AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (Agreement) is made as of this
19th day of August, 2016, by and among Xxxxxxx Xxxxx Trust II, a Delaware
statutory trust (the Xxxxxxx Sachs Trust), with its principal place
of business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on behalf of
the following of its separate series: Xxxxxxx Xxxxx Target Date 2020 Portfolio,
Xxxxxxx Sachs Target Date 2030 Portfolio,
Xxxxxxx Xxxxx Target Date 2040 Portfolio
and Xxxxxxx Sachs Target Date 2050 Portfolio (each, an Acquiring Fund),
and Madison Funds, a Delaware statutory trust (the Madison Trust), with its
principal place of business at 000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000,
on behalf of the following of its separate series:
Madison Target Retirement 2020 Fund, Madison Target Retirement 2030 Fund,
Madison Target Retirement 2040 Fund and Madison Target Retirement 2050 Fund
(each, an Acquired Fund). Xxxxxxx Xxxxx Asset Management, L.P. (GSAM),
a Delaware limited partnership, joins this agreement solely for purposes
of paragraphs 1.6, 5.1, 9.2, 14, 16.4, 16.5 and 16.6.
Madison Asset Management, LLC (MAM), a Wisconsin limited liability company,
joins this Agreement solely for purposes of paragraphs 1.6, 5.1, 5.4, 9.2, 14,
16.4, 16.5 and 16.6.
WHEREAS, each Acquired Fund and each Acquiring Fund is a series of an open-end,
management investment company registered under the Investment Company Act
of 1940, as amended (the 1940 Act);
WHEREAS, each Acquiring Fund is an existing series of the Xxxxxxx Sachs Trust,
but has had no assets and has carried on no investment activities prior to
the date first shown above;
WHEREAS, the following chart shows each Acquiring Fund and its classes
of shares of beneficial interest (no par value) (Acquiring Fund Shares) and
the corresponding Acquired Fund with its classes of shares of beneficial
interest (no par value) (Acquired Fund Shares):
Acquiring Fund, each a series of Xxxxxxx Xxxxx Trust II
Xxxxxxx Sachs Target Date 2020 Portfolio Class R6
Xxxxxxx Xxxxx Target Date 2030 Portfolio Class R6
Xxxxxxx Sachs Target Date 2040 Portfolio Class R6
Xxxxxxx Xxxxx Target Date 2050 Portfolio Class R6
Corresponding Acquired Fund, each a series of Madison Funds
Madison Target Retirement 2020 Fund Class R6
Madison Target Retirement 2030 Fund Class R6
Madison Target Retirement 2040 Fund Class R6
Madison Target Retirement 2050 Fund Class R6
WHEREAS, throughout this Agreement, the term Acquiring Fund Shares should
be read to include each class of shares of the applicable Acquiring Fund and
each reference to Acquiring Fund Shares in connection with an Acquired Fund
should be read to include each class of the particular Acquiring Fund that
corresponds to the relevant class of the Acquired Fund;
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 United States Internal Revenue Code of 1986, as amended (Code);
WHEREAS, each reorganization and liquidation contemplated hereby will consist
of (1) the sale, assignment, transfer and delivery of all of the property
and assets of an Acquired Fund to the corresponding Acquiring Fund in
exchange solely for the Acquiring Fund Shares as described herein, (2) the
assumption by the Acquiring Fund of the stated liabilities of the Acquired
Fund, and (3) the distribution of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in complete liquidation of the Acquired
Fund, as provided herein (Reorganization), all upon the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS, each Acquired Fund owns securities that generally are assets of
the character in which the corresponding Acquiring Fund is permitted to
invest;
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not interested persons, of the Xxxxxxx Sachs Trust has determined,
with respect to each Acquiring Fund, that the sale, assignment, transfer
and delivery of all of the property and assets of the corresponding
Acquired Fund for Acquiring Fund Shares and the assumption of the stated
liabilities of the Acquired Fund by the Acquiring Fund is in the best
interests of the Acquiring Fund and its shareholders and that the
interests of the existing shareholders, if any, of the Acquiring Fund
would not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees
who are not interested persons, of the Madison Trust has determined that
the sale, assignment, transfer and delivery of all of the property and
assets of each Acquired Fund for Acquiring Fund Shares and the
assumption of the stated liabilities of each Acquired Fund by the
corresponding Acquiring Fund is in the best interests of the Acquired
Fund and its shareholders and that the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result
of this transaction;
NOW, THEREFORE, in consideration of the above recitals and premises and of
the covenants and agreements hereinafter set forth and intending to be legally
bound hereby, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF EACH ACQUIRED FUND TO THE CORRESPONDING
ACQUIRING FUND IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF
STATED ACQUIRED FUND LIABILITIES BY THE CORRESPONDING ACQUIRING FUND AND THE
LIQUIDATION OF EACH ACQUIRED FUND
1.1. Subject to the requisite approval of each Acquired Funds
shareholders (Acquired Fund Shareholders) and the other terms and conditions
herein set forth, including without limitation paragraph 15.1, and on the
basis of the representations and warranties contained herein, each Acquired
Fund agrees to sell, assign, transfer and deliver all of its property and
assets, as set forth in paragraph 1.2, to the corresponding Acquiring Fund,
and each Acquiring Fund agrees in exchange therefor:
(i) to deliver to the corresponding Acquired Fund the number of full and
fractional Acquiring Fund Shares determined by dividing: (A) the aggregate
value of the Acquired Funds Assets, net of the Liabilities (each as defined
in paragraph 1.2), computed in the manner set forth in paragraph 2.1,
by (B) the net asset value of one share of the Acquiring Fund computed in
the manner set forth in paragraph 2.1, in each case as of the time and date
set forth in paragraph 2.1; and
(ii) to assume the Liabilities of the Acquired Fund, as set forth in
paragraph 1.2.
Transactions described in paragraph 1.1(i) and (ii) shall take place on
the date of the closing provided for in paragraph 3.1 (Closing Date).
1.2. The property and assets of each Acquired Fund to be acquired by the
corresponding Acquiring Fund shall consist of all assets and property,
including, without limitation, all rights, cash, securities, commodities and
futures interests, forwards, swaps and other financial instruments, claims
(whether absolute or contingent, known or unknown), receivables (including
dividends, interest, principal, subscriptions and other receivables),
goodwill and other intangible property, contractual rights and choses in
action, all books and records belonging to the Acquired Fund, any deferred
or prepaid expenses shown as an asset on the books of the Acquired Fund on
the Closing Date, and all interests, rights, privileges and powers, other
than the Acquired Funds rights under this Agreement on the Valuation Date as
defined in paragraph 2.1, excluding the estimated costs of extinguishing
any Excluded Liability (as defined below) and cash in an amount necessary to
pay any dividends pursuant to sub-paragraph 6.3 (collectively, with respect
to each Acquired Fund separately, Assets). The Assets of each Acquired Fund
shall be delivered to each corresponding Acquiring Fund free and clear of all
liens, encumbrances, hypothecations and claims whatsoever and there shall be
no restrictions on the full transfer thereof. Each Acquiring Fund shall
assume only those liabilities, expenses, costs, charges and reserves
reflected on the Statement of Assets and Liabilities of the corresponding
Acquired Fund prepared on behalf of the Acquired Fund, as of the Valuation
Date, in accordance with generally accepted accounting principles
consistently applied from the prior audited period, except for the Acquired
Funds Excluded Liabilities (as defined below), if any, pursuant to this
Agreement (collectively, with respect to each Acquired Fund separately,
Liabilities). Each Acquiring Fund shall assume only those Liabilities of the
corresponding Acquired Fund reflected in such Statement of Assets and
Liabilities and shall not assume any other liabilities, whether absolute
or contingent, known or unknown, accrued or unaccrued, all of which shall
remain the obligation of the Acquired Fund. Each Acquired Fund will use its
best efforts to discharge all known Liabilities prior to or at the Valuation
Date (as defined in paragraph 2.1) to the extent permissible and consistent
with its own investment objectives and policies. If prior to the Closing
Date, the Xxxxxxx Xxxxx Trust identifies a Liability that the Xxxxxxx Sachs
Trust and the Madison Trust, on behalf of an Acquired Fund, mutually agree
should not be assumed by the Xxxxxxx Xxxxx Trust, such Liability shall be
excluded from the definition of Liabilities hereunder and shall be listed on
a Schedule of Excluded Liabilities to be signed by the Xxxxxxx Sachs Trust
and the Madison Trust at the Closing (the Excluded Liabilities). Certain
Liabilities that would otherwise be listed as Excluded Liabilities may be
assumed by the Xxxxxxx Xxxxx Trust on behalf of an Acquiring Fund, on the
condition that the Xxxxxxx Sachs Trust and the relevant Acquiring Fund be
indemnified in writing to their reasonable satisfaction by MAM or its
affiliates against any and all losses, claims, damages or liability to
which the Xxxxxxx Xxxxx Trust and the Acquiring Fund may become subject as
a result of assuming such Liability.
1.3. Immediately following the action contemplated by paragraph 1.1, each
Acquired Fund will (a) distribute to its shareholders of record with respect
to each class of Acquired Fund Shares as of the Closing Date (Acquired Fund
Shareholders), on a pro rata basis within that class, the Acquiring Fund
Shares of the corresponding class received by the Acquired Fund pursuant to
paragraph 1.1 and (b) as soon as reasonably practicable thereafter,
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to each class of Acquired Fund Shares, by the transfer of the
corresponding Acquiring Fund Shares then credited to the account of each
Acquired Fund on the books of the applicable Acquiring Fund to open accounts
on the share records of the applicable Acquiring Fund in the names of the
Acquired Fund Shareholders. An Acquiring Fund shall not issue certificates
representing any class of Acquiring Fund Shares in connection with such
exchange. The aggregate net asset value of each class of Acquiring Fund
Shares to be so credited to each corresponding class of Acquired Fund
Shareholders shall, with respect to each class, be equal to the aggregate
net asset value of the Acquired Fund Shares of that class owned by Acquired
Fund Shareholders on the Valuation Date. All issued and outstanding Acquired
Fund Shares will simultaneously be redeemed and canceled on the books of the
Acquired Fund. The Acquired Funds will be dissolved in accordance with the
laws of Delaware as soon as practicable following the Closing Date.
1.4. Ownership of Acquiring Fund Shares will be shown on the books of each
Acquiring Funds Transfer Agent, as defined in paragraph 3.3.
1.5. Any reporting responsibility of an Acquired Fund, including, but not
limited to, the responsibility for filing regulatory reports, tax returns,
or other documents with the Securities and Exchange Commission (Commission),
any state securities commission, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund. Each Acquired Fund shall file such
regulatory reports, tax returns, or other documents on a timely basis.
1.6. At least fifteen business days prior to the Valuation Date, MAM, on
behalf of each Acquired Fund, will provide GSAM with a schedule of the
Assets held by such Acquired Fund. At least ten business days prior to the
Valuation Date, GSAM, on behalf of each Acquiring Fund will advise MAM of
any investments of the corresponding Acquired Fund shown on the Acquired
Funds schedule of Assets which such Acquiring Fund would not be permitted
to hold (i) under its investment objective, principal investment strategies
or investment restrictions; (ii) under applicable law; or (iii) because
the transfer of such investments would result in material operational or
administrative difficulties to such Acquiring Fund in connection with
facilitating the orderly transition of such Acquired Funds Assets. Under
such circumstances, to the extent practicable, an Acquired Fund will, if
requested by an Acquiring Fund and, to the extent permissible and
consistent with its own investment objectives and policies and the
fiduciary duties of the investment adviser responsible for the portfolio
management of the Acquired Fund, dispose of such investments prior to the
Valuation Date. In addition, if it is determined that the portfolios of
an Acquired Fund and the corresponding Acquiring Fund, when aggregated,
would contain investments exceeding certain percentage limitations to which
the Acquiring Fund is or will be subject with respect to such investments,
to the extent practicable, the Acquired Fund will, if requested by the
Acquiring Fund and, to the extent permissible and consistent with its own
investment objectives and policies and the fiduciary duties of the
investment adviser responsible for the portfolio management of the Acquired
Fund, dispose of and/or reinvest a sufficient amount of such investments
as may be necessary to avoid violating such limitations as of the Valuation
Date. Notwithstanding the foregoing, nothing herein will require an
Acquired Fund to dispose of any Assets, if, in the reasonable judgment of
the Acquired Funds investment adviser, such disposition would adversely
affect the tax-free nature of the Reorganization for federal income tax
purposes or would otherwise not be in the best interests of the
Acquired Fund.
1.7. No sales load, contingent deferred sales charge, commission,
redemption fee or other transactional fee will be charged by the Acquired
Fund as a result of, or in connection with, the Reorganization.
1.8. Immediately after the Closing Date, the share transfer books
relating to the Acquired Fund shall be closed and no transfer of shares
shall thereafter be made on such books.
2. VALUATION
2.1. The value of the Assets of each Acquired Fund shall be the value
of such Assets as of the close of business of the New York Stock Exchange
and after the declaration of any dividends on the business day immediately
preceding the Closing Date (such time and date being hereinafter called
the Valuation Date), computed using the valuation procedures set forth in
the then-current prospectus and statement of additional information with
respect to each Acquiring Fund and the valuation procedures established by
the Xxxxxxx Sachs Trusts Board of Trustees (such procedures, the Xxxxxxx
Xxxxx Trust Valuation Procedures). Each Acquired Fund shall deliver
a copy of its valuation report to each Acquiring Fund by 7 p.m. (Eastern
time on the Valuation Date.
2.2. The Madison Trust and the Xxxxxxx Sachs Trust agree to use all
commercially reasonable efforts to resolve prior to the Valuation Date any
material pricing differences between the prices of portfolio securities
determined in accordance with the pricing policies and procedures of an
Acquired Fund and those determined in accordance with the Xxxxxxx Xxxxx
Trust Valuation Procedures.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date for each Reorganization shall, subject to
paragraph 15.1, be such date as an authorized officer of each of the parties
may agree, subject to the satisfaction or waiver of the conditions in this
Agreement and which date shall in no event be later than December 31, 2016.
All acts taking place at the closing of the transactions provided for in
this Agreement (the Closing) shall, subject to the satisfaction or waiver
of the conditions in this Agreement, be deemed to take place simultaneously
as of immediately before the opening of business on the Closing Date unless
otherwise agreed to by the parties. The Closing shall be held at the
offices of Xxxxxxx Xxxx & Xxxxxxxxx LLP at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000 or at such other place as an authorized officer of each
of the parties may agree. To the extent any Acquired Funds Assets are for
any reason not transferred on the Closing Date, subject to paragraph 15.1,
such Acquired Fund shall cause such Acquired Funds Assets to be transferred
in accordance with this Agreement at the earliest practicable date
thereafter. The Madison Trust, on behalf of each Acquired Fund, shall
notify the Xxxxxxx Sachs Trust of any portfolio security held by such
Acquired Fund in other than book-entry form at least five business days
prior to the Closing Date.
3.2. The Madison Trust shall direct State Street Bank and Trust Company,
as custodian for the Acquired Fund (Custodian), to deliver to the Xxxxxxx
Xxxxx Trust, on behalf of each Acquiring Fund, at the Closing, a certificate
of an authorized officer stating that (i) the Assets of each Acquired Fund
have been delivered in proper form to the corresponding Acquiring Fund on
the Closing Date, and (ii) all necessary taxes in connection with the
delivery of the Assets of each Acquired Fund, including all applicable
federal and state stock transfer stamps, if any, have been paid or provision
for payment has been made, or such other certification as shall be agreed
by the Xxxxxxx Sachs Trust and the Madison Trust. Each Acquired Funds
portfolio securities represented by a certificate or other written
instrument shall be presented by the Custodian to the applicable Acquiring
Funds custodian. Such presentation shall be made for examination no later
than five business days preceding the Closing Date, and such certificates
and other written instruments shall be transferred and delivered by each
Acquired Fund as of the Closing Date for the account of the corresponding
Acquiring Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. The Custodian shall deliver to
the applicable Acquiring Funds custodian the Assets of each Acquired Fund
as of the Closing Date by book entry, in accordance with the customary
practices of the Custodian and of each securities depository or other
permitted counterparties, in accordance with Rule 17f-4, Rule 17f-5,
Rule 17f-6 or Rule 17f-7, as the case may be, under the 1940 Act. The cash
to be transferred by each Acquired Fund shall be delivered by wire
transfer of same day federal funds on the Closing Date.
3.3. The Madison Trust shall cause its transfer agent (the Transfer Agent)
to deliver to the Xxxxxxx Xxxxx Trust, on behalf of each Acquiring Fund, at
the Closing a certificate of an authorized officer stating that its records
contain the name and address of each Acquired Fund Shareholder and the number
and percentage ownership of each outstanding class of shares owned by each
such shareholder immediately prior to the Closing. The Xxxxxxx Sachs Trust
shall deliver to the Secretary of the Madison Trust, on behalf of the
corresponding Acquired Fund, a confirmation evidencing that (a) the
appropriate number of Acquiring Fund Shares have been credited to the
Acquired Funds account on the books of the applicable Acquiring Fund pursuant
to paragraph 1.1, (b) the appropriate number of Acquiring Fund Shares have
been credited to the accounts of the Acquired Fund Shareholders on the books
of the applicable Acquiring Fund pursuant to paragraph 1.4 and (c) the
information set out in clause (a) and (b) was provided by the Xxxxxxx Xxxxx
Trusts transfer agent. At the Closing each Acquired Fund shall deliver to
the corresponding Acquiring Fund such bills of sale, checks, assignments,
share certificates, if any, receipts or other documents as the corresponding
Acquiring Fund or its counsel may reasonably request.
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of an
Acquiring Fund or the corresponding Acquired Fund (each, an Exchange)
shall be closed to trading or trading thereupon shall be restricted, or
(b) trading or the reporting of trading on such Exchange or elsewhere
shall be disrupted so that, in the judgment of either an appropriate
officer of the Xxxxxxx Sachs Trust or an appropriate officer of the
Madison Trust, accurate appraisal of the value of the net assets of the
Acquired Fund or the Acquiring Fund is impracticable, the Valuation Date
and 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 or such later dates as may be mutually agreed in writing by
an authorized officer of each party.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been fully disclosed to the applicable corresponding
Acquiring Fund prior to the date of this Agreement in a written instrument
executed by an officer of the Madison Trust and acknowledged in writing by
an officer of the Xxxxxxx Xxxxx Trust, the Madison Trust, on behalf of each
Acquired Fund, severally and not jointly, represents and warrants to the
Xxxxxxx Sachs Trust as follows:
(a) Each Acquired Fund is duly organized as a series of the Madison Trust,
which is a statutory trust duly organized, validly existing, and in good
standing under the laws of the State of Delaware with the power under the
Madison Trusts Declaration of Trust to own all of its Assets and to carry on
its business as it is currently conducted. Each Acquired Fund is qualified
as a foreign association or business trust in every jurisdiction where
required, except to the extent that failure to so qualify would not have a
material adverse effect on the Acquired Fund. Each 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 currently conducted
and to carry out the transactions contemplated by this Agreement;
(b) The Madison Trust is duly registered with the Commission as an
investment company classified as a management company of the open-end type,
and its registration with the Commission as an investment company under
the 1940 Act, and the registration of each class of Acquired Fund Shares
under the Securities Act of 1933, as amended (1933 Act), is in full force
and effect with respect to each Acquired Fund, and no action or
proceeding to revoke or suspend such registrations is pending, or to the
knowledge of the Madison Trust, threatened. All issued and outstanding
Acquired Fund Shares have been offered for sale and sold in compliance
in all material respects with applicable federal and state securities laws;
(c) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by any Acquired Fund
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the Securities Exchange Act of 0000
(xxx 0000 Xxx), 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) and the Xxxx-Xxxxx-Xxxxxx Act, which shall have been obtained
on or prior to the Closing Date. No consent of or notice to any other third
party or entity is required for the consummation by any Acquired Fund of
the transactions contemplated by this Agreement;
(d) Each Acquired Funds current prospectus and statement of additional
information (collectively, as amended or supplemented from time to time,
the Acquired Fund Prospectus) and current shareholder reports (true and
correct copies of which have been delivered to the Xxxxxxx Sachs Trust)
and each prospectus, statement of additional information and shareholder
report of each Acquired Fund used during the three years prior to the
date of this Agreement conform or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act,
the 1934 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 relating to the Acquired Fund
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Each Acquired Fund currently complies in all material respects with,
and for the five year period ending on the date of this Agreement, has
complied in all material respects with, the requirements of, and the rules
and regulations under, the 1933 Act, the 1934 Act and the 0000 Xxx, xxxxx
securities laws and all other applicable federal and state laws or
regulations. Each Acquired Fund currently complies in all material
respects with, and for the five year period ending on the date of this
Agreement, has complied in all material respects with, all of its
investment objectives, policies, guidelines and restrictions and
compliance procedures. All advertising and sales material used by each
Acquired Fund during the five year period ending on the date of this
Agreement complied, at the time such material was used, with applicable law
and the rules and regulations of the Financial Industry Regulatory
Authority and did not include any untrue statement of a material fact or
omit to state any material fact relating to the Acquired Fund required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not materially misleading;
(e) On the Valuation Date, each Acquired Fund will have good and
marketable title to the Assets of the Acquired Fund and full right, power,
and authority to sell, assign, transfer and deliver such Assets hereunder
free of any liens, encumbrances, hypothecations and claims whatsoever, and
upon delivery and payment for such Assets, the Xxxxxxx Xxxxx Trust, on
behalf of each Acquiring Fund, will acquire good and marketable title
thereto, subject to no restrictions on the full transfer thereof, excluding
such restrictions as might arise under the 1933 Act;
(f) Each Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Agreement by the Acquired Fund will not
result, in a violation of the Madison Trusts Declaration of Trust or
By-Laws, the laws of its jurisdiction of organization, or a material
violation of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Madison Trust, on behalf of each Acquired
Fund, is a party or by which it is bound;
(g) The execution, delivery and performance of this Agreement will not
result in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Madison Trust, on behalf of each
Acquired Fund, is a party or by which it is bound, nor will the execution,
delivery and performance of this Agreement by any Acquired Fund result in
the acceleration of any obligation, or the imposition of any penalty,
under any material agreement, indenture, instrument, contract, lease or
other undertaking to which an Acquired Fund is a party, or by which the
Acquired Fund is bound;
(h) No litigation or administrative proceeding or investigation of or
before any court, governmental body or regulatory agency is presently pending
or, to the Madison Trusts knowledge, threatened against the Madison Trust,
with respect to any Acquired Fund or any of the Acquired Funds properties or
assets that, if adversely determined, would materially and adversely affect
its financial condition or the conduct of its business or its ability to
consummate the transactions contemplated by this Agreement. The Madison
Trust, on behalf of each Acquired Fund, knows of no facts which might form
the basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court,
governmental body or regulatory agency which materially and adversely
affects any Acquired Funds business or its ability to consummate the
transactions herein contemplated. Neither the Madison Trust nor any of the
Acquired Funds is in violation of, or has violated, nor, to the knowledge
of the Madison Trust, is under investigation with respect to or has been
threatened to be charged with or given notice of any violation of, any
applicable law or regulation. None of the Acquired Funds (A) has outstanding
any option to purchase or other right to acquire shares of the Acquired Fund
issued or granted by or on behalf of the Acquired Fund to any person;
(B) has since December 31, 2015, entered into any contract or agreement or
amendment of any contract or agreement or terminated any contract or
agreement, except as otherwise contemplated by this Agreement; (C) has
incurred any indebtedness, other than in the ordinary course of business
consistent with past practice; (D) has entered into any amendment of its
organizational documents; (E) has outstanding any grant or imposition of
any lien, claim, charge or encumbrance (other than encumbrances arising in
the ordinary course of business) upon any asset of the Acquired Fund other
than a lien for taxes not yet due and payable; or (F) has entered into any
agreement or made any commitment to do any of the foregoing;
(i) The Statement of Assets and Liabilities, Statements of Operations and
Changes in Net Assets, and Schedule of Investments of each Acquired Fund as
of October 31, 2015 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, and are in accordance with
accounting principles generally accepted in the United States of America
(GAAP) consistently applied, and such statements (copies of which have
been furnished to the applicable Acquiring Fund) present fairly, in all
material respects, the financial condition of the Acquired Fund as of such
date in accordance with GAAP, and there are no known contingent liabilities
of the Acquired Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date not disclosed
therein. No significant deficiency, material weakness, fraud, significant
change or other factor that could significantly affect the internal controls
of an Acquired Fund has been disclosed or is required to be disclosed in an
Acquired Funds reports on Form N-CSR and, to the knowledge of the
Madison Trust, no such disclosure will be required following the Closing Date;
(j) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of each Acquired Fund
at April 30, 2016 (unaudited) are, or will be when sent to Acquired Fund
Shareholders in the regular course, in accordance with GAAP consistently
applied, and such statements (copies of which have been, or will be,
furnished to the Xxxxxxx Xxxxx Trust) present or will present fairly, in all
material respects, the financial condition of the Acquired Fund as of such
date in accordance with GAAP, including all known contingent liabilities of
the Acquired Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date;
(k) Since April 30, 2016, there has not been any material adverse change
in any Acquired Funds financial condition, assets, liabilities or business,
other than changes occurring in the ordinary course of business consistent
with past practice, or any incurrence by the Acquired Fund of indebtedness
maturing more than 60 days from the date such indebtedness was incurred. For
the purposes of this subparagraph (k), a decline in net asset value per
share of Acquired Fund Shares due to declines in market values of securities
held by the Acquired Fund, the discharge of Acquired Fund liabilities,
or the redemption of Acquired Fund Shares by shareholders of the Acquired
Fund shall not constitute a material adverse change;
(l) For each taxable year of its operation ending prior to or on the
Closing Date, each Acquired Fund will have declared a dividend or dividends
prior to or as of the Valuation Date that, together with all previous
dividends, shall have the effect of distributing to its shareholders all of
its investment company taxable income (determined without regard to the
deduction for dividends paid) and all of its net capital gains, if any;
(m) Each Acquired Fund is a separate series of the Madison Trust. For
each period for which the Madison Trust had more than one series,
the Acquired Fund was a separate series of the Madison Trust treated as
a separate corporation from each other series of the Madison Trust under
Section 851(g) of the Code;
(n) For each taxable year of its existence, each Acquired Fund has had
in effect an election to be a regulated investment company under
Subchapter M of the Code, has satisfied, and, for the taxable year that
includes the Closing Date, for that portion of such taxable year ending
with the Closing Date, expects to satisfy, all of the requirements of
Subchapter M of the Code for treatment as a regulated investment company,
and for each such taxable year (or portion thereof), each Acquired Fund
has been eligible to compute its federal income tax under Section 852
of the Code. Each Acquired Fund will qualify as such as of the Closing Date
and will satisfy the diversification requirements of Section 851(b)(3) of
the Code without regard to the last sentence of Section 851(d)(1) of the Code.
Each Acquired Fund has not taken any action, caused any action to be taken,
failed to take any action, or caused any failure to take any action which
action or failure could cause the Acquired Fund to fail to qualify as a
regulated investment company under the Code. Each Acquired Fund does not and
will not have any tax liability under Section 4982 of the Code for any
period ending on or before the Closing Date. Each Acquired Fund has no
earnings or profits accumulated with respect to any taxable year in which
the provisions of Subchapter M of the Code did not apply to the Acquired
Fund. All dividends paid by each Acquired Fund at any time prior to the
Closing Date have qualified or will qualify for the deduction for dividends
paid as defined in Section 561 of the Code;
(o) Within the times and in the manner prescribed by law, each
Acquired Fund has properly filed on a timely basis all federal and other tax
returns (including dividend reporting forms and other tax-related reports)
that it was required to file, and all such tax returns were complete and
accurate in all material respects. No Acquired Fund has been informed in
writing by any jurisdiction that the jurisdiction believes that the
Acquired Fund was required to file any tax return that was not filed and
the Acquired Fund does not know of any basis upon which a jurisdiction
could assert such a position;
(p) Each Acquired Fund has timely paid, in the manner prescribed by law,
all taxes that were due and payable or that were claimed to be due;
(q) No Acquired Fund has waived or extended any applicable statute of
limitations relating to the assessment or collection of taxes;
(r) No Acquired Fund has been notified in writing that any examinations
of the tax returns of the Acquired Fund are currently in progress or
threatened, and, to the knowledge of each Acquired Fund, no such
examinations are currently in progress or threatened, and no deficiencies
have been asserted or assessed against an Acquired Fund as a result of
any audit by the Internal Revenue Service or any state, local or foreign
taxing authority, and, to the knowledge of each Acquired Fund, no such
deficiency has been proposed or threatened, and there are no levies, liens
or other encumbrances related to taxes existing or known to each
Acquired Fund to be threatened or pending with respect to the Assets
of the Acquired Fund;
(s) No Acquired Fund has actual or potential liability for any tax
obligation of any taxpayer other than itself. No Acquired Fund is currently
or has ever been a member of a group of corporations with which it has filed
(or been required to file) consolidated, combined or unitary tax returns.
No Acquired Fund is a party to any tax allocation, sharing, or
indemnification agreement;
(t) The unpaid taxes of each Acquired Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for taxes (excluding
accruals and reserves for deferred taxes established to reflect timing
differences between book and tax income) set forth on the Statement of
Assets and Liabilities rather than in any notes thereto. All taxes that
each Acquired Fund is or was required by law to withhold or collect have
been duly withheld or collected and, to the extent required, have been
timely paid to the proper governmental agency;
(u) Each Acquired Fund has delivered to the respective Acquiring Fund or
made available to such Acquiring Fund complete and accurate copies of all
tax returns of the Acquired Fund, together with all related examination
reports and statements of deficiency for all periods not closed under the
applicable statutes of limitations and complete and correct copies of all
private letter rulings, revenue agent reports, information document
requests, notices of proposed deficiencies, deficiency notices, protests,
petitions, closing agreements, settlement agreements, pending ruling
requests and any similar documents submitted by, received by or agreed to
by or on behalf of the Acquired Fund. Each Acquired Fund has disclosed on
its federal income tax returns all positions taken therein that could give
rise to a substantial understatement of federal income tax within the
meaning of Section 6662 of the Code;
(v) No Acquired Fund has undergone, has agreed to undergo, or is required
to undergo (nor will it be required as a result of the transactions
contemplated in this Agreement to undergo) a change in its method of
accounting resulting in an adjustment to its taxable income pursuant to
Section 481 of the Code. No Acquired Fund (including the respective
Acquiring Fund as its successor) will be required to include any item
of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result
of any (i) change in method of accounting for a taxable period ending on or
prior to the Closing Date; (ii) closing agreement as described in Section 7121
of the Code (or any corresponding or similar provision of state, local or
foreign income tax law) executed on or prior to the Closing Date; (iii)
installment sale or open transaction disposition made on or prior to the
Closing Date; or (iv) prepaid amount received on or prior to the Closing Date;
(w) There are (and as of immediately following the Closing there will be)
no liens on the assets of any Acquired Fund relating to or attributable to
taxes, except for taxes not yet due and payable;
(x) The tax bases of the assets of each Acquired Fund are accurately
reflected on the Acquired Funds tax books and records;
(y) All issued and outstanding Acquired Fund Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the applicable Acquired Fund and have been offered
and sold in every state, territory and the District of Columbia in
compliance in all material respects with applicable registration
requirements of the 1933 Act and applicable state securities laws and are
not, and on the Closing Date will not be, subject to preemptive or
objecting shareholder rights. All of the issued and outstanding
Acquired Fund Shares will, on the Valuation Date and at the time of
Closing, be held of record by the persons and in the amounts set forth in
the records of the Transfer Agent, on behalf of the applicable
Acquired Fund, as provided in paragraph 3.3. Each Acquired Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquired Fund Shares, nor is there outstanding any
security convertible into any of the Acquired Fund Shares;
(z) The Madison Trust, on behalf of each Acquired Fund, has all requisite
power and authority to enter into this Agreement and to consummate the
transactions contemplated herein. The execution, delivery and performance of
this Agreement, and the transactions contemplated herein, have been duly
authorized by all necessary action, if any, on the part of the Trustees of
the Madison Trust, on behalf of each Acquired Fund, and no other action or
proceedings by the Acquiring Funds are necessary to authorize such
execution, delivery and performance of this Agreement, and the transactions
contemplated herein, other than the approval of the Acquired Fund
Shareholders. This Agreement constitutes a valid and binding obligation
of each Acquired Fund, enforceable against each Acquired Fund in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors rights and to general equity principles;
(aa) The information relating to each Acquired Fund furnished by the
Acquired Fund for use in no-action letters, applications for orders,
registration statements, proxy materials and other documents filed or to
be filed with any federal, state or local regulatory or self-regulatory
authority that are necessary in connection with the transactions
contemplated hereby is and will be accurate and complete in all material
respects and will comply in all material respects with federal securities
laws and regulations thereunder and other applicable laws and regulations
applicable thereto;
(bb) As of the date of this Agreement, each Acquired Fund has provided
the Xxxxxxx Xxxxx Trust with information relating to the Acquired Fund
reasonably necessary for the preparation of a prospectus, including the
proxy statement of each Acquired Fund (the Prospectus/Proxy Statement), to
be included in a Registration Statement on Form N-14 of the Xxxxxxx Sachs
Trust (as the same may be amended or supplemented, the Registration Statement)
, in compliance with the 1933 Act, the 1934 Act and the 1940 Act in
connection with the meeting of shareholders of the Acquired Fund to approve
this Agreement and the transactions contemplated hereby. As of the effective
date of the Registration Statement, the date of the meeting of shareholders
of each Acquired Fund and the Closing Date, such information provided by any
Acquired Fund 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, in light of the circumstances under which such
statements were made, not misleading;
(cc) There are no material contracts outstanding to which an Acquired Fund
is a party, other than as disclosed in the Acquired Fund Prospectus or in
the Registration Statement. No Acquired Fund has any material contracts,
agreements or other similar commitments that will not be terminated without
liability to it before the Closing Date, other than liabilities, if any,
to be discharged prior to the Closing Date or that are Liabilities;
(dd) There have been no miscalculations of the net asset value of an
Acquired Fund or the net asset value per share of any class of shares of an
Acquired Fund during the twelve-month period preceding the date hereof that
have not been remedied in accordance with industry practice which,
individually or in the aggregate, would have a material adverse effect on
such Acquired Fund or its Assets, and all such calculations have been made
in accordance with the applicable provisions of the 1940 Act;
(ee) The minute books and other similar records of the Madison Trust have
been made available to the Xxxxxxx Xxxxx Trust prior to the execution of this
Agreement and contain a true and complete record in all material respects of
all actions taken at all meetings and by all written consents in lieu of
meetings of the shareholders and of its Board of Trustees and any committees
of the Board of Trustees. The stock transfer ledgers and other similar
records of an Acquired Fund have been made available to the Xxxxxxx Sachs
Trust prior to the execution of this Agreement and accurately reflect all
record transfers prior to the execution of this Agreement in the shares of
the Acquired Fund. All other books and records of an Acquired Fund have
been made available to the Xxxxxxx Xxxxx Trust, and are true and correct in
all material respects and contain no material omissions with respect to
the business and operations of the Acquired Fund;
(ff) The Madison Trust and each Acquired Fund have maintained, or caused
to be maintained on its behalf, all books and records required of
a registered investment company in compliance with the requirements of
Section 31 of the 1940 Act and rules thereunder and such books and records
are true and correct in all material respects;
(gg) The Madison Trust has adopted and implemented written policies and
procedures in accordance with Rule 38a-1 under the 1940 Act relating to
the Acquired Funds;
(hh) The Madison Trust and each Acquired Fund have adopted and
implemented written policies and procedures related to xxxxxxx xxxxxxx and
a code of ethics that complies with all applicable provisions of
Section 17(j) of the 1940 Act and Rule 17j-1 thereunder;
(ii) The Madison Trust and each Acquired Fund have maintained each
material license, permit, franchise, authorization, certification and approval
required by any governmental entity in the conduct of its business
(the Licenses and Permits). Each License and Permit has been duly obtained,
is valid and in full force and effect, and is not subject to any pending or,
to the knowledge of the Madison Trust, threatened administrative or judicial
proceeding to revoke, cancel, suspend or declare such License and Permit
invalid;
(jj) No Acquired Fund has any unamortized or unpaid organizational fees
or expenses;
(kk) The Madison Trust represents that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof, other than as contemplated by this Agreement;
(ll) Each Acquired Funds investment operations from inception to
the date hereof have been in compliance in all material respects with
the investment policies and investment restrictions set forth in each A
cquired Funds prospectus;
(mm) The officers of the Madison Trust, on behalf of each Acquired Fund,
will call a special meeting of shareholders of each Acquired Fund to
consider and act upon this Agreement and the transactions contemplated
hereby and to take all other appropriate action necessary to obtain approval
of the transactions contemplated herein. Such meeting shall be scheduled at
such date that the parties may agree to in writing and will comply with all
applicable laws and regulations; and
(nn) Neither any Acquired Fund nor any affiliated person (as defined in
the 0000 Xxx) thereof is ineligible to serve as an employee, officer,
director, member of an advisory board, investment adviser, depositor or
principal underwriter of any investment company registered under
the 1940 Act by reason of any conviction of a felony or misdemeanor,
described in Section 9(a)(1) of the 1940 Act, or by reason of any order,
judgment or decree of any court of competent jurisdiction, described in
Section 9(a)(2) of the 1940 Act, and is not subject to any order issued
by the Commission under Section 9(b) of the 1940 Act. No affiliated
person of any Acquired Fund has been the subject, or presently is the
subject, of any proceeding or investigation with respect to any
disqualification that would be a basis for denial, suspension or
revocation of registration as an investment adviser under Section 203(e)
of the Investment Advisers Act of 1940, as amended, or any rule thereunder,
or for disqualification as an investment adviser, employee, officer,
director of an investment company under Section 9 of the 1940 Act.
4.2. Except as has been fully disclosed to the applicable corresponding
Acquired Fund prior to the date of this Agreement in a written instrument
executed by an officer of the Xxxxxxx Xxxxx Trust and acknowledged in writing
by an officer of the Madison Trust, the Xxxxxxx Sachs Trust, on behalf of
each Acquiring Fund, severally and not jointly, represents and warrants to
the Madison Trust as follows:
(a) Each Acquiring Fund is duly organized as a series of the Xxxxxxx
Xxxxx Trust, which is a statutory trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware. Each
Acquiring Fund is qualified as a foreign association or business trust
in every jurisdiction where required, except to the extent that failure to
so qualify would not have a material adverse effect on the Acquiring Fund.
Each Acquiring Fund has all necessary federal, state and local
authorizations to carry out this Agreement;
(b) The Xxxxxxx Sachs Trust is duly registered with the Commission as an
investment company classified as a management company of the open-end type,
and its registration with the Commission as an investment company under
the 1940 Act and the registration of each class of Acquiring Fund Shares
under the 1933 Act is in full effect with respect to each Acquiring Fund
and will be in full force and effect with respect to each Acquiring Fund
as of the Closing Date, and no action or proceeding to revoke or suspend
such registrations is pending, or to the knowledge of
the Xxxxxxx Xxxxx Trust, threatened;
(c) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by any Acquiring
Fund of the transactions contemplated by this Agreement, except such as may
be required under the 1933 Act, the 1934 Act, the 1940 Act, state
securities or blue sky laws (which term as used herein shall include the
laws of the District of Columbia and of Puerto Rico) and the
Xxxx-Xxxxx-Xxxxxx Act, which shall have been obtained on or prior to the
Closing Date. No consent of or notice to any other third party or entity
is required for the consummation by any Acquiring Fund of the transactions
contemplated by this Agreement;
(d) Each Acquiring Funds current prospectus and statement of additional
information (collectively, as amended or supplemented from time to time and
in effect, the Acquiring Fund Prospectus) 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 relating to
the Acquiring Fund required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(e) On the Valuation Date and the Closing Date, each Acquiring Fund will
have good and marketable title to its assets, if any, free and clear of any
liens, encumbrances, hypothecations and claims whatsoever, except those
liens or encumbrances as to which the Acquiring Fund has received notice and
documentation prior to the Closing Date;
(f) Each Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement by the Acquiring Fund will not
result, in a violation of the Xxxxxxx Xxxxx Trusts Agreement and Declaration
of Trust or By-Laws, the laws of its jurisdiction of organization or a
material violation of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Xxxxxxx Sachs Trust, on behalf of each
Acquiring Fund, is a party or by which it is bound;
(g) The execution, delivery and performance of this Agreement will not
result in the acceleration of any obligation, give rise to the right of
termination or result in the imposition of any penalty, under any agreement,
indenture, instrument, contract, lease, judgment or decree to which the
Xxxxxxx Xxxxx Trust, on behalf of each Acquiring Fund, is a party or by which
it is bound, nor will the execution, delivery and performance of this
Agreement by any Acquiring Fund result in the acceleration of any obligation,
give rise to the right of termination or result in the imposition of any
penalty, under any material agreement, indenture, instrument, contract, lease
or other undertaking to which an Acquiring Fund is a party, or by which
the Acquiring Fund is bound;
(h) No litigation or administrative proceeding or investigation of or
before any court, governmental body or regulatory agency is presently pending
or, to the Xxxxxxx Sachs Trusts knowledge, threatened against the
Xxxxxxx Xxxxx Trust, with respect to any Acquiring Fund or any of the
Acquiring Funds properties or assets, that, if adversely determined, would
materially and adversely affect any Acquiring Funds financial condition
or the conduct of its business or its ability to consummate the
transactions contemplated by this Agreement. The Xxxxxxx Sachs Trust, on
behalf of each Acquiring Fund, knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court, governmental
body or regulatory agency which materially and adversely affects any
Acquiring Funds ability to consummate the transactions herein contemplated;
(i) Each Acquiring Fund has not yet commenced operations. Each Acquiring
Fund has not yet filed its first federal income tax return and, thus, has not
yet elected to be treated as a regulated investment company for federal
income tax purposes. However, upon filing its first federal income tax return
at the completion of its first taxable year, each Acquiring Fund will elect
to be a regulated investment company and until such time will take all steps
necessary to ensure that it qualifies for taxation as a regulated investment
company under Sections 851 and 852 of the Code.
(j) Each Acquiring Funds shares will be, upon consummation of the
Reorganization, duly and validly issued and outstanding, fully paid and
non-assessable by the Xxxxxxx Xxxxx Trust and will have been offered and sold
in every state, territory and the District of Columbia in compliance in all
material respects with applicable registration requirements of the 1933 Act
and applicable state securities laws. Each Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there any outstanding security
convertible into any of the Acquiring Fund Shares;
(k) The Xxxxxxx Sachs Trust, on behalf of each Acquiring Fund, has all
requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated herein. The execution, delivery and
performance of this Agreement, and the transactions contemplated herein,
have been duly authorized by all necessary action, if any, on the part of
the Trustees of the Xxxxxxx Xxxxx Trust, on behalf of each Acquiring Fund,
and no other action or proceedings by the Acquiring Funds are necessary to
authorize this Agreement and the transactions contemplated herein. This
Agreement constitutes a valid and binding obligation of each Acquiring
Fund, enforceable against each Acquiring Fund 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;
(l) As of the effective date of the Registration Statement, the date of
the meeting of shareholders of each Acquired Fund and the Closing Date, the
Prospectus/Proxy Statement, including the documents contained or incorporated
therein by reference (insofar as it relates to the Xxxxxxx Sachs Trust and
any Acquiring Fund) 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, in light of the circumstances under which
such statements were made, not misleading;
(m) There are no material contracts outstanding to which an Acquiring
Fund is a party, other than as disclosed in the Acquiring Fund Prospectus
or in the Registration Statement;
(n) The Xxxxxxx Xxxxx Trust has adopted and implemented written policies
and procedures in accordance with Rule 38a-1 under the 1940 Act relating
to the Acquiring Funds;
(o) The Xxxxxxx Sachs Trust and each Acquiring Fund have adopted and
implemented written policies and procedures related to xxxxxxx xxxxxxx and
a code of ethics that complies with all applicable provisions of Section
17(j) of the 1940 Act and Rule 17j-1 thereunder;
(p) The copy of the Xxxxxxx Sachs Trust Valuation Procedures that the
Xxxxxxx Xxxxx Trust has provided to the Madison Trust is an accurate and
complete statement of such Procedures as of the date that such copy was
so provided; and
(p) Each Acquiring Fund was formed for the purpose of effecting the
transactions contemplated by this Agreement, and has not commenced
investment operations and will not do so until after the Closing Date, and
has no assets or liabilities (other than its rights and obligations under
this Agreement). Accordingly, each Acquiring Fund does not have any tax
attributes immediately before the transaction other than tax attributes,
if any, related to a de minimis amount of assets held, if any, to
facilitate the organization of an Acquiring Fund. Each Acquiring Fund
does not have any shareholders, and immediately following the Closing Date,
the former shareholders of the corresponding Acquired Fund will own all
of the Acquiring Funds outstanding shares. Each Acquiring Fund may issue
nominal Acquiring Fund Shares to GSAM (or an affiliate thereof) for
purposes of certain organizational matters only.
5. COVENANTS OF THE PARTIES.
5.1. Each Acquired Fund will operate its business in the ordinary course
consistent with past practice between the date hereof and the Closing Date,
it being understood that, with respect to each Acquired Fund, such ordinary
course of business will include purchases and sales of portfolio securities
and other instruments, sales and redemptions of Acquired Fund Shares and
regular and customary periodic dividends and distributions. Each Acquiring
Fund shall take such actions as are customary to the organization of a new
series prior to its commencement of operations. In order to facilitate the
transfer of Assets at the Closing Date, GSAM may request in writing that
MAM use commercially reasonable efforts, subject to MAMs fiduciary duty,
to limit or cease portfolio trading on behalf of an Acquired Fund for a
period of up to three days prior to the Valuation Date. MAM agrees that
it will accommodate such requests to the extent such trading restrictions
are consistent with the investment objectives, policies and strategies of
the applicable Acquired Fund and consistent with fulfilling its fiduciary
obligations as an investment adviser. No party shall take any action that
would, or would reasonably be expected to, result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect.
5.2. Each Acquired Fund will call a meeting of the Acquired Fund
Shareholders to be held prior to the Closing Date to consider and act upon
this Agreement and to take all other action necessary to obtain the
required shareholder approval of the transactions contemplated hereby.
In the event that any Acquired Fund receives insufficient votes from
shareholders, the meeting may be adjourned as permitted under the Madison
Trusts Declaration of Trust, Bylaws, applicable law and the Acquired Funds
Prospectus/Proxy Statement in order to permit further solicitation of
proxies.
5.3. In connection with the Acquired Fund Shareholders meetings referred
to in paragraph 5.2, the Xxxxxxx Sachs Trust, with the assistance of each
Acquired Fund, will prepare the Registration Statement and Prospectus/Proxy
Statement for such meeting, in which the Xxxxxxx Xxxxx Trust will file for
registration under the 1933 Act the Acquiring Fund Shares to be distributed
to Acquired Fund Shareholders pursuant hereto, all in compliance with the
applicable requirements of the 1933 Act, the 1934 Act and the 1940 Act. If
at any time prior to the Closing Date a party becomes aware of any untrue
statement of a material fact or omission to state a material fact required
to be stated therein or necessary to make the statements made not misleading
in light of the circumstances under which they were made in respect of such
Registration Statement and Prospectus/Proxy Statement, the party discovering
the item shall notify the other party and the parties shall cooperate in
promptly preparing and filing with the Commission and, if appropriate,
distributing to shareholders appropriate disclosure with respect to the item.
Each Acquired Fund agrees to mail to its respective shareholders of record
entitled to vote at the special meeting of shareholders at which action is
to be considered regarding this Agreement, in sufficient time to comply
with requirements as to notice thereof, the Prospectus/Proxy Statement
contained in the Registration Statement or other documents as are necessary,
which each comply in all material respects with the applicable provisions
of section 14(a) of the 1934 Act and section 20(a) of the 1940 Act, and the
rules and regulations, respectively, thereunder.
5.4. The Madison Trust, each of the Acquired Funds, the Xxxxxxx Sachs Trust
and each of the Acquiring Funds will cooperate with the others, and each will
furnish to the others the information relating to itself required by the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations under
such acts to be set forth in the Registration Statement, including the
Prospectus/Proxy Statement. Without limiting the foregoing, each Acquired
Fund and MAM will assist the Acquiring Funds in obtaining such information
as the Acquiring Funds reasonably request concerning the beneficial
ownership of Acquired Fund Shares and will assist the Acquiring Funds and
GSAM in obtaining copies of any books and records of the Acquired Funds
from their service providers reasonably requested by the Xxxxxxx Xxxxx Trust
or GSAM. In addition, the Xxxxxxx Sachs Trust and the Madison Trust will
provide each other and their respective representatives with such
cooperation, assistance and information as either of them reasonably may
request of the other in filing any tax returns, amended return or claim
for refund, determining a liability for taxes or a right to a refund of
taxes or participating in or conducting any audit or other proceeding in
respect of taxes, or in determining the financial reporting of any tax
position. Upon reasonable notice, the Acquired Funds shall make available
to the Acquiring Funds officers and agents, acting on behalf of the
Acquiring Funds, all books and records of the Acquired Funds.
5.5. Each Acquired Fund will prepare and deliver to the Acquiring Fund at
least five business days prior to the Closing Date a statement of the assets
and the liabilities of the Acquired Fund as of such date for review and
agreement by the parties to determine that the Assets and the Liabilities of
the Acquired Fund are being correctly determined in accordance with the
terms of this Agreement. The Acquired Fund will deliver at the Closing
(1) a statement of Assets and Liabilities of the Acquired Fund as of the
Valuation Date and (2) a list of the Acquired Funds Assets as of the
Closing Date showing the tax costs of each of its assets by lot and the
holding periods of such Assets, certified by the Treasurer or Assistant
Treasurer of the Acquired Fund.
5.6. The Madison Trust, on behalf of each Acquired Fund, agrees that the
liquidation of each Acquired Fund will be effected in the manner provided
in the Madison Trusts Declaration of Trust and Bylaws in accordance with
applicable law, and that on and after the Closing Date, each Acquired Fund
shall not conduct any business except in connection with its liquidation.
5.7. It is the intention of the parties that the transaction contemplated
by this Agreement will qualify as a reorganization with the meaning of
Section 368(a) of the Code. None of the parties to this Agreement shall
take any action or cause any action to be taken (including, without
limitation the filing of any tax return) that is inconsistent with such
treatment or results in the failure of the transaction to qualify as a
reorganization with the meaning of Section 368(a) of the Code. As promptly
as practicable, each Acquired Fund shall furnish to the corresponding
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 U.S.
federal income tax purposes, as well as any capital loss carryovers and
items that the Acquiring Fund will succeed to and take into account as a
result of section 381 of the Code.
5.8. Prior to the valuation of the Assets as of the Valuation Date,
each Acquired Fund shall have declared a dividend, dividends or other
distribution or distributions, with a record and ex-dividend date prior
to the Valuation Date, which, together with all previous dividends and
distributions, shall have the effect of distributing to the shareholders
of each Acquired Fund sufficient amounts of the Acquired Funds
investment company taxable income for all taxable periods ending on or
before the Closing Date (computed without regard to any deduction for
dividends paid), if any, plus sufficient amounts of the excess of its
interest income, if any, excludable from gross income under Section
103(a) of the Code over its deductions disallowed under Sections 265
and 171(a)(2) of the Code for all taxable periods ending on or before
the Closing Date and sufficient amounts of its net capital gains
realized in all taxable periods ending on or before the Closing Date
(after reduction for any capital loss carry forward) to satisfy the
distribution requirements imposed by Section 852(a) of the Code for
each of its taxable years.
5.9. Each Acquiring Fund and each Acquired Fund will use commercially
reasonable efforts to fulfill or obtain the fulfillment of the conditions
precedent to consummate and make effective in the most expeditious manner
practicable the transactions contemplated by this Agreement. The Madison
Trust and the Xxxxxxx Xxxxx Trust shall each use commercially reasonable
efforts to make its officers available upon reasonable notice at reasonable
times to provide explanation of any documents or information provided under
this Agreement to the extent such officer is familiar with such documents
or information.
5.10. The Madison Trust and the Xxxxxxx Sachs Trust will execute and
deliver or cause to be executed and delivered all such assignments and other
instruments and will take or cause to be taken such further action as may
be necessary, proper or advisable in order to vest in and confirm (a) each
Acquired Funds title to and possession of the Acquiring Fund Shares to be
delivered hereunder and (b) each Acquiring Funds title to and possession
of all the Assets.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND
The obligations of the Xxxxxxx Xxxxx Trust and each Acquiring Fund to
complete the transactions provided for herein shall be subject, at their
election, to the performance by the Madison Trust and the applicable
Acquired Fund of all the obligations to be performed by them hereunder on
or before the Closing Date and, in addition thereto, to the following
further conditions:
6.1. The Madison Trust and each Acquired Fund shall have delivered to
the applicable Acquiring Fund a certificate executed on their behalf by
the Madison Trusts President or any Vice President and its Chief Financial
Officer, Treasurer or Assistant Treasurer, in form and substance reasonably
satisfactory to the Xxxxxxx Sachs Trust and dated as of the Closing Date, to
the effect that the representations and warranties of the Madison Trust and
each Acquired Fund made in this Agreement are true and correct at and as of
the date hereof and at and as of the Closing Date (except for such
representations and warranties required to be true and correct as of another
date, which representation and warranty shall be true and correct as of
such other date), except as they may be affected by the transactions
contemplated by this Agreement, and that the Madison Trust and each
Acquired Fund have complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed or
satisfied under this Agreement at or prior to the Closing Date.
6.2. The Madison Trust, on behalf of each Acquired Fund, shall have
furnished to the Xxxxxxx Xxxxx Trust a statement of the Acquired Funds
assets and liabilities, with values determined as provided in Section 2
of this Agreement, together with a list of investments with their
respective tax costs, all as of the Valuation Date, certified by the
Madison Trusts Chief Financial Officer, Treasurer or Assistant Treasurer.
This information will present fairly the financial condition and Assets
of each Acquired Fund as of the Valuation Date in conformity with GAAP
applied on a consistent basis, and there will be no material contingent
liabilities of any Acquired Fund not disclosed in such information.
6.3 Prior to the Closing Date each Acquired Fund shall have declared a
dividend or dividends which, together with all previous such dividends, shall
have the effect of distributing to its stockholders all of its investment
company taxable income (computed without regard to any deduction for dividends
paid) for its taxable year ended October 31, 2015, and for any prior years,
and all of the Acquired Funds net capital gain recognized in its taxable
year ended October 31, 2015, and for any prior years (after reduction for
any capital loss carryovers).
6.4. Prior to the Closing Date each Acquired Fund shall have distributed
an amount to its stockholders of at least the sum of ninety-eight percent of
its ordinary income for the calendar year ended on December 31, 2015 and
for any prior years, and ninety-eight and two-tenths percent of the Acquired
Funds capital gain net income for the one-year period ending on October 31
of the calendar year ended on December 31, 2015 plus any shortfalls from
prior years.
6.5. Each Acquiring Fund shall have received a favorable opinion of
Xxxxxxx & Xxxx, S.C., counsel to the Madison Trust for the transactions
contemplated hereby, dated the Closing Date, with such assumptions and
limitations as shall be in the opinion of Xxxxxxx & Xxxx, S.C. appropriate
to render the opinions expressed therein, and in a form satisfactory to
the applicable Acquiring Fund, to the following effect:
(a) The Madison Trust is a statutory trust duly organized and validly
existing under the laws of the State of Delaware and has all requisite
power and authority to own all of its properties and assets and to carry
on its business as an open-end investment company as described in the
Registration Statement, and each Acquired Fund is a series thereof duly
constituted in accordance with the Declaration of Trust and Bylaws of
the Madison Trust.
(b) This Agreement has been duly authorized, executed and delivered
by the Madison Trust, on behalf of each Acquired Fund, and assuming the
due authorization, execution and delivery of this Agreement by the Xxxxxxx
Sachs Trust, on behalf of each Acquiring Fund, is a valid and binding
obligation of the Madison Trust and each Acquired Fund enforceable against
the Madison Trust and each Acquired Fund in accordance with its terms.
(c) Each Acquired Fund has the power to sell, assign, transfer and
deliver the Assets and the Liabilities to be transferred by it hereunder.
(d) The execution and delivery of this Agreement by the Madison Trust
on behalf of each Acquired Fund did not, and the performance by the Madison
Trust and each Acquired Fund of their obligations hereunder will not,
(i) violate the Madison Trusts Declaration of Trust or Bylaws,
(ii) violate any provisions of applicable U.S. federal securities laws
(excluding, however, antifraud and other provisions with respect to
disclosures of material information) or (iii) violate any provision of
any agreement disclosed in or filed with the Acquired Fund Prospectus
or Acquired Funds Registration Statement on Form N-1A to which the
Madison Trust or any Acquired Fund is a party or by which it is bound
or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty under any judgment or
decree to which the Madison Trust or any Acquired Fund is a party or
by which it or its property is bound.
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any Delaware or federal court or governmental
authority is required for the consummation by the Madison Trust or any
Acquired Fund of the transactions contemplated by this Agreement,
except such as have been obtained.
(f) The Madison Trust is registered with the Commission as an open-end
management investment company under the 1940 Act.
In addition, such counsel will confirm whether, as of the Closing Date, it
is representing the Madison Trust or any Acquired Fund in any pending
litigation in which the Madison Trust or any Acquired Fund is a named
defendant that challenges the validity or the enforceability of the
Agreement.
6.6. The Madison Trust shall have duly executed and delivered to the
Xxxxxxx Xxxxx Trust, on behalf of each Acquired Fund, such bills of sale,
assignments, certificates and other instruments of transfer, including
transfer instructions to each Acquired Funds custodian and instructions
to the Xxxxxxx Sachs Trusts transfer agent as the Xxxxxxx Xxxxx Trust
may reasonably deem necessary or desirable to evidence the transfer to
the Acquiring Fund by such Acquired Fund all of the right, title and
interest of such Acquired Fund in and to the respective Assets of each
Acquired Fund. In each case the Assets of each Acquired Fund shall be
accompanied by all necessary state stock transfer stamps or cash for
the appropriate purchase price therefor.
6.7. The Xxxxxxx Xxxxx Trust shall have received at the Closing:
(i) a certificate of an authorized signatory of State Street Bank
and Trust Company, as custodian for the Madison Trust, stating that the
Assets of each Acquired Fund have been delivered to the Xxxxxxx Sachs Trust;
(ii) a certificate of an authorized signatory from the applicable
custodian for the Acquiring Funds, stating that the Assets of each
Acquired Fund have been received; (iii) a certificate of an authorized
signatory of the Madison Trust confirming that each Acquired Fund has
delivered its records containing the names and addresses of the record
holders of each Acquired Funds shares and the number and percentage
(to four decimal places) of ownership of each Acquired Fund owned by each
such holder as of the Valuation Date; (iv) a statement of the respective
tax basis of all investments to be transferred by each Acquired Fund to
the corresponding Acquiring Fund; and (v) the tax books and records of
each Acquired Fund for purposes of preparing any tax returns required by
law to be filed after the Closing Date.
6.8. The Xxxxxxx Xxxxx Trust, on behalf of each Acquiring Fund, shall have
received from Deloitte & Touche LLP a letter addressed to the Xxxxxxx Sachs
Trust, on behalf of the applicable Acquiring Fund, dated as of the effective
date of the Registration Statement in form and substance satisfactory to the
Xxxxxxx Xxxxx Trust, on behalf of the applicable Acquiring Fund, to the
effect that:
(a) they are independent public accountants with respect to the
applicable Acquired Fund within the meaning of the 1933 Act and the
applicable regulations thereunder; and
(b) in their opinion, the financial statements and financial
highlights of the applicable Acquired Fund included or incorporated by
reference in the Registration Statement and reported on by them comply as
to form in all material aspects with the applicable accounting requirements
of the 1933 Act and the rules and regulations thereunder.
6.9. The Xxxxxxx Sachs Trust, on behalf of each Acquiring Fund, and the
Madison Trust, on behalf of each Acquired Fund, shall have received from
Deloitte & Touche LLP a letter addressed to both parties and dated as of
the effective date of the Registration Statement in form and substance
satisfactory to each party, to the effect that: on the basis of limited
procedures agreed upon by the Xxxxxxx Xxxxx Trust, on behalf of each
Acquiring Fund, and the Madison Trust, on behalf of each Acquired Fund,
and described in such letter (but not an examination in accordance with
generally accepted auditing standards), specified information relating to
each Fund appearing in the Registration Statement has been obtained from
the accounting records of each Fund or from schedules prepared by officers
of each Fund having responsibility for financial and reporting matters and
such information is in agreement with such records, schedules or
computations made therefrom.
6.10. The Xxxxxxx Sachs Trust, on behalf of each Acquiring Fund, shall have
received from PricewaterhouseCoopers LLP a letter addressed to the Xxxxxxx
Xxxxx Trust, on behalf of each Acquiring Fund, and dated as of the Closing
Date stating that, as of a date no more than three business days prior to the
Closing Date, PricewaterhouseCoopers LLP performed limited procedures and
that on the basis of those procedures it confirmed the matters set forth
in paragraph 6.9.
6.11. The Madison Trusts agreements, on behalf of each Acquired Fund,
with each of its service providers shall have terminated on or prior to the
Closing Date with respect to each Acquired Fund in compliance with their
termination provisions without being subject to a contractual penalty, and
the Xxxxxxx Sachs Trust shall have received assurances from the Madison
Trust that no claims for damages (liquidated or otherwise) will arise as
a result of such termination.
6.12. As of the Closing Date, there shall have been no material change
in the investment objectives, policies and restrictions or any increase in
the investment management fee rate or other fee rates that any Acquired Fund
is currently contractually obligated to pay for services provided to the
Acquired Fund from those described in the Registration Statement.
6.13. In aggregate, the Acquired Funds shall not have experienced net
outflows of more than fifty percent (50%) of the Acquired Funds aggregate
net assets in the period beginning on May 24, 2016 and ending on the
Closing Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRED FUND
The obligations of the Madison Trust and each Acquired Fund to complete the
transactions provided for herein shall be subject, at their election, to
the performance by the Xxxxxxx Xxxxx Trust and the applicable Acquiring Fund
of all the obligations to be performed by them hereunder on or before the
Closing Date and, in addition thereto, to the following further conditions:
7.1. The Xxxxxxx Sachs Trust and each Acquiring Fund shall have delivered
to the applicable Acquired Fund a certificate executed on their behalf by
the Xxxxxxx Xxxxx Trusts President or any Vice President and its Chief
Financial Officer, Treasurer or Assistant Treasurer, in form and substance
reasonably satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties of the
Xxxxxxx Sachs Trust and each Acquiring Fund made in this Agreement are
true and correct at and as of the date hereof and at and as of the
Closing Date (except for such representations and warranties required
to be true and correct as of another date, which representation and warranty
shall be true and correct as of such other date), except as they may be
affected by the transactions contemplated by this Agreement, and that the
Xxxxxxx Xxxxx Trust and each Acquiring Fund have complied with all the
covenants and agreements and satisfied all of the conditions on their parts
to be performed or satisfied under this Agreement at or prior to the
Closing Date.
7.2. The Xxxxxxx Sachs Trust, on behalf of each Acquiring Fund, shall
have executed and delivered to the Madison Trust, on behalf of the
applicable Acquired Fund, an Assumption of Liabilities dated as of the
Closing Date pursuant to which each Acquiring Fund will assume all of the
Liabilities of the applicable Acquired Fund existing at the Valuation Date
in connection with the transactions contemplated by this Agreement.
7.3 Each Acquired Fund shall have received a favorable opinion of
Dechert LLP, counsel to the Xxxxxxx Xxxxx Trust, dated the Closing Date, with
such assumptions and limitations as shall be in the opinion of such counsel
appropriate to render the opinions expressed therein, and in a form
satisfactory to the applicable Acquired Fund, which opinion may rely on a
separate opinion of local counsel to the extent it relates to the laws of the
State of Delaware, to the following effect:
(a) The Xxxxxxx Sachs Trust is a statutory trust duly organized and
validly existing under the laws of the State of Delaware and has all requisite
power and authority to carry on its business as an open-end investment
company as described in the Registration Statement, and each Acquiring Fund is
a separate series thereof duly constituted in accordance with the Agreement
and Declaration of Trust and the Bylaws of the Xxxxxxx Xxxxx Trust and
applicable law.
(b) This Agreement has been duly authorized, executed and delivered by
the Xxxxxxx Sachs Trust, on behalf of each Acquiring Fund, and assuming the
due authorization, execution and delivery of this Agreement by the
Madison Trust, on behalf of each Acquired Fund, is the valid and binding
obligation of the Xxxxxxx Xxxxx Trust and each Acquiring Fund enforceable
against the Xxxxxxx Sachs Trust and each Acquiring Fund in accordance with
its terms.
(c) Each Acquiring Fund has the power to assume the Liabilities to be
transferred to it hereunder.
(d) The execution and delivery of this Agreement by the Xxxxxxx Xxxxx
Trust on behalf of each Acquiring Fund did not, and the performance by
the Xxxxxxx Sachs Trust and each Acquiring Fund of their obligations
hereunder will not, (i) violate the Xxxxxxx Xxxxx Trusts Agreement and
Declaration of Trust or Bylaws, (ii) violate any provisions of applicable
U.S. federal securities laws (excluding, however, antifraud and other
provisions with respect to disclosures of material information) or
(iii) violate any provision of any agreement disclosed in or filed with the
Acquiring Fund Prospectus or Acquiring Funds Registration Statement on
Form N-1A to which the Xxxxxxx Sachs Trust or any Acquiring Fund is a party
or by which it is bound or, to the knowledge of such counsel, result in
the acceleration of any obligation or the imposition of any penalty under
any judgment or decree to which the Xxxxxxx Xxxxx Trust or any Acquiring
Fund is a party or by which it or its property is bound.
(e) To the knowledge of such counsel, no consent, approval, authorization
or order of any Delaware or federal court or governmental authority is
required for the consummation by the Xxxxxxx Sachs Trust or any Acquiring
Fund of the transactions contemplated by this Agreement except such as may
be required under state securities or blue sky laws or such as have been
obtained.
(f) The Xxxxxxx Xxxxx Trust is registered with the Commission as an
open-end management investment company under the 1940 Act.
In addition, such counsel will confirm whether, as of the Closing Date,
it is representing the Xxxxxxx Sachs Trust or any Acquiring Fund in any
pending litigation in which the Xxxxxxx Xxxxx Trust or any Acquiring Fund is
a named defendant that challenges the validity or the enforceability of
the Agreement.
7.4. The Xxxxxxx Sachs Trust shall have duly executed and delivered to
the Madison Trust, on behalf of each Acquiring Fund, such instrument of
assumptions of liabilities and other instruments as an Acquired Fund may
reasonably deem necessary or desirable to evidence the transactions
contemplated by this Agreement, including the assumption of all of the
Liabilities of each Acquired Fund by the Acquiring Fund into which it
is being reorganized.
7.5. The Madison Trust shall have received from the Transfer Agent a
certificate stating that it has received from the Xxxxxxx Xxxxx Trust the
number of full and fractional Acquiring Fund Shares of each relevant class
equal in value to the value of each corresponding class of the corresponding
Acquired Fund as of the time and date set forth in paragraph 3.
7.6. As of the Closing Date, there shall have been no material change in
the investment objectives, policies and restrictions or any increase in the
investment management fee rate or other fee rates that any Acquiring Fund
is currently contractually obligated to pay for services provided to the
Acquiring Fund from those described in the Registration Statement.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The respective obligations of the Xxxxxxx Sachs Trust, the Madison Trust,
each Acquired Fund and each Acquiring Fund hereunder are subject to the
further conditions that on or before the Closing Date:
8.1. This Agreement shall have been approved by a majority of the
outstanding shares of each Acquired Fund in the manner required by the
Madison Trusts Declaration of Trust, Bylaws and applicable law, and the
parties shall have received reasonable evidence of each such approval.
8.2. The Agreement, the transactions contemplated herein and the filing of
the Registration Statement shall have been approved by the Board of Trustees
of the Xxxxxxx Xxxxx Trust and the Agreement, the transactions contemplated
herein and the filing of the Prospectus/Proxy Statement shall have been
approved by the Board of Trustees of the Madison Trust, and each party shall
have delivered to the other a copy of the resolutions approving this
Agreement adopted by the other partys Board, certified by the Secretary
or an equivalent officer.
8.3. On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted any
proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act and,
to the knowledge of the parties hereto, no action, suit or other
proceeding shall be threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages
or other relief in connection with, this Agreement or the transactions
contemplated herein.
8.4. 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) deemed
necessary by the Xxxxxxx Sachs Trust and each Acquiring Fund, or the
Madison Trust and each Acquired Fund, to permit consummation 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 each
Acquiring Fund or each Acquired Fund.
8.5. The Registration Statement shall have become effective under the
1933 Act and no stop order suspending the effectiveness thereof shall have
been issued and, to the knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 0000 Xxx.
8.6. As of the Closing Date, there shall be no pending litigation brought
by any person against the Madison Trust, the Xxxxxxx Xxxxx Trust, any
Acquired Fund or Acquiring Fund or any of the investment advisers, directors
or officers of the foregoing, as applicable, arising out of, or seeking to
prevent completion of the transactions contemplated by, this Agreement.
Furthermore, no action, suit or other proceeding shall be pending before
any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein. No litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to the knowledge of any party
hereto, threatened against a party or any of its properties or assets that,
if adversely determined, would materially and adversely affect its
business or its ability to consummate the transactions herein contemplated.
8.7. Each Acquired Fund and each applicable Acquiring Fund shall have
received a favorable opinion of Xxxxxxx Xxxx & Xxxxxxxxx LLP dated on the
Closing Date satisfactory to both parties substantially to the effect that,
on the basis of the existing provisions of the Code, Treasury regulations
promulgated thereunder, current administrative rules, and court decisions,
generally for federal income tax purposes:
(a) The acquisition by each Acquiring Fund of the assets of the
applicable Acquired Fund in exchange for such Acquiring Funds assumption
of the Liabilities of that Acquired Fund and issuance of the Acquiring Fund
Shares, followed by the distribution by that Acquired Fund of such Acquiring
Fund Shares to the shareholders of such Acquired Fund in exchange for their
shares of such Acquired Fund, all as provided in Section 1 hereof, will
constitute a reorganization within the meaning of Section 368(a) of the Code,
and such Acquired Fund and Acquiring Fund will each be a party to a
reorganization within the meaning of Section 368(b) of the Code.
(b) Under Sections 361 and 357(a) of the Code, no gain or loss will be
recognized by any Acquired Fund (i) upon the transfer of its assets to the
applicable Acquiring Fund in exchange for the Acquiring Fund Shares and the
assumption by each Acquiring Fund of the Liabilities of the applicable
Acquired Fund or (ii) upon the distribution of the Acquiring Fund Shares by
each Acquired Fund to its shareholders in liquidation, as contemplated in
Section 1 hereof, except for any gain or loss that may be required to be
recognized solely as a result of gain recognized on the transfer of certain
assets of an Acquired Fund.
(c) Under Section 1032 of the Code, no gain or loss will be recognized by
any Acquiring Fund upon the receipt of the assets of the applicable Acquired
Fund in exchange for the assumption of the Liabilities of such Acquired Fund
and issuance of the Acquiring Fund Shares as contemplated in Section 1 hereof.
(d) Under Section 362(b) of the Code, the tax basis of the assets of each
Acquired Fund acquired by the applicable Acquiring Fund will be the same as
the tax basis of such assets in the hands of such Acquired Fund immediately
prior to the transfer increased by the amount of gain or decreased by the
amount of loss, if any, recognized by the applicable Acquired Fund upon the
transfer.
(e) Under Section 1223(2) of the Code, the holding periods of the assets
of each Acquired Fund in the hands of the applicable Acquiring Fund will
include the periods during which such assets were held by such Acquired Fund
(except to the extent that the investment activities of the applicable
Acquiring Fund reduce or eliminate such holding period and except for any
assets on which gain is recognized on the transfer to such Acquiring Fund).
(f) Under Section 354 of the Code, no gain or loss will be recognized
by Acquired Fund Shareholders upon the exchange of all of their Acquired
Fund Shares for the Acquiring Fund Shares.
(g) Under Section 358 of the Code, the aggregate tax basis of the
Acquiring Fund Shares to be received by each shareholder of the Acquired
Fund will be the same as the aggregate tax basis of Acquired Fund Shares
exchanged therefor.
(h) Under Section 1223(1) of the Code, an Acquired Fund Shareholders
holding period for the Acquiring Fund Shares to be received will include
the period during which Acquired Fund Shares exchanged therefor were held,
provided that the shareholder held Acquired Fund Shares as a capital asset
on the date of the exchange.
(i) Each Acquiring Fund will succeed to and take into account the items
of the applicable Acquired Fund described in Section 381(c) of the Code.
The parties acknowledge that the opinion will be based on certain factual
certifications made by officers of the Madison Trust and the Xxxxxxx Sachs
Trust and will also be based on customary assumptions; the opinion is not
a guarantee that the tax consequences of the Reorganization will be as
described above; and there is no assurance that the Internal Revenue Service
or a court would agree with the opinion.
8.8. With respect to each Acquired Fund individually, the Reorganization
of such Acquired Fund into its corresponding Acquiring Fund and the material
attributes of such Acquiring Fund, including, but not limited to, its
investment advisory agreement, each of its investment sub-advisory agreements,
Rule 12b-1 Plans, shareholder service plans, sales charges, share classes,
redemption fees, distribution agreement, transfer agent agreement, custody
agreement, and independent registered public accounting firm, shall, in all
material respects, be in substantially the form as described in the
Prospectus/Proxy Statement.
8.9. At any time prior to the Closing, any of the foregoing conditions
of this Section 8 (except for paragraph 8.1 and paragraph 8.7) may be
jointly waived by the Board of Trustees of the Madison Trust and the Board
of Trustees of the Xxxxxxx Xxxxx Trust, if, in the judgment of the Board of
Trustees of the Madison Trust, such waiver will not have a material adverse
effect on the interests of the Acquired Fund Shareholders and, if, in the
judgment of the Board of Trustees of the Xxxxxxx Sachs Trust, such waiver
will not have a material adverse effect on the interests of the shareholders,
if any, of each Acquiring Fund.
8.10. All of the conditions to the closing of the transactions
contemplated by the Asset Purchase Agreement between MAM and GSAM,
dated May 24, 2016 (the Asset Purchase Agreement), shall be satisfied or
waived, and the closing of the transactions contemplated by the Asset
Purchase Agreement shall be consummated concurrently with the Closing.
9. BROKERAGE FEES AND EXPENSES
9.1. The Xxxxxxx Xxxxx Trust, on behalf of each Acquiring Fund, and the
Madison Trust, on behalf of each Acquired Fund, represent and warrant to each
other that there are no brokers or finders entitled to receive any payments
in connection with the transactions provided for herein.
9.2. The Madison Trust and its Acquired Funds and the Xxxxxxx Sachs Trust
and its Acquiring Funds will not bear any costs arising in connection with
the transactions contemplated by this Agreement. The responsibility for
payment of all of the costs arising in connection with the transactions
contemplated by this Agreement, whether or not the transactions contemplated
hereby are concluded, shall be borne by GSAM, MAM, or their respective
affiliates. The costs arising in connection with the transactions
contemplated by this Agreement shall include, but not be limited to, costs
and expenses (including legal fees) related to the preparation and
distribution of materials to the Boards of Trustees of the Madison Trust and
the Xxxxxxx Xxxxx Trust, costs incurred in attending the Board meetings and
preparing the minutes of the Board meetings, obtaining an opinion of counsel
as to certain matters, the preparation of this Agreement, fees of the
Commission, state corporate fees and any fees of any state securities
commission, transfer agency fees, auditing fees associated with each
Acquiring Funds financial statements, costs and expenses associated with
obtaining any necessary order of exemption from the 1940 Act, if any,
preparation of the Prospectus/Proxy Statement and Registration Statement,
printing and distributing the Prospectus/Proxy Statement and Registration
Statement, solicitation fees, brokerage commissions incurred in connection
with paragraph 1.6, all necessary taxes in connection with the delivery of
the Assets of each Acquired Fund, including all applicable federal and state
stock transfer stamps, and expenses of holding shareholders meetings.
Notwithstanding any of the foregoing, expenses will in any event be paid by
the party directly incurring such expenses if and to the extent that the
payment by another person of such expenses would result in the
disqualification of such party as a regulated investment company within the
meaning of Section 851 of the Code or would prevent the Reorganization
from qualifying as a tax-free reorganization under Section 368(a) of the
Code pursuant to applicable guidance including, but not limited to,
IRS Revenue Ruling 73-54.
10. ENTIRE AGREEMENT; TERMINATION OF WARRANTIES
10.1. The Xxxxxxx Sachs Trust and the Madison Trust agree that neither
party has made any representation, warranty or covenant, on behalf of either
an Acquiring Fund or an Acquired Fund, respectively, not set forth herein
and that this Agreement constitutes the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall not survive the consummation of the transactions contemplated
hereunder. Notwithstanding the foregoing sentence, the covenants to be
performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by resolution of the either the Board of Trustees of the
Xxxxxxx Xxxxx Trust or the Board of Trustees of the Madison Trust, at any
time prior to the Closing Date, if circumstances should develop that, in the
opinion of that Board, make proceeding with the Agreement inadvisable with
respect to any Acquiring Fund or any Acquired Fund, respectively.
In addition, this Agreement may be terminated at any time prior to the
Closing Date:
(a) by the written consent of each of the parties;
(b) by the Madison Trust (i) following a breach by the Xxxxxxx Sachs
Trust of any of its representations, warranties or covenants contained in
this Agreement, provided that the Xxxxxxx Xxxxx Trust shall have been given
a period of 10 business days from the date of the occurrence of a breach of
a covenant or agreement to cure such breach and shall have failed to do so
(provided, that the Madison Trust is not then in material breach of the
terms of this Agreement, and, provided further, that no cure period shall be
required for a breach which is not capable of being cured); or (ii) upon the
occurrence of an event which has a material adverse effect upon the
Xxxxxxx Sachs Trust or an Acquiring Fund;
(c) by the Xxxxxxx Xxxxx Trust (i) following a breach by the Madison
Trust of any of its representations, warranties or covenants contained in
this Agreement, provided that the Madison Trust shall have been given a
period of 10 business days from the date of the occurrence of a breach of
a covenant or agreement to cure such breach and shall have failed to do so
(provided, that the Xxxxxxx Sachs Trust is not then in material breach of
the terms of this Agreement, and, provided further, that no cure period
shall be required for a breach which is not capable of being cured);
or (ii) upon the occurrence of an event which has a material adverse effect
upon the Madison Trust or an Acquired Fund;
(d) by either the Xxxxxxx Xxxxx Trust or the Madison Trust if: (i) there
shall be a final, non-appealable order of a federal or state court in
effect preventing consummation of the transactions contemplated hereby;
or (ii) there shall be any final action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to
the transactions contemplated hereby by any governmental entity which would
make consummation of the transactions contemplated hereby illegal; or
(e) by either the Xxxxxxx Sachs Trust or the Madison Trust if the
Closing shall not have been consummated by December 31, 2016, provided the
right to terminate this Agreement under this paragraph 11(e) shall not be
available to any party whose failure to fulfill any material obligation
under this Agreement has been the cause of, or resulted in, the failure of
the Closing to occur on or before such date.
If a party terminates this Agreement in accordance with this Section 11,
other than a termination under (b), (c), (d) or (e) in connection with
a willful default, there shall be no liability for damages on the part
of any party, or the trustees, directors or officers of such party.
In the event of a termination under (b), (c), (d) or (e) in connection
with a willful default, all remedies at law or in equity of the party
adversely affected shall survive.
At any time prior to the Closing Date, any of the terms or conditions of this
Agreement (except for paragraph 8.1, paragraph 8.7 and paragraph 15.1) may
be waived by either the Madison Trust or the Xxxxxxx Xxxxx Trust,
respectively (whichever is entitled to the benefit thereof). Such waiver
shall be in writing and authorized by an officer of the waiving party.
The failure of either party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver
of any such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of either party thereafter to
enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented by a written
instrument in such manner as may be deemed necessary or advisable by both
the authorized officers of the Madison Trust and the Xxxxxxx Sachs Trust;
provided, however, that following the meeting of the shareholders of each
Acquired Fund called by the Acquired Funds pursuant to paragraph 5.2 of
this Agreement, no such amendment may have the effect of changing the
provisions for determining the number of Acquiring Fund Shares to be issued
to each corresponding class of Acquired Fund Shareholders, under this
Agreement to the detriment of such shareholders without their further
approval; provided further that paragraph 15.1 shall not be amended without
the prior consent of GSAM and MAM.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, electronic delivery, personal service or prepaid or certified
mail addressed to:
To the Xxxxxxx Xxxxx Trust:
Xxxxxxx Sachs Trust II
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
To the Madison Trust:
Madison Funds
000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Legal Officer
With a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxx S.C.
One East Main Street,
Suite 500
P.O. Box 2719
Madison, WI 53701-2719
Attention: Xxxxxx X. Xxxxx, Esq.
To GSAM:
Xxxxxxx Xxxxx Asset Management, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Xxxxx X. Xxxxxxx, Esq.
To MAM:
Madison Asset Management, LLC
000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Legal Officer
With a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxx S.C.
One East Main Street,
Suite 500
P.O. Box 2719
Madison, WI 53701-2719
Attention: Xxxxxx X. Xxxxx, Esq.
14. PUBLICITY/CONFIDENTIALITY
14.1. Publicity. Any public announcements or similar publicity with
respect to this Agreement or the transactions contemplated herein will be
made at such time and in such manner as the parties mutually shall agree
in writing (which writing may include e-mail), provided that nothing herein
shall prevent either party from making such public announcements as may be
required by law, in which case the party issuing such statement or
communication shall use all reasonable commercial efforts to advise the
other party prior to such issuance.
14.2. Confidentiality.
(a) The Madison Trust, the Xxxxxxx Xxxxx Trust,
MAM and GSAM (for purposes of this paragraph 14.2, the Protected Persons)
will hold, and will cause their board members, officers, employees,
representatives, agents and affiliates to hold, in strict confidence, and not
disclose to any other person, and not use in any way except in connection
with the transactions herein contemplated, without the prior written consent
of the other Protected Persons, all confidential information obtained from
the other Protected Persons in connection with the transactions contemplated
by this Agreement, except such information may be disclosed: (i) to
governmental or regulatory bodies, and, where necessary, to any other person
in connection with the obtaining of consents or waivers as contemplated by
this Agreement; (ii) if required by court order or decree or applicable law;
(iii) if it is publicly available through no act or failure to act of such
party; (iv) it if was already known to such party on a non-confidential
basis on the date of receipt; (v) during the course of or in connection with
any litigation, government investigation, arbitration, or other proceedings
based upon or in connection with the subject matter of this Agreement,
including, without limitation, the failure of the transactions contemplated
hereby to be consummated; or (vi) if it is otherwise expressly provided
for herein.
(b) In the event of a termination of this Agreement, the Madison Trust,
the Xxxxxxx Sachs Trust, MAM and GSAM agree that they along with their
employees, representative agents and affiliates shall, and shall cause their
affiliates to, except with the prior written consent of the other Protected
Persons, keep secret and retain in strict confidence, and not use for the
benefit of itself or themselves, nor disclose to any other persons, any and
all confidential or proprietary information relating to the other Protected
Persons and their related parties and affiliates, whether obtained through
their due diligence investigation, this Agreement or otherwise, except such
information may be disclosed: (i) if required by court order or decree or
applicable law; (ii) if it is publicly available through no act or failure
to act of such party; (iii) if it was already known to such party on a
non-confidential basis on the date of receipt; (iv) during the course of or
in connection with any litigation, government investigation, arbitration,
or other proceedings based upon or in connection with the subject matter
of this Agreement, including, without limitation, the failure of the
transactions contemplated hereby to be consummated; or (v) if it is
otherwise expressly provided for herein.
15. CONTINGENCY OF EACH REORGANIZATION ON CONSUMMATION OF OTHER
REORGANIZATIONS
15.1. For purposes of this paragraph 15.1, the reorganizations of
(i) the Madison Target Retirement 2020 Fund into the Xxxxxxx Xxxxx
Target Date 2020 Portfolio, (ii) the Madison Target Retirement 2030 Fund
into the Xxxxxxx Sachs Target Date 2030 Portfolio, (iii) the Madison
Target Retirement 2040 Fund into the Xxxxxxx Xxxxx Target Date 2040
Portfolio, and (iv) the Madison Target Retirement 2050 Fund into the
Xxxxxxx Sachs Target Date 2050 Portfolio shall each individually be
referred to as a Reorganization. Each Reorganization is contingent
upon the consummation of each other Reorganization, and the provisions
of this Agreement shall be construed to effect this intent. In the event
that shareholders of a particular Acquired Fund that is a party to a
Reorganization do not approve the Reorganization relating to such Acquired
Fund and/or any condition precedent to a Reorganization does not occur
and is not waived, none of the Reorganizations referenced in this
Agreement will be consummated.
16. HEADINGS; GOVERNING LAW; SEVERABILITY; ASSIGNMENT; LIMITATION OF
LIABILITY; COUNTERPARTS
16.1. 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.
16.2. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to its principles of
conflicts of laws.
16.3. The warranties, representations, and agreements contained in this
Agreement made by the Madison Trust on behalf of each of the Acquired Funds,
are made on a several (and not joint, or joint and several) basis.
Similarly, the warranties, representations, and agreements contained in this
Agreement made by the Xxxxxxx Xxxxx Trust on behalf of each of the Acquiring
Funds, are made on a several (and not joint, or joint and several) basis.
The benefits and obligations attendant to the Reorganization are severable
with respect to each Acquired Fund and its corresponding Acquiring Fund and
the other Acquired Funds and their corresponding Acquiring Funds
participating in the Reorganization. Shareholders of the Acquired Funds have
no rights under this Agreement with respect to the reorganization and
liquidation of any other Acquired Fund in which they do not hold shares.
16.4. 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. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
16.5. The name Xxxxxxx Xxxxx Trust II is the designation of the trustees
for the time being under an Amended and Restated Agreement and Declaration of
Trust dated April 6, 2013, as amended from time to time, and all persons
dealing with the Xxxxxxx Sachs Trust or an Acquiring Fund must look solely
to the property of the Xxxxxxx Xxxxx Trust or such Acquiring Fund for the
enforcement of any claims as none of its trustees, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of the Xxxxxxx Sachs Trust. No portfolio of the Xxxxxxx Xxxxx Trust
shall be liable for any claims against any other portfolio of the Xxxxxxx
Sachs Trust. Each Acquired Fund, MAM and GSAM specifically acknowledge and
agree that any liability of the Xxxxxxx Xxxxx Trust under this Agreement
with respect to a particular Acquiring Fund of the Xxxxxxx Sachs Trust, or
in connection with the transactions contemplated herein with respect to a
particular Acquiring Fund, shall be discharged only out of the assets of
the particular Acquiring Fund and that no other portfolio of the Xxxxxxx
Xxxxx Trust shall be liable with respect thereto.
16.6. The name Madison Funds is the designation of the trustees for the
time being under an Amended and Restated Declaration of Trust dated
October 15, 2015, as amended from time to time, and all persons dealing
with the Madison Trust or an Acquired Fund must look solely to the
property of the Madison Trust or such Acquired Fund for the enforcement
of any claims as none of the directors, officers, agents or shareholders
assume any personal liability for obligations entered into on behalf of
Madison Trust. No portfolio of the Madison Trust shall be liable for any
claims against any other portfolio of the Madison Trust. Each Acquiring
Fund, MAM and GSAM specifically acknowledge and agree that any liability
of the Madison Trust under this Agreement with respect to a particular
Acquired Fund of the Madison Trust, or in connection with the
transactions contemplated herein with respect to a particular Acquired
Fund, shall be discharged only out of the assets of the particular
Acquired Fund and that no other portfolio of the Madison Trust shall be
liable with respect thereto.
16.7. This Agreement may be executed in one or more counterparts, all
of which counterparts shall together constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President.
Xxxxxxx Sachs Trust II,
on behalf of its series:
Xxxxxxx Xxxxx Target Date 2020 Portfolio
Xxxxxxx Sachs Target Date 2030 Portfolio
Xxxxxxx Xxxxx Target Date 2040 Portfolio
Xxxxxxx Sachs Target Date 2050 Portfolio
By: /s/ Xxxxx XxXxxx
Name: Xxxxx XxXxxx
Title: Treasurer, Senior Vice President and Principal Financial Officer
Madison Funds,
on behalf of its series:
Madison Target Retirement 2020 Fund
Madison Target Retirement 2030 Fund
Madison Target Retirement 2040 Fund
Madison Target Retirement 2050 Fund
By: /s/ Xxxxxxxxx X. Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: President
Solely for purpose of paragraphs 1.6, 5.1, 9.2, 14, 16.4, 16.5 and 16.6
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Managing Director
Solely for purpose of paragraphs 1.6, 5.1, 5.4, 9.2, 14, 16.4, 16.5 and 16.6
MADISON ASSET MANAGEMENT, LLC
By: /s/ Xxxxxxxxx X. Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Chief Operating Officer
