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 IV, 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 Multiple
Discipline Portfolio--Balanced All Cap Growth and Value (the Acquiring Fund),
Xxxx Xxxxx Partners Variable Portfolios I, Inc., a Maryland corporation (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 Total Return 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 common stock 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 subsequent distribution of the Acquiring Fund Shares and any of the
remaining properties and assets to the shareholders of the Acquired Fund and
the termination 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 Directors 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, THE SUBSEQUENT DISTRIBUTION OF ACQUIRING FUND SHARES AND THE
TERMINATION 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 Funds 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 Class I
shares and Class II shares of the Acquired Fund correspond to the Class I
shares and Class II shares of the Acquiring Fund, respectively, and the term
Acquiring Fund Shares should be read to include each such class of 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 take such actions necessary to complete the
reorganization of the Acquired Fund. To complete the reorganization, the
Acquired Entity, on behalf of the Acquired Fund, shall (a) distribute to the
latters 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, (b) thereafter, redeem or cancel, as the case may be, shares
of the Acquired Fund in accordance with Maryland law and (c) terminate the
Acquired Fund. Such distribution 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. 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 Funds 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 Funds
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 Funds 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 Funds 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 Funds 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 corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland, with power under
its Articles of Incorporation, 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 corporation 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
Maryland 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 Funds 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 Entitys 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 Funds 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
Funds business or the Acquired Entitys 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 Funds 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 Entitys 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 Entitys 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 Funds 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
Funds business or the Acquiring Entitys 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 Funds 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 Entitys 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
Entitys title to and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) the Acquiring Entitys 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 Entitys 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 Funds
title to and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) the Acquiring Entitys 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 Entitys
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 Entitys 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 Funds title to and possession of the
Acquiring Fund Shares to be delivered hereunder and (b) the Acquiring Funds
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 Entitys
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 Maryland 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 shareholders 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 Xxxxxxx & Xxxxxxxx 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 State of Maryland; (b) the Acquired Entity,
with respect to the Acquired Fund, has the corporate power 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 Xxxxxxx
& Xxxxxxxx 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 Xxxxxxx & Xxxxxxxx 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. With respect to all
matters of Maryland law, such counsel shall be entitled to state that, with
the approval of the Acquiring Entity, they have relied on the opinion of
Xxxxxxx 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 LLP.
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 Funds 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 Funds 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.
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 IV, on behalf of its series
XXXX XXXXX PARTNERS VARIABLE MULTIPLE
DISCIPLINE PORTFOLIO--BALANCED ALL CAP
GROWTH AND VALUE
XXXX XXXXX PARTNERS VARIABLE
PORTFOLIOS I, INC., on behalf of its
series XXXX XXXXX PARTNERS VARIABLE
TOTAL RETURN 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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