AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is
made as of this 11th day of September, 2006, by and among Xxxx
Xxxxx Partners Variable Portfolios II, a Massachusetts business
trust (the "Acquiring Entity"), with its principal place of
business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on
behalf of its series Xxxx Xxxxx Partners Variable Appreciation
Portfolio (the "Acquiring Fund"), Xxxx Xxxxx Partners Investment
Series, a Massachusetts business trust (the "Acquired Entity"),
with its principal place of business at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, on behalf of its series Xxxx Xxxxx
Partners Variable Growth and Income Portfolio (the "Acquired
Fund"), and, solely for purposes of paragraph 10.2 hereof, Xxxx
Xxxxx Partners Fund Advisor, LLC.
WHEREAS, each of the Acquired Fund and the Acquiring Fund is
a series of an open-end management investment company registered
pursuant to the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, it is intended that, for United States federal
income tax purposes (i) the transactions contemplated by this
Agreement shall qualify as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code") and (ii) this Agreement shall constitute a
plan of reorganization within the meaning of Treasury Regulation
Section 1.368-2(g);
WHEREAS, the reorganization will consist of (1) the sale,
assignment, conveyance, transfer and delivery of all of the
property and assets of the Acquired Fund to the Acquiring Fund
in exchange solely for classes of shares of beneficial interest
of the Acquiring Fund (the "Acquiring Fund Shares")
corresponding to the classes of outstanding shares of beneficial
interest of the Acquired Fund (the "Acquired Fund Shares"), as
described herein, (2) the assumption by the Acquiring Fund of
all liabilities of the Acquired Fund, and (3) the distribution
of the Acquiring Fund Shares to the shareholders of the Acquired
Fund and the liquidation of the Acquired Fund, as provided
herein (the "Reorganization"), all upon the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS, the Acquired Fund currently owns securities that are
generally assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Board of Trustees of the Acquiring Entity (the
"Acquiring Entity Board") has determined, with respect to the
Acquiring Fund, that the sale, assignment, conveyance, transfer
and delivery of all of the property and assets of the Acquired
Fund for Acquiring Fund Shares and the assumption of all
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 of the Acquiring
Fund will not be diluted as a result of this transaction;
WHEREAS, the Board of Trustees of the Acquired Entity (the
"Acquired Entity Board") has determined, with respect to the
Acquired Fund, that the sale, assignment, conveyance, transfer
and delivery of all of the property and assets of the Acquired
Fund for Acquiring Fund Shares and the assumption of all
liabilities of the Acquired Fund by the 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 will not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties
hereto covenant and agree as follows:
1.
TRANSFER OF THE ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING
FUND IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF
ALL ACQUIRED FUND LIABILITIES AND THE LIQUIDATION OF THE
ACQUIRED FUND
1.1 Subject to requisite approvals and the other terms and
conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired
Entity, on behalf of the Acquired Fund, agrees to sell, assign,
convey, transfer and deliver all of its property and assets, as
set forth in paragraph 1.2, to the Acquiring Fund, and the
Acquiring Entity, on behalf of the Acquiring Fund, agrees in
exchange therefor: (a) to deliver to the Acquired Fund the
number of full and fractional Acquiring Fund Shares
corresponding to each class of the Acquired Fund Shares as of
the time and date set forth in paragraph 3.1, determined by
dividing the value of the Acquired Fund's net assets with
respect to each class of the Acquired Fund (computed in the
manner and as of the time and date set forth in paragraph 2.1)
by the net asset value of one share of the corresponding class
of Acquiring Fund Shares (computed in the manner and as of the
time and date set forth in paragraph 2.2); and (b) to assume all
liabilities of the Acquired Fund. Such transactions shall take
place on a closing date as provided for in paragraph 3.1 (the
"Closing Date"). For purposes of this Agreement, the
undesignated shares of the Acquired Fund correspond to the
undesignated shares of the Acquiring Fund and the term
"Acquiring Fund Shares" should be read to include the
undesignated shares of the Acquiring Fund.
1.2 The property and assets of the Acquired Entity,
attributable to the Acquired Fund, to be sold, assigned,
conveyed, transferred and delivered to and acquired by the
Acquiring Entity, on behalf of the Acquiring Fund, shall consist
of all assets and property of every kind and nature of the
Acquired Fund, including, without limitation, all rights,
receivables (including dividend, interest and other
receivables), cash, cash equivalents, claims (whether absolute
or contingent, known or unknown), securities, commodities and
futures interests, good will and other intangible property, any
deferred or prepaid expenses and all interests, rights,
privileges and powers, the Acquired Fund owns at the Valuation
Date (as defined in paragraph 2.1) (collectively, "Assets"). The
Acquiring Entity, on behalf of the Acquiring Fund, shall assume
all of the liabilities and obligations of the Acquired Fund,
including, without limitation, all indemnification obligations
of the Acquired Fund with respect to the current and former
members of the Acquired Entity Board and officers of the
Acquired Entity, whether accrued or contingent, known or
unknown, existing at the Valuation Date (collectively,
"Liabilities"). The Acquired Fund will sell, assign, convey,
transfer and deliver to the Acquiring Entity, on behalf of the
Acquiring Fund, any rights, stock dividends, or other securities
received by the Acquired Fund after the Closing Date as stock
dividends or other distributions on or with respect to the
property and assets transferred, which rights, stock dividends,
and other securities shall be deemed included in the property
and assets transferred to the Acquiring Entity, on behalf of the
Acquiring Fund, at the Closing Date and shall not be separately
valued, in which case any such distribution that remains unpaid
as of the Closing Date shall be included in the determination of
the value of the assets of the Acquired Fund acquired by the
Acquiring Entity on behalf of the Acquiring Fund.
1.3 The Acquired Fund will make reasonable efforts to
discharge all of its known Liabilities prior to the Valuation
Date.
1.4 On or as soon as practicable prior to the Closing Date,
the Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so that
it will have distributed substantially all of its investment
company taxable income as defined in the Code (computed without
regard to any deduction for dividends paid) and realized net
capital gain as defined in the Code (after deduction for any
available capital loss carryover), if any, for all tax periods
ending on or before the Closing Date (and treating the current
taxable year as ending on the Closing Date) such that the
Acquired Fund will have no tax liability under Section 852 or
Section 4982 for the current and any prior tax periods.
1.5 Immediately following the actions contemplated by
paragraph 1.1, the Acquired Entity shall (a) distribute to the
latter's 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 Entity, on behalf of the Acquired Fund, pursuant to
paragraph 1.1 and (b) completely liquidate and dissolve in
accordance with Massachusetts law. Such distribution and
liquidation shall 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 the
Acquired Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the names
of the Acquired Fund Shareholders. 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 each corresponding class owned by
Acquired Fund Shareholders on the Closing Date. All issued and
outstanding Acquired Fund Shares will be canceled on the books
of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing any class of Acquiring Fund Shares in
connection with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund's transfer agent.
1.7 Any reporting responsibility of the 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 Entity, on
behalf of the Acquired Fund. The Acquiring Entity shall fully
cooperate to the extent necessary or desirable for these
responsibilities to be discharged.
2. VALUATION
2.1 The value of the Assets and the amount of the Liabilities
shall be determined as of the time for calculation of net asset
value as set forth in the then-current prospectus for the
Acquired Fund, and after the declaration of any dividends by the
Acquired Fund, on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), computed using the
valuation procedures established by the Acquired Entity Board.
All computations of value and amounts shall be made by (a) State
Street Bank and Trust Company, in its capacity as accounting
agent for the Acquired Fund, or (b) in the case of securities
subject to fair valuation, in accordance with the valuation
procedures of the Acquired Entity adopted in good faith by the
Acquired Entity Board. All computations of value and amounts
pursuant to this paragraph 2.1 shall be subject to confirmation
by the Acquiring Fund's independent registered public accounting
firm.
2.2. The net asset value per share of each class of Acquiring
Fund Shares shall be determined to the nearest full cent on the
Valuation Date, using the valuation procedures established by
the Acquiring Entity Board. All computations of value shall be
made by (a) State Street Bank and Trust Company, in its capacity
as accounting agent for the Acquiring Fund, or (b) in the case
of securities subject to fair valuation, in accordance with the
valuation procedures of the Acquiring Entity adopted in good
faith by the Acquiring Entity Board. All computations of value
pursuant to this paragraph 2.2 shall be subject to confirmation
by the Acquired Fund's independent registered public accounting
firm.
2.3 The number of Acquiring Fund Shares of each class to be
issued in exchange for the Assets shall be determined with
respect to each such class by dividing the value of the net
assets with respect to each class of Acquired Fund Shares,
determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of an Acquiring Fund Share
of the corresponding class, determined using the same valuation
procedures referred to in paragraph 2.2.
3. CLOSING AND CLOSING DATE
3.1 Subject to the terms and conditions set forth herein, the
Closing Date shall be April 27, 2007, or such other date as the
parties may agree. All acts taking place at the closing of the
transactions provided for in this Agreement ("Closing") shall be
deemed to take place simultaneously as of the "close of
business" on the Closing Date unless otherwise agreed to by the
parties. The close of business on the Closing Date shall be as
of 4:00 p.m., Eastern Time or such later time on that date as
the Acquired Fund's net asset value and/or the net asset value
per share of each class of shares of the Acquiring Fund is
calculated in accordance with paragraph 2.2 and after the
declaration of any dividends. The Closing shall be held at the
offices of Xxxxxxx Xxxx & Xxxxxxxxx LLP or at such other time
and/or place as the parties may agree.
3.2 The Acquired Entity shall direct State Street Bank and
Trust Company (the "Custodian") to transfer ownership of the
Assets from the accounts of the Acquired Fund that the Custodian
maintains as custodian for the Acquired Fund to the accounts of
the Acquiring Fund that the Custodian maintains as custodian for
the Acquiring Fund and to deliver to the Acquiring Entity, at
the Closing, a certificate of an authorized officer stating that
(i) the Assets of the Acquired Fund have been so transferred as
of the Closing Date, and (ii) all necessary taxes in connection
with the delivery of the Assets of the Acquired Fund, including
all applicable federal and state stock transfer stamps, if any,
have been paid or provision for payment has been made.
3.3 The Acquired Entity shall direct PFPC Inc., in its
capacity as transfer agent for the Acquired Fund ("Transfer
Agent"), to deliver to the Acquiring Entity 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 Acquired Fund Shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall
deliver to the Secretary of the Acquired Fund a confirmation
evidencing that (a) the appropriate number of Acquiring Fund
Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund pursuant to paragraph 1.1 prior to
the actions contemplated by paragraph 1.5 and (b) the
appropriate number of Acquiring Fund Shares have been credited
to the accounts of the Acquired Fund Shareholders on the books
of the Acquiring Fund pursuant to paragraph 1.5. At the Closing,
each party shall deliver to the other party such bills of sale,
checks, assignments, share certificates, if any, receipts or
other documents as the other party 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 the Acquiring Fund or the 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
accurate appraisal of the value of the net assets of the
Acquired Fund or the Acquiring Fund is impracticable (in the
judgment of the Acquiring Entity Board with respect to the
Acquiring Fund and the Acquired Entity Board with respect to the
Acquired Fund), the Closing Date shall be postponed until the
first Friday (that is also a business day) after the day when
trading shall have been fully resumed and reporting shall have
been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as has been fully disclosed to the Acquiring
Entity in Schedule 4.1 of this Agreement, the Acquired Entity,
on behalf of the Acquired Fund, represents and warrants to the
Acquiring Entity and the Acquiring Fund as follows:
(a) The Acquired Fund is duly established as a series of
the Acquired Entity, which is a business trust duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, with power under
its Declaration of Trust, as amended and/or supplemented (the
"Acquired Entity Charter"), to own all of its assets and to
carry on its business as it is being conducted as of the date
hereof. The Acquired Entity is duly qualified to do business
as a foreign trust in each jurisdiction in which the conduct
of its business makes such qualification necessary except
where the failure to so qualify would not have a material
adverse effect on the condition (financial or otherwise),
business, properties, net assets or results of operations of
the Acquired Entity. The Acquired Entity has all necessary
federal, state and local authorization to carry on its
business as now being conducted and to fulfill the terms of
this Agreement, except as set forth in paragraph 4.1(c).
(b) The Acquired Entity is a registered open-end
management investment company, 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.
(c) No consent, approval, authorization, or order of any
court or governmental authority is required for the
consummation by the Acquired Fund of the transactions
contemplated herein, except such as may be required under the
1933 Act, the Securities Exchange Act of 1934 ("1934 Act"),
the 0000 Xxx, xxxxx securities laws and the Xxxx-Xxxxx-Xxxxxx
Act.
(d) The current prospectus and statement of additional
information of the Acquired Fund (true and correct copies of
which have been delivered to the Acquiring Entity) and each
prospectus and statement of additional information of the
Acquired Fund used during the three (3) years prior to the
date of this Agreement conforms or conformed at the time of
its use 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 does not or
did not at the time of its use include any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not materially misleading.
(e) On the Closing Date, the Acquired Entity, on behalf
of the Acquired Fund, will have good and marketable title to
the Assets and full right, power and authority to sell,
assign, convey, transfer and deliver such Assets hereunder
free of any liens or other encumbrances, and upon delivery
and payment for the Assets, the Acquiring Entity, on behalf
of the 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) The Acquired Fund is not engaged currently, and the
execution, delivery and performance of this Agreement by the
Acquired Entity, on behalf of the Acquired Fund, will not
result, in a material violation of Massachusetts law or of
the Acquired Entity Charter or the by-laws of the Acquired
Entity, or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Acquired Entity, on
behalf of the Acquired Fund, is a party or by which it is
bound, and the execution, delivery and performance of this
Agreement by the Acquired Entity, on behalf of the Acquired
Fund, will not result in the acceleration of any material
obligation, or the imposition of any material penalty, under
any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Acquired Entity, on behalf of
the Acquired Fund, is a party or by which it is bound.
(g) All material contracts or other commitments of the
Acquired Fund (other than this Agreement, certain investment
contracts, including options, futures, swaps and forward
contracts, the indemnification agreements of the current and
former members of the Acquired Entity Board, and those
contracts listed in Schedule 4.1) will terminate without
liability to the Acquired Fund on or prior to the Closing
Date. Each contract listed in Schedule 4.1 is a valid,
binding and enforceable obligation of the Acquired Fund and,
to the Acquired Fund's knowledge, the other parties thereto
(assuming due authorization, execution and delivery by the
other parties thereto) and the assignment by the Acquired
Fund to the Acquiring Fund of each such contract will not
result in the termination of such contract, any breach or
default thereunder by the Acquired Fund or the imposition of
any penalty thereunder.
(h) No litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to the Acquired Entity's knowledge,
threatened against the Acquired Entity, with respect to the
Acquired Fund or any of its properties or assets, that, if
adversely determined, would materially and adversely affect
its financial condition or the conduct of the Acquired Fund's
business. The Acquired Entity, on behalf of the Acquired
Fund, is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body
which materially and adversely affects the Acquired Fund's
business or the Acquired Entity's ability to consummate the
transactions herein contemplated on behalf of the Acquired
Fund.
(i) The Statement of Assets and Liabilities, Statements
of Operations and Changes in Net Assets and Schedule of
Investments of the Acquired Fund as at the last day of and
for the most recently completed fiscal year of the Acquired
Fund prior to the date of this Agreement, have been audited
by KPMG 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 (true and correct
copies of which have been furnished to the Acquiring Entity)
present fairly, in all material respects, the financial
condition of the Acquired Fund as of such date and for such
period in accordance with GAAP, and there are no known
contingent, accrued or other 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 that
are not disclosed therein. The Statement of Assets and
Liabilities, Statements of Operations and Changes in Net
Assets and Schedule of Investments (unaudited) of the
Acquired Fund as at the last day of and for the most recently
completed fiscal half year of the Acquired Fund following the
date of the audited annual statements referenced above are in
accordance with GAAP consistently applied, and such
statements (true and correct copies of which have been
furnished to the Acquiring Entity) present fairly, in all
material respects, the financial condition of the Acquired
Fund, and all known contingent, accrued or other 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 are disclosed therein.
(j) Since the last day of the most recently completed
fiscal year of the Acquired Fund prior to the date of this
Agreement, there has not been any material adverse change in
the Acquired Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary
course of business, or any incurrence by the Acquired Fund of
indebtedness for money borrowed maturing more than one year
from the date such indebtedness was incurred. For the
purposes of this subparagraph (j), 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.
(k) On the Closing Date, all federal and other tax
returns, dividend reporting forms and other tax-related
reports of the Acquired Fund required by law to have been
filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects,
and all federal and other taxes shown as due or required to
be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment
thereof and, to the best of the Acquired Entity's knowledge,
no such return is currently under audit and no assessment has
been asserted with respect to such returns.
(l) For each taxable year of its operation (including the
current taxable year, assuming such year ends on the Closing
Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of Chapter 1 of the Code for
qualification and treatment as a "regulated investment
company," has elected to be treated as such, and has been (or
will be) eligible to compute and has computed (or will
compute) its federal income tax under Section 852 of the
Code, and on or before the Closing Date, will have
distributed or will have declared dividends intended to be
sufficient to distribute substantially all of (i) the excess
of (x) its investment income excludible from gross income
under Section 103 of the Code over (y) its deductions
disallowed under Sections 265 and 171 of the Code ("net tax-
exempt income"), (ii) its investment company taxable income
(as defined in the Code) (computed without regard to any
deduction for dividends paid) and (iii) any net capital gain
(after reduction for any allowable capital loss carryover)
(as defined in the Code) that has accrued or been recognized,
respectively, through the Closing Date such that for all tax
periods ending on or before the Closing Date (and treating
the current tax year as ending on the Closing Date) the
Acquired Fund will not have any tax liability under
Section 852 or Section 4982.
(m) All issued and outstanding Acquired Fund Shares are,
and on the Closing Date will be, duly authorized and validly
and legally issued and outstanding, fully paid and non-
assessable by the Acquired Entity and have been offered and
sold in any state, territory or the District of Columbia in
compliance in all material respects with applicable
registration requirements of all applicable federal and state
securities laws. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held by the
persons and in the amounts set forth in the records of the
Transfer Agent, on behalf of the Acquired Fund, as provided
in paragraph 3.3. The 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.
(n) The Acquired Fund will review its assets to ensure
that at any time after its shareholders have approved this
Agreement and prior to the Closing Date its assets do not
include any assets that the Acquiring Fund is not permitted,
or reasonably believes to be unsuitable for it, to acquire,
including without limitation any security that, prior to its
acquisition by the Acquired Fund, is unsuitable for the
Acquiring Fund to acquire.
(o) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquired Entity Board, on behalf of the Acquired Fund,
and this Agreement constitutes a valid and binding obligation
of the Acquired Entity, on behalf of the Acquired Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights and to general equity principles.
(p) The combined proxy statement and prospectus ("Proxy
Statement") to be included in the Registration Statement (as
defined in paragraph 5.6), insofar as it relates to the
Acquired Fund, from the effective date of the Registration
Statement through the date of the meeting of shareholders of
the Acquired Fund contemplated therein and on the Closing
Date, will (i) not contain any statement which, at the time
and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or
which omits to state any material fact necessary in order to
make the statements therein not false or misleading (provided
that this representation and warranty shall not apply to
statements in or omissions from the Proxy Statement made in
reliance upon and in conformity with information that was
furnished by the Acquiring Entity for use therein) and
(ii) comply in all material respects with the provisions of
the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder. The information to be furnished by
the Acquired Fund for use in registration statements and
other documents filed or to be filed with any federal, state
or local regulatory authority, which may be necessary in
connection with the transactions contemplated hereby, shall
be accurate and complete in all material respects and shall
comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto.
4.2 Except as has been fully disclosed to the Acquired Entity
in Schedule 4.2 to this Agreement, the Acquiring Entity, on
behalf of the Acquiring Fund, represents and warrants to the
Acquired Entity and the Acquired Fund as follows:
(a) The Acquiring Fund is duly established as a series of
the Acquiring Entity, which is a business trust duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, with the power
under its Declaration of Trust, as amended and/or
supplemented (the "Acquiring Entity Charter"), to own all of
its assets and to carry on its business as it is being
conducted as of the date hereof. The Acquiring Entity is duly
qualified to do business as a foreign trust in each
jurisdiction in which the conduct of its business makes such
qualification necessary except where the failure to so
qualify would not have a material adverse effect on the
condition (financial or otherwise), business, properties, net
assets or results of operations of the Acquiring Entity. The
Acquiring Entity has all necessary federal, state and local
authorization to carry on its business as now being conducted
and to fulfill the terms of this Agreement except as
described in paragraph 4.2(c).
(b) The Acquiring Entity is a registered open-end
management investment company, 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 force and effect or will be in full
force and effect as of the Closing Date.
(c) No consent, approval, authorization, or order of any
court or governmental authority is required for the
consummation by the Acquiring Fund of the transactions
contemplated herein, except such as may be required under the
1933 Act, the 1934 Act, the 1940 Act, state securities laws
and the Xxxx-Xxxxx-Xxxxxx Act.
(d) The current prospectus and statement of additional
information of the Acquiring Fund (true and correct copies of
which have been delivered to the Acquired Entity) and each
prospectus and statement of additional information of the
Acquiring Fund used during the three (3) years prior to the
date of this Agreement conforms or conformed at the time of
its use 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 does not or
did not at the time of its use include any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not materially misleading.
(e) The Acquiring Fund is not engaged currently, and the
execution, delivery and performance of this Agreement by the
Acquiring Entity, on behalf of the Acquiring Fund, will not
result, in a material violation of Massachusetts law or of
the Acquiring Entity Charter or the by-laws of the Acquiring
Entity, or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Acquiring Entity, on
behalf of the Acquiring Fund, is a party or by which it is
bound, and the execution, delivery and performance of this
Agreement by the Acquiring Entity, on behalf of the Acquiring
Fund, will not result in the acceleration of any material
obligation, or the imposition of any material penalty, under
any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Acquiring Entity, on behalf
of the Acquiring Fund, is a party or by which it is bound.
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to the Acquiring Entity's knowledge,
threatened against the Acquiring Entity, with respect to the
Acquiring Fund, or any of its properties or assets, that, if
adversely determined, would materially and adversely affect
its financial condition or the conduct of such Acquiring
Fund's business. The Acquiring Entity, on behalf of the
Acquiring Fund, is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the
Acquiring Fund's business or the Acquiring Entity's ability
to consummate the transactions herein contemplated on behalf
of the Acquiring Fund.
(g) The Statement of Assets and Liabilities, Statements
of Operations and Changes in Net Assets and Schedule of
Investments of the Acquiring Fund as at the last day of and
for the most recently completed fiscal year of the Acquiring
Fund prior to the date of this Agreement, have been audited
by KPMG LLP, an independent registered public accounting
firm, and are in accordance with GAAP consistently applied,
and such statements (true and correct copies of which have
been furnished to the Acquired Entity) present fairly, in all
material respects, the financial condition of the Acquiring
Fund as of such date and for such period in accordance with
GAAP, and there are no known contingent, accrued or other
liabilities of the Acquiring Fund required to be reflected on
a balance sheet (including the notes thereto) in accordance
with GAAP as of such date that are not disclosed therein. The
Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments
(unaudited) of the Acquiring Fund as at the last day of and
for the most recently completed fiscal half year of the
Acquiring Fund following the date of the audited annual
statements referenced above in accordance with GAAP
consistently applied, and such statements (true and correct
copies of which have been furnished to the Acquired Entity)
present fairly, in all material respects, the financial
condition of the Acquiring Fund, and all known contingent,
accrued or other liabilities of the Acquiring Fund required
to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date are
disclosed therein.
(h) Since the last day of the most recently completed
fiscal year of the Acquiring Fund prior to the date of this
Agreement, there has not been any material adverse change in
the Acquiring Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary
course of business, or any incurrence by the Acquiring Fund
of indebtedness for money borrowed maturing more than one
year from the date such indebtedness was incurred. For the
purposes of this subparagraph (h), a decline in net asset
value per share of Acquiring Fund Shares due to declines in
market values of securities held by the Acquiring Fund, the
discharge of Acquiring Fund liabilities, or the redemption of
Acquiring Fund Shares by shareholders of the Acquiring Fund
shall not constitute a material adverse change.
(i) On the Closing Date, all federal and other tax
returns, dividend reporting forms and other tax-related
reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects,
and all federal and other taxes shown as due or required to
be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment
thereof and, to the best of the Acquiring Entity's knowledge,
no such return is currently under audit and no assessment has
been asserted with respect to such returns.
(j) For each taxable year of its operation (including the
taxable year that includes the Closing Date), the Acquiring
Fund has met (or will meet) the requirements of Subchapter M
of Chapter 1 of the Code for qualification and treatment as a
"regulated investment company," has elected to be treated as
such, and has been (or will be) eligible to compute and has
computed (or will compute) its federal income tax under
Section 852 of the Code, and will have distributed (or will
distribute pursuant to the provisions of Section 855 of the
Code) substantially all of (i) its net tax-exempt income,
(ii) its investment company taxable income (computed without
regard to any deduction for dividends paid) (as defined in
the Code) and (iii) any net capital gain (after reduction for
any capital loss carryover) (as defined in the Code) for
taxable years ending prior to the Closing Date such that for
all those years the Acquiring Fund will have no tax liability
under Section 852 or Section 4982.
(k) All issued and outstanding Acquiring Fund Shares are,
and on the Closing Date will be, duly authorized and validly
and legally issued and outstanding, fully paid and non-
assessable by the Acquiring Entity and will have been offered
and sold in any state, territory or the District of Columbia
in compliance in all material respects with applicable
registration requirements of all applicable federal and state
securities laws. The Acquiring Fund does not have outstanding
any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any Acquiring Fund Shares. All
of the Acquiring Fund Shares to be issued and delivered to
the Acquired Entity, for the account of the Acquired Fund
Shareholders, pursuant to this Agreement, will on the Closing
Date have been duly authorized and, when so issued and
delivered, will be duly and validly and legally issued
Acquiring Fund Shares and be fully paid and non-assessable by
the Acquiring Entity.
(l) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquiring Entity Board, on behalf of the Acquiring Fund,
and this Agreement constitutes a valid and binding obligation
of the Acquiring Entity, on behalf of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights and to general equity principles.
(m) The Proxy Statement to be included in the
Registration Statement, insofar as it relates to the
Acquiring Fund and the Acquiring Fund Shares, from the
effective date of the Registration Statement through the date
of the meeting of shareholders of the Acquired Fund
contemplated therein and on the Closing Date, will (i) not
contain any statement which, at the time and in the light of
the circumstances under which it is made, is false or
misleading with respect to any material fact, or which omits
to state any material fact necessary to make the statements
therein not false or misleading (provided that this
representation and warranty shall not apply to statements in
or omissions from the Proxy Statement made in reliance upon
and in conformity with information that was furnished by the
Acquired Entity for use therein) and (ii) comply in all
material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations
thereunder. The information to be furnished by the Acquiring
Fund for use in registration statements and other documents
filed or to be filed with any federal, state or local
regulatory authority, which may be necessary in connection
with the transactions contemplated hereby, shall be accurate
and complete in all material respects and shall comply in all
material respects with federal securities and other laws and
regulations applicable thereto.
5. COVENANTS
The Acquired Entity, on behalf of the Acquired Fund, and the
Acquiring Entity, on behalf of the Acquiring Fund, respectively,
hereby further covenant as follows:
5.1 The Acquired Fund and the Acquiring Fund each will
operate its business in the ordinary course and shall comply in
all material respects with all applicable laws, rules and
regulations between the date hereof and the Closing Date, it
being understood that such ordinary course of business will
include the declaration and payment of customary dividends and
other distributions, and any other distribution that may be
advisable.
5.2 The Acquired Entity will call and hold a meeting of the
shareholders of the Acquired Fund to consider and act upon this
Agreement and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.3 The Acquiring Fund Shares to be acquired by the Acquired
Fund hereunder are not being acquired for the purpose of making
any distribution thereof, other than in accordance with the
terms of this Agreement.
5.4 The Acquired Entity, on behalf of the Acquired Fund, will
assist the Acquiring Entity in obtaining such information as the
Acquiring Entity reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares.
5.5 Subject to the provisions of this Agreement, the
Acquiring Entity, on behalf of the Acquiring Fund, and the
Acquired Entity, on behalf of the Acquired Fund, each will take,
or cause to be taken, all action, and do or cause to be done,
all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by
this Agreement.
5.6 The Acquiring Entity, on behalf of the Acquiring Fund,
shall prepare and file a Registration Statement on Form N-14 in
compliance with the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations thereunder with respect to the
Reorganization (the "Registration Statement"). The Acquired
Entity, on behalf of the Acquired Fund, will provide to the
Acquiring Entity such information regarding the Acquired Fund as
may be reasonably necessary for the preparation of the
Registration Statement.
5.7 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the Acquired Fund, each
will use its reasonable best efforts to fulfill or obtain the
fulfillment of the conditions precedent to effect the
transactions contemplated by this Agreement as promptly as
practicable.
5.8 The Acquired Entity, on behalf of the Acquired Fund,
will, from time to time, as and when reasonably requested by the
Acquiring Entity, 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 the
Acquiring Entity, on behalf of the Acquiring Fund, may
reasonably deem necessary or desirable in order to vest in and
confirm (a) the Acquired Entity's title to and possession of the
Acquiring Fund Shares to be delivered hereunder and (b) the
Acquiring Entity's title to and possession of all the Assets and
to otherwise to carry out the intent and purpose of this
Agreement.
5.9 The Acquiring Entity, on behalf of the Acquiring Fund,
will use all reasonable efforts to obtain the approvals and
authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in
order to continue its operations after the Closing Date.
5.10 The Acquiring Entity shall not change the Acquiring
Entity Charter, prospectus or statement of additional
information so as to restrict permitted investments for the
Acquiring Fund, except as required by the Commission prior to
the Closing.
5.11 Prior to the Valuation Date, the Acquired Entity Board
shall adopt the valuation procedures of the Acquiring Entity
with respect to the Acquired Fund.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED ENTITY
The obligations of the Acquired Entity, on behalf of the
Acquired Fund, to consummate the transactions provided for
herein shall be subject, at the Acquired Entity's election, to
the following conditions:
6.1 All representations and warranties of the Acquiring
Entity, on behalf of the Acquiring Fund, contained in this
Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing
Date, with the same force and effect as if made on and as of the
Closing Date.
6.2 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have performed all of the covenants and complied with all
of the provisions required by this Agreement to be performed or
complied with by the Acquiring Entity, on behalf of the
Acquiring Fund, on or before the Closing Date.
6.3 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have executed and delivered an assumption of the
Liabilities and all such other agreements and instruments as the
Acquired Entity may reasonably deem necessary or desirable in
order to vest in and confirm (a) the Acquired Fund's title to
and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) the Acquiring Entity's assumption of all of
the Liabilities and to otherwise to carry out the intent and
purpose of this Agreement.
6.4 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have delivered to the Acquired Fund a certificate executed
in the name of the Acquiring Entity on behalf of the Acquiring
Fund, by the Acquiring Entity's President or Vice President and
its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquired Entity and dated as of the Closing
Date, as to the matters set forth in paragraphs 6.1 and 6.2 and
as to such other matters as the Acquired Entity shall reasonably
request.
6.5 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the Acquired Fund, shall
have agreed on the number of full and fractional Acquiring Fund
Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph
1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING ENTITY
The obligations of the Acquiring Entity, on behalf of the
Acquiring Fund, to consummate the transactions provided for
herein shall be subject, at the Acquiring Entity's election, to
the following conditions:
7.1 All representations and warranties of the Acquired
Entity, on behalf of the Acquired Fund, contained in this
Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing
Date, with the same force and effect as if made on and as of the
Closing Date.
7.2 The Acquired Entity, on behalf of the Acquired Fund,
shall have performed all of the covenants and complied with all
of the provisions required by this Agreement to be performed or
complied with by the Acquired Entity, on behalf of the Acquired
Fund, on or before the Closing Date.
7.3 The Acquired Entity shall have delivered to the Acquiring
Entity, on behalf of the Acquiring Fund, a Statement of Assets
and Liabilities of the Acquired Fund as of the Closing Date,
including a schedule of investments, certified by the Treasurer
of the Acquired Entity on behalf of the Acquired Fund. The
Acquired Entity, on behalf of the Acquired Fund, shall have
executed and delivered all such assignments and other
instruments of transfer as the Acquiring Entity may reasonably
deem necessary or desirable in order to vest in and confirm
(a) the Acquired Fund's title to and possession of the Acquiring
Fund Shares to be delivered hereunder and (b) the Acquiring
Fund's title to and possession of all the Assets and to
otherwise to carry out the intent and purpose of this Agreement.
7.4 The Acquired Entity, on behalf of the Acquired Fund,
shall have delivered to the Acquiring Entity a certificate
executed in the name of the Acquired Entity, on behalf of the
Acquired Fund, by the Acquired Entity's President or Vice
President and its Treasurer or Assistant Treasurer, in a form
reasonably satisfactory to the Acquiring Entity and dated as of
the Closing Date, as to the matters set forth in paragraphs 7.1
and 7.2 and as to such other matters as the Acquiring Entity
shall reasonably request.
7.5 The Acquired Entity, on behalf of the Acquired Fund, and
the Acquiring Entity, on behalf of the Acquiring Fund, shall
have agreed on the number of full and fractional Acquiring Fund
Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph
1.1.
8.
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING
ENTITY AND ACQUIRED ENTITY
If any of the conditions set forth below have not been
satisfied on or before the Closing Date with respect to the
Acquired Entity, on behalf of the Acquired Fund, or the
Acquiring Entity, on behalf of the Acquiring Fund, the other
party to this Agreement shall be entitled on behalf of the
Acquired Fund or Acquiring Fund, as applicable, at its option,
to refuse to consummate the transactions contemplated by this
Agreement:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of
the outstanding shares of the Acquired Fund, in accordance with
the provisions of the Acquired Entity Charter, the by-laws of
the Acquired Entity, and Massachusetts law, and certified copies
of the resolutions evidencing such approval shall have been
delivered to the Acquiring Entity. Notwithstanding anything
herein to the contrary, neither the Acquiring Entity nor the
Acquired Entity may waive the condition set forth in this
paragraph 8.1.
8.2 On the Closing Date, no court or governmental agency of
competent jurisdiction shall have issued any order that remains
in effect and that restrains or enjoins the Acquired Entity,
with respect to the Acquired Fund, or the Acquiring Entity, with
respect to the Acquiring Fund, from completing the transactions
contemplated by this Agreement.
8.3 All consents of other parties and all other consents,
orders and permits of federal, state and local regulatory
authorities deemed necessary by the Acquiring Entity or the
Acquired Entity to permit consummation, in all material
respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent,
order or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Fund or the
Acquired Fund, provided that either party hereto may for itself
waive any of such conditions.
8.4 The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending.
8.5 The parties shall have received the opinion of Dechert
LLP, dated the Closing Date, substantially to the effect that,
based upon certain facts, assumptions and representations made
by the Acquired Entity, on behalf of the Acquired Fund, the
Acquiring Entity, on behalf of the Acquiring Fund, and their
respective authorized officers, (i) the transactions
contemplated by this Agreement will constitute a reorganization
within the meaning of Section 368(a) of the Code; (ii) no gain
or loss will be recognized by the Acquiring Fund upon receipt of
the Assets in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Acquired Fund
Liabilities; (iii) the basis in the hands of the Acquiring Fund
in the Assets will be the same as the basis of the Acquired Fund
in the Assets immediately prior to the transfer thereof;
(iv) the holding periods of the Assets in the hands of the
Acquiring Fund will include the periods during which the Assets
were held by the Acquired Fund (except where investment
activities of the Acquiring Fund have the effect of reducing or
eliminating the holding period with respect to an asset); (v) no
gain or loss will be recognized by the Acquired Fund upon the
transfer of the Assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund
of the Acquired Fund Liabilities, or upon the distribution of
the Acquiring Fund Shares by the Acquired Fund to its
shareholders except for gain or loss that may be recognized with
respect to contracts subject to Section 1256 of the Code and/or
stock in a "passive foreign investment company" as defined in
Section 1297(a) of the Code; (vi) no gain or loss will be
recognized by the Acquired Fund shareholders upon the exchange
of their Acquired Fund Shares for the Acquiring Fund Shares;
(vii) the aggregate basis of the Acquiring Fund Shares that each
Acquired Fund shareholder receives in connection with the
transaction will be the same as the aggregate basis of his or
her Acquired Fund Shares exchanged therefor; and (viii) an
Acquired Fund shareholder's holding period for his or her
Acquiring Fund Shares will be determined by including the period
for which he or she held the Acquired Fund Shares exchanged
therefor, provided that he or she held the Acquired Fund Shares
as capital assets. The delivery of such opinion is conditioned
upon the receipt by Dechert LLP of representations it shall
request of the Acquiring Entity and the Acquired Entity.
Notwithstanding anything herein to the contrary, neither the
Acquiring Entity nor the Acquired Entity may waive the condition
set forth in this paragraph 8.5.
8.6 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have received on the Closing Date an opinion of Xxxxxxx
XxXxxxxxx LLP, in a form reasonably satisfactory to the
Acquiring Entity, and dated as of the Closing Date,
substantially to the effect that, based upon certain facts and
certifications made by the Acquired Entity, on behalf of the
Acquired Fund, and its authorized officers: (a) the Acquired
Entity is a corporation existing under the laws of the
Commonwealth of Massachusetts; (b) the Acquired Entity, with
respect to the Acquired Fund, has the power as a business trust
to carry on its business as an open-end investment company
registered under the 1940 Act; (c) this Agreement has been duly
authorized, executed and, so far as known to such counsel,
delivered by the Acquired Entity, on behalf of the Acquired
Fund, and assuming due authorization, execution and delivery of
this Agreement by the Acquiring Entity, on behalf of the
Acquiring Fund, constitutes a valid and legally binding
obligation of the Acquired Entity, on behalf of the Acquired
Fund, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (whether in a proceeding under equity or at law);
provided that such counsel shall be entitled to state that it
expresses no opinion with respect to the validity, binding
effect or enforceability of any contractual provisions
purporting to provide indemnification of any person for any
claims, damages, liabilities or expenses which may be limited by
any applicable federal or state securities laws or as a matter
of public policy; (d) the execution and delivery of this
Agreement did not, and the transfer of the Assets for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the
Liabilities pursuant to this Agreement will not, violate the
Acquired Entity Charter or the by-laws of the Acquired Entity or
any contracts or other documents known to Xxxxxxx XxXxxxxxx LLP
which can affect the rights or obligations of the Acquired
Entity; (e) to the knowledge of such counsel, all regulatory or
court consents, authorizations, approvals, orders or filings
required to be obtained or made by the Acquired Entity, on
behalf of the Acquired Fund, under the federal laws of the
United States or the laws of the State of Maryland for the
transfer of the Assets for Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Liabilities pursuant to
this Agreement have been obtained or made, except such as may be
required under state securities or blue sky laws as to which
such counsel need express no opinion; and (f) to the knowledge
of such counsel, and without any independent investigation,
other than as disclosed on the schedule provided by the Acquired
Entity pursuant to paragraph 4.1 of this Agreement, the Acquired
Fund is not subject to any litigation or administrative
proceeding that could reasonably be expected to have a
materially adverse effect on the operations of the Acquired
Fund. Such opinion may state that it is solely for the benefit
of the Acquiring Entity and the Acquiring Entity Board. Such
opinion may contain such assumptions and limitations as shall be
in the opinion of Xxxxxxx XxXxxxxxx LLP appropriate to render
the opinions expressed therein. Such opinion also shall include
such other matters incident to the transactions contemplated
hereby as the Acquiring Entity, on behalf of the Acquiring Fund,
may reasonably request.
8.7 The Acquired Entity, on behalf of the Acquired Fund,
shall have received on the Closing Date an opinion of Xxxxxxx
Xxxx & Xxxxxxxxx LLP, in a form reasonably satisfactory to the
Acquired Entity, and dated as of the Closing Date, substantially
to the effect that, based upon certain facts and certifications
made by the Acquiring Entity, on behalf of the Acquiring Fund
and its authorized officers: (a) the Acquiring Entity is a
business trust existing under the laws of the Commonwealth of
Massachusetts; (b) the Acquiring Entity, with respect to the
Acquiring Fund, has the power as a business trust to carry on
its business as an open-end investment company registered under
the 1940 Act; (c) this Agreement has been duly authorized,
executed and, so far as is known to such counsel, delivered by
the Acquiring Entity, on behalf of the Acquiring Fund, and
assuming due authorization, execution and delivery of this
Agreement by the Acquired Entity, on behalf of the Acquired
Fund, constitutes a valid and legally binding obligation of the
Acquiring Entity, on behalf of the Acquiring Fund, enforceable
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and laws of general applicability relating to or affecting
creditors' rights and to general equity principles (whether in a
proceeding under equity or at law); provided that such counsel
shall be entitled to state that it expresses no opinion with
respect to the validity, binding effect or enforceability of any
contractual provisions purporting to provide indemnification of
any person for any claims, damages, liabilities or expenses
which may be limited by any applicable federal or state
securities laws or as a matter of public policy; (d) the
execution and delivery of this Agreement did not, and the
issuance of the Acquiring Fund Shares and the assumption of the
Liabilities in exchange for the transfer of the Assets pursuant
to this Agreement will not, violate the Acquiring Entity Charter
or the by-laws of the Acquiring Entity or any contracts or other
documents known to Xxxxxxx Xxxx & Xxxxxxxxx LLP which can affect
the rights and obligations of the Acquiring Entity; (e) to the
knowledge of such counsel, all regulatory or court consents,
authorizations, approvals, orders or filings required to be
obtained or made by the Acquiring Entity, on behalf of the
Acquiring Fund, under the federal laws of the United States or
the laws of the Commonwealth of Massachusetts with respect to
the issuance of the Acquiring Fund Shares and the assumption of
the Liabilities in exchange for the transfer of the Assets
pursuant to this Agreement have been obtained or made, except
such as may be required under state securities or blue sky laws,
as to which such counsel need express no opinion; and (f) to the
knowledge of such counsel, and without any independent
investigation, other than as disclosed on the schedule provided
by the Acquiring Entity pursuant to paragraph 4.2 of this
Agreement, the Acquiring Fund is not subject to any litigation
or administrative proceeding that could reasonably be expected
to have a materially adverse effect on the operations of the
Acquiring Fund. Such opinion may state that it is solely for the
benefit of the Acquired Entity and the Acquired Entity Board.
Such opinion may contain such assumptions and limitations as
shall be in the opinion of Xxxxxxx Xxxx & Xxxxxxxxx LLP
appropriate to render the opinions expressed therein. Such
opinion also shall include such other matters incident to the
transactions contemplated hereby as the Acquired Entity, on
behalf of the Acquired Fund, may reasonably request. With
respect to all matters of Massachusetts law, such counsel shall
be entitled to state that, with the approval of the Acquired
Entity, they have relied on the opinion of Xxxxxxx XxXxxxxxx LLP
and that their opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as
are contained in the opinion of Xxxxxxx XxXxxxxxx LLP.
8.8 The Assets will include no assets which the Acquiring
Fund, by reason of limitations contained in the Acquiring Entity
Charter or in investment restrictions in effect on the Closing
Date, may not properly acquire.
9. INDEMNIFICATION
9.1 The Acquiring Entity, out of the Acquiring Fund's assets
and property (including any amounts paid to the Acquiring Fund
pursuant to any applicable liability insurance policies or
indemnification agreements) agrees to indemnify and hold
harmless the Acquired Entity and the members of the Acquired
Entity Board and its officers from and against any and all
losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which the Acquired Entity
and those board members and officers may become subject, insofar
as such loss, claim, damage, liability or expense (or actions
with respect thereto) arises out of or is based on (a) any
breach by the Acquiring Entity, on behalf of the Acquiring Fund,
of any of its representations, warranties, covenants or
agreements set forth in this Agreement or (b) any act, error,
omission, neglect, misstatement, materially misleading
statement, breach of duty or other act wrongfully done or
attempted to be committed by the Acquiring Entity or the members
of the Acquiring Entity Board or its officers prior to the
Closing Date, provided that such indemnification by the
Acquiring Entity is not (i) in violation of any applicable law
or (ii) otherwise prohibited as a result of any applicable order
or decree issued by any governing regulatory authority or court
of competent jurisdiction.
9.2 The Acquired Entity, out of the Acquired Fund's assets
and property (including any amounts paid to the Acquired Fund
pursuant to any applicable liability insurance policies or
indemnification agreements) agrees to indemnify and hold
harmless the Acquiring Entity and the members of the Acquiring
Entity Board and its officers from and against any and all
losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which the Acquiring Entity
and those board members and officers may become subject, insofar
as such loss, claim, damage, liability or expense (or actions
with respect thereto) arises out of or is based on (a) any
breach by the Acquired Entity, on behalf of the Acquired Fund,
of any of its representations, warranties, covenants or
agreements set forth in this Agreement or (b) any act, error,
omission, neglect, misstatement, materially misleading
statement, breach of duty or other act wrongfully done or
attempted to be committed by the Acquired Entity or the members
of the Acquired Entity Board or its officers prior to the
Closing Date, provided that such indemnification by the Acquired
Entity is not (i) in violation of any applicable law or
(ii) otherwise prohibited as a result of any applicable order or
decree issued by any governing regulatory authority or court of
competent jurisdiction.
10. BROKER FEES AND EXPENSES
10.1 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the 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.
10.2 Xxxx Xxxxx Partners Fund Advisor, LLC will pay the
printing, proxy solicitation, mailing and postage costs of the
Reorganization. Additional costs, including expenses related to
the preparation and filing of the Registration Statement, legal
fees and auditor fees, shall be divided equally between Xxxx
Xxxxx Partners Fund Advisor, LLC, on the one hand, and the
Acquiring Entity and the Acquired Entity, on the other hand.
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.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Acquiring Entity and the Acquired Entity agree that
neither party has made any representation, warranty or covenant,
on behalf of either the Acquiring Fund or the Acquired Fund,
respectively, not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
11.2 The covenants to be performed after the Closing by both
the Acquiring Entity and the Acquired Entity, and the
obligations of the Acquiring Entity, on behalf of the Acquiring
Fund, in Article 9, shall survive the Closing. All other
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 and shall terminate on the
Closing.
12. TERMINATION
This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the
Closing Date by resolution of either the Acquiring Entity Board
or the Acquired Entity Board, if circumstances should develop
that, in the opinion of that Board, make proceeding with the
Agreement inadvisable with respect to the Acquiring Fund or the
Acquired Fund, respectively. Any such termination resolution to
be effective shall be promptly communicated to the other party
and, in any event, prior to the Closing Date.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in
such manner as may be deemed necessary or advisable by the
authorized officers of the Acquired Entity and the Acquiring
Entity; provided, however, that following the meeting of the
Acquired Fund shareholders called by the Acquired Fund 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 Acquired Fund
shareholders under this Agreement to the detriment of such
shareholders without their further approval.
14. 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 (i.e., e-mail),
personal service or prepaid or certified mail addressed to the
Acquiring Entity or the Acquired Entity, at its address set
forth in the preamble to this Agreement, in each case to the
attention of its President.
15.
HEADINGS; COUNTERPARTS; GOVERNING LAW; SEVERABILITY;
ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
15.3 This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of
New York.
15.4 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.
15.5 The Acquiring Entity Charter is on file with the
Secretary of State of the Commonwealth of Massachusetts.
Consistent with the Acquiring Entity Charter, the obligations of
the Acquiring Entity with respect to the Acquiring Fund entered
into in the name or on behalf of the Acquiring Entity by any of
its Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, officers, employees, agents or shareholders
of the Acquiring Entity, personally, but bind only the assets of
the Acquiring Entity belonging to the Acquiring Fund, and all
persons dealing with any series or funds of the Acquiring Entity
must look solely to the assets of the Acquiring Entity belonging
to such series or fund for the enforcement of any claims against
the Acquiring Entity.
15.6 The Acquired Entity Charter is on file with the
Secretary of State of the Commonwealth of Massachusetts.
Consistent with the Acquired Entity Charter, the obligations of
the Acquired Entity with respect to the Acquired Fund entered
into in the name or on behalf of the Acquired Entity by any of
its Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, officers, employees, agents or shareholders
of the Acquired Entity, personally, but bind only the assets of
the Acquired Entity belonging to the Acquired Fund, and all
persons dealing with any series or funds of the Acquired Entity
must look solely to the assets of the Acquired Entity belonging
to such series or fund for the enforcement of any claims against
the Acquired Entity.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officer.
XXXX XXXXX PARTNERS VARIABLE
PORTFOLIOS II, on behalf of its series
XXXX XXXXX PARTNERS VARIABLE
APPRECIATION PORTFOLIO
XXXX XXXXX PARTNERS INVESTMENT SERIES,
on behalf of its series XXXX XXXXX
PARTNERS VARIABLE GROWTH AND INCOME
PORTFOLIO
By:
_________________________________
By:
__________________________________
Name: R. Xxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
Name: R. Xxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
Solely for purposes of paragraph 10.2 of this Agreement:
XXXX XXXXX PARTNERS FUND ADVISOR, LLC
By:
__________________________________________
Name: R. Xxx Xxxxxx
Title: President and Chief Executive
Officer
SCHEDULE 4.1
NONE
SCHEDULE 4.2
NONE
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