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EXHIBIT 4(a)
AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization ("Agreement") dated as of November 24,
1997, by and between Nationwide Investing Foundation, a Michigan business trust
("NIF") and Nationwide Investing Foundation III, an Ohio business trust ("NIF
III").
WHEREAS, NIF is registered under the Investment Company Act of 1940, as
amended ("1940 Act") as an open-end investment company of the management type
and has issued and outstanding shares of beneficial interest, par value $1.00
per share, of the following four series: Nationwide Growth Fund ("NIF Growth
Fund"), Nationwide Fund ("NIF Fund"), Nationwide Bond Fund ("NIF Bond Fund"),
and Nationwide Money Market Fund ("NIF Money Market Fund", and, together with
each of the NIF's other three series described in this paragraph, the "Acquired
Series"); and
WHEREAS, NIF III is registered under the 1940 Act as an open-end investment
company of the management type, and has authorized the issuance of Class D
shares of beneficial interest, without par value, of the following series
(Nationwide Money Market Fund will only issue shares of beneficial interest,
without par value, without any class designation): Nationwide Growth Fund ("NIF
III Growth Fund"), Nationwide Fund ("NIF III Fund"), Nationwide Bond Fund ("NIF
III Bond Fund"), and Nationwide Money Market Fund ("NIF III Money Market Fund",
and, together with each of NIF III's other three series described in this
paragraph, the "Acquiring Series"); and
WHEREAS, Each Acquiring Series currently is a shell series, without assets
or liabilities, created for the purpose of acquiring the assets and liabilities
of the corresponding Acquired Series; and
WHEREAS, Each of the Acquired Series plans to transfer all assets belonging
to such series, and to assign all of the liabilities belonging to such series,
to the corresponding Acquiring Series, in exchange for Class D shares (or, in
the case of NIF III Money Market Fund, shares of beneficial interest, without
par value, without any class designation) of the corresponding Acquiring Series
("Acquiring Series Shares"), which are voting securities, followed by the
distribution of the Acquiring Series Shares by each Acquired Series to the
shareholders of the Acquired Series in connection with the dissolution of NIF
and the Acquired Series, all upon the terms and provisions of this Agreement
(individually and together, the "Reorganization"); and
WHEREAS, The Acquired Series and the Acquiring Series correspond to one
another as follows: NIF Growth Fund corresponds to NIF III Growth Fund, NIF Fund
corresponds to NIF III Fund, NIF Bond Fund corresponds to NIF III Bond Fund, and
NIF Money Market Fund corresponds to NIF III Money Market Fund; and
WHEREAS, Each of the Acquired Series is, and each of the Acquiring Series
intends to be, a regulated investment company as described in Section 851 of the
United States Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, 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
Code for each Acquired Series and its corresponding Acquiring Series; and
WHEREAS, The Board of Trustees of NIF has determined that the
Reorganization is in the best interests of NIF, and that the interests of its
shareholders will not be diluted as a result thereof; and
WHEREAS, The Board of Trustees of NIF III has determined that the
Reorganization is in the best interests of NIF III and that the interests of its
shareholders will not be diluted as a result thereof;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto covenant and agree as follows:
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1. PLAN OF REORGANIZATION
(a) Sale of Assets, Assumption of Liabilities. Subject to the prior
approval of shareholders of NIF and to the other terms and conditions
contained herein (including the condition that each Acquired Series shall
distribute to its shareholders all of its investment company taxable income
and net capital gain as described in Section 9(h) herein), NIF and the
Acquired Series agree to assign, convey, transfer and deliver to NIF III
and the Acquiring Series, and NIF III and the Acquiring Series agree to
acquire from NIF and the Acquired Series on the Exchange Date (as defined
below), all of the Investments (as defined below), cash and other assets of
NIF in exchange for that number of full and fractional Acquiring Series
Shares of the corresponding Acquiring Series having an aggregate net asset
value equal to the value of all assets of NIF transferred to the Acquring
Series, as provided in Section 4, less the liabilities of NIF assumed by
the Acquiring Series.
(b) Assets Acquired. The assets to be acquired by the Acquiring Series
from NIF shall consist of all of NIF's property, including, without
limitation, all Investments (as defined below), cash and dividends or
interest receivables which are owned by NIF and any deferred or prepaid
expenses shown as an asset on the books of NIF as of the Valuation Time
described in Section 4.
(c) Liabilities Assumed. Prior to the Exchange Date NIF will endeavor
to discharge or cause to be discharged, or make provision for the payment
of, all of its known liabilities and obligations. The Acquiring Series
shall assume all liabilities, expenses, costs, charges and reserves of NIF,
contingent or otherwise, including liabilities reflected in the unaudited
statements of assets and liabilities of NIF as of the Valuation Time,
prepared by or on behalf of NIF as of the Valuation Time in accordance with
generally accepted accounting principles consistently applied from and
after October 31, 1996, and including all liabilities of the NIF under its
registration statement on Form N-1A filed with the Securities and Exchange
Commission ("Commission") under the Securities Act of 1933, as amended
("1933 Act").
(d) Liquidation and Dissolution. Upon consummation of the transactions
described in Section 1(a), 1(b) and 1(c) above, each Acquired Series shall
distribute to its shareholders of record as of the Exchange Date the
Acquiring Series Shares received by it, each Acquired Series shareholder of
record being entitled to receive that number of Acquiring Series Shares
equal to the proportion which the number of shares of beneficial interest,
par value $1.00 per share, of the Acquired Series held by such shareholder
bears to the total number of such shares of the Acquired Series outstanding
on such date, and shall take such further action as may be required,
necessary or appropriate under NIF's Amended Trust Indenture, Michigan law
and the Code to effect the complete liquidation and dissolution of NIF. NIF
will fulfill all reporting requirements under the 1940 Act, both before and
after the Reorganization.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NIF. NIF represents and
warrants to and agrees with NIF III and the Acquiring Series that:
(a) NIF is a business trust validly existing under the laws of the
State of Michigan and has power to own all of its properties and assets and
to carry out its obligations under this Agreement.
(b) NIF is registered under the 1940 Act as an open-end investment
company of the management type, and such registration has not been revoked
or rescinded and is in full force and effect. NIF has elected to qualify
and has qualified each of the Acquired Series as a regulated investment
company under Part I of Subchapter M of the Code as of and since its first
taxable year, and each such Acquired Series qualified and intends to
continue to qualify as a regulated investment company for its taxable year
ending upon its liquidation. Each Acquired Series has been a regulated
investment company under such sections of the Code (and predecessors of the
Code) at all times since its inception.
(c) The statements of assets and liabilities, including the statements
of investments as of October 31, 1996, and the related statements of
operations for the year then ended, and statements of changes in net assets
for each of the two years in the period then ended, for NIF, such
statements having been audited by KPMG Peat Marwick LLP, independent
auditors of NIF, have been furnished to NIF III. Such statements of assets
and liabilities fairly present the financial position of NIF as of such
date and such statements of operations and changes in net assets fairly
reflect the results of operations and changes in net assets for the
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periods covered thereby in conformity with generally accepted accounting
principles, and there are no known material liabilities of NIF as of such
dates which are not disclosed therein.
(d) The Prospectus of NIF dated February 28, 1997 and its related
Statement of Additional Information dated February 28, 1997 (together, the
"NIF Prospectus"), in the form filed under the 1933 Act with the Commission
and previously furnished to NIF III, did not as of their date and do not as
of the date hereof contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(e) Except as may have been previously disclosed to NIF III, there are
no material legal, administrative or other proceedings pending or, to the
knowledge of NIF, threatened against NIF.
(f) There are no material contracts outstanding to which NIF is a
party, other than as disclosed in the NIF Prospectus, and there are no such
contracts or commitments (other than this Agreement) which will be
terminated with liability to NIF on or prior to the Exchange Date.
(g) NIF has no known liabilities of a material nature, contingent or
otherwise, other than those shown as belonging to it on its statements of
assets and liabilities at October 31, 1996 and those incurred in the
ordinary course of NIF's business as an investment company since that date.
(h) As used in this Agreement, the term "Investments" shall mean NIF's
investments shown on the statements of assets and liabilities at October
31, 1996 referred to in Section 2(g) hereof, as supplemented with such
changes as NIF shall make after October 31, 1996 in the ordinary course of
its business.
(i) NIF has filed or will file all federal and state tax returns
which, to the knowledge of NIF's officers, are required to be filed by NIF
and has paid or will pay all federal and state taxes shown to be due on
said returns or on any assessments received by NIF. All tax liabilities of
NIF have been adequately provided for on its books, and no tax deficiency
or liability of NIF has been asserted, and no question with respect thereto
has been raised, by the Internal Revenue Service or by any state or local
tax authority for taxes in excess of those already paid.
(j) As of both the Valuation Time and the Exchange Date and except for
shareholder approval and otherwise as described in Section 2(1), NIF will
have full right, power and authority to assign, transfer and deliver the
Investments and any other of its assets and liabilities to be transferred
to NIF III and the Acquiring Series pursuant to this Agreement. On the
Exchange Date, subject only to the delivery of the Investments and any such
other assets and liabilities as contemplated by this Agreement, NIF III and
the Acquiring Series will acquire the Investments and any such other assets
subject to no encumbrances, liens or security interests in favor of any
third party creditor of NIF and, except as described in Section 2(k),
without any restrictions upon the transfer thereof.
(k) No registration under the 1933 Act of any of the Investments would
be required if they were, as of the time of such transfer, the subject of a
public distribution by either of NIF or NIF III, except as previously
disclosed to NIF III by NIF prior to the date hereof.
(l) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by NIF of the
transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the 1940 Act, state securities or blue sky laws (which term as
used herein shall include the laws of the District of Columbia and of
Puerto Rico) or state laws applicable to business trusts.
(m) The registration statement (the "N-14 Registration Statement") to
be filed with the Commission by NIF III on Form N-14 relating to the
Acquiring Series Shares issuable hereunder, and the proxy statement of NIF
included therein (the "Proxy Statement"), on the effective date of the N-14
Registration Statement and insofar as they relate to NIF and the Acquired
Series, (i) will 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 and (ii) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the time of
the shareholders' meeting referred to in Section 7 below and on the
Exchange Date, the prospectus contained in
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the N-14 Registration Statement of which the Proxy Statement is a part, as
amended or supplemented by any amendments or supplements filed with the
Commission by NIF III, (together, the "N-14 Prospectus") insofar as it
relates to NIF and the Acquired Series, will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that the representations and warranties in
this Section 2(m) shall apply only to statements of fact relating to NIF
and the Acquired Series contained in the N-14 Registration Statement, the
N-14 Prospectus or and the Proxy Statement, or omissions to state in any
thereof a material fact relating to NIF or any Acquired Series, as such
Registration Statement, N-14 Prospectus and Proxy Statement shall be
furnished to NIF in definitive form as soon as practicable following
effectiveness of the N-14 Registration Statement and before any public
distribution of the N-14 Prospectus or Proxy Statement.
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF NIF III. NIF III represents
and warrants to and agrees with NIF that:
(a) NIF III is a business trust validly existing under the laws of the
State of Ohio and has power to carry on its business as it is now being
conducted and to carry out its obligations under this Agreement.
(b) NIF III is registered under the 1940 Act as an open-end investment
company of the management type. The Acquiring Series expect to qualify as
regulated investment companies under Part I of Subchapter M of the Code.
(c) The Acquiring Series will have no assets or liabilities as of the
Valuation Time.
(d) The final prospectus of each Acquiring Series, expected to be
dated as of a date in December, 1997 or January, 1998, and the related
Statement of Additional Information for the Acquiring Series to be dated as
of such date (together, the "Acquiring Series Prospectus"), in the forms to
be filed by NIF III with the Commission, will be furnished to NIF promptly
upon the completion thereof and will not as of their date contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of NIF III or its Acquiring Series threatened
against NIF III or the Acquiring Series, which assert liability on the part
of NIF III or the Acquiring Series.
(f) There are no material contracts outstanding to which NIF III or
the Acquiring Series is a party, other than this Agreement and material
contracts disclosed in the N-14 Registration Statement.
(g) NIF III and the Acquiring Series will file all federal and state
tax returns which, to the knowledge of NIF III's officers, are required to
be filed by NIF III and the Acquiring Series and will pay all federal and
state taxes shown to be due on such returns or on any assessments received
by NIF III of the Acquiring Series.
(h) No consent, approval, authorization or order of any governmental
authority is required for the consummation by NIF III or the Acquiring
Series of the transactions contemplated by this Agreement, except such as
may be required under the 1933 Act, 1934 Act, 1940 Act, state securities or
blue sky laws or state laws applicable to business trusts.
(i) As of both the Valuation Time and the Exchange Date and otherwise
as described in Section 3(h), NIF III and the Acquiring Series will have
full right, power and authority to acquire the Investments and any other
assets and assume the liabilities of NIF to be transferred to the Acquiring
Series pursuant to this Agreement.
(j) The N-14 Registration Statement, the N-14 Prospectus and the Proxy
Statement, on the effective date of the N-14 Registration Statement and
insofar as they relate to NIF III and the Acquiring Series: (i) will 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, and (ii) will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time of the shareholders'
meeting referred to in Section 7 and on the Exchange Date,
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the N-14 Prospectus, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that none of the representations and warranties in this subsection shall
apply to statements in or omissions from the N-14 Registration Statement,
the N-14 Prospectus or the Proxy Statement made in reliance upon and in
conformity with information furnished by NIF or any Acquired Series for use
in the N-14 Registration Statement, the N-14 Prospectus or the Proxy
Statement.
(k) NIF III has no plan or intention to issue additional shares of the
Acquiring Series following the Reorganization except for shares issued in
the ordinary course of NIF III's business as an open-end investment
company, nor does NIF III have any plan or intention to redeem or otherwise
reacquire any shares of the Acquiring Series issued to NIF shareholders
pursuant to the Reorganization, other than through redemptions arising in
the ordinary course of that business. NIF III will actively continue NIF's
business in the same manner that NIF conducted it immediately before the
Reorganization and has no plan or intention to sell or otherwise dispose of
any of the assets to be acquired by NIF III in the Reorganization, except
for dispositions made in the course of its business and dispositions
necessary to maintain the status of each Acquiring Series as a regulated
investment company under Subchapter M of the Code.
(l) The Acquiring Series Shares to be issued by NIF III have been duly
authorized and when issued and delivered by NIF III to NIF pursuant to this
Agreement will be legally and validly issued by NIF III and will be fully
paid and nonassessable and no shareholder of NIF III will have any
preemptive right of subscription or purchase in respect thereof.
(m) The issuance of Acquiring Series Shares pursuant to this Agreement
will be in compliance with all applicable federal and state securities
laws.
(n) Each Acquiring Series, upon filing of its first income tax return
at the completion of its first taxable year, will elect to be a regulated
investment company and until such time will take all steps necessary to
ensure its qualification as a regulated investment company.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, NIF III will deliver
to NIF a number of corresponding Acquiring Series Shares having an
aggregate net asset value equal to the value of the assets of NIF acquired
by the respective Acquiring Series, less the value of the liabilities of
NIF assumed, determined as hereafter provided in this Section 4.
(a) The net assets of NIF and each Acquired Series will be computed as
of the Valuation Time, using the valuation procedures set forth in the NIF
Prospectus.
(b) The net asset value of each of the Acquiring Series Shares will be
determined to the nearest full cent as of the Valuation Time, and shall be
set at the net asset value per share of the corresponding Acquired Series
as of the Valuation Time.
(c) The Valuation Time shall be 4:00 P.M., Eastern Standard Time, on
February 28, 1998, or such earlier or later day as may be mutually agreed
upon in writing by the parties hereto (the "Valuation Time").
(d) The Acquiring Series shall issue its Acquiring Series Shares to
NIF on a share deposit receipt registered in the name of NIF. NIF shall
distribute in liquidation the Acquiring Series Shares received by it
hereunder pro rata to its shareholders by redelivering such share deposit
receipt to NIF III's transfer agent, which will as soon as practicable make
such modifications to the accounts for each former NIF shareholder as may
be necessary and appropriate.
(e) The Acquiring Series shall assume all liabilities of NIF, whether
accrued or contingent, described in subsection l(c) hereof in connection
with the acquisition of assets and subsequent dissolution of NIF or
otherwise, except that recourse for assumed liabilities relating to an
Acquired Series shall be limited to the corresponding Acquiring Series.
5. EXPENSES, FEES. ETC. Except as set forth below, each of NIF and NIF III
shall be responsible for its respective fees and expenses of the
Reorganization; NIF III will be responsible for its organization costs; and
NIF will be responsible for proxy solicitation and other costs associated
with the special meeting.
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Notwithstanding the foregoing, Nationwide Advisory Services, Inc.,
investment adviser of NIF and NIF III, will be responsible for 50% of NIF's
and NIF III's fees and expenses of the Reorganization and 50% of NIF's
proxy solicitation and other costs associated with the special meeting.
6. EXCHANGE DATE. Delivery of the assets of NIF to be transferred, assumption
of the liabilities of NIF to be assumed, and the delivery of Acquiring
Series Shares to be issued shall be made at the offices of NIF, at 9:00
A.M. on March 1, 1998, or at such other time, date, and location agreed to
by NIF and NIF III, the date and time upon which such delivery is to take
place being referred to herein as the "Exchange Date."
7. SPECIAL MEETING OF SHAREHOLDERS; DISSOLUTION
(a) NIF agrees to call a special meeting of its shareholders as soon
as is practicable for the purpose of considering the transfer of all of the
assets of NIF to, and the assumption of all of the liabilities of NIF by,
the Acquiring Series as herein provided, authorizing and approving this
Agreement, and authorizing and approving the liquidation and dissolution of
NIF, and it shall be a condition to the obligations of each of the parties
hereto that the holders of shares of beneficial interest, par value $1.00
per share, of NIF shall have approved this Agreement, and the transactions
contemplated herein, including the liquidation and dissolution of NIF, in
the manner required by law and NIF's Amended Trust Indenture at such a
meeting on or before the Valuation Time.
(b) NIF agrees that the liquidation and dissolution of NIF will be
effected in the manner provided in NIF's Amended Trust Indenture and in
accordance with applicable law, and that it will not make any constructive
distribution of any Acquiring Series Shares to the shareholders of NIF
without first paying or adequately providing for the payment of all of
NIF's known debts, obligations and liabilities.
(c) Each of NIF and NIF III will cooperate with the other, and each
will furnish to the other the information relating to itself required by
the 1934 Act and 1940 Act and the rules and regulations thereunder to be
set forth in the N-14-Registration Statement, including the N-14 Prospectus
and N-14 Proxy Statement included therein.
8. CONDITIONS OF NIF'S OBLIGATIONS. The obligations of NIF hereunder shall be
subject to the following conditions:
(a) This Agreement shall have been authorized and the transactions
contemplated hereby, including the liquidation and dissolution of NIF,
shall have been approved by the trustees and shareholders of NIF in the
manner required by law.
(b) NIF III shall have executed and delivered to NIF an Assumption of
Liabilities dated as of the Exchange Date pursuant to which the Acquiring
Series will assume all of the liabilities, expenses, costs, charges and
reserves of NIF, contingent or otherwise, including liabilities existing at
the Valuation Time and described in Section 1(c) hereof in connection with
the transactions contemplated by this Agreement; provided that recourse for
assumed liabilities relating to an Acquired Series shall be limited to the
corresponding Acquiring Series.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of NIF III made in this Agreement are true
and correct in all material respects as if made at and as of such dates,
NIF III and the Acquiring Series have complied with all of the agreements
and satisfied all of the conditions on their part to be performed or
satisfied at or prior to each of such dates, and NIF III shall have
furnished to NIF a statement, dated the Exchange Date, signed by NIF III's
Chairman and Treasurer (or other financial officer) certifying those facts
as of such dates.
(d) There shall not be any material litigation pending or overtly
threatened with respect to the matters contemplated by this Agreement.
(e) NIF shall have received an opinion of Druen, Dietrich, Xxxxxxxx &
Xxxxxxx in form reasonably satisfactory to NIF, and dated the Exchange
Date, to the effect that (i) NIF III is a business trust validly existing
under the laws of the State of Ohio, (ii) the Acquiring Series Shares to be
delivered to NIF as provided for by this Agreement are duly authorized and
upon such delivery will be validly issued and will be
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fully paid and nonassessable by NIF III and no shareholder of NIF III has
any preemptive right to subscription or purchase in respect thereof, (iii)
this Agreement has been duly authorized, executed and delivered by NIF III,
and assuming due authorization, execution and delivery of this Agreement by
NIF, is a valid and binding obligation of NIF III, enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and other equitable principles, (iv) the
execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated hereby will not, violate NIF III's
Declaration of Trust or its By-Laws or any provision of any agreement known
to such counsel to which NIF III or the Acquiring Series is a party or by
which it is bound, (v) to the knowledge of such counsel no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by NIF III or the Acquiring Series of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, 1934 Act and 1940 Act and such as may be required under state
securities or blue sky laws or as may be required under state laws
applicable to business trusts laws. In rendering such opinion Druen,
Dietrich, Xxxxxxxx & Xxxxxxx may rely on certain reasonable assumptions and
certifications of fact received from NIF III and its officers.
(f) NIF shall have received an opinion of Xxxxx & Xxxxxxxxx LLP
addressed to NIF, NIF III and each Acquiring Series and in a form
reasonably satisfactory to NIF dated the Exchange Date, with respect to the
matters specified in Section 9(e) of this Agreement. In rendering such
opinion Xxxxx & Xxxxxxxxx LLP may rely on certain reasonable assumptions
and certifications of fact received from NIF III, NIF and certain of its
shareholders.
(g) All necessary proceedings taken by NIF III in connection with the
transactions contemplated by this Agreement and all documents incidental
thereto reasonably shall be satisfactory in form and substance to NIF,
Druen, Dietrich, Xxxxxxxx & Xxxxxxx and Xxxxx & Xxxxxxxxx LLP.
(h) The N-14 Registration Statement shall have become effective under
the 1933 Act and applicable Blue Sky provisions, and no stop order
suspending such effectiveness shall have been instituted or, to the
knowledge of NIF, contemplated by the Commission or any state regulatory
authority.
(i) NIF III and NIF shall have received from the Commission, if
necessary, a written order of exemption, satisfactory in form and substance
to NIF III and NIF, exempting the Reorganization from the provisions of
Section 17(a) of the 1940 Act.
9. CONDITIONS OF NIF III'S OBLIGATIONS. The obligations of NIF III and the
Acquiring Series hereunder shall be subject to the following conditions:
(a) This Agreement shall have been authorized and the transactions
contemplated hereby, including the liquidation and dissolution of NIF,
shall have been approved by the trustees and shareholders of NIF in the
manner required by law.
(b) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of NIF made in this Agreement are true and
correct in all material respects as if made at and as of such dates, NIF
has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to each of such dates,
and NIF shall have furnished to NIF III a statement, dated the Exchange
Date, signed by NIF's Chairman and Treasurer (or other financial officer)
certifying those facts as of such dates.
(c) There shall not be any material litigation pending or overtly
threatened with respect to the matters contemplated by this Agreement.
(d) NIF III shall have received an opinion of Druen, Dietrich,
Xxxxxxxx & Xxxxxxx, in form reasonably satisfactory to NIF III and dated
the Exchange Date, to the effect that (i) NIF is a business trust validly
existing under the laws of the State of Michigan, (ii) this Agreement has
been duly authorized, executed and delivered by NIF and, assuming due
authorization, execution and delivery of this Agreement by NIF III, is a
valid and binding obligation of NIF, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
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creditors' rights generally and other equitable principles, (iii) NIF has
power to assign, convey, transfer and deliver the Investments and other
assets contemplated hereby and, upon consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement, NIF
will have duly assigned, conveyed, transferred and delivered such
Investments and other assets to NIF III, (iv) the execution and delivery of
this Agreement did not and the consummation of the transactions
contemplated hereby will not, violate NIF's Amended Trust Indenture or its
Code of Regulations, as amended, or any provision of any agreement known to
such counsel to which NIF is a party or by which it is bound, and (v) to
the knowledge of such counsel no consent, approval, authorization or order
of any court or governmental authority is required for the consummation by
NIF of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, 1934 Act and 1940 Act and such as may be
required under state securities or blue sky laws or state laws applicable
to business trusts. In rendering such opinion, Druen, Dietrich, Xxxxxxxx &
Xxxxxxx may rely upon certain reasonable and customary assumptions and
certifications of fact received from NIF and its officers.
(e) NIF III shall have received an opinion of Xxxxx & Xxxxxxxxx LLP,
addressed to NIF III, each Acquiring Series and NIF, in form reasonably
satisfactory to NIF III and dated the Exchange Date, to the effect that for
Federal income tax purposes (i) the transfer of all or substantially all of
Acquired Series' assets in exchange for the Acquiring Series Shares and the
assumption by the Acquiring Series of the liabilities of Acquired Series
will constitute a "reorganization" within the meaning of Section 368(a) of
the Code, and each of the Acquiring Series and Acquired Series is a "party
to a reorganization" within the meaning of Section 368(b) of the Code; (ii)
no gain or loss will be recognized by Acquired Series upon the transfer of
the assets of the Acquired Series in exchange for Acquiring Series Shares
and the assumption by the Acquiring Series of the liabilities of Acquired
Series or upon the distribution of Acquiring Series Shares by Acquired
Series to its shareholders in liquidation; (iii) no gain or loss will be
recognized by the shareholders of Acquired Series upon the exchange of
their shares for Acquiring Series Shares, (iv) the basis of the Acquiring
Series Shares an Acquired Series shareholder receives in connection with
the Reorganization will be the same as the basis of his or her shares
exchanged therefor; (v) an Acquired Series shareholder's holding period for
his or her Acquiring Series Shares will be determined by including the
period for which he or she held Acquired Series Shares exchanged therefor,
provided that he or she held such Shares as capital assets; (vi) no gain or
loss will be recognized by the Acquiring Series upon the receipt of the
assets of the corresponding Acquired Series in exchange for Acquiring
Series Shares and the assumption by the Acquiring Series of the liabilities
of the corresponding Acquired Series (vii) the basis in the hands of the
Acquiring Series of the assets of the corresponding Acquired Series
transferred to the Acquiring Series will be the same as the basis of the
assets in the hands of the corresponding Acquired Series immediately prior
to the transfer and (viii) the Acquiring Series' holding periods of the
assets of the corresponding Acquired Series will include the period for
which such assets of the corresponding Acquired Series were held by the
corresponding Acquired Series. In rendering such opinion, Xxxxx & Xxxxxxxxx
LLP may rely upon certain reasonable and customary assumptions and
certifications of fact received from NIF III, NIF, and certain of its
shareholders.
(f) The N-14 Registration Statement shall have become effective under
the 1933 Act and applicable Blue Sky provisions, and no stop order
suspending such effectiveness shall have been instituted or, to the
knowledge of NIF III, contemplated by the Commission or any state
regulatory authority.
(g) All necessary proceedings taken by NIF in connection with the
transactions contemplated by this Agreement and all documents incidental
thereto reasonably shall be satisfactory in form and substance to NIF III,
Xxxxx Xxxxxxxx, Xxxxxxxx & Xxxxxxx and Xxxxx & Xxxxxxxxx LLP.
(h) Prior to the Exchange Date, each Acquired Series shall have
declared a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to its shareholders all of
its investment company taxable income for its taxable year ended October
31, 1997 and the short taxable year beginning on November 1, 1997 and
ending on the Valuation Time (computed without regard to any deduction for
dividends paid), and all of its net capital gain realized in its taxable
year ended October 31, 1997 and the short taxable year beginning November
1, 1997 and ending on the Valuation Time (after reduction for any capital
loss carryover).
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(i) NIF shall have duly executed and delivered to NIF III a xxxx of
sale, assignment, certificate and other instruments of transfer ("Transfer
Documents") as NIF III may deem necessary or desirable to transfer all of
NIF's entire right, title and interest in and to the Investments and all
other assets of NIF to the Acquiring Series.
(j) NIF III and NIF shall have received from the Commission, if
necessary, a written order of exemption, satisfactory in form and substance
to NIF III and NIF, exempting the Reorganization from the provisions of
Section 17(a) of the 1940 Act.
10. TERMINATION. NIF III and NIF may, by mutual consent of their respective
trustees, terminate this Agreement, and NIF III or NIF, after consultation
with counsel and by consent of their respective trustees or an officer
authorized by such trustees may, subject to Section 11 of this Agreement,
waive any condition to their respective obligations hereunder.
11. SOLE AGREEMENT; GOVERNING LAW; AMENDMENTS. This Agreement supersedes all
previous correspondence and oral communications between the parties
regarding the subject matter hereof, constitutes the only understanding
with respect to such subject matter and shall be construed in accordance
with and governed by the laws of the State of Ohio.
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officer of NIF III and
NIF; provided, however, that following the special meeting of NIF's shareholders
called by NIF pursuant to Section 7 of this Agreement, no such amendment may
have the effect of altering or changing the amount or kind of shares received by
NIF, or altering or changing to any material extent the amount or kind of
liabilities assumed by NIF III and the Acquiring Series, or altering or changing
any other terms and conditions of the Reorganization if any of the alterations
or changes, alone or in the aggregate, would materially adversely affect NIF's
shareholders without their further approval.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
NATIONWIDE INVESTING FOUNDATION
By /s/ XXXXX X. XXXXX, XX.
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NATIONWIDE INVESTING FOUNDATION III
By /s/ XXXXXXXXXXX X. XXXX
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