiring Fund, acquire any additional securities other than
securities of the type in which the Acquiring Fund is permitted to invest.
1.3. The Acquired Fund will endeavor to discharge all the Acquired
Fund's known liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume all liabilities, expenses, costs, charges and
reserves reflected on an unaudited Statement of Assets and Liabilities of the
Acquired Fund prepared by Deutsche Asset Management, Inc. ('XXXX, INC.'), as
administrator of the Acquired Fund, as of the Valuation Date, in accordance with
generally accepted accounting principles consistently applied from the prior
audited period. The Acquiring Fund shall assume only those liabilities of the
Acquired Fund reflected in that unaudited Statement of Assets and Liabilities
and shall not assume any other liabilities, whether absolute or contingent, not
reflected thereon.
1.4. On the Closing Date or as soon thereafter as is conveniently
practicable (the 'LIQUIDATION DATE'), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's stockholders of record determined as
of the close of business on the Closing Date (the 'ACQUIRED FUND STOCKHOLDERS'),
the Acquiring Fund Shares it receives pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the Acquired Fund on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the name of the stockholders of the Acquired Fund and representing the
respective pro rata number of the Acquiring Fund Shares due such stockholders.
All issued and outstanding shares of common stock of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although any
share certificates representing shares of common stock of the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as determined
in accordance with paragraph 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. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.6. Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund shares on
the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7. Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the Closing
Date and such later date on which the Acquired Fund is dissolved.
1.8. The Acquired Fund shall, following the Closing Date and the making
of all distributions pursuant to paragraph 1.4, be dissolved under the laws of
the State of Maryland and in accordance with its governing documents.
2. VALUATION
2.1. The value of the assets of the Acquired Fund to be transferred,
and liabilities of the Acquired Fund to be assumed, hereunder shall be the value
of such assets computed as of the close of regular trading on The New York Stock
Exchange, Inc. (the 'NYSE') on the date of the Closing of the Reorganization
(such time and date being hereinafter called the Closing Date or the 'VALUATION
DATE'), using the valuation procedures set forth in the Acquired Fund's most
recent annual report to stockholders.
2.2. The net asset value of the Acquiring Fund Shares shall be the
value computed as of the close of regular trading on the NYSE on the Valuation
Date, using the valuation procedures set forth in the then current prospectus or
statement of additional information of the Acquiring Fund.
2.3 The net asset value of the Acquired Fund Shares shall be the value
computed as of the close of regular trading on the NYSE on the Valuation Date,
using the valuation procedures set forth in the Acquired Fund's most recent
annual report to stockholders.
2.4. All computations of value shall be made by [DOES BT STILL SERVE AS
PRICING AGENT?] Bankers Trust Company ('Bankers Trust') in accordance with its
regular practice as pricing agent for the Acquiring Fund and in accordance with
its regular practice as pricing agent for the Acquired Fund.
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3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be ________ , 2002, or such later date as
the parties may agree to in writing. All acts taking place at the Closing shall
be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 4:00
p.m. at the offices of Deutsche Asset Management, Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, or at such other time and/or place as the parties may agree.
3.2. The custodian for the Acquired Fund (the 'CUSTODIAN') shall
deliver at the Closing a certificate of an authorized officer stating that: (a)
the Acquired Fund's assets have been delivered in proper form to the Acquiring
Fund on the Closing Date and (b) all necessary transfer taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the BT Trust or the Fund
shall be closed to trading or trading thereon shall be restricted or (b) trading
or the reporting of trading on the NYSE or elsewhere shall be disrupted so that
accurate appraisal of the value of the net assets of the parties hereto 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. The Acquired Fund shall deliver to the Acquiring Fund at the
Closing a list of the names, addresses, taxpayer identification numbers and
backup withholding and nonresident alien withholding status of the Acquired Fund
Stockholders and the number and percentage ownership of outstanding full and
fractional shares owned by each such stockholder immediately prior to the
Closing, certified on behalf of the Acquired Fund by the President or a Vice
President of the Fund. The Acquiring Fund shall issue and deliver a confirmation
evidencing the Acquiring Fund Shares to be credited to the Acquired Fund's
account 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.
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.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Acquired Fund represents and warrants to the BT Trust and the
Acquiring Fund as follows:
(a) The Acquired Fund is a corporation 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, subject to approval by the stockholders of the
Acquired Fund, to perform its obligations under this Agreement. The Acquired
Fund is not required to qualify to do business in any jurisdiction in which it
is not so qualified or where failure to qualify would subject it to any material
liability or disability. The Acquired Fund has all necessary federal, state and
local authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquired Fund is a registered closed-end investment management
company, and its registration with the Securities and Exchange Commission (the
'COMMISSION') as an investment company under the Investment Company Act of 1940,
as amended (the '1940 ACT'), is in full force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement with respect to the Acquired Fund will not result,
in a material violation of its Charter, or any amendment thereto, or Second
Amended and Restated Bylaws or of any agreement, indenture, instrument,
contract, lease or other undertaking with respect to the Acquired Fund to which
the BT Trust is a party or by which it is bound;
(d) The Acquired Fund has no material contracts or other commitments
(other than this Agreement) that will be terminated with liability to the
Acquired Fund prior to the Closing Date;
(e) No material litigation or administrative proceeding or
investigation of the same, before any court or governmental body, is presently
pending or, to the best of its knowledge, threatened against the Acquired Fund
or any of the Acquired Fund's properties or assets, except as previously
disclosed in writing to, and acknowledged in writing by, the Acquiring Fund. The
Acquired Fund knows of no facts which might form the basis for the institution
of such proceedings 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 the Acquired Fund's business or the
Acquired Fund's ability to consummate the transactions herein contemplated;
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(f) The Statement of Assets and Liabilities of the Acquired Fund as of
December 31, 2001, has been audited by KPMG, LLP, independent accountants, and
is in accordance with generally accepted accounting principles consistently
applied, and such statement (copies of which have been furnished to each of the
other parties hereto) fairly reflects the financial condition of the Acquired
Fund as of such date, and there are no known contingent liabilities of the
Acquired Fund as of such date not disclosed therein;
(g) Since December 31, 2001, 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 that such indebtedness was incurred, except as otherwise disclosed to
and accepted by each of the other parties hereto. For the purposes of this
subparagraph (g), a decline in net asset value per share of the Acquired Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law then to have been filed by such dates shall
have been timely filed, and all federal and other taxes (whether or not shown as
due on such returns) 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;
(i) For each taxable year of its operations, 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 such and will
qualify and be treated as such for its final taxable year ending on the Closing
Date;
(j) For each taxable year of its operations, the Acquired Fund has met
the requirements of Section 851(g) of the Code for qualification and treatment
as a separate corporation and will qualify and be treated as such for its final
taxable year ending on the Closing Date;
(k) All issued and outstanding shares of common stock of the Acquired
Fund are, and at the Closing Date will be duly authorized and validly issued,
fully paid and non-assessable. All of the issued and outstanding shares of
common stock 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 the transfer agent as
provided in paragraph 3.4. The Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any shares of the
Acquired Fund, nor is there outstanding any security convertible into any shares
of the Acquired Fund;
(l) At the Closing Date, the Acquired Fund will have good and
marketable title to the assets to be transferred to the Acquiring Fund pursuant
to paragraph 1.1 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 Securities Act of 1933, as amended (the
'1933 ACT'), other than as disclosed in writing to, and accepted in writing by,
the Acquiring Fund;
(m) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Acquired Fund's Board
of Directors, and, subject to the approval of the Acquired Fund stockholders,
assuming due authorization, execution and delivery by the BT Trust on behalf of
the Acquiring Fund, this Agreement will constitute a valid and binding
obligation of the Acquired 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;
(n) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents 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;
(o) The information to be included in the registration statement on
Form N-14 of the Acquiring Fund (the 'REGISTRATION STATEMENT') (other than
information therein that relates to the Acquiring Fund and supplied in writing
by the Acquiring Fund for inclusion therein) will, on the effective date of the
Registration Statement and on the Closing Date, 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;
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(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated by this Agreement;
(q) All of the issued and outstanding shares of common stock of the
Acquired Fund have been offered for sale and sold in conformity with all
applicable federal and state securities laws, except as may have been previously
disclosed in writing to and accepted by the Acquiring Fund; and
(r) To the best of their knowledge, after consulting with their
independent auditors, the Acquired Fund has not taken or agreed to take any
action that would prevent the Reorganization from constituting a transaction
qualifying as a reorganization under Section 368(a) of the Code.
4.2. The BT Trust and the Acquiring Fund represent and warrant to the
Acquired Fund as follows:
(a) The Acquiring Fund is a series of the BT Trust, which is a business
trust, validly existing and in good standing under the laws of The Commonwealth
of Massachusetts and has the power to own all of its properties and assets and
to perform its obligations under this Agreement. The Acquiring Fund is not
required to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would subject it to any material liability
or disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The BT Trust is a registered open-end investment management
company, and its registration with the Commission as an investment company under
the Investment Company Act is in full force and effect;
(c) The current prospectus of and statement of additional information
of the BT Trust on behalf of the Acquiring Fund conform in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) The BT Trust has, and at the Closing Date will have, good and
marketable title to the Acquiring Fund's assets;
(e) The BT Trust is not, and the execution, delivery and performance of
this Agreement on behalf of the Acquiring Fund will not result, in a material
violation of its Declaration of Trust or By-laws or of any agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquiring
Fund to which the BT Trust is a party or by which it is bound;
(f) No material litigation or administrative proceeding or
investigation of the same, before any court or governmental body, is presently
pending or, to the best of its knowledge, threatened against the BT Trust with
respect to the Acquiring Fund or any of the Acquiring Fund's properties or
assets, except as previously disclosed in writing to, and acknowledged in
writing by, the Acquired Fund. The BT Trust and the Acquiring Fund know of no
facts which might form the basis for the institution of such proceedings and
neither the BT Trust 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 the Acquiring Fund's business or the BT
Trust's ability on behalf of the Acquiring Fund to consummate the transactions
contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as of
September 30, 2001, has been audited by PricewaterhouseCoopers, LLP, independent
accountants, and is in accordance with generally accepted accounting principles
consistently applied, and such statement (copies of which have been furnished to
each of the other parties hereto) fairly reflects the financial condition of the
Acquiring Fund as of such date, and there are no known contingent liabilities of
the Acquiring Fund as of such date not disclosed therein;
(h) Since September 30, 2001, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date that such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes of this subparagraph (h),
a decline in net asset value per share of the Acquiring Fund shall not
constitute a material adverse change;
(i) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law then to have been filed by such dates
shall have been timely filed, and all federal and other taxes (whether or not
shown as due on said returns and reports) shall have been paid so far as due, or
provision shall have been made for the payment thereof and, to the best of the
Acquiring Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
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(j) For each taxable year of its operations, the Acquiring 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 such and will
qualify and be treated as such on the Closing Date;
(k) For each taxable year of its operations, the Acquiring Fund has met
the requirements of Section 851(g) of the Code for qualification and treatment
as a separate corporation and will qualify and be treated as such for its final
taxable year ending on the Closing Date;
(l) At the date hereof, all issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquiring Fund, nor is there outstanding any security
convertible into shares of the Acquiring Fund;
(m) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action, if any, on the part of the BT Trust's
Board of Trustees on behalf of the Acquiring Fund, and, assuming due
authorization, execution and delivery by the Acquired Fund, this Agreement will
constitute a valid and binding obligation of the BT Trust on behalf 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;
(n) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund stockholders, 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 Acquiring
Fund Shares and will be fully paid and non-assessable;
(o) The information to be furnished by BT Trust on behalf of the
Acquiring Fund, for use in no-action letters, applications for exemptive orders,
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations applicable
thereto;
(p) The information contained in the Registration Statement (other than
information therein that relates to the Acquired Fund and supplied in writing by
the Acquired Fund for inclusion therein) will, on the effective date of the
Registration Statement and on the Closing Date, 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;
(q) The BT Trust, on behalf of the Acquiring Fund, agrees to use all
reasonable efforts to obtain the approvals and authorizations required by the
1933 Act, the 1940 Act and such of the state Blue Sky or securities laws as it
may deem appropriate in order to continue the Acquiring Fund's operations after
the Closing Date;
(r) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the BT Trust on
behalf of the Acquiring Fund of the transactions contemplated by this Agreement.
5. COVENANTS OF EACH OF THE PARTIES
5.1. The Acquired Fund will operate its business in the ordinary course
between the date hereof and the Closing Date. It is understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions and any other dividends and distributions
necessary or advisable (except to the extent distributions that are not
customary may be limited by representations made in connection with the issuance
of the tax opinion described in paragraph 7.6 hereof), in each case payable
either in cash or in additional shares. Explicit covenant for Acquired Fund to
declare and pay all undistributed distributions/dividends for its current fiscal
year.
5.2. The BT Trust, on behalf of the Acquiring Fund, will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions necessary or advisable, in each case payable either in cash or in
additional shares.
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5.3. This Agreement will have been approved by the affirmative vote of
a majority of the outstanding shares of common stock of the Acquired Fund
entitled to vote on the matter. The Acquired Fund will take all action necessary
to obtain approval of the transactions contemplated herein.
5.4. The Acquired Fund covenants that the Acquiring Fund 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.
5.5. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
5.6. Subject to the provisions of this Agreement, the Acquired Fund and
the BT Trust, on behalf of the Acquiring Fund, each will take, or cause to be
taken, all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
5.7. The Acquired Fund shall furnish to the Acquiring Fund on the
Closing Date the Statement of Assets and Liabilities of the Acquired Fund as of
the Closing Date, which statement shall be prepared in accordance with generally
accepted accounting principles consistently applied and shall be certified by
the Acquired Fund's Treasurer or Assistant Treasurer. As promptly as
practicable, but in any case within 60 days after the Closing Date, the Acquired
Fund shall furnish to the Acquiring Fund, in such form as is reasonably
satisfactory to the Acquiring Fund, a statement of the earnings and profits of
the Acquired Fund for federal income tax purposes, and of any capital loss
carryovers and other items that will be carried over to the Acquiring Fund as a
result of Section 381 of the Code, and which statement will be certified by the
Treasurer of the Acquired Fund.
5.8. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of the Registration Statement, in
compliance with the 1933 Act, the Securities Exchange Act of 1934 (the '1934
ACT'), and the 1940 Act in connection with the Acquired Fund's stockholders
approval of this Agreement and the transactions contemplated herein.
5.9 The Acquired Fund and the Acquiring Fund shall each use its best
reasonable efforts to cause the Reorganization to be treated as a reorganization
within the meaning of Section 368(a) of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND AND THE
ACQUIRING FUND
The obligations of each Fund to consummate the transactions provided
for herein shall be subject, at their election, to the performance by each Fund
of all of the obligations to be performed by them hereunder on or before the
Closing Date and, in addition thereto, the following further conditions:
6.1. All representations and warranties made in this Agreement by or on
behalf of the Funds 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 Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities showing the federal
income tax basis and holding periods as of the Closing Date, certified by the
Acquired Fund's Treasurer or Assistant Treasurer on behalf of the Acquired Fund;
6.3 The Acquired Fund and BT Trust on behalf of the Acquiring Fund
shall have delivered to the Acquiring Fund and the Acquired Fund, respectively,
on the Closing Date a certificate executed in its name by its President or Vice
President and Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Acquiring Fund and the Acquired Fund, respectively, and
dated as of the Closing Date, to the effect that the representations and
warranties made in this Agreement by or on behalf of the Acquired Fund and the
Acquiring Fund, respectively, are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement.
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
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7.1. This 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
Charter and Second Amended and Restated Bylaws and certified copies of the votes
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, no party hereto may waive the
conditions set forth in this paragraph 7.1;
7.2. On the Closing Date, no action, suit or other proceeding shall be
pending or 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;
7.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
'no-action' positions of and exemptive orders from such federal and state
authorities) deemed necessary by either party hereto 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
any party hereto, provided that any party may for itself waive any of such
conditions;
7.4. 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;
7.5. The Acquired Fund shall have distributed to its stockholders all
of its investment company taxable income, as defined in Section 852(b)(2) of the
Code (prior to reduction by any dividends paid deduction), and all of its net
capital gain, as such term is used in Section 852(b)(3)(C) of the Code, after
reduction by any capital loss carryforward, and all of the excess of (1) its
interest income excludable from gross income under Section 103(a) of the Code
over (2) the deductions disallowed under Sections 265 and 171(a)(2) of the Code,
in each case for its taxable year ending on the Closing Date.
7.6. The parties shall have received a favorable written opinion of
Xxxxxxx Xxxx & Xxxxxxxxx, addressed to the BT Trust with respect to the
Acquiring Fund and to the Acquired Fund, and satisfactory to each of Xxxxxx X.
Xxxxxx, as Secretary of the Acquiring Fund, and Xxxx Xxxxxxx-Xxxx, as Secretary
of the Acquired Fund, substantially to the effect that for federal income tax
purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in exchange for the issuance of Acquiring Fund Shares to
the Acquired Fund and the assumption of certain scheduled Acquired Fund
liabilities by the Acquiring Fund, followed by the distribution by the Acquired
Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the
Acquired Fund stockholders in exchange for their Acquired Fund shares of common
stock and the dissolution of the Acquired Fund, will constitute a reorganization
within the meaning of Section 368(a) of the Code, and the Acquired Fund and the
Acquiring Fund will each be 'a party to a reorganization' within the meaning of
Section 368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund upon (i)
the transfer of all of its assets to the Acquiring Fund solely in exchange for
the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of
certain scheduled Acquired Fund liabilities by the Acquiring Fund and (ii) the
distribution by the Acquired Fund of such Acquiring Fund Shares to the Acquired
Fund stockholders;
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the issuance
of Acquiring Fund Shares to the Acquired Fund and the assumption of certain
scheduled Acquired Fund liabilities by the Acquiring Fund;
(d) The basis of the assets of the Acquired Fund acquired by the
Acquiring Fund will be, in each instance, the same as the basis of those assets
in the hands of the Acquired Fund immediately prior to the transfer;
(e) The tax holding period of the assets of the Acquired Fund in the
hands of the Acquiring Fund will, in each instance, include Acquired Fund's tax
holding period for those assets;
(f) The Acquired Fund stockholders will not recognize gain or loss upon
the exchange of all of their shares of common stock of the Acquired Fund solely
for Acquiring Fund Shares as part of the transaction;
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(g) The basis of the Acquiring Fund Shares received by each Acquired
Fund stockholder in the transaction will be the same as the basis of the shares
of common stock of the Acquired Fund surrendered in exchange therefor; and
(h) The tax holding period of the Acquiring Fund Shares received by
each Acquired Fund stockholder will include the tax holding period for the
shares of common stock of the Acquired Fund surrendered in exchange therefor,
provided that such Acquired Fund shares were held as capital assets on the date
of the exchange.
(i) No gain or loss will be recognized by the Acquiring Fund upon its
contribution of the assets of the Acquired Fund to the Small Cap Portfolio
solely in exchange for an interest in the Small Cap Portfolio;
(j) No gain or loss will be recognized by the Small Cap Portfolio upon
the contribution by the Acquiring Fund of the assets of the Acquired Fund to the
Small Cap Portfolio solely in exchange for an interest in the Small Cap
Portfolio;
(k) The basis of the Small Cap Portfolio in the assets of the Acquired
Fund contributed to the Small Cap Portfolio by the Acquiring Fund will be, in
each instance, the same as the basis of those assets in the hands of the
Acquiring Fund immediately prior to such contribution;
(l) The tax holding period of the Small Cap Portfolio with respect to
the assets of the Acquired Fund contributed by the Acquiring Fund to the Small
Cap Portfolio will, in each instance, include the Acquired Fund's and the
Acquiring Fund's tax holding periods for such assets;
(m) The basis of the interest in the Small Cap Portfolio acquired by
the Acquiring Fund as a result of its contribution to the Small Cap Portfolio of
the assets of the Acquired Fund will be the same as the Acquiring Fund's basis
in such assets; and
(n) The tax holding period of the Acquiring Fund with respect to its
interest in the Small Cap Portfolio will include the Acquired Fund's and the
Acquiring Fund's tax holding periods for the assets of the Acquired Fund
contributed to the Small Cap Portfolio by the Acquiring Fund.
Notwithstanding anything herein to the contrary, no party hereto may
waive in any material respect the conditions set forth in this paragraph 7.6.
7.7 The parties shall have received a favorable written opinion of
[Xxxx and Xxxx LLP], addressed to the Acquired Fund with respect to the
Acquiring Fund and to the Acquired Fund, and satisfactory to each of Xxxxxx X.
Xxxxxx, as Secretary of the Acquiring Fund, and Xxxx Xxxxxxx-Xxxx, as Secretary
of the Acquired Fund, substantially to the effect that all Acquiring Fund
Shares, when issued in accordance with the terms of this Agreement, will be
legally and validly issued, fully paid and non-assessable by the Acquiring Fund.
7.8 Each of the Acquiring Fund and the Acquired Fund agrees to make and
provide representations with respect to itself and its shareholders and
stockholders that are reasonably necessary to enable Xxxxxxx Xxxx & Xxxxxxxxx
and [Xxxx and Xxxx] to deliver their respective opinions substantially as set
forth in paragraphs 7.6 and 7.7.
8. BROKERAGE FEES AND EXPENSES
8.1. Each party hereto represents and warrants to each other party
hereto, that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
8.2. XxXX, Inc. will bear 70% of each party's expenses in connection
with the Reorganization. The Acquired Fund will bear the remaining 30% of those
expenses.
8.3 Stockholders of the Acquired Fund and shareholders of the Acquiring
Fund will bear their respective expenses, if any, in connection with the
transaction.
9. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
9.1. The parties hereto agree that no party has made any
representation, warranty or covenant not set forth herein or referred to in
paragraphs 4.1, 4.2, 5.1 and 5.2 through 5.8 hereof and that this Agreement
constitutes the entire agreement between the parties.
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9.2. 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.
10. TERMINATION
10.1. This Agreement may be terminated at any time prior to the Closing
Date by: (a) the mutual agreement of the Acquired Fund and the BT Trust on
behalf of the Acquiring Fund; (b) any party in the event that the other party
hereto shall materially breach any representation, warranty or agreement
contained herein to be performed at or prior to the Closing Date; or (c) a
condition herein expressed to be precedent to the obligations of the terminating
party has not been met and it reasonably appears that it will not or cannot be
met.
10.2. In the event of any such termination, there shall be no liability
for damages on the part of any party hereto or their respective Directors,
Trustees or officers to any other party, but each shall bear the expenses
incurred by it incidental to the preparation and carrying out of this Agreement.
11. 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 BT Trust on behalf of the Acquiring Fund; provided,
however, that following the meeting of the Acquired Fund stockholders called by
the Acquired Fund pursuant to paragraph 5.3 of this Agreement, 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 stockholders under this
Agreement to the detriment of such stockholders without their further approval.
12. 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 Acquired Fund and the BT
Trust on behalf of the Acquiring Fund at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
13.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
13.3. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
13.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, 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 parties hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm, corporation or other entity, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
13.5. It is expressly agreed that the obligations of the BT Trust and
the Acquired Fund shall not be binding upon any of their respective Directors or
Trustees, stockholders or shareholders, nominees, officers, agents or employees
personally, but bind only the trust property of the BT Trust or the assets and
property of the Acquired Fund, as the case may be, as provided in the trust
instruments of the BT Trust and under Maryland law in the case of the Acquired
Fund. The execution and delivery of this Agreement have been authorized by the
Trustees of the BT Trust and the Directors of the Acquired Fund, and this
Agreement has been executed by authorized officers of the BT Trust and the
Acquired Fund, respectively, acting as such, and neither such authorization by
such Directors or Trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
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the BT Trust and the assets and property of the Acquiring Fund, as the case may
be, as provided in the Declaration of Trust of the BT Trust and under Maryland
law in the case of the Acquired Fund.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and attested by its
Secretary or Assistant Secretary.
Attest: BT INVESTMENT FUNDS ON BEHALF OF
SMALL CAP FUND
By: __________________________ By: _____________________
Name: Xxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
Attest: THE SMALL CAP FUND, INC.
By: __________________________ By: _______________________
Name: Xxxx Xxxxxxx-Xxxx Name: Xxxxxx M.T. Xxxxx
Title: Secretary Title: President
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