AGREEMENT AND ARTICLES OF MERGER
AGREEMENT AND ARTICLES OF MERGER, dated this 14th day of February,
1994, by and between FPA New Income, Inc., a Maryland corporation (hereinafter
called the "Maryland Corporation" or the "Surviving Corporation") and FPA New
Income, Inc., a Delaware corporation (hereinafter called the "Delaware
Corporation"), said corporations sometimes collectively called the "Constituent
Corporations".
WHEREAS, the Maryland Corporation is a corporation duly organized and
validly existing under the laws of the State of Maryland, has authorized capital
stock consisting of 100,000,000 common shares, having a par value of $0.01 per
share, and owns no interest in land in the State of Maryland; and
WHEREAS, the Maryland Corporation is a wholly-owned subsidiary of the
Delaware corporation; and
WHEREAS, the Delaware corporation is a corporation duly organized and
validly existing under the laws of the State of Delaware, has authorized capital
stock consisting of 20,000,000 common shares, having a par value of $1.00 per
share, and owns no interest in land in the State of Maryland; and
WHEREAS, the principal office of the Maryland Corporation in the State
of Maryland is c/o CT Corporation System, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000. Its principal place of business is 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000; and
WHEREAS, the principal office of the Delaware Corporation in the State
of Delaware is c/o The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. Its principal place of business is 00000 Xxxx
Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000; and
WHEREAS, the Board of Directors of each of the Constituent Corporations
has adopted this Agreement and Articles of Merger as a Plan of Reorganization
intended to qualify as such under Section 368(a)(1) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the Constituent Corporations and their
respective Boards of Directors deem it advisable and to the advantage of the
Constituent Corporations and their respective stockholders that the Delaware
Corporation be merged with and into the Maryland Corporation, with the Maryland
Corporation being the Surviving Corporation, under and pursuant to the laws of
the State of Delaware and the State of Maryland on the terms and conditions
herein contained.
NOW, THEREFORE, in consideration of the premises and mutual agreements,
covenants and provisions herein contained, the parties hereto agree to the terms
and conditions of the foregoing merger and the mode of carrying the same into
effect as follows:
ARTICLE I
1.1 The Delaware Corporation and the Maryland Corporation agree that at
the Effective Time of the merger, as defined in Section 1.2 below, the Delaware
Corporation shall be merged with and into the Maryland Corporation, and the
Maryland Corporation shall be the Surviving Corporation and shall be governed by
the laws of the State of Maryland.
1.2 The merger shall become effective at the time and date that the
later of the following two events has occurred: (i) the filing of this Agreement
and Articles of Merger (the "Agreement") with the State Department of
Assessments and Taxation for the State of Maryland in accordance with the
provisions of Section 3-113 of the Maryland General Corporation Law, and (ii)
the acceptance of this Agreement for filing by the Secretary of the State of
Delaware in accordance with Section 252 of the Delaware General Corporation Law.
The date and time when the merger shall become effective are referred to herein
as the "Effective Time".
1.3 The Articles of Incorporation of the Maryland Corporation in effect
immediately prior to the Effective Time shall continue to be the Articles of
Incorporation of the Surviving Corporation, until amended in the manner provided
in the By-Laws and in the Maryland General Corporation Law.
1.4 The By-Laws of the Maryland Corporation in effect immediately prior
to the Effective Time of the merger shall continue to be the By-Laws of the
Surviving Corporation, until amended in the manner provided in the By-Laws and
in the Maryland General Corporation Law.
1.5 The persons who constitute the Board of Directors of the Maryland
Corporation immediately prior to the Effective Time shall constitute the Board
of Directors of the Surviving Corporation and shall hold office until the next
annual meeting of stockholders of the Surviving Corporation or until their
respective successors are elected and qualified, provided that they are elected
by the stockholders of the Delaware Corporation at the 1994 Annual Meeting of
Stockholders of the Delaware Corporation (the "1994 Annual Meeting").
1.6 The persons who serve as the officers of the Maryland Corporation
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until the next annual meeting
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of directors of the Surviving Corporation or until their respective successors
are elected and qualified.
1.7 Ernst & Young, the independent accountants of the Delaware
Corporation immediately prior to the Effective Time, shall serve as independent
accountants to the Surviving Corporation to report upon the financial condition
of the Surviving Corporation for the fiscal year ending September 30, 1994,
provided the appointment of Ernst & Young is approved by the stockholders of the
Delaware Corporation at the 1994 Annual Meeting.
ARTICLE II
2.1 The manner and basis of converting the issued and outstanding
shares of the common stock of the Delaware Corporation into the shares of the
Surviving Corporation shall be as hereinafter set forth in this Article II.
2.2 Each share or fraction thereof of common stock of the Maryland
Corporation issued and outstanding immediately prior to the Effective Time
shall, as of the Effective Time, forthwith cease to exist and be canceled.
2.3 Each share or fraction thereof of common stock of the Delaware
Corporation issued and outstanding immediately prior to the Effective Time shall
thereupon be converted, without any action on the part of the holder thereof,
into an equal number of whole and fractional shares of common stock of the
Surviving Corporation. Each certificate representing shares of the Delaware
Corporation shall represent the same number of shares of the Surviving
Corporation subject to the right of each holder of a stock certificate
representing shares of the Delaware Corporation to surrender the same to the
Surviving Corporation and to receive in exchange therefor a certificate
representing an equal number of shares of common stock of the Surviving
Corporation. Each such share of common stock of the Surviving Corporation issued
pursuant to this paragraph shall be fully paid and non-assessable.
2.4 Any transfer taxes payable upon issuance of shares of common stock
of the Surviving Corporation in a name other than that of the registered holder
of the shares of the Delaware Corporation entitled to receive the same shall be
paid by the person to whom such shares are to be issued.
ARTICLE III
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3.1 At the Effective Time, the separate existence of the Delaware
Corporation shall cease, except to the extent, if any, continued by statute, and
all the assets, rights, privileges, powers and franchises of the Delaware
Corporation and all debts due on whatever account to it, shall be taken and
deemed to be transferred to and vested in the Surviving Corporation without
further act or deed; and all such assets, rights, privileges, powers and
franchises, and all and every other interest of the Delaware Corporation shall
be thereafter effectually the property of the Surviving Corporation as they were
of the Delaware Corporation; and the title to and interest in any real estate
vested by deed, lease or otherwise, unto either of the Constituent Corporations,
shall not revert or be in any way impaired. The Surviving Corporation shall be
responsible for all of the liabilities and obligations of the Delaware
Corporation, but the liabilities of the Constituent Corporations or of their
stockholders, directors, or officers, shall not be affected by this merger, nor
shall the rights of the creditors thereof or any persons dealing with such
corporation or any liens upon the property of such corporations, be impaired by
this merger, and any such claim existing or action or proceeding pending by or
against either Constituent Corporation may be prosecuted to judgment as if this
merger had not taken place, or the Surviving Corporation may be proceeded
against or substituted in place of the Delaware Corporation. Except as otherwise
specifically set forth in this Agreement, the identity, existence, purposes,
powers, franchise, rights, immunities and liabilities of the Maryland
Corporation shall continue unaffected and unimpaired by the merger.
3.2 All corporate accounts, plans, policies, resolutions, approvals,
and authorizations of stockholders, Board of Directors, Committees of the Board
of Directors, and agents of the Delaware Corporation that are in effect
immediately prior to the Effective Time shall be taken for all purposes as the
acts, plans, policies, resolutions, approvals and authorizations of the
Surviving Corporation and shall be as effective and binding thereon as the same
were with respect to the Delaware Corporation.
3.3 In case at any time after the Effective Time the Surviving
Corporation shall determine that any further conveyance, assignment or other
documents or any further action is necessary or desirable to vest in or confirm
to the Surviving Corporation full title to all cash and securities and other
properties, assets, rights, privileges and franchises of the Constituent
Corporations, the officers and directors of the Constituent Corporations, at the
expense of the Surviving Corporation, shall execute and deliver all such
instruments and take all such action as the Surviving Corporation may determine
to be necessary or desirable in order to vest in and confirm to the Surviving
Corporation title to and possession of all such cash and securities and other
properties, assets, rights, privileges and franchises and otherwise to carry out
the purpose of this Agreement.
3.4 The Surviving Corporation hereby (1) agrees that it may be served
with process in the State of Delaware in any proceeding for the enforcement of
any obligation of the Delaware
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Corporation, as well as for the enforcement of any obligation of the Surviving
Corporation arising from the merger herein provided, including any suit or
proceeding to enforce the right, if any, of any stockholder as determined in
appraisal proceedings pursuant to the provisions of Section 262 of the General
Corporation Law of the State of Delaware, (2) irrevocably appoints the Secretary
of State of the State of Delaware as its agent to accept service of process in
any such suit or other proceedings, and (3) specifies the following as the
address to which a copy of such process shall be mailed by the Secretary of
State of Delaware: FPA New Income, Inc., 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Corporate Secretary.
ARTICLE IV
4.1 Each of the Constituent Corporations represents and warrants to and
agrees with the other that:
(a) Such Corporation is duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation
and is, or will be, duly qualified as a foreign corporation in the
State of California.
(b) Such Corporation has full power and authority to carry on
its business as it is presently being conducted and to enter into the
merger contemplated hereby.
(c) There is no suit, action or legal or administrative
proceeding pending, or to its knowledge threatened, against it which,
if adversely determined, might materially and adversely affect its
financial condition or the conduct of its business.
(d) At the Effective Time, consummation of the transactions
contemplated hereby will not result in the breach of, or constitute a
default under, any agreement or instrument by which it is bound.
(e) All of its presently outstanding shares, if any, are
validly issued, fully paid and non-assessable.
(f) Immediately prior to the Effective Time, such Corporation
will have good, marketable and unencumbered title to its cash,
securities and other assets.
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ARTICLE V
5.1 The obligation of each of the Constituent Corporations to
effectuate the merger hereunder shall be subject to the following conditions:
(a) The representations and warranties of each Constituent
Corporation contained herein shall be true as of and at the Effective
Time with the same effect as though made as of and at such date, and
each Constituent Corporation shall have performed all obligations
required by this Agreement to be performed by it prior to the Effective
Time; and each Constituent Corporation shall have delivered to the
other a certificate dated as of the Effective Time signed by its
Chairman, President or Vice President and by its Secretary or Treasurer
to the foregoing effect.
(b) Each Constituent Corporation shall have delivered to the
other a certified copy of the resolutions of its Board of Directors
approving this Agreement, which resolutions shall be adopted by at
least a majority vote of its directors, including a majority of its
directors who are not "interested persons" of the Delaware Corporation
as that term is defined in the Investment Company Act of 1940 (the
"1940 Act").
(c) The Securities and Exchange Commission ("SEC") shall not
have issued an unfavorable advisory report under Section 25(b) of the
1940 Act nor instituted any proceeding seeking to enjoin consummation
of the merger under Section 25(c) of the 1940 Act.
(d) No legal, administrative or other proceedings shall have
been instituted or threatened between the date of this Agreement and
the Effective Time seeking to restrain or otherwise prohibit the
merger.
(e) The holders of a least a majority of the outstanding
shares of common stock of the Delaware Corporation shall have voted in
favor of the adoption of this Agreement and the merger contemplated
hereby at the annual meeting of stockholders, and the holders of the
outstanding shares of the Maryland Corporation shall have approved the
adoption of this Agreement and the merger contemplated hereby by
written consent or at an annual or special meeting of shareholders.
(f) Each Constituent Corporation shall have received an
opinion of counsel, from O'Melveny & Xxxxx, substantially to the effect
that:
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(1) The merger of the Delaware Corporation into the
Maryland Corporation will qualify as a reorganization within the
meaning of Section 368(a)(1) of the Code and each Constituent
Corporation will be a party to the reorganization within the meaning of
Section 368(b) of the Code;
(2) No gain or loss will be recognized to the
Delaware Corporation upon the transfer of its assets to, and assumption
of its liabilities by, the Maryland Corporation;
(3) The basis of the assets of the Delaware
Corporation received by the Maryland Corporation will be the same as
the basis of such assets in the hands of the Delaware Corporation
immediately prior to the merger;
(4) The holding period of the assets of the Delaware
Corporation received by the Maryland Corporation will include the
period during which such assets were held by the Delaware Corporation;
(5) No gain or loss will be recognized by the
Maryland Corporation upon its receipt of the assets of the Delaware
Corporation;
(6) No gain or loss will be recognized by the
stockholders of the Delaware Corporation upon their receipt of common
stock of the Surviving Corporation as a consequence of the merger;
(7) The basis of the shares of common stock of the
Surviving Corporation received by stockholders of the Delaware
Corporation will be the same as the basis of the shares of the Delaware
Corporation surrendered by such stockholders;
(8) The holding period of the shares of common stock
of the Surviving Corporation received by stockholders of the Delaware
Corporation will include the holding period of such shares of common
stock of the Delaware Corporation as are surrendered by such
stockholders provided that such shares of the Delaware Corporation were
held as a capital asset at the Effective Time; and
(9) The accumulated earnings and profits of the
Delaware Corporation will become earnings and profits of the Maryland
Corporation available for the subsequent distribution of dividends
within the meaning of Section 316 of the Code.
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(g) Each Constituent Corporation shall have received an
opinion (or opinions) of counsel in form and substance satisfactory to
it to the effect that:
(1) the corporate existence, good standing and
authorized common stock of each Constituent Corporation are as stated
or referred to in this Agreement;
(2) the shares of common stock of the Surviving
Corporation to be issued pursuant to the terms of this Agreement have
been duly authorized and, when issued and delivered as provided herein,
will have been validly issued, fully paid and non-assessable;
(3) all corporate proceedings required to be taken by
or on the part of each Constituent Corporation to authorize and carry
out this Agreement and to effect the merger contemplated hereby have
been duly and properly taken; and
(4) this Agreement is the legal, valid and binding
obligation of each Constituent Corporation enforceable against it in
accordance with its terms.
ARTICLE VI
6.1 The Maryland Corporation agrees that this Agreement shall be
submitted to its stockholders for approval by unanimous written consent on or
before May 9, 1994, or o such other date as its Board of Directors shall
approve.
6.2 The Delaware Corporation agrees that this Agreement shall be
submitted to its stockholders for approval at a meeting duly called and held on
May 9, 1994, or on such other date as its Board of Directors shall approve. If
this Agreement is adopted by the affirmative vote of a least a majority of the
outstanding shares of common stock of the Delaware Corporation at such meeting
and by the stockholders of the Maryland Corporation pursuant to Section 6.1,
then this Agreement, properly executed and acknowledged and accompanied by such
other certificates or documents as may be required by law, shall (if not
terminated or abandoned pursuant to Article VII hereof) be filed and recorded as
provided under the laws of Delaware and Maryland.
6.3 If the merger contemplated hereby is consummated and made
effective, all expenses incurred by either the Constituent Corporation in
connection with this Agreement shall be paid by the Surviving Corporation. If
such merger is not consummated, each of the Constituent Corporations shall bear
such expenses as have been separately incurred by it. Neither of the Constituent
Corporations
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shall pay the expenses, if any, of its stockholders arising out of the merger.
ARTICLE VII
7.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the merger abandoned at
any time (whether before or after adoption hereof by the stockholders of the
Delaware Corporation) prior to the Effective Time:
(a) by mutual consent of the Constituent Corporations;
(b) by either of the Constituent Corporations if any condition
set forth in Article V hereof has not been fulfilled or waived by it;
or
(c) by either of the Constituent Corporations if the merger
shall not have become effective on or before December 31, 1994.
7.2 An election by a Constituent Corporation to terminate this
Agreement and abandon the merger shall be exercised by its Board of Directors.
7.3 In the event of termination of this Agreement pursuant to the
provisions hereof, the same shall, without any liability on the part of either
of the Constituent Corporations or persons who are its directors, officers, or
stockholders in respect of this Agreement, become void and have no effect,
provided that this provision shall not protect any director or officer of either
of the Constituent Corporations against any liability to such corporation or its
stockholders to which they would otherwise be subject by reason of will
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their office.
7.4 At any time prior to the Effective Time, any of the terms or
conditions of this Agreement may be waived by the Constituent Corporation
entitled to the benefit thereof by action by its Board of Directors or its
President, if, in the judgment of the Board of Directors or President taking
such action, such waiver will not have a material adverse effect on the benefits
intended under this Agreement to the stockholders of the Constituent Corporation
on behalf of which such action is taken.
ARTICLE VIII
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8.1 The respective representations and warranties of the Constituent
Corporations contained in Article IV hereof shall expire with, and be terminated
by, the merger contemplated by this Agreement, and neither the respective
Constituent Corporations nor any of their directors or officers shall be under
any liability with respect to any such representation or warranties after the
Effective Time. This provision shall not protect any director or officer of
either of the Constituent Corporations against any liability to such corporation
or to its stockholders to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office.
ARTICLE IX
9.1 This Agreement embodies the entire agreement between the parties,
and there are no agreements, understandings, restrictions or warranties among
the parties other than those set forth herein or herein provided for.
9.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original but all of such counterparts together
shall constitute but on instrument.
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IN WITNESS WHEREOF, each of the Constituent Corporations has caused
this Agreement and Articles of Merger to be executed on its behalf by its
President or Vice President and attested to by its Secretary or Assistant
Secretary all as of the day and year first written above.
FPA NEW INCOME, INC.
a Delaware corporation
(Corporate Seal)
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx, Secretary
FPA NEW INCOME, INC.
a Maryland corporation
(Corporate Seal)
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx, Secretary
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