EXHIBIT 99.4
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this ____th day of __________, 2000, 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 (the "Acquiring Fund"), a
series of the BT Trust, (ii) Xxxxxx Xxxxxxxx Investment Trust (the "MG Trust"),
a business trust organized under the laws of the State of Delaware with its
principal place of business at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on
behalf of Smaller Companies (the "Acquired Fund"), a series of the MG Trust.
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 each class of shares of
the Acquired Fund to the Acquiring Fund in exchange for (a) the issuance of
shares of the corresponding class of beneficial interest of the Acquiring Fund
(collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share")
to each class of shares of the Acquired Fund, and (b) the assumption by the
Acquiring Fund of certain scheduled liabilities of each class of shares 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 shareholders of each class of shares of the
Acquired Fund in liquidation of each class of shares of the Acquired Fund and
the termination of each class of shares 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 MG Trust and the BT Trust are each registered open-end
management investment companies, and 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 each class 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 Trustees of the MG Trust has determined that the
exchange of all of the assets of each class of the Acquired Fund for shares of
the Acquiring Fund and the assumption of certain scheduled liabilities of the
Acquired Fund is in the best interests of the Acquired Fund shareholders and
that the interests of the existing shareholders of the Acquired Fund would not
be diluted as a result of this transaction.
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EXHIBIT 99.4
1. TRANSFER OF ASSETS OF EACH CLASS OF SHARES OF THE ACQUIRED FUND IN EXCHANGE
FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ACQUIRED FUND'S
SCHEDULED LIABILITIES AND LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND.
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund agrees
to transfer all of its assets to the Acquiring Fund as set forth in paragraph
1.2 to the Acquiring Fund 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 for each class of shares of the Acquired Fund 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 such class of shares of the Acquired Fund, as
set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing").
1.2. (a) The assets of each class of shares of the Acquired Fund to be
acquired by the Acquiring Fund shall consist of all the property of such class,
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.
(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 for each class of shares
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 (for each class of
its shares) liquidate and distribute pro rata by class to the Acquired Fund's
shareholders of record of such class determined as of the close of business on
the Closing Date (the "Acquired Fund Shareholders"), 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
account of the class of shares of 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 shareholders of the relevant class of the Acquired Fund and
representing the respective pro rata number of the Acquiring Fund Shares due
such shareholders. All
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EXHIBIT 99.4
issued and outstanding shares of the relevant class of Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates, if any, representing interests in the relevant class of shares 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 terminated.
1.8. The Acquired Fund shall, following the Closing Date and the making of
all distributions pursuant to paragraph 1.4, be terminated under the laws of the
State of Delaware and in accordance with its governing documents.
2. VALUATION
2.1. The value of the assets of each class of shares of the Acquired Fund
to be transferred, and liabilities of each class of shares 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 Closing Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the then current prospectus
or statement of additional information of the Acquiring Fund.
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. All computations of value shall be made by Bankers Trust Company
("Bankers Trust") in accordance with its regular practice as pricing agent for
the Acquiring Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be ______________, 2001, 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 5:00
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
3
EXHIBIT 99.4
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 MG Trust
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
Shareholders and the number and percentage ownership of outstanding full and
fractional shares owned by each such shareholder immediately prior to the
Closing, certified on behalf of the Acquired Fund by the President or a Vice
President of the MG Trust. 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 MG Trust on behalf 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 MG Trust and the Acquired Fund represent and warrant to the BT
Trust and the Acquiring Fund as follows:
(a) The Acquired Fund is a series of the MG Trust, which is a business
trust, validly existing and in good standing under the laws of the State of
Delaware and has the power to own all of its properties and assets and, subject
to approval by the shareholders 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 MG Trust is a registered open-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 MG Trust 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 Declaration of Trust or By-laws 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 MG Trust has no material contracts or other commitments (other
than this Agreement) with respect to the Acquired Fund that will be terminated
with liability to the MG Trust or to the Acquired Fund prior to the Closing
Date;
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EXHIBIT 99.4
(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 MG Trust with respect to 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 MG Trust and the Acquired Fund know of no facts which might
form the basis for the institution of such proceedings and neither the MG Trust
nor the Acquired 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 Acquired Fund's business or the MG Trust's ability to
consummate the transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired Fund as of
October 31, 2000, 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
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 October 31, 2000, 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 the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the Acquired
Fund will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of 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 MG Trust with respect to the Acquired Fund
will have good and marketable title to the assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.1
5
EXHIBIT 99.4
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 MG Trust's Board of
Trustees on behalf of the Acquired Fund, and, subject to the approval of the
Acquired Fund shareholders, 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 MG Trust with respect to 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 MG Trust on behalf of 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;
(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the MG Trust on
behalf of the Acquired Fund of the transactions contemplated by this Agreement;
(q) All of the issued and outstanding shares of beneficial interest 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) The prospectus of the Acquired Fund dated February 28, 2000, and any
amendments or supplements thereto, previously furnished to the Acquiring Fund,
does not contain any untrue statements 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; and
(s) To the best of their knowledge, after consulting with their
independent auditors, neither the MG Trust nor the Acquired Fund has 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 MG Trust
and the Acquired Fund as follows:
6
EXHIBIT 99.4
(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, 2000, 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, 2000, 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;
7
EXHIBIT 99.4
(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;
(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 MG Trust on behalf of 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 shareholders, pursuant to the terms
of this Agreement, will at the Closing Date have been duly authorized and, when
so issued and delivered, will be duly and validly issued 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;
8
EXHIBIT 99.4
(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 MG Trust, on behalf of 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.
5.3. This Agreement will have been approved by the affirmative vote of the
holders of the majority of the outstanding shares of the Acquired Fund. The MG
Trust 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 MG Trust, on behalf
of 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 MG Trust'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 MG
Trust.
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
9
EXHIBIT 99.4
Securities Exchange Act of 1934 (the "1934 Act"), and the 1940 Act in connection
with the Acquired Fund's shareholders 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 MG
Trust's Treasurer or Assistant Treasurer on behalf of the Acquired Fund;
6.3 MG Trust on behalf of 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 Funds,
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:
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 MG Trust's
Declaration of Trust and By-laws 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,
10
EXHIBIT 99.4
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 shareholders 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 and the MG Trust with
respect to the relevant Fund and satisfactory to Xxxxxx X. Xxxxxx, as Secretary
of the Acquired Fund and the Acquiring Fund, substantially to the effect that
for federal income tax purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of each
class of shares 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 shareholders in exchange for their
Acquired Fund shares of beneficial interest and the termination 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 shareholders;
(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;
11
EXHIBIT 99.4
(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 shareholders will not recognize gain or loss upon
the exchange of all of their shares of beneficial interest in the Acquired Fund
solely for Acquiring Fund Shares as part of the transaction;
(g) The basis of the Acquiring Fund Shares received by each Acquired Fund
shareholder in the transaction will be the same as the basis of the shares of
beneficial interest of the Acquired Fund surrendered in exchange therefor; and
(h) The tax holding period of the Acquiring Fund Shares received by each
Acquired Fund shareholder will include the tax holding period for the shares of
beneficial interest in 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 Each of the Acquiring Fund and the Acquired Fund agrees to make and
provide representations with respect to itself and its shareholders that are
reasonably necessary to enable Xxxxxxx Xxxx & Xxxxxxxxx to deliver an opinion
substantially as set forth in paragraph 7.6.
12
EXHIBIT 99.4
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. Each party will bear its own expenses in connection with the
transaction, except that XxXX, Inc. will pay certain expenses incurred in
connection with the Reorganization.
8.3 Shareholders of each of Acquired Fund and 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.
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 MG Trust on behalf 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 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 MG
Trust on behalf of the Acquired Fund and the BT Trust on behalf of the Acquiring
Fund; provided, however, that following the meeting of the Acquired Fund
shareholders called by the MG Trust 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
shareholders under this Agreement to the detriment of such shareholders 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
13
EXHIBIT 99.4
addressed to the MG Trust on behalf of 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
MG Trust shall not be binding upon any of their respective Trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
the trust property of the BT Trust or the MG Trust, as the case may be, as
provided in the trust instruments of the BT Trust and the MG Trust,
respectively. The execution and delivery of this Agreement have been authorized
by the Trustees of each of the BT Trust and the MG Trust, and this Agreement has
been executed by authorized officers of the BT Trust and the MG Trust on behalf
of the Acquired Fund and the Acquiring Fund, respectively, acting as such, and
neither such authorization by such 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 the BT Trust and the MG Trust, as the case may be, as provided in
the Declaration of Trust of the BT Trust and the MG Trust, respectively.
14
EXHIBIT 99.4
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
By: __________________________ By: ___________________________
Name: Xxxxxx X. Xxxxxx
Title: Secretary Name: __________________________
Title: ________________________
Attest: XXXXXX XXXXXXXX INVESTMENT TRUST
on behalf of SMALLER COMPANIES
By: __________________________ By: ___________________________
Name: Xxxxxx X. Xxxxxx
Title: Secretary Name: __________________________
Title: ________________________
15
