AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
January 20, 2010 by and between (i) each of the Xxx Xxxxxx open-end registered
investment companies identified on Exhibit A hereto (each a "Target Entity")
separately, on behalf of its respective series identified on Exhibit A hereto
(each a "Target Fund"); and (ii) Xxxxxx Xxxxxxx Institutional Fund, Inc., SEC
File No. 033-23166 (the "Acquiring Entity"), on behalf of its respective series
identified on Exhibit A hereto (each an "Acquiring Fund").
WITNESSETH:
WHEREAS, the Board of Directors of the Acquiring Entity, on behalf of each
Acquiring Fund (the "Acquiring Entity Board"), and the Board of
Directors/Trustees of each Target Entity, on behalf of its respective Target
Fund (collectively, the "Target Entity Board" and, together with the Acquiring
Entity Board, the "Boards"), have determined that entering into this Agreement
whereby each Target Fund would transfer all of its assets and liabilities to the
corresponding Acquiring Fund in exchange for shares of such Acquiring Fund, is
in the best interests of the shareholders of their respective Fund; and
WHEREAS, the parties hereto intend for each Acquiring Fund and its
corresponding Target Fund (as set forth in Exhibit A hereto) to enter into a
transaction pursuant to which: (i) the Acquiring Fund will acquire the assets
and liabilities of the Target Fund in exchange for the corresponding class or
classes of shares (as applicable) of the Acquiring Fund identified on Exhibit A
of equal value to the net assets of the Target Fund being acquired, (ii) the
Target Fund will distribute such shares of the Acquiring Fund to shareholders of
the corresponding class of the Target Fund, in connection with the liquidation
of the Target Fund, all upon the terms and conditions hereinafter set forth in
this Agreement , and (iii) the outstanding shares of the Acquired Fund held by
such shareholders will then be redeemed and cancelled as permitted by the
organizational documents of the Acquired Fund and applicable law (each such
transaction, a "Reorganization" and collectively, the "Reorganizations"). Each
Acquiring Fund is, and will be immediately prior to the Closing Date (defined in
Section II), a shell series, without assets (other than seed capital) or
liabilities, created for the purpose of acquiring the assets and liabilities of
the Target Fund;
WHEREAS, each Target Entity and the Acquiring Entity is a registered
open-end, investment company; and
WHEREAS, the parties intend that this transaction qualify as a
reorganization within the meaning of Section 368(a)(1)(F) of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and intending to be legally bound hereby, the parties hereto agree as follows:
I. PLAN OF TRANSACTION.
It is the intention of the parties hereto that each Reorganization
described herein shall be conducted separately of the others, and a party
that is not a party to a Reorganization shall incur no obligations, duties
or liabilities with respect to such Reorganization by reason of being a
party to this Agreement. If any one or more Reorganizations should fail to
be consummated, such failure shall not affect the other Reorganizations in
any way.
Provided that all conditions precedent to a Reorganization set forth
herein have been satisfied as of the Closing Date (as defined below), and
based on the representations and warranties each party provides to the
others, each Target Entity and the Acquiring Entity agree to take the
following steps with respect to their Reorganization(s), the parties to
which and classes of shares to be issued in connection with which are set
forth in Exhibit A:
A. TRANSFER OF ASSETS. Upon satisfaction of the conditions precedent to a
Reorganization set forth in Sections VII and VIII hereof, the Target
Fund will convey, transfer and deliver to the Acquiring Fund at the
closing, provided for in Section II hereof, all of the existing assets
of the Target Fund (including accrued interest to the Closing Date (as
defined below)), free and clear of all liens, encumbrances and claims
whatsoever (the assets so transferred collectively being referred to
as the "Assets").
B. CONSIDERATION. In consideration thereof, the Acquiring Fund agrees
that the Acquiring Fund at the closing will (i) deliver to the Target
Fund, full and fractional shares of common stock, $0.001 par value per
share, of each class of the Acquiring Fund that corresponds to the
class of shares of the Target Fund, as set forth in Exhibit A, with an
aggregate net asset value equal to the aggregate dollar value of the
Assets net of any liabilities of the corresponding class of the Target
Fund described in Section III.E. hereof (the "Liabilities") determined
pursuant to Section III.A. of this Agreement (collectively, the
"Acquiring Fund Shares") and (ii) assume all of the Liabilities of the
Target Fund. The calculation of full and fractional Acquiring Fund
Shares to be exchanged shall be carried out to no less than two (2)
decimal places. All Acquiring Fund Shares delivered to the Target Fund
in exchange for such Assets shall be delivered at net asset value
without sales load, commission or other transactional fees being
imposed.
II. CLOSING OF THE TRANSACTION.
A. CLOSING DATE. The closing of each Reorganization shall occur within
ten (10) business days after the later of the receipt of all necessary
regulatory approvals and the final adjournment of the meeting of
shareholders of the applicable Target Fund at which this Agreement
will be considered and approved, or such other date as the parties may
2
mutually agree (the "Closing Date"). On the Closing Date, the
Acquiring Fund shall deliver to the Target Fund the Acquiring Fund
Shares in the amount determined pursuant to Section I.B. hereof and
the Target Fund thereafter shall, in order to effect the distribution
of such shares to the Target Fund shareholders, instruct the Acquiring
Fund to register the pro rata interest in the Acquiring Fund Shares
(in full and fractional shares) of each of the holders of record of
shares of the Target Fund in accordance with their holdings of the
corresponding class of the Target Fund, as set forth in Exhibit A, and
shall provide as part of such instruction a complete and updated list
of such holders (including addresses and taxpayer identification
numbers), and the Acquiring Fund agrees promptly to comply with said
instruction. The Acquiring Fund shall have no obligation to inquire as
to the validity, propriety or correctness of such instruction, but
shall assume that such instruction is valid, proper and correct.
III. PROCEDURE FOR REORGANIZATION.
A. VALUATION. With respect to each Reorganization, the value of the
Assets and Liabilities of the Target Fund to be transferred and
assumed, respectively, by the Acquiring Fund shall be computed as of
4:00 p.m. (New York time) on the business day immediately preceding
the Closing Date, in the manner set forth in the most recent
Prospectus and Statement of Additional Information of the Acquiring
Fund (collectively, the "Acquiring Fund Prospectus"), copies of which
have been delivered to the Target Fund.
B. DELIVERY OF FUND ASSETS. he Assets shall be delivered to JPMorgan
Chase Bank, N.A. or other custodian as designated by the Acquiring
Fund (collectively the "Custodian") for the benefit of the Acquiring
Fund, duly endorsed in proper form for transfer in such condition as
to constitute a good delivery thereof, free and clear of all liens,
encumbrances and claims whatsoever, in accordance with the custom of
brokers, and shall be accompanied by all necessary state stock
transfer stamps, if any, the cost of which shall be borne by the
investment adviser to the Target Fund, with respect to Xxx Xxxxxx Core
Growth Fund and Xxx Xxxxxx Global Growth Fund, and Xxx Xxxxxx Equity
Growth Fund.
C. FAILURE TO DELIVER SECURITIES. If the Target Fund is unable to make
delivery pursuant to Section III.B. hereof to the Custodian of any of
the securities of the Target Fund then, in lieu of such delivery, the
Target Fund shall deliver to the Custodian, with respect to said
securities, executed copies of an agreement of assignment and due
bills, together with such other documents as may be required by the
Acquiring Fund or Custodian.
3
D. SHAREHOLDER ACCOUNTS. The Acquiring Fund, in order to assist the
Target Fund in the distribution of the Acquiring Fund Shares to the
Target Fund shareholders after delivery of the Acquiring Fund Shares
to the Target Fund, will establish pursuant to the request of the
Target Fund an open account with the Acquiring Fund for each
shareholder of the Target Fund and, upon request by the Target Fund,
shall transfer to such accounts, the exact number of Acquiring Fund
Shares then held by the Target Fund specified in the instruction
provided pursuant to Section II hereof. The Acquiring Fund is not
required to issue certificates representing Acquiring Fund Shares
unless requested to do so by a shareholder. Upon liquidation or
dissolution of the Target Fund, certificates representing shares of
the Target Fund shall become null and void.
E. LIABILITIES. The Liabilities shall include all of the Target Fund's
liabilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether
or not arising in the ordinary course of business, whether or not
determinable at the Closing Date, and whether or not specifically
referred to in this Agreement.
F. EXPENSES. In the event that the Reorganization of Xxx Xxxxxx Core
Growth Fund into Advantage Portfolio is consummated, and the
Reorganization of Xxx Xxxxxx Global Growth Fund into Global Growth
Portfolio is consummated, the expenses of each such Reorganization,
including the costs of the special meeting of shareholders of each
Target Fund, will be paid by Xxxxxx Xxxxxxx Investment Management,
Inc., the investment adviser to Advantage Portfolio and Global Growth
Portfolio. In the event that the Reorganization of Xxx Xxxxxx Equity
Growth Fund into Equity Growth Portfolio is consummated, the expenses
of such Reorganization, including the costs of the special meeting of
shareholders of Xxx Xxxxxx Equity Growth Fund, will be paid by Xxx
Xxxxxx Equity Growth Fund. In the event that the transactions
contemplated herein are not consummated by reason of a Target Fund
being either unwilling or unable to go forward (other than by reason
of the nonfulfillment or failure of any condition to the Target Fund's
obligations specified in this Agreement), the Target Fund's only
obligation hereunder shall be to reimburse the corresponding Acquiring
Fund for all reasonable out-of-pocket fees and expenses incurred by
the Acquiring Fund in connection with those transactions. The
investment adviser to the Target Fund will reimburse the corresponding
Acquiring Fund for any such amounts on behalf of the Target Fund. In
the event the transactions contemplated herein are not consummated by
reason of an Acquiring Fund being either unwilling or unable to go
forward (other than by reason of the nonfulfillment or failure of any
condition to the Acquiring Fund's obligations specified in this
Agreement), the Acquiring Fund's only obligation hereunder shall be to
reimburse the corresponding Target Fund for all reasonable
out-of-pocket fees and expenses incurred by the Target
4
Fund in connection with those transactions. The investment adviser to
the Acquiring Fund will reimburse the corresponding Target Fund for
any such amounts on behalf of the Acquiring Fund.
G. DISSOLUTION. As soon as practicable after the Closing Date but in no
event later than one year after the Closing Date, the Target Fund
shall voluntarily dissolve and completely liquidate by taking, in
accordance with the law in the state of its organization and federal
securities laws, all steps as shall be necessary and proper to effect
a complete liquidation and dissolution of the Target Fund. Immediately
after the Closing Date, the share transfer books relating to the
Target Fund shall be closed and no transfer of shares shall thereafter
be made on such books.
IV. REPRESENTATIONS AND WARRANTIES OF THE TARGET FUND.
Each Target Entity on behalf of itself or, where applicable, a Target Fund
hereby represents and warrants to the Acquiring Entity and its corresponding
Acquiring Fund, which representations and warranties are true and correct on the
date hereof, and agrees with the Acquiring Entity and its corresponding
Acquiring Fund that:
A. ORGANIZATION. The Target Fund is duly organized as a series of the
Target Entity, and the Target Entity is in good standing, under the
laws of the state of its organization and the Target Fund is duly
authorized to transact business in the state of its organization. The
Target Fund is qualified to do business in all jurisdictions in which
it is required to be so qualified, except jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
Target Fund. The Target Fund has all material federal, state and local
authorizations necessary to own all of its properties and assets and
to carry on its business as now being conducted, except authorizations
which the failure to so obtain would not have a material adverse
effect on the Target Fund.
B. REGISTRATION. The Target Entity is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company and such registration has not been
revoked or rescinded. The Target Entity is in compliance in all
material respects with the 1940 Act, and the rules and regulations
thereunder with respect to its activities. All of the outstanding
common shares of the Target Fund have been duly authorized and are
validly issued, fully paid and nonassessable and not subject to
pre-emptive or dissenters' rights.
C. AUDITED FINANCIAL STATEMENTS. The statement of assets and liabilities
and the portfolio of investments and the related statements of
operations and changes in net assets of the Target Entity, with
respect to its corresponding Target Fund, audited as of the most
recently completed fiscal year, true and complete copies of which have
been heretofore
5
furnished to the Acquiring Fund, fairly represent the financial
condition and the results of operations of the Target Fund as of and
for their respective dates and periods in conformity with generally
accepted accounting principles applied on a consistent basis during
the periods involved.
D. FINANCIAL STATEMENTS. The Target Entity, on behalf of the
corresponding Target Fund, shall furnish to the Acquiring Fund within
five (5) business days after the Closing Date, an unaudited statement
of assets and liabilities and the portfolio of investments and the
related statements of operations and changes in net assets as of and
for the interim period ending on the Closing Date; such financial
statements will represent fairly the financial position and portfolio
of investments and the results of the Target Fund's operations as of,
and for the periods ending on, the dates of such statements in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved and the results of its
operations and changes in financial position for the period then
ended; and such financial statements shall be certified by the
Treasurer of the Target Entity as complying with the requirements
hereof.
E. CONTINGENT LIABILITIES. There are, and as of the Closing Date will be,
no contingent Liabilities of the Target Fund not disclosed in the
financial statements delivered pursuant to Sections IV.C. and IV.D.
which would materially affect the Target Fund's financial condition,
and there are no legal, administrative, or other proceedings pending
or, to the Target Entity's knowledge, threatened against the Target
Fund which would, if adversely determined, materially affect the
Target Fund's financial condition. All Liabilities were incurred by
the Target Fund in the ordinary course of its business.
F. MATERIAL AGREEMENTS. The Target Fund is in compliance with all
material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and
except as referred to in the most recent Prospectus and Statement of
Additional Information of the Target Fund (collectively, the "Target
Fund Prospectus") there are no material agreements outstanding
relating to the Target Fund to which the Target Fund is a party.
G. STATEMENT OF EARNINGS. As promptly as practicable, but in any case no
later than thirty (30) calendar days after the Closing Date, the
Target Fund shall furnish the Acquiring Fund with a statement of the
earnings and profits of the Target Fund within the meaning of the Code
as of the Closing Date.
H. TAX RETURNS. At the date hereof and on the Closing Date, all federal
and other material tax returns and reports of the Target Fund required
by
6
law to have been filed by such dates shall have been filed, and all
federal and other taxes shown thereon shall have been paid so far as
due, or provision shall have been made for the payment thereof, and to
the best of the Target Entity's knowledge no such return is currently
under audit and no assessment has been asserted with respect to any
such return.
I. CORPORATE AUTHORITY. The Target Entity, on behalf of its corresponding
Target Fund, has the necessary power to enter into this Agreement and
to consummate the transactions contemplated herein. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by the
Target Fund Board, and except for obtaining approval of the Target
Fund shareholders, no other corporate acts or proceedings by the
Target Fund are necessary to authorize this Agreement and the
transactions contemplated herein. This Agreement has been duly
executed and delivered by the Target Fund and constitutes a valid and
binding obligation of the Target Fund enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar
laws affecting creditors' rights generally, or by general principles
of equity (regardless of whether enforcement is sought in a proceeding
at equity or law).
J. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement by the Target Entity, on behalf of its
corresponding Target Fund, does not and will not (i) result in a
material violation of any provision of the Target Entity's
organizational documents, (ii) violate any statute, law, judgment,
writ, decree, order, regulation or rule of any court or governmental
authority applicable to the Target Entity, (iii) result in a material
violation or breach of, or constitute a default under any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument or obligation to which the Target Entity is subject, or
(iv) result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Target Entity. Except
as have been obtained, (i) no consent, approval, authorization, order
or filing with or notice to any court or governmental authority or
agency is required for the consummation by the Target Entity, on
behalf of its corresponding Target Fund, of the transactions
contemplated by this Agreement and (ii) no consent of or notice to any
third party or entity is required for the consummation by the Target
Entity, on behalf of its corresponding Target Fund, of the
transactions contemplated by this Agreement.
K. TITLE. On the Closing Date, the Target Fund will have good and
marketable title to the Assets, free and clear of all liens,
mortgages, pledges, encumbrances, charges, claims and equities
whatsoever, other than a lien for taxes not yet due and payable, and
full right, power and authority to sell, assign, transfer and deliver
such Assets; upon delivery of such Assets, the Acquiring Fund will
receive good and marketable title to
7
such Assets, free and clear of all liens, mortgages, pledges,
encumbrances, charges, claims and equities whatsoever, other than a
lien for taxes not yet due and payable.
L. PROSPECTUS/PROXY STATEMENT. The Acquiring Entity's Registration
Statement on Form N-14 and the Prospectus/Proxy Statement contained
therein, as of the effective date of such Registration Statement, and
at all times subsequent thereto up to and including the Closing Date,
as amended or as supplemented if it shall have been amended or
supplemented, conform and will conform as they relate to the Target
Fund, in all material respects, to the applicable requirements of the
applicable federal securities laws and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder, and do
not and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
no representations or warranties in this Section IV.L. apply to
statements or omissions made in reliance upon and in conformity with
written information concerning the Acquiring Fund furnished to the
Target Entity by the Acquiring Fund.
M. TAX QUALIFICATION. The Target Fund has qualified as a regulated
investment company within the meaning of Section 851 of the Code for
each of its taxable years; and has satisfied the distribution
requirements imposed by Section 852 of the Code for each of its
taxable years.
N. FAIR MARKET VALUE. The fair market value on a going concern basis of
the Assets will equal or exceed the Liabilities to be assumed by the
Acquiring Fund and those to which the Assets are subject.
O. TARGET FUND LIABILITIES. Except as otherwise provided for herein, the
Target Fund shall use reasonable efforts, consistent with its ordinary
operating procedures, to repay in full any indebtedness for borrowed
money and to discharge or reserve against all of the Target Fund's
known debts, liabilities and obligations including expenses, costs and
charges whether absolute or contingent, accrued or unaccrued.
V. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND.
The Acquiring Entity, on behalf of the applicable Acquiring Fund, hereby
represents and warrants to the corresponding Target Entity and Target Fund,
which representations and warranties are true and correct on the date hereof,
and agrees with the corresponding Target Entity and Target Fund that:
A. ORGANIZATION. The Acquiring Fund is duly organized as a series of the
Acquiring Entity, and in good standing under the laws of the state of
its organization and is duly authorized to transact business in the
state of
8
its organization. The Acquiring Fund is qualified to do business in
all jurisdictions in which it is required to be so qualified, except
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Acquiring Fund. The Acquiring Fund has
all material federal, state and local authorizations necessary to own
all of its properties and assets and to carry on its business and the
business thereof as now being conducted, except authorizations which
the failure to so obtain would not have a material adverse effect on
the Acquiring Fund.
B. REGISTRATION. The Acquiring Entity is registered under the 1940 Act as
an open-end management investment company and such registration has
not been revoked or rescinded. The Acquiring Fund is in compliance in
all material respects with the 1940 Act, and the rules and regulations
thereunder with respect to its activities. All of the outstanding
shares of common stock of the Acquiring Fund have been duly authorized
and are validly issued, fully paid and non-assessable and not subject
to pre-emptive or dissenters' rights.
C. FINANCIAL STATEMENTS. The Acquiring Fund is, and will be on the
Closing Date, a newly created series of the Acquiring Entity, without
assets (other than seed capital) or liabilities, formed for the
purpose of receiving the Assets and Liabilities of the Target Fund in
connection with the Reorganization and, accordingly, the Acquiring
Fund has not prepared books of account and related records or
financial statements or issued any shares except those issued in a
private placement to Xxxxxx Xxxxxxx Investment Management Inc. or its
affiliate to secure any required initial shareholder approvals;
D. MATERIAL AGREEMENTS. The Acquiring Fund is in compliance with all
material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and,
except as referred to in the current Prospectus of the Acquiring Fund
there are no material agreements outstanding relating to the Acquiring
Fund to which the Acquiring Fund is a party.
E. CORPORATE AUTHORITY. The Acquiring Entity, on behalf of its
corresponding Acquiring Fund, has the necessary power to enter into
this Agreement and to consummate the transactions contemplated herein.
The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein have been duly
authorized by the Acquiring Entity Board, no other corporate acts or
proceedings by the Acquiring Fund are necessary to authorize this
Agreement and the transactions contemplated herein. This Agreement has
been duly executed and delivered by the Acquiring Fund and constitutes
a valid and binding obligation of the Acquiring Fund enforceable in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or
9
similar laws affecting creditors' rights generally, or by general
principals of equity (regardless of whether enforcement is sought in a
proceeding at equity or law).
F. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement by the Acquiring Entity, on behalf of
its corresponding Acquiring Fund, does not and will not (i) result in
a material violation of any provision of the Acquiring Fund's
organizational documents, (ii) violate any statute, law, judgment,
writ, decree, order, regulation or rule of any court or governmental
authority applicable to the Acquiring Fund, (iii) result in a material
violation or breach of, or constitute a default under any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument or obligation to which the Acquiring Fund is subject, or
(iv) result in the creation or imposition or any lien, charge or
encumbrance upon any property or assets of the Acquiring Fund. Except
as have been obtained, (i) no consent, approval, authorization, order
or filing with or notice to any court or governmental authority or
agency is required for the consummation by the Acquiring Entity, on
behalf of its corresponding Acquiring Fund, of the transactions
contemplated by this Agreement and (ii) no consent of or notice to any
third party or entity is required for the consummation by the
Acquiring Entity, on behalf of its corresponding Acquiring Fund, of
the transactions contemplated by this Agreement.
G. ABSENCE OF PROCEEDINGS. There are no legal, administrative or other
proceedings pending or, to its knowledge, threatened against the
Acquiring Fund which would materially affect its financial condition.
H. ACQUIRING FUND SHARES: REGISTRATION. The Acquiring Fund Shares to be
issued pursuant to Section I hereof will be duly registered under the
Securities Act of 1933, as amended (the "Securities Act"), and all
applicable state securities laws.
I. ACQUIRING FUND SHARES: AUTHORIZATION. The Acquiring Fund Shares to be
issued pursuant to Section I hereof have been duly authorized and,
when issued in accordance with this Agreement, will be validly issued,
fully paid and non-assessable, will not be subject to pre-emptive or
dissenters' rights and will conform in all material respects to the
description thereof contained in the Acquiring Fund's Prospectus
furnished to the Target Fund.
J. REGISTRATION STATEMENT. The Acquiring Entity's Registration Statement
on Form N-14 and the Prospectus/Proxy Statement contained therein as
of the effective date of such Registration Statement, and at all times
subsequent thereto up to and including the Closing Date, as amended or
as supplemented if they shall have been amended or supplemented,
conforms and will conform, as they relate to the Acquiring
10
Fund, in all material respects, to the applicable requirements of the
applicable federal securities laws and the rules and regulations of
the SEC thereunder, and do not and will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representations or warranties in this
Section V apply to statements or omissions made in reliance upon and
in conformity with written information concerning the Target Fund
furnished to the Acquiring Entity by the Target Fund.
K. TAX QUALIFICATION. The Acquiring Fund was formed for the purpose of
the respective Reorganization and intends to elect to be a regulated
investment company within the meaning of Section 851 of the Code. The
Acquiring Fund will satisfy the requirements of Part I of Subchapter M
of the Code to maintain qualification as a regulated investment
company for its current taxable year. The Acquiring Fund has no
earnings or profits accumulated in any taxable year in which the
provisions of Subchapter M of the Code did not apply to it.
VI. COVENANTS.
During the period from the date of this Agreement and continuing until the
Closing Date, with respect to each Reorganization, the Target Entity, on behalf
of its corresponding Target Fund, and Acquiring Entity, on behalf of its
corresponding Acquiring Fund, agree as follows (except as expressly contemplated
or permitted by this Agreement):
A. OTHER ACTIONS. The Target Fund and Acquiring Fund shall operate only
in the ordinary course of business consistent with prior practice. No
party shall take any action that would, or reasonably would be
expected to, result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material
respect.
B. GOVERNMENT FILINGS; CONSENTS. The Target Fund and Acquiring Fund shall
file all reports required to be filed by the Target Fund and Acquiring
Fund with the SEC between the date of this Agreement and the Closing
Date and shall deliver to the other party copies of all such reports
promptly after the same are filed. Except where prohibited by
applicable statutes and regulations, each party shall promptly provide
the other (or its counsel) with copies of all other filings made by
such party with any state, local or federal government agency or
entity in connection with this Agreement or the transactions
contemplated hereby. Each of the Target Fund and the Acquiring Fund
shall use all reasonable efforts to obtain all consents, approvals and
authorizations required in connection with the
11
consummation of the transactions contemplated by this Agreement and to
make all necessary filings with the appropriate federal and state
officials.
C. PREPARATION OF THE REGISTRATION STATEMENT ON FORM N-14 AND THE
PROSPECTUS/PROXY STATEMENT. In connection with the Registration
Statement on Form N-14 and the Prospectus/Proxy Statement, each party
hereto will cooperate with the other and furnish to the other the
information relating to the Target Fund or Acquiring Fund, as the case
may be, required by the Securities Act or the Securities Exchange Act
of 1934 and the rules and regulations thereunder, as the case may be,
to be set forth in such Registration Statement on Form N-14 or the
Prospectus/Proxy Statement, as the case may be. The Target Entity
shall promptly prepare for filing with the SEC the Prospectus/Proxy
Statement and the Acquiring Entity shall promptly prepare and file
with the SEC the Registration Statement, in which the Prospectus/Proxy
Statement will be included as a prospectus. In connection with the
Registration Statement, insofar as it relates to the Target Fund and
its affiliated persons, the Acquiring Entity shall only include such
information as is approved by the Target Entity for use in the
Registration Statement. The Acquiring Entity shall not amend or
supplement any such information regarding the Target Fund and such
affiliates without the prior written consent of the Target Fund which
consent shall not be unreasonably withheld or delayed. The Acquiring
Entity shall promptly notify and provide the Target Fund with copies
of all amendments or supplements filed with respect to the
Registration Statement. The Acquiring Entity shall use all reasonable
efforts to have the Registration Statement declared effective under
the Securities Act as promptly as practicable after such filing. The
Acquiring Entity shall also take any action (other than qualifying to
do business in any jurisdiction in which it is now not so qualified)
required to be taken under any applicable state securities laws in
connection with the issuance of the Acquiring Fund Shares in the
transactions contemplated by this Agreement, and the Target Entity
shall furnish all information concerning the Target Fund and the
holders of the Target Fund's shares as may be reasonably requested in
connection with any such action.
D. ACCESS TO INFORMATION. During the period prior to the Closing Date,
the Target Fund shall make available to the Acquiring Fund a copy of
each report, schedule, registration statement and other document (the
"Documents") filed or received by it during such period pursuant to
the requirements of federal or state securities laws or federal or
state banking laws (other than Documents which such party is not
permitted to disclose under applicable law). During the period prior
to the Closing Date, the Acquiring Fund shall make available to the
Target Fund each Document pertaining to the transactions contemplated
hereby filed or received by it during such period pursuant to federal
or state securities laws or federal or state banking laws (other than
Documents which such party is not permitted to disclose under
applicable law).
12
E. SHAREHOLDERS MEETING. The Target Entity shall call a meeting of the
Target Fund shareholders to be held as promptly as practicable for the
purpose of voting upon the approval of this Agreement and the
transactions contemplated herein, and shall furnish a copy of the
Prospectus/Proxy Statement and form of proxy to each shareholder of
the Target Fund as of the record date for such meeting. The Target
Entity Board shall recommend to the Target Fund shareholders approval
of this Agreement and the transactions contemplated herein, subject to
fiduciary obligations under applicable law.
F. COORDINATION OF PORTFOLIOS. The Target Fund and Acquiring Fund
covenant and agree to coordinate the respective portfolios of the
Target Fund and Acquiring Fund from the date of the Agreement up to
and including the Closing Date in order that at Closing, when the
Assets are added to the Acquiring Fund's portfolio, the resulting
portfolio will meet the Acquiring Fund's investment objective,
policies and restrictions, as set forth in the Acquiring Fund's
Prospectus, a copy of which has been delivered to the Target Fund.
G. DISTRIBUTION OF THE SHARES. At closing the Target Fund covenants that
it shall cause to be distributed the Acquiring Fund Shares in the
proper pro rata amount for the benefit of Target Fund's shareholders
and such that the Target Fund shall not continue to hold amounts of
said shares so as to cause a violation of Section 12(d)(1) of the 1940
Act. The Target Fund covenants further that, pursuant to Section
III.G., it shall liquidate and dissolve as promptly as practicable
after the Closing Date. The Target Fund covenants to use all
reasonable efforts to cooperate with the Acquiring Fund and the
Acquiring Fund's transfer agent in the distribution of said shares.
H. BROKERS OR FINDERS. Except as disclosed in writing to the other party
prior to the date hereof, each of the Target Fund and the Acquiring
Fund represents that no agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, and each
party shall hold the other harmless from and against any and all
claims, liabilities or obligations with respect to any such fees,
commissions or expenses asserted by any person to be due or payable in
connection with any of the transactions contemplated by this Agreement
on the basis of any act or statement alleged to have been made by such
first party or its affiliate.
I. ADDITIONAL AGREEMENT. In case at any time after the Closing Date any
further action is necessary or desirable in order to carry out the
purposes of this Agreement, the proper directors, trustees and
officers of each party to this Agreement shall take all such necessary
action.
13
J. PUBLIC ANNOUNCEMENTS. For a period of time from the date of this
Agreement to the Closing Date, the Target Fund and the Acquiring Fund
will consult with each other before issuing any press releases or
otherwise making any public statements with respect to this Agreement
or the transactions contemplated herein and shall not issue any press
release or make any public statement prior to such consultation,
except as may be required by law.
K. TAX STATUS OF REORGANIZATION. The intention of the parties is that the
transaction will qualify as a reorganization within the meaning of
Section 368(a) of the Code. Neither the Acquiring Fund nor the Target
Fund 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 within the meaning of
Section 368(a)(1)(F) of the Code. At or prior to the Closing Date, the
Acquiring Fund and the Target Fund will take such action, or cause
such action to be taken, as is reasonably necessary to enable Dechert
LLP, counsel to the Acquiring Entity, to render the tax opinion
required herein.
VII. CONDITIONS TO OBLIGATIONS OF THE TARGET FUND.
The obligations of the Target Entity, on behalf of the Target Fund,
hereunder with respect to the consummation of each Reorganization are subject to
the satisfaction of the following conditions, unless waived in writing by the
Target Entity, on behalf of the Target Fund:
A. SHAREHOLDER APPROVAL. With respect to Xxx Xxxxxx Core Growth Fund and
Xxx Xxxxxx Global Growth Fund, this Agreement and the transactions
contemplated herein shall have been approved by the affirmative vote
of the holders of a majority of the outstanding shares of the Target
Fund. With respect to Xxx Xxxxxx Equity Growth Fund, this Agreement
and the transactions contemplated herein shall have been approved by
the affirmative vote of the lesser of: (1) more than 50% of the
outstanding common shares of the Fund, or (2) 67% or more of the
common shares of the Fund represented at the shareholder meeting if
the holders of more than 50% of the outstanding common shares of the
Fund are present or represented by proxy.
B. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Acquiring Fund and the Acquiring
Entity contained herein shall be true in all material respects as of
the Closing Date, there shall have been no material adverse change in
the financial condition, results of operations, business properties or
assets of the Acquiring Fund as of the Closing Date, and the Target
Fund shall have received a certificate of an authorized officer of the
Acquiring Entity
14
satisfactory in form and substance to the Target Fund so stating. The
Acquiring Entity and the Acquiring Fund shall have performed and
complied in all material respects with all agreements, obligations and
covenants required by this Agreement to be so performed or complied
with by it on or prior to the Closing Date.
C. REGISTRATION STATEMENT EFFECTIVE. The Acquiring Entity's Registration
Statement on Form N-14 shall have become effective and no stop orders
under the Securities Act pertaining thereto shall have been issued.
D. CLASS R SHARES REDEMPTION. All Class R Shares of each Acquired Fund,
as applicable, shall have been redeemed.
E. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been
obtained.
F. ABSENCE OF CHANGES. As of the Closing Date, there shall have been no
change in the business, results of operations, assets or financial
condition or the manner of conducting the business of the Acquiring
Fund, other than changes in the ordinary course of its business, which
has had a material adverse effect on such business, results of
operations, assets, financial condition or manner of conducting
business.
G. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or
prohibition (an "Injunction") preventing the consummation of the
transactions contemplated by this Agreement shall be in effect, nor
shall any proceeding by any state, local or federal government agency
or entity seeking any of the foregoing be pending. There shall not
have been any action taken or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the transactions
contemplated by this Agreement, which makes the consummation of the
transactions contemplated by this Agreement illegal or which has a
material adverse effect on business operations of the Acquiring Fund.
H. TAX OPINION. The Target Entity shall have obtained an opinion from
Dechert LLP, counsel for the Acquiring Entity, dated as of the Closing
Date, addressed to the Target Entity, that absent a change of law or
change of fact between the date of this Agreement and the Closing, the
consummation of the transactions set forth in this Agreement comply
with the requirements of a reorganization as described in Section
368(a)(1)(F) of the Code. In rendering such opinion, Dechert LLP may
request and rely upon representations contained in certificates of
officers of the Target
15
Entity and others, and the officers of the Target Entity shall use
their best efforts to make available such truthful certificates.
I. OPINION OF COUNSEL.
1. The Target Entity shall have received the opinion of Dechert LLP,
counsel for the Acquiring Entity, dated as of the Closing Date,
addressed to the Target Entity substantially in the form and to
the effect that:
(a) The Acquiring Entity is registered as an open-end,
management investment company under the 0000 Xxx.
(b) The Agreement constitutes the valid and binding obligation
of the Acquiring Entity on behalf of the Acquiring Fund,
enforceable against it in accordance with its terms.
(c) Neither the execution, delivery or performance by the
Acquiring Entity, on behalf of the Acquiring Fund, of the
Agreement nor the compliance by the Acquiring Entity, on
behalf of the Acquiring Fund, with the terms and provisions
thereof will contravene any provision of any applicable law
of the United States of America.
(d) No approval by any court, regulatory body, administrative
agency or governmental body of the United States of America,
which has not been obtained or taken and is not in full
force and effect, is required to authorize, or is required
in connection with, the execution or delivery of the
Agreement by the Acquiring Entity, on behalf of the
Acquiring Fund, or the consummation by the Acquiring Entity,
on behalf of the Acquiring Fund, of the transactions
contemplated thereby.
2. In addition, the Target Fund shall have received the opinion of
Xxxxxxx Xxxxx LLP, Maryland counsel for the Acquiring Entity,
dated as of the Closing Date, addressed to the Target Fund
substantially in the form and to the effect that:
(a) The Acquiring Fund is duly incorporated and validly existing
as a corporation in good standing under the laws of the
State of Maryland.
(b) The Acquiring Fund has the requisite corporate power and
authority under the Maryland General Corporation Law and its
charter and bylaws, to own its properties and assets and to
conduct its business as described in its charter and to
enter into and perform its obligations under the Agreement.
16
(c) The execution and delivery of the Agreement by the Acquiring
Fund have been duly authorized by all necessary corporate
action on the part of the Acquiring Fund under its charter
and bylaws and the Maryland General Corporation Law, and the
Agreement has been duly executed and, to the knowledge of
such counsel, delivered by the Acquiring Fund.
(d) The execution and delivery of the Agreement by the Acquiring
Fund, and the consummation of the transactions contemplated
thereby, do not and will not result in any violation of the
provisions of the charter or bylaws of the Acquiring Fund or
the Maryland General Corporation Law.
(e) No approval of any court, regulatory body, administrative
agency or governmental body of the State of Maryland is
required to be obtained by the Acquiring Fund under the
Maryland General Corporation Law in connection with the
execution, delivery and performance of the Agreement by the
Acquiring Fund, except for such as have been obtained.
(f) The issuance of the Acquiring Fund Shares has been duly
authorized by all necessary corporate action on the part of
the Acquiring Fund, and when such Acquiring Fund Shares are
issued and delivered by the Acquiring Fund as contemplated
by the Agreement in exchange for the consideration therefor
described in the Agreement, such Acquiring Fund Shares will
be validly issued, fully paid and non-assessable, and the
issuance of the Acquiring Fund Shares by the Acquiring Fund
will not be subject to any pre-emptive or similar rights
arising under the charter or bylaws of the Acquiring Fund or
under the Maryland General Corporation Law.
J. OFFICER CERTIFICATES. The Target Fund shall have received a
certificate of an authorized officer of the Acquiring Entity, dated as
of the Closing Date, certifying that the representations and
warranties set forth in Section V are true and correct on the Closing
Date, together with certified copies of the resolutions adopted by the
Acquiring Entity Board.
VIII. CONDITIONS TO OBLIGATIONS OF ACQUIRING FUND.
The obligations of the Acquiring Entity, on behalf of the Acquiring Fund,
hereunder with respect to the consummation of the Reorganization are subject to
the satisfaction of the following conditions, unless waived in writing by the
Acquiring Entity, on behalf of the Acquiring Fund:
17
A. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Target Entity and the Target
Fund contained herein shall be true in all material respects as of the
Closing Date, there shall have been no material adverse change in the
financial condition, results of operations, business, properties or
assets of the Target Fund as of the Closing Date, and the Acquiring
Fund shall have received a certificate of an authorized officer of the
Target Entity satisfactory in form and substance to the Acquiring Fund
so stating. The Target Fund shall have performed and complied in all
material respects with all agreements, obligations and covenants
required by this Agreement to be so performed or complied with by them
on or prior to the Closing Date.
B. REGISTRATION STATEMENT EFFECTIVE. The Acquiring Entity's Registration
Statement on Form N-14 shall have become effective and no stop orders
under the Securities Act pertaining thereto shall have been issued.
C. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been
obtained.
D. ABSENCE OF CHANGES. As of the Closing Date, there shall not have been:
1. any change in the business, results of operations, assets, or
financial condition or the manner of conducting the business of
the Target Fund, other than changes in the ordinary course of its
business, or any pending or threatened litigation, which has had
or may have a material adverse effect on such business, results
of operations, assets, financial condition or manner of
conducting business;
2. issued by the Target Fund any option to purchase or other right
to acquire shares of the Target Fund to any person other than
subscriptions to purchase shares at net asset value in accordance
with terms in the Target Fund Prospectus;
3. any entering into, amendment or termination of any contract or
agreement by the Target Fund, except as otherwise contemplated by
this Agreement (and except with respect to the deferred
compensation plan and the retirement plan applicable to the
Target Entity Board);
4. any indebtedness incurred, other than in the ordinary course of
business, by the Target Fund for borrowed money or any commitment
to borrow money entered into by the Target Fund;
18
5. any amendment of the Target Fund's organizational documents; or
6. any grant or imposition of any lien, claim, charge or encumbrance
(other than encumbrances arising in the ordinary course of
business with respect to covered options) upon any asset of the
Target Fund other than a lien for taxes not yet due and payable.
E. NO INJUNCTIONS OR RESTRAINTS: ILLEGALITY. No Injunction preventing the
consummation of the transactions contemplated by this Agreement shall
be in effect, nor shall any proceeding by any state, local or federal
government agency or entity seeking any of the foregoing be pending.
There shall not have been any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to
the transactions contemplated by this Agreement, which makes the
consummation of the transactions contemplated by this Agreement
illegal.
F. TAX OPINION. The Acquiring Entity shall have obtained an opinion from
Dechert LLP, counsel for the Acquiring Entity, dated as of the Closing
Date, addressed to the Acquiring Entity, that absent a change of law
or a change in fact between the date of this Agreement and the
Closing, the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as
described in Section 368(a)(1)(F) of the Code. In rendering such
opinion, Dechert LLP may request and rely upon representations
contained in certificates of officers of the Acquiring Entity and
others, and the officers of the Acquiring Entity shall use their best
efforts to make available such truthful certificates.
G. OPINION OF COUNSEL.
1. The Acquiring Entity shall have received the opinion of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP ("Skadden) counsel for each
Target Entity, dated as of the Closing Date, addressed to the
Acquiring Entity, substantially in the form and to the effect
that:
(a) The Target Entity is registered as an open-end, management
investment company under the 0000 Xxx.
(b) Neither the execution, delivery or performance by the Target
Entity, on behalf of the Target Fund, of the Agreement nor
the compliance by the Target Entity, on behalf of the Target
Fund, with the terms and provisions thereof will contravene
any provision of any applicable law of the United States of
America.
(c) No approval by any court, regulatory body, administrative
agency or governmental body of the United States of America,
which has not been obtained or taken and is not in full
force and effect, is required to authorize, or is required
19
in connection with, the execution or delivery of the
Agreement by the Target Entity, on behalf of the Target
Fund, or the enforceability of the Agreement against the
Target Entity, on behalf of the Target Fund, in connection
with the opinion.
2. The Acquiring Fund shall have received the opinion of Skadden,
Delaware counsel for Xxx Xxxxxx Equity Trust II, on behalf of Xxx
Xxxxxx Core Growth Fund, and Xxx Xxxxxx Equity Trust, on behalf
of Xxx Xxxxxx Global Growth Fund, dated as of the Closing Date,
addressed to the Acquiring Fund substantially in the form and to
the effect that:
(a) The Target Fund is a statutory trust validly existing and in
good standing under the laws of the State of Delaware.
(b) The Target Fund has the statutory trust power and authority
to execute, deliver and perform its obligations under the
Agreement and the applicable laws of the State of Delaware.
(c) The Agreement constitutes the valid and binding obligation
of the Target Entity, on behalf of the Target Fund,
enforceable against the Target Entity in accordance with its
terms under the applicable laws of the State of Delaware.
(d) The execution and delivery of the Agreement and the
consummation by the Target Fund of the transactions
contemplated thereby have been duly authorized by all
requisite statutory trust action on the part of the Target
Fund under the applicable laws of the State of Delaware. The
Agreement has been duly executed and, to the knowledge of
such counsel, delivered by the Target Fund under the
applicable laws of the State of Delaware.
3. In addition, the Acquiring Entity shall have received the opinion
of Xxxxxxx Xxxxx LLP, Maryland counsel for Xxx Xxxxxx Series
Fund, Inc., on behalf of Xxx Xxxxxx Equity Growth Fund, dated as
of the Closing Date, addressed to the Acquiring Fund
substantially in the form and to the effect that:
(a) The Target Fund is duly incorporated and validly existing as
a corporation in good standing under the laws of the State
of Maryland.
(b) The Target Fund has the requisite corporate power and
authority under the Maryland General Corporation Law and its
charter and bylaws, to own its properties and assets and
20
to conduct its business as described in its charter and to
enter into and perform its obligations under the Agreement.
(c) The execution and delivery of the Agreement by the Target
Fund have been duly authorized by all necessary corporate
action on the part of the Target Fund under its charter and
bylaws and the Maryland General Corporation Law, and the
Agreement has been duly executed and, to the knowledge of
such counsel, delivered by the Target Fund.
(d) The Agreement constitutes the valid and binding obligation
of the Target Entity, on behalf of the Target Fund,
enforceable against the Target Entity in accordance with its
terms under the applicable laws of the State of Maryland.
(e) The execution and delivery of the Agreement by the Target
Fund, and the consummation of the transactions contemplated
thereby, do not and will not result in any violation of the
provisions of the charter or bylaws of the Target Fund or
the Maryland General Corporation Law.
(f) No approval of any court, regulatory body, administrative
agency or governmental body of the State of Maryland is
required to be obtained by the Target Fund under the
Maryland General Corporation Law in connection with the
execution, delivery and performance of the Agreement by the
Target Fund, except for such as have been obtained.
H. SHAREHOLDER LIST. The Target Entity, on behalf of the Target Fund,
shall have delivered to the Acquiring Fund an updated list of all
shareholders of the Target Fund, as reported by the Target Fund's
transfer agent, as of one (1) business day prior to the Closing Date
with each shareholder's respective holdings in the Target Fund,
taxpayer identification numbers, Form W9 and last known address.
I. OFFICER CERTIFICATES. The Acquiring Fund shall have received a
certificate of an authorized officer of the Target Entity, dated as of
the Closing Date, certifying that the representations and warranties
set forth in Section IV are true and correct on the Closing Date,
together with certified copies of the resolutions adopted by the
Target Entity Board and Target Fund shareholders.
IX. AMENDMENT, WAIVER AND TERMINATION.
A. The parties hereto may, by agreement in writing authorized by their
respective Boards, amend this Agreement at any time before or after
approval thereof by the shareholders of the Target Fund; provided,
21
however, that after receipt of Target Fund shareholder approval, no
amendment shall be made by the parties hereto which substantially
changes the terms of Sections I, II and III hereof without obtaining
Target Fund's shareholder approval thereof.
B. At any time prior to the Closing Date, either of the parties may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii)
waive compliance with any of the covenants or conditions made for its
benefit contained herein. No delay on the part of either party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any
such right, power or privilege, or any single or partial exercise of
any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
C. This Agreement may be terminated, and the transactions contemplated
herein may be abandoned with respect to one or more (or all)
Reorganizations at any time prior to the Closing Date:
1. by the consent of the Target Entity Board and the Acquiring
Entity Board;
2. by the Target Fund, if the Acquiring Fund breaches in any
material respect any of its representations, warranties,
covenants or agreements contained in this Agreement;
3. by the Acquiring Fund, if the Target Fund breaches in any
material respect any of its representations, warranties,
covenants or agreements contained in this Agreement;
4. by either the Target Fund or the Acquiring Fund, if the Closing
has not occurred on or prior to December 31, 2010 (provided that
the rights to terminate this Agreement pursuant to this
subsection C.(4) shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement
has been the cause of or resulted in the failure of the closing
to occur on or before such date);
5. by the Acquiring Fund in the event that: (a) all the conditions
precedent to the Target Fund's obligation to close, as set forth
in Section VII of this Agreement, have been fully satisfied (or
can be fully satisfied at the Closing); (b) the Acquiring Fund
gives the Target Fund written assurance of its intent to close
irrespective of the satisfaction or nonsatisfaction of all
conditions precedent to the Acquiring Fund's obligation to close,
as set forth in Section VIII of this Agreement; and (c) the
Target Fund then fails or refuses to
22
close within the earlier of five (5) business days or December
31, 2010; or
6. by the Target Fund in the event that: (a) all the conditions
precedent to the Acquiring Fund's obligation to close, as set
forth in Section VIII of this Agreement, have been fully
satisfied (or can be fully satisfied at the Closing); (b) the
Target Fund gives the Acquiring Fund written assurance of its
intent to close irrespective of the satisfaction or
nonsatisfaction of all the conditions precedent to the Target
Fund's obligation to close, as set forth in Section VII of this
Agreement; and (c) the Acquiring Fund then fails or refuses to
close within the earlier of five (5) business days or December
31, 2010.
X. REMEDIES.
In the event of termination of this Agreement by either or both of the
Target Fund and Acquiring Fund pursuant to Section IX.C., written notice thereof
shall forthwith be given by the terminating party to the other party hereto, and
this Agreement shall therefore terminate and become void and have no effect, and
the transactions contemplated herein and thereby shall be abandoned, without
further action by the parties hereto.
XI. SURVIVAL OF WARRANTIES AND INDEMNIFICATION.
A. SURVIVAL. The representations and warranties included or provided for
herein, or in the schedules or other instruments delivered or to be
delivered pursuant hereto, shall survive the Closing Date for a three
(3) year period except that any representation or warranty with
respect to taxes shall survive for the expiration of the statutory
period of limitations for assessments of tax deficiencies as the same
may be extended from time to time by the taxpayer. The covenants and
agreements included or provided for herein shall survive and be
continuing obligations in accordance with their terms. The period for
which a representation, warranty, covenant or agreement survives shall
be referred to hereinafter as the "Survival Period." Notwithstanding
anything set forth in the immediately preceding sentence, the right of
the Acquiring Fund and the Target Fund to seek indemnity pursuant to
this Agreement shall survive for a period of ninety (90) days beyond
the expiration of the Survival Period of the representation, warranty,
covenant or agreement upon which indemnity is sought. In no event
shall the Acquiring Fund or the Target Fund be obligated to indemnify
the other if indemnity is not sought within ninety (90) days of the
expiration of the applicable Survival Period.
B. INDEMNIFICATION. Each party (an "Indemnitor") shall indemnify and hold
the other and its directors, trustees, officers, agents and persons
23
controlled by or controlling any of them (each an "Indemnified Party")
harmless from and against any and all losses, damages, liabilities,
claims, demands, judgments, settlements, deficiencies, taxes,
assessments, charges, costs and expenses of any nature whatsoever
(including reasonable attorneys' fees), including amounts paid in
satisfaction of judgments, in compromise or as fines and penalties,
and counsel fees reasonably incurred by such Indemnified Party in
connection with the defense or disposition of any claim, action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or investigative body in which such Indemnified Party
may be or may have been involved as a party or otherwise or with which
such Indemnified Party may be or may have been threatened
(collectively, the "Losses") arising out of or related to any claim of
a breach of any representation, warranty or covenant made herein by
the Indemnitor, provided, however, that no Indemnified Party shall be
indemnified hereunder against any Losses arising directly from such
Indemnified Party's (i) willful misfeasance, (ii) bad faith, (iii)
gross negligence or (iv) reckless disregard of the duties involved in
the conduct of such Indemnified Party's position.
C. INDEMNIFICATION PROCEDURE. The Indemnified Party shall use its best
efforts to minimize any liabilities, damages, deficiencies, claims,
judgments, assessments, costs and expenses in respect of which
indemnity may be sought hereunder. The Indemnified Party shall give
written notice to the Indemnitor within the earlier of ten (10) days
of receipt of written notice to the Indemnified Party or thirty (30)
days from discovery by the Indemnified Party of any matters which may
give rise to a claim for indemnification or reimbursement under this
Agreement. The failure to give such notice shall not affect the right
of the Indemnified Party to indemnity hereunder unless such failure
has materially and adversely affected the rights of the Indemnitor;
provided that in any event such notice shall have been given prior to
the expiration of the Survival Period. At any time after ten (10) days
from the giving of such notice, the Indemnified Party may, at its
option, resist, settle or otherwise compromise, or pay such claim
unless it shall have received notice from the Indemnitor that the
Indemnitor intends, at the Indemnitor's sole cost and expense, to
assume the defense of any such matter, in which case the Indemnified
Party shall have the right, at no cost or expense to the Indemnitor,
to participate in such defense. If the Indemnitor does not assume the
defense of such matter, and in any event until the Indemnitor states
in writing that it will assume the defense, the Indemnitor shall pay
all costs of the Indemnified Party arising out of the defense until
the defense is assumed; provided, however, that the Indemnified Party
shall consult with the Indemnitor and obtain the Indemnitor's prior
written consent to any payment or settlement of any such claim. The
Indemnitor shall keep the Indemnified Party fully apprised at all
times as to the
24
status of the defense. If the Indemnitor does not assume the defense,
the Indemnified Party shall keep Indemnitor apprised at all times as
to the status of the defense. Following indemnification as provided
for hereunder, the Indemnitor shall be subrogated to all rights of the
Indemnified Party with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been
made.
XII. SURVIVAL.
The provisions set forth in Sections X, XI and XVI hereof shall survive the
termination of this Agreement for any cause whatsoever.
XIII. NOTICES.
All notices hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered personally or sent by registered mail or
certified mail, postage prepaid. Notice to the Target Entity, with respect to
its corresponding Target Fund shall be addressed to the Target Entity c/o Xxx
Xxxxxx Asset Management, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel, or at such other address as the Target Entity may designate by
written notice to the Acquiring Entity. Notice to the Acquiring Entity, with
respect to its corresponding Acquiring Fund shall be addressed to the Acquiring
Fund c/o Morgan Xxxxxxx Investment Management, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel, or at such other address and to the
attention of such other person as the Acquiring Entity may designate by written
notice to the Target Entity. Any notice shall be deemed to have been served or
given as of the date such notice is delivered personally or mailed.
XIV. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns. This Agreement shall not be
assigned by any party without the prior written consent of the other party
hereto.
XV. BOOKS AND RECORDS.
The Target Fund and the Acquiring Fund agree that copies of the books and
records of the Target Fund relating to the Assets including, but not limited to,
all files, records, written materials (e.g., closing transcripts, surveillance
files and credit reports) shall be delivered by the Target Fund to the Acquiring
Fund on or prior to the Closing Date. In addition to, and without limiting the
foregoing, the Target Fund and the Acquiring Fund agree to take such action as
may be necessary in order that the Acquiring Fund shall have reasonable access
to such other books and records as may be reasonably requested, all for three
(3) complete fiscal and tax years after the Closing Date; namely, general
ledgers, journal entries, voucher registers, distribution journals, payroll
registers, monthly balance owing reports, income tax returns, tax depreciation
schedules, and investment tax credit basis schedules.
25
XVI. GENERAL.
This Agreement supersedes all prior agreements between the parties (written
or oral), is intended as a complete and exclusive statement of the terms of the
Agreement between the parties and may not be amended, modified or changed, or
terminated orally. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been executed by the Target Fund
and Acquiring Fund and delivered to each of the parties hereto. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement is
for the sole benefit of the parties hereto, and nothing in this Agreement,
expressed or implied, is intended to confer upon any other person any rights or
remedies under or by reason of this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of Maryland
without regard to principles of conflicts or choice of law.
26
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first written above.
XXXXXX XXXXXXX INSTITUTIONAL FUND INC.,
ON BEHALF OF ITS SERIES IDENTIFIED ON
EXHIBIT A HERETO
----------------------------------------
Name: Xxxxx Xxxxxx
Title: President
ATTEST:
/s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
XXX XXXXXX EQUITY TRUST II, ON BEHALF OF
XXX XXXXXX CORE GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal
Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
XXX XXXXXX SERIES FUND, INC. , ON BEHALF
OF XXX XXXXXX EQUITY GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal
Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
XXX XXXXXX EQUITY TRUST, ON BEHALF OF
XXX XXXXXX GLOBAL GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal
Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
29
EXHIBIT A
CHART OF REORGANIZATIONS
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND SHARE
ENTITY CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Core Growth Fund, a series of Advantage Portfolio, a series of Xxxxxx
Xxx Xxxxxx Equity Trust II Xxxxxxx Institutional Fund, Inc.
CLASS A (ARROW) CLASS H
CLASS B (ARROW)
CLASS C (ARROW) CLASS L
CLASS I (ARROW) CLASS I
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND SHARE
ENTITY CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Equity Growth Fund, a series of Equity Growth Portfolio, a series of Xxxxxx
Xxx Xxxxxx Series Fund, Inc. Xxxxxxx Institutional Fund, Inc.
CLASS A (ARROW) CLASS H
CLASS B (ARROW)
CLASS C (ARROW) CLASS L
CLASS I (ARROW) CLASS I
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND SHARE
ENTITY CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Global Growth Fund, a series of Global Growth Portfolio, a series of Xxxxxx
Xxx Xxxxxx Equity Trust Xxxxxxx Institutional Fund, Inc.
CLASS A (ARROW) CLASS H
CLASS B (ARROW)
CLASS C (ARROW) CLASS L
CLASS I (ARROW) CLASS I
A-1
