AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this 12th
day of December, 2005, by and between The Xxxxxxxx Funds, Inc., a Maryland
corporation ("BFI"), on behalf of the Xxxxxxxx Growth Fund and Xxxxxxxx Focus
Fund, each a series of BFI (each an "Acquired Fund"), and Sentinel Group Funds,
Inc., a Maryland corporation ("SGF"), on behalf of the Sentinel Growth Leaders
Fund and Sentinel Capital Growth Fund, each a series of SGF (each an "Acquiring
Fund"). All agreements, representations, actions and obligations described in
this Agreement made or to be taken or undertaken by any Acquired or Acquiring
Fund are made and shall be taken or undertaken by the SGF on behalf of an
Acquiring Fund and by BFI on behalf of an Acquired Fund. Other than the
Acquiring Funds, no other series of SGF, respectively, is a party to this
Agreement.
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended ("Code"). Each reorganization will consist of the transfer of
all of the assets of an Acquired Fund to the corresponding Acquiring Fund in
exchange solely for Class A shares of the corresponding Acquiring Fund
("Acquiring Fund Shares"), the assumption by an Acquiring Fund of all of the
liabilities of the corresponding Acquired Fund and the distribution of the
Acquiring Fund Shares to the shareholders of the corresponding Acquired Fund in
liquidation of the Acquired Fund, all upon the terms and conditions set forth in
this Agreement. The Acquired Fund and corresponding Acquiring Fund are set forth
below:
ACQUIRED FUND ACQUIRING FUND
Xxxxxxxx Growth Fund Sentinel Capital Growth Fund
Xxxxxxxx Focus Fund Sentinel Growth Leaders Fund
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ACQUIRING FUND SHARES AND THE LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions set forth in this Agreement and
on the basis of the representations and warranties contained in this Agreement,
each Acquired Fund agrees to assign, transfer and convey all of its assets as
set forth in paragraph 1.2 to the corresponding Acquiring Fund, and each
Acquiring Fund agrees in exchange for such assets: (a) to deliver to the
corresponding Acquired Fund that number of full and fractional Acquiring Fund
Shares equal to the number of full and fractional shares of the Acquired Fund
("Acquired Fund Shares") outstanding immediately prior to the Closing (defined
below) at net asset value and (b) to assume the liabilities of the corresponding
Acquired Fund as reflected in paragraph 1.3. Such transactions shall take place
at the Closing.
1.2 (a) The assets of each Acquired Fund to be acquired by the
corresponding Acquiring Fund ("Assets") shall consist of all property and assets
of every kind and nature of the Acquired Fund, including, without limitation,
all cash, cash equivalents, securities, receivables (including interest and
dividend receivables), claims or rights of action, rights to register shares
under applicable securities laws, books and records, any deferred or prepaid
expenses and all other property reflected on an unaudited statement of assets
and liabilities of the Acquired Fund prepared as of the business day immediately
preceding the Closing Date (defined below) by the Acquired Fund's accounting
agent in accordance with generally accepted accounting principles ("GAAP")
consistently applied from the prior audited period ("Closing Balance Sheet"). A
preliminary Closing Balance Sheet shall be delivered to the Acquiring Fund at
least 15 business days prior to the Closing Date. The final Closing Balance
Sheet shall be delivered at Closing.
(b) BFI has provided the Acquiring Fund with a list of each
Acquired Fund's portfolio securities as of the date of execution of this
Agreement. BFI reserves the right to sell any of these securities prior to
Closing. BFI will, within a reasonable time prior to the Closing Date, furnish
each Acquiring Fund with a list of the securities. In the event that the
Acquired Fund holds any investments which the Acquiring Fund may not hold, the
Acquired Fund will dispose of such securities prior to the Closing Date in a
manner that does not jeopardize the federal tax-free nature of each
Reorganization.
1.3 Each Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date, other than those
liabilities and obligations which would otherwise be discharged at a later date
in the ordinary course of business. Each Acquiring Fund shall assume all
liabilities, expenses, costs, charges and reserves of the corresponding Acquired
Fund reflected on the Closing Balance Sheet. Each Acquiring Fund shall also
assume any liabilities, expenses, costs or charges incurred by or on behalf of
the corresponding Acquired Fund specifically arising from or relating to the
operations and/or transactions of the Acquired Fund prior to and including the
Closing Date that are not reflected on the Closing Balance Sheet.
1.4 Immediately upon the issuance and delivery of the one share of each
Acquiring Fund to Sentinel Asset Management, Inc. or an affiliate ("Sentinel")
pursuant to paragraph 7.1 of this Agreement, Sentinel is expected to approve the
investment advisory agreement between Sentinel Advisors Company and the
Acquiring Funds.
1.5 Immediately prior to or contemporaneously with the consummation of
the transactions described in paragraph 1.1, the share of each Acquiring Fund
acquired by Sentinel pursuant to paragraph 7.1 shall be redeemed by each
Acquiring Fund for $1.00. In addition, prior to the transactions described in
paragraph 1.1, each Acquired Fund Shareholder (as defined in paragraph 1.6
below) shall have the right to receive any dividends or other distributions that
were declared prior to the Closing Date with respect to the Acquired Fund Shares
that are held by such Acquired Fund Shareholders on the Closing Date.
1.6 Immediately after the transfer of Assets and delivery of the
Acquiring Fund Shares, each Acquired Fund will distribute to the corresponding
Acquired Fund's shareholders of record ("Acquired Fund Shareholders"),
determined as of the Valuation Time (as defined below), on a pro rata basis, the
Acquiring Fund Shares received by each Acquired Fund in complete liquidation of
each Acquired Fund. Such distribution and liquidation will be accomplished by
Sentinel Administrative Services Company ("SASC"), in its capacity as transfer
agent for each Acquiring Fund, opening accounts on the stock records of each
Acquiring Fund in the names of the corresponding Acquired Fund Shareholders and
transferring to each such Acquired Fund Shareholder account the pro rata number
of Acquiring Fund Shares due each such Acquired Fund Shareholder from the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund. All issued and outstanding shares of each Acquired
Fund will simultaneously be redeemed by that Acquired Fund pursuant to Section
5.8(b) of BFI's Articles of Incorporation and subsequently cancelled. The
Acquiring Fund will not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.7 As soon as practicable after the redemption of Acquired Fund
Shares, BFI shall take all steps necessary to effect its dissolution and to have
its existence terminated in accordance with Maryland General Corporation Law
("MGCL") and other applicable requirements.
1.8 Any reporting responsibility of the Acquired Fund including,
without limitation, the responsibility for filing of regulatory reports, tax
returns, or other documents with the Securities and Exchange Commission
("Commission"), any state securities commission, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund.
1.9 All books and records of each Acquired Fund, including all books
and records required to be maintained under the Investment Company Act of 1940,
as amended ("1940 Act"), and its rules and regulations, shall be available to
the Acquiring Funds from and after the Closing Date and copies of all such books
and records shall be turned over to the Acquiring Funds or its agents as soon as
practicable following the Closing Date.
2. VALUATION
2.1 The value of the Assets to be acquired and the liabilities to be
assumed by each Acquiring Fund shall be computed as of the close of regular
trading on The New York Stock Exchange, Inc. ("NYSE") on the Closing Date
("Valuation Time") after the declaration and payment of any dividends and/or
other distributions on that date, using the Acquired Fund's valuation
procedures.
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2.2 The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Assets shall be equal to the
number of full and fractional Acquired Fund Shares outstanding as of the last
daily determination of each Acquired Fund's net asset value on the last business
day preceding the Closing Date (after giving effect to any issuances or
redemptions of shares of the Acquired Fund prior to or as of such time). Each
Acquired Fund shall not issue any shares or redeem any shares after the last
daily determination of the Acquired Fund's net asset value on the last business
day preceding the Closing Date.
3. CLOSING AND CLOSING DATE
3.1 The Closing shall occur as of March 17, 2006, or such other date as
the parties may mutually agree ("Closing Date"). The Closing shall be held at
the offices of Dechert LLP, or such other place as the parties may agree.
3.2 In the event that immediately prior to the Valuation Time, (a) the
NYSE or another primary trading market for portfolio securities of the Acquired
Funds is closed to trading, or trading is restricted, or (b) trading or
reporting of trading on the NYSE or elsewhere is disrupted so that accurate
appraisal of the value of the net assets of the Acquired Funds is impracticable,
the Closing Date shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have been
restored.
3.3 Each Acquired Fund shall deliver to the corresponding Acquiring
Fund at the Closing a schedule of its investments as of such date and the
Closing Balance Sheet, both of which shall be certified by U.S. Bancorp Fund
Services, LLC ("U.S. Bancorp"), the administrator of the Acquired Fund.
3.4 The Acquired Funds shall cause U.S. Bank, N.A. ("U.S. Bank"),
custodian for the Acquired Funds, to deliver at the Closing a certificate of an
authorized officer stating that (a) the Assets shall have been delivered in
proper form to State Street Bank and Trust Company ("State Street"), custodian
for the Acquiring Funds, prior to or on the Closing Date, and (b) all necessary
taxes in connection with the delivery of Assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. Each Acquired Fund shall cause its portfolio securities
represented by a certificate or other written instrument to be presented by U.S.
Bank to State Street for examination no later than five (5) business days
preceding the Closing Date and transferred and delivered to State Street as of
the Closing Date for the account of the Acquiring Fund duly endorsed in proper
form for transfer in such condition as to constitute good delivery thereof. Each
Acquired Fund's portfolio securities and instruments deposited with a securities
depository, as defined in Rule 17f-4 under the 1940 Act, shall be delivered as
of the Closing Date by book entry in accordance with the customary practices of
such depositories and State Street. The cash to be transferred by the Acquired
Fund shall be delivered by wire transfer of federal funds on the Closing Date.
3.5 The Acquired Funds shall cause U.S. Bancorp, as transfer agent for
the Acquired Funds, to deliver at the Closing a list of the names, addresses and
account histories of the Acquired Fund Shareholders and the number and
percentage ownership of outstanding Acquired Fund Shares owned by each such
shareholder immediately prior to Closing. The Acquiring Fund shall cause its
transfer agent, SASC, to deliver at the Closing a certificate as to the opening
of accounts in the Acquired Fund Shareholders' names on each Acquiring Fund's
share transfer books. Each Acquiring Fund shall issue and deliver a confirmation
evidencing the Acquiring Fund Shares to be credited on the Closing Date to the
corresponding Acquired Fund or provide evidence satisfactory to the Acquired
Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund.
3.6 At the Closing, each party shall deliver to the other such bills of
sale, checks, assignments, stock certificates, receipts and other documents as
the other party, or its counsel, may reasonably request to effect the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUND
BFI, on behalf of the Acquired Funds, represents and warrants to SGF and the
Acquiring Funds:
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4.1 BFI is a corporation duly incorporated and existing under the MGCL
and in good standing with the State Department of Assessments and Taxation of
Maryland ("SDAT"). BFI has the corporate power to own its properties and conduct
its business as a registered investment company. BFI has all necessary federal,
state and local authorizations to own all of its properties and assets and to
carry on its business as it is now being conducted and, subject to approval of
shareholders of each Acquired Fund, to carry out the Agreement. Each Acquired
Fund is a separate series of common stock, par value $0.0001per share, of BFI
duly classified and designated in accordance with the applicable provisions of
BFI's Articles of Incorporation. Each Acquired Fund has all necessary federal,
state and local authorizations to own all of the properties and assets and to
carry on its business as now being conducted.
4.2 BFI is registered with the Commission as an open-end management
investment company under the 1940 Act; such registration has not been revoked or
rescinded and is in full force and effect and the Acquired Fund is in compliance
in all material respects with the 1940 Act and its rules and regulations.
4.3 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by any Acquired Fund of
the transactions contemplated in this Agreement, except such as have been
obtained under the Securities Act of 1933, as amended ("1933 Act"), the
Securities Exchange Act of 1934, as amended ("1934 Act"), and the 1940 Act and
such as may be required by state securities laws or the MGCL.
4.4 Each Acquired Fund is not, and the execution, delivery and
performance of this Agreement by BFI will not result (a) in violation of the
MGCL or of BFI's Articles of Incorporation or Bylaws; (b) in violation or breach
of, or constitute a default under, any material agreement, indenture,
instrument, contract, lease, judgment or other undertaking to which the Acquired
Fund is a party or by which it is bound, and the execution, delivery and
performance of this Agreement by the Acquired Fund will not result in the
acceleration of any obligation, or the imposition of any penalty, under any
material agreement, indenture, instrument, contract, lease, judgment or other
undertaking to which the Acquired Fund is a party or by which it is bound; or
(c) in the creation or imposition of any lien, charge or encumbrance on any
property or assets of the Acquired Fund.
4.5 Except as otherwise designated in writing and accepted by each
Acquiring Fund, all material contracts and other commitments of or applicable to
the Acquired Fund (other than this Agreement) will be terminated, or provision
for discharge of any liabilities of the Acquired Fund will be made, at or prior
to the Closing Date, without the Acquired Fund or the Acquiring Fund incurring
any liability or penalty.
4.6 No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to each Acquired Fund's knowledge, threatened against the Acquired Fund or
any properties or assets held by it. Each Acquired Fund knows of no facts which
might form the basis for the institution of such proceedings that would
materially and adversely affect its business and 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 its business or its ability to
consummate the transactions herein contemplated.
4.7 The Statements of Assets and Liabilities, Operations, and Changes
in Net Assets, the Financial Highlights, and the Investment Portfolio of each
Acquired Fund at and for each of the fiscal years since each Acquired Fund's
inception ended June 30 have been audited by PricewaterhouseCoopers LLP, an
independent registered accounting firm, and are in accordance with GAAP
consistently applied, and such statements (copies of which have been furnished
to each Acquiring Fund) present fairly, in all material respects, the financial
position of the Acquired Fund as of such dates, and there are no known
liabilities of each Acquired Fund as of such dates not disclosed in those
documents.
4.8 Since June 30, 2005, there has not been any material adverse change
in any Acquired Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise disclosed to and
accepted in writing by the corresponding Acquiring Fund.
4.9 All federal and other tax returns and reports of each Acquired Fund
required by law to have been filed by such dates (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 provisions shall have been made for
the payment thereof, and, to the Acquired Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns.
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4.10 For each taxable year of its operation (including the period
ending on the Closing Date), each Acquired Fund has met the requirements of
Subchapter M of the Code for qualification as a regulated investment company and
has elected to be treated as such, and has been eligible to and has computed its
federal income tax under Section 852 of the Code.
4.11 All issued and outstanding shares of each Acquired Fund (a) have
been offered and sold in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws; (b) are,
and on the Closing Date, have been duly authorized and will be validly issued
and outstanding, fully paid and non-assessable and not subject to preemptive or
dissenter's rights under the MGCL; and (c) will be held of record at the time of
the Closing by the persons and in the amounts set forth in the records of US.
Bancorp. Neither Acquired Fund has outstanding any options, warrants or other
rights to subscribe for or purchase any of its shares nor is there outstanding
any security convertible into any of its shares.
4.12 At the Closing Date, each Acquired Fund will have good and
marketable title to the Assets to be transferred to the Acquiring Fund and full
right, power and authority to sell, assign, transfer and deliver such Assets
free of any liens or other encumbrances, except those liens or encumbrances as
to which the corresponding Acquiring Fund has received notice at or prior to the
Closing, and upon delivery and payment for such Assets, the Acquiring Fund will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer of the Assets, including such restrictions as might arise under
the 1933 Act and the 1940 Act, except those restrictions as to which the
Acquiring Fund has received notice at or prior to the Closing.
4.13 The execution, delivery and performance of this Agreement will
have been duly authorized prior to the execution of this Agreement by all
necessary action on the part of the Board of Directors of BFI and, subject to
the approval of the Acquired Fund Shareholders at a special meeting, this
Agreement constitutes a valid and binding obligation of BFI, on behalf of each
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles.
4.14 The current prospectus and statement of additional information of
each Acquired Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and its rules and regulations and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading.
4.15 Insofar as the following relate to each Acquired Fund, the
registration statement filed by each Acquiring Fund on Form N-14 relating to
Acquiring Fund Shares that will be registered with the Commission pursuant to
this Agreement, which without limitation, shall include a proxy statement of
each Acquired Fund and a prospectus and statement of additional information of
each Acquiring Fund with respect to the transactions contemplated by this
Agreement, and any supplement or amendment to the prospectus, and the documents
contained or incorporated into the prospectus or statement of additional
information by reference ("N-14 Registration Statement") will, on the effective
date of the N-14 Registration Statement, through the time of the Special
Meeting, and on the Closing Date, (a) comply in all material respects with the
provisions and regulations of the 1933 Act, 1934 Act and 1940 Act, as
applicable, and (b) not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
are made, not materially misleading; provided, however, that the representations
and warranties in this paragraph shall only apply to statements in or omissions
from the Proxy Statement and the N-14 Registration Statement made in reliance
upon and in conformity with information that was furnished by BFI
4.16 Each Acquired Fund has withheld and paid all federal and other
taxes required to have been withheld and paid and has complied with all
information reporting and backup withholding requirements. No Acquired Fund
anticipates any authority will assess any additional federal or other tax for
any period for which tax returns have been filed. No Acquired Fund has
participated in a "reportable transaction" within the meaning of Treasury Reg.
ss.1.6011-4(b) or a "potentially abusive tax shelter" within the meaning of
Section 6112(b) of the Code.
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4.17 Each Acquired Fund will provide the corresponding Acquiring Fund
with information reasonably necessary for the preparation of the N-14
Registration Statement, in compliance in all material respects with the 1933
Act, the 1934 Act and the 1940 Act.
5. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND
SGF, on behalf of each Acquiring Fund, represents and warrants to BFI
and the Acquired Funds as follows:
5.1 SGF is a corporation incorporated and existing under the MGCL and
in good standing with the SDAT. SGF has the corporate power to own its
properties and conduct its business as a registered investment company. SGF has
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as it is now being conducted
and to carry out this Agreement. Each Acquiring Fund is a separate series of
common stock, par value $0.01 per share, of SGF that will be duly classified and
designated in accordance with the applicable provisions of SGF's Charter. SGF
has all necessary federal, state and local authorizations to own all of the
properties and assets and to carry on its business as now being conducted.
5.2 SGF is registered with the Commission as an open-end management
investment company under the 1940 Act; such registration has not been revoked or
rescinded and is in full force and effect and, as of the Closing Date, each
Acquiring Fund will be in compliance in all material respects with the 1940 Act
and its rules and regulations. The Post-Effective Amendments (defined below)
filed by SGF pursuant to this Agreement will, on the effective date of the
Post-Effective Amendments, comply in all material respects with the 1940 Act and
its rules and regulations.
5.3 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by each Acquiring Fund
of the transactions contemplated in this Agreement, except such as have been
obtained or will be obtained prior to Closing under the 1933 Act, the 1934 Act
and the 1940 Act and such as may be required by state securities laws.
5.4 Each Acquiring Fund is not, and the execution, delivery and
performance of this Agreement by SGF will not result (a) in a violation of the
MGCL or of SGF's Charter or Bylaws; (b) in a violation or breach of, or
constitute a default under, any material agreement, indenture, instrument,
contract, lease, judgment or other undertaking to which the Acquiring Fund is a
party or by which it is bound, and the execution, delivery and performance of
this Agreement by the Acquiring Fund will not result in the acceleration of any
obligation, or the imposition of any penalty, under any material agreement,
indenture, instrument, contract, lease, judgment or other undertaking to which
the Acquiring Fund is a party or by which it is bound; or (c) in the creation or
imposition of any lien, charge or encumbrance on any property or assets of SGF
5.5 Each Acquiring Fund has not commenced operations and will not
commence operations until after the Closing.
5.6 The Acquiring Fund shares to be issued and delivered to each
Acquiring Fund (a) will be offered and sold in compliance in all material
respects with applicable registration requirements of the 1933 Act and state
securities laws and (b) are, and on the Closing Date, have been duly authorized
and will be validly issued and outstanding, fully paid and non-assessable and
not subject to preemptive or dissenter's rights under the MGCL. Neither
Acquiring Fund has outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares, except as described in Section 1.5
of this Agreement, nor is there outstanding any security convertible into any of
its shares.
5.7 The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Board of Directors of SGF and this Agreement constitutes a valid and
binding obligation of SGF, on behalf of each Acquiring Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity principles.
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5.8 The N-14 Registration Statement, other than as it relates to each
Acquired Fund, will, on the effective date of the N-14 Registration Statement,
through the time of the Special Meeting, and on the Closing Date, (a) comply in
all material respects with the provisions and regulations of the 1933 Act, 1934
Act and 1940 Act, and (b) not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements in the N-14 Registration Statement, in light of the circumstances
under which such statements are made, not materially misleading; provided,
however, that the representations and warranties in this paragraph shall only
apply to statements in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information that was furnished by SGF
5.9 Each Acquiring Fund covenants to prepare in compliance with the
1933 Act, the 1934 Act and the 1940 Act the N-14 Registration Statement in
connection with a special meeting of the Acquired Fund Shareholders to consider
approval of this Agreement, including the Investment Advisory Agreement attached
to this Agreement as Annex I, and the transactions contemplated in this
Agreement. The Acquiring Funds will file the N-14 Registration Statement with
the Commission.
6. COVENANTS OF THE ACQUIRING FUNDS AND THE ACQUIRED FUNDS
6.1 Each Acquired Fund covenants to operate its business in the
ordinary course between the date of this Agreement and the Closing Date. It is
understood that such ordinary course of business will include the declaration
and payment of customary dividends and other distributions, the selling and
redeeming of shares of the Acquired Fund and such selling and purchasing of
securities and other changes as are contemplated by the Acquired Fund's normal
operations. No party shall take any action that would, or reasonably would be
expected to, result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect.
6.2 Upon reasonable notice, the Acquiring Funds' officers and agents
shall have reasonable access to the Acquired Funds' books and records necessary
to maintain current knowledge of the Acquired Funds and to ensure that the
representations and warranties made by the Acquired Funds are accurate.
6.3 The Acquired Funds will call a special meeting of the Acquired Fund
Shareholders entitled to vote to consider and act upon this Agreement and to
take all reasonable actions necessary to obtain approval of the transactions
contemplated in this Agreement.
6.4 Each Acquired Fund covenants that the Acquiring Fund Shares to be
issued under this Agreement are not being acquired for the purpose of making any
distribution other than in accordance with the terms of this Agreement.
6.5 Each Acquired Fund covenants that it will assist the corresponding
Acquiring Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Acquired Fund shares.
6.6 Subject to the provisions of this Agreement, the Acquiring Funds
and the Acquired Funds will each take, or cause to be taken, all actions, and do
or cause to be done, all things reasonably necessary, proper, and/or advisable
to consummate and make effective the transactions contemplated by this
Agreement.
6.7 SGF has filed or will file one or more post-effective amendments to
its Registration Statement on Form N-1A ("Post-Effective Amendments") to become
effective on or before the Closing Date to register the Acquiring Funds' capital
stock under the 1933 Act and to amend SGF's Registration Statement under the
0000 Xxx.
6.8 As soon as reasonably practicable after the Closing, each Acquired
Fund shall make a liquidating distribution to its shareholders consisting of the
Acquiring Fund Shares received at the Closing.
6.9 It is the intention of the parties that the transaction will
qualify as a reorganization within the meaning of Section 368(a) of the Code.
Neither BFI, SGF, the Acquired Funds nor the Acquiring Funds shall take any
action, or cause any action to be taken (including, without limitation the
filing of any tax return) that is inconsistent with such treatment or results in
the failure of the transaction to qualify as a reorganization within the meaning
of Section 368(a) of the Code. At or prior to the Closing Date, the parties to
this Agreement will take such action, or cause such action to be taken, as is
reasonably necessary to enable Sidley Xxxxxx Xxxxx & Xxxx LLP to render the tax
opinion contemplated in this Agreement.
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6.10 Each Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act, the
MGCL and such of the state securities laws as may be necessary in order to
continue its operations after the Closing Date.
6.11 Following the transfer of Assets by each Acquired Fund to the
corresponding Acquiring Fund and the assumption of liabilities of each Acquired
Fund in exchange for Acquiring Fund Shares as contemplated in this Agreement,
BFI will file any final regulatory reports, including but not limited to any
Form N-SAR and Rule 24f-2 filings with respect to each Acquired Fund after the
Closing Date but prior to the date of any applicable statutory or regulatory
deadlines and also will take all other steps as are necessary and proper to
effect the de-registration and dissolution of BFI in accordance with the 1933
Act, 1940 Act, the MCGL and other applicable requirements.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS
The obligations of each Acquired Fund to complete the transactions
provided for in this Agreement shall be subject, at its election, to the
performance by the corresponding Acquiring Fund of all the obligations to be
performed by it hereunder on or before the Closing Date, and in addition
thereto, the following further conditions:
7.1 Prior to Closing, the Directors of the Acquiring Funds shall have
authorized the issuance of and each Acquiring Fund shall have issued one share
of each Acquiring Fund to Sentinel in consideration of the payment of $1.00 and
Sentinel shall have voted affirmatively on the matters referred to in paragraph
1.4, above.
7.2 The items that are required to be delivered by each Acquiring Fund
or its agents shall have been delivered to the Acquired Fund or its agents on or
prior to the Closing Date.
7.3 All representations and warranties of SGF, on behalf of each
Acquiring Fund, contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement 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.
7.4 Each Acquiring Fund shall have delivered to the corresponding
Acquired Fund on the Closing Date a certificate executed in its name by an
authorized officer, in a form reasonably satisfactory to the Acquired Fund and
dated as of the Closing Date, to the effect that the representations and
warranties of the Acquiring Fund made in this Agreement are true and correct on
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement.
7.5 Each Acquired Fund shall have received on the Closing Date an
opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel to each Acquiring Fund, in a
form reasonably satisfactory to the corresponding Acquired Fund, and dated as of
the Closing Date, to the effect that:
(a) SGF is a corporation incorporated and existing under the
MGCL and in good standing with the SDAT. SGF has the corporate power to own its
properties and conduct its business as a registered investment company. SGF has
all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as it is now being conducted
and to carry out this Agreement. Each Acquiring Fund is a separate series of
common stock, par value $0.01 per share, of SGF that has been duly classified
and designated in accordance with the applicable provisions of SGF's Charter.
SGF has all necessary federal, state and local authorizations to own all of the
properties and assets and to carry on its business as now being conducted;
(b) SGF is registered with the Commission as an open-end
management investment company under the 1940 Act; such registration has not been
revoked or rescinded and is in full force and effect and each Acquiring Fund is
in compliance in all material respects with the 1940 Act and its rules and
regulations;
(c) To such counsel's knowledge, no consent, approval,
authorization, or order of any court or governmental authority is required for
the consummation by each Acquiring Fund of the transactions contemplated in this
Agreement, except such as have been obtained under the 1933 Act, the 1934 Act
and the 1940 Act and such as may be required by state securities laws;
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(d) The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action on the part of the Board of
Directors of SGF and this Agreement constitutes a valid and binding obligation
of SGF, on behalf of each Acquiring Fund, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles and
(e) To such counsel's actual knowledge, the N-14 Registration
Statement, other than as it relates to each Acquired Fund, (a) complies in all
material respects with the provisions and regulations of the 1933 Act, 1934 Act
and 1940 Act, and (b) does not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements in the N-14 Registration Statement, in light of the
circumstances under which such statements are made, not materially misleading;
provided, however, that the opinion shall only apply to statements in or
omissions from the N-14 Registration Statement made in reliance upon and in
conformity with information that was furnished by SGF.
Such counsel shall be entitled to state that, with the approval of the
Acquired Funds, they have relied upon officers' certificates and certificates of
public officials in rendering their opinion.
7.6 The Board of Directors of SGF shall have approved this Agreement
and the transactions contemplated by it.
7.7 The consummation of the transactions contemplated by the Asset
Purchase Agreement between Xxxxxxxx Capital Management, Inc. and Sentinel Asset
Management, Inc.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUNDS
The obligations of the Acquiring Funds to complete the transactions
provided for herein shall be subject, at its election, to the performance by
each Acquired Fund of all the obligations to be performed by it under this
Agreement on or before the Closing Date, and in addition, the following further
conditions:
8.1 The items that are required to be delivered by the Acquired Funds
or its agents shall have been delivered to the Acquiring Fund on or prior to the
Closing Date.
8.2 All representations and warranties of BFI, on behalf of the
Acquired Funds, contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement 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.
8.3 Each Acquired Fund shall have delivered to the corresponding
Acquiring Fund on the Closing Date a certificate executed in its name by its
President or Vice President, in a form reasonably satisfactory to the Acquiring
Fund and dated as of the Closing Date, to the effect that the representations
and warranties of the Acquired Fund made in this Agreement are true and correct
on and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement.
8.4 Each Acquiring Fund shall have received on the Closing Date an
opinion of Dechert LLP, counsel to BFI, in a form reasonably satisfactory to the
Acquiring Fund, and dated as of the Closing Date, to the effect that:
(a) BFI is a corporation duly incorporated and existing under
the MGCL and in good standing with the State Department of Assessments and
Taxation of Maryland ("SDAT"). BFI has the corporate power to own its properties
and conduct its business as a registered investment company. BFI has all
necessary federal, state and local authorizations to own all of its properties
and assets and to carry on its business as it is now being conducted and to
carry out the Agreement. Each Acquired Fund is a separate series of common
stock, par value $0.0001 per share, of BFI duly classified and designated in
accordance with the applicable provisions of BFI's Articles of Incorporation.
Each Acquired Fund has all necessary federal, state and local authorizations to
own all of the properties and assets and to carry on its business as now being
conducted;
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(b) BFI is registered with the Commission as an open-end
management investment company under the 1940 Act; such registration has not been
revoked or rescinded and is in full force and effect and the Acquired Fund is in
compliance in all material respects with the 1940 Act and its rules and
regulations;
(c) To such counsel's knowledge, no consent, approval,
authorization, or order of any court or governmental authority is required for
the consummation by any Acquired Fund of the transactions contemplated in this
Agreement, except such as have been obtained under the Securities Act of 1933,
as amended ("1933 Act"), the Securities Exchange Act of 1934, as amended ("1934
Act"), and the 1940 Act and such as may be required by state securities laws or
the MGCL;
(d) To such counsel's knowledge, no material litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to each Acquired Fund's knowledge,
threatened against the Acquired Fund or any properties or assets held by it, and
there are no facts that might form the basis for the institution of such
proceedings that would materially and adversely affect its business and 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 its business
or its ability to consummate the transactions herein contemplated and
(e) To such counsel's actual knowledge, insofar as the
following relate to each Acquired Fund, the registration statement filed by each
Acquiring Fund on Form N-14 relating to Acquiring Fund Shares registered with
the Commission pursuant to this Agreement, which without limitation, included a
proxy statement of each Acquired Fund and a prospectus and statement of
additional information of each Acquiring Fund with respect to the transactions
contemplated by this Agreement, and any supplement or amendment to the
prospectus, and the documents contained or incorporated into the prospectus or
statement of additional information by reference ("N-14 Registration Statement")
(a) complies in all material respects with the provisions and regulations of the
1933 Act, 1934 Act and 1940 Act, as applicable, and (b) does not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements are made, not materially misleading;
provided, however, that the opinion shall only apply to statements in or
omissions from the Proxy Statement and the N-14 Registration Statement made in
reliance upon and in conformity with information that was furnished by BFI.
Such counsel shall be entitled to state that, with the approval of the
Acquiring Funds, they have relied upon officers' certificates and certificates
of public officials in rendering their opinion.
8.5 The Board of Directors of BFI shall have approved this Agreement
and the transactions contemplated by this Agreement.
8.6 The consummation of the transactions contemplated by the Asset
Purchase Agreement between Xxxxxxxx Capital Management, Inc. and Sentinel Asset
Management, Inc.
9. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUNDS AND THE
ACQUIRED FUNDS
If any of the conditions set forth below have not been met on or before
the Closing Date with respect to any Acquired Fund or Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
9.1 This Agreement and the transactions contemplated in this Agreement
shall have been approved by the requisite vote of the holders of the outstanding
shares of each Acquired Fund in accordance with the provisions of BFI's Articles
of Incorporation and Bylaws, MGCL and the 1940 Act, and evidence of such
approval shall have been delivered to the corresponding Acquiring Fund.
Notwithstanding anything in this Agreement to the contrary, neither the
Acquiring Funds nor the Acquired Funds may waive the conditions set forth in
this paragraph. The failure by one Acquired Fund to obtain the necessary
approvals shall not affect the rights or obligations of the other Acquired Fund
or corresponding Acquiring Fund under this Agreement.
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9.2 On the Closing Date, no action, suit or other proceeding shall be
pending or to its knowledge threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or obtain material damages or
other relief in connection with, this Agreement or the transactions contemplated
in this Agreement.
9.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities deemed necessary by
the Acquiring Funds or the Acquired Funds to permit consummation, in all
material respects, of the transactions contemplated by this Agreement shall have
been obtained, except where failure to obtain any such consent, order or permit
would not have a material adverse effect on the assets or properties of any
Acquiring Fund or Acquired Fund, provided that either party to this Agreement
may for itself waive any of such conditions.
9.4 The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop orders suspending its effectiveness shall have been
issued and, to the knowledge of the parties to this Agreement, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 0000 Xxx.
9.5 The parties shall have received an opinion of Sidley Xxxxxx Xxxxx &
Xxxx LLP addressed to each of the Acquiring Funds and Acquired Funds, based on
customary representations and assumptions, dated the Closing Date, to the effect
that, on the basis of existing provisions of the Code, current administrative
rules and court decisions, for federal income tax purposes:
(a) the transfer to each Acquiring Fund of the Assets of the
corresponding Acquired Fund in exchange solely for the Acquiring Fund Shares and
the assumption by each Acquiring Fund of all of the liabilities of the
corresponding Acquired Fund, followed by the distribution of such Acquiring Fund
Shares to the Acquired Fund Shareholders in exchange for their shares of the
Acquired Fund, will constitute a "reorganization" within the meaning of Section
368(a) of the Code; and each Acquiring Fund and corresponding Acquired Fund will
each be "a party to a reorganization" within the meaning of Section 368(b) of
the Code;
(b) no gain or loss will be recognized by any Acquired Fund or
Acquiring Fund as a result of the applicable reorganization;
(c) no gain or loss will be recognized by the Acquired Fund
Shareholders upon the exchange of their Acquired Fund shares for Acquiring Fund
Shares in connection with the applicable reorganization;
(d) the basis of the Acquiring Fund Shares, both full and
fractional, received by Acquired Fund shareholders will be the same as the basis
of the corresponding Acquired Fund shares exchanged therefor;
(e) the holding period for Acquiring Fund Shares, both full
and fractional, received by corresponding Acquired Fund Shareholders will
include the holding period for the Acquired Fund Shares exchanged, provided such
Acquired Fund Shares were held as capital assets at the time of the exchange;
(f) the tax basis of the assets of each Acquired Fund in the
hands of the corresponding Acquiring Fund will be the same as the basis and
holding period of such assets immediately prior to the transfer;
(g) the holding period of the assets acquired by each
Acquiring Fund will include the period during which such assets were held by the
corresponding Acquired Fund.
(h) Pursuant to section 381 of the Code and Treasury
Regulations thereunder, each Acquiring Fund will be treated as a mere
continuation of the corresponding Acquired Fund and, as a result, each Acquired
Fund's tax identification number will survive and the tax year of the Acquired
Fund will continue in the name of the corresponding Acquiring Fund; and
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9.6 SGF's Post-Effective Amendments under the 1933 Act and the 1940 Act
shall have been declared effective by the Commission and no stop orders under
the 1933 Act pertaining to them shall have been issued, and all approvals,
registrations, and exemptions under the federal and state laws considered to be
necessary by SGF shall have been obtained.
10. AMENDMENTS, WAIVERS, AND TERMINATION; NON-SURVIVAL OF COVENANTS, WARRANTIES
AND REPRESENTATIONS; GOVERNING LAW
10.1 This Agreement may be amended, modified or supplemented in writing
at any time by mutual consent of both parties to the Agreement, notwithstanding
approval by the Acquired Fund Shareholders, provided that no such amendment
shall have a material adverse effect on the interests of such shareholders
without their further approval.
10.2 At any time prior to the Closing Date, either of the parties may
waive compliance with any of the covenants or conditions made for its benefit
contained in this Agreement.
10.3 This Agreement may be terminated at any time prior to the Closing
Date without liability on the part of either party to this Agreement or its
respective directors, officers or shareholders by either party on notice to the
other.
10.4 The representations, warranties or covenants contained in this
Agreement or in any document delivered pursuant to this Agreement or in
connection with this Agreement shall not survive each reorganization, except
that the covenants to be performed after the Closing shall survive the Closing.
10.5 This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland, without giving effect to principles of
conflict of law.
11. EXPENSES
11.1 Sentinel Advisors Company and/or an affiliate shall be responsible
for all expenses in connection with each reorganization, except that the
Acquired Fund Shareholders will pay their own expenses, if any, incurred in
connection with each reorganization.
11.2 SGF, on behalf of the Acquiring Funds, and BFI, on behalf of the
Acquired Funds, each represents and warrants to the other that there are no
business brokers or finders or other entities entitled to receive any payments
in connection with the transactions provided for in this Agreement. However,
both parties understand and agree that Grail Partners LLP may be due a fee from
Sentinel Advisors Company and/or an affiliate based on the assets of the
Acquiring Funds over a period of time with respect to the transactions
contemplated by the Asset Purchase Agreement between Xxxxxxxx Capital
Management, Inc. and Sentinel Asset Management, Inc.
12. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be delivered by
personal delivery, commercial delivery service or registered or certified mail,
return receipt requested, or sent by telefacsimile, and addressed as follows:
The Xxxxxxxx Funds, Inc.
Xxxxxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Sentinel Group Funds, Inc.
Xxxxx X. Xxxx, Secretary
Xxx Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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13. MISCELLANEOUS
This Agreement supersedes all prior agreements between the parties
(written or oral), is intended as a complete exclusive statement of the terms of
the agreement between the parties and may not be changed or terminated orally.
This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement, and shall become effective when one or
more counterparts have been executed by SGF and BFI and delivered to each of
them. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
person not a party to this Agreement any rights or remedies under or by reason
of this Agreement.
IN WITNESS WHEREOF, each of the parties to this Agreement has caused
this Agreement to be executed by a duly authorized officer as of the date set
forth above.
THE XXXXXXXX FUNDS, INC.
Attest:
By:___________________________________ By:____________________________
Name:
Title:
SENTINEL GROUP FUNDS, INC.
Attest:
By:___________________________________ By:____________________________
Name:
Title:
-13-
Annex I
SENTINEL FUNDS INVESTMENT ADVISORY AGREEMENT
Agreement made as of this first day of March, 1993, by and between
Sentinel Group Funds, Inc., a Maryland corporation and a registered series
investment company under the Investment Company Act of 1940 (hereinafter called
"Funds"), and Sentinel Advisors Company, a Vermont general partnership, and a
registered investment adviser under the Investment Advisers Act of 1940
(hereinafter called "Advisor").
WITNESSETH:
In consideration of the mutual promises and agreements herein contained and
other good and valuable considerations, the receipt of which is hereby
acknowledged, it is hereby agreed by and between the parties hereto as follows:
1. MANAGEMENT OF SECURITIES PORTFOLIOS
Advisor agrees to act as investment adviser to Funds with respect to
the investment of its assets and in general to supervise the investments of
several portfolios of Funds, subject at all times to the direction and control
of the Board of Directors of Funds, all as more fully set forth herein. In
connection therewith, Advisor shall regularly provide investment advice to
Funds, and shall, subject to the succeeding provisions of this section,
continuously supervise the investment and reinvestment of cash, securities or
other property comprising the assets of the several investment portfolios of
Funds, and Advisor shall accordingly:
(a) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic or foreign,
affecting the economy generally, the several portfolios of Funds, the individual
companies whose securities are included in Funds' portfolios, the industries in
which they engage, and securities which Advisor considers may be suitable for
inclusion in any of Funds' portfolios, and regularly report thereon to the Board
of Directors of Funds; and
(b) provide continuously an investment program for each portfolio of
Funds consistent, in its opinion, with the investment policy and objectives for
which such portfolio is designed; and
(c) determine what securities shall be purchased or sold by Funds, and
regularly report thereon to the Board of Directors of Funds; and
(d) take, on behalf of Funds, all actions which appear to Advisor
necessary to carry into effect such investment programs and supervisory
functions as aforesaid including the placing of purchase and sale orders.
Any investment program provided by Advisor under this section, or any
supervisory functions taken hereunder by it shall at all times conform to, and
be in accordance with, any requirements imposed by: the provisions of the
Investment Company Act of 1940 (the "1940 Act"), and any rules or regulations in
force thereunder, any other applicable provision of law, the provisions of the
Articles of Incorporation of Funds as amended from time to time, the provisions
of the By-Laws of Funds as amended from time to time, resolutions as adopted
and/or amended from time to time by the Board of Directors of Funds, and the
terms of the registration statements of Funds, as amended from time to time,
under the Securities Act of 1933 and the 1940 Act.
In furtherance of these duties, Advisor will make its principal
executive officers available as principal executive officers of Funds at no
expense to Funds.
2. FUNDS TO BEAR OTHER EXPENSES
It is understood and agreed that Funds, in addition to the advisory fee
paid to Advisors set forth in Article 3 below, will bear and pay for its
expenses of operation including its (i) rent and office equipment, if any; (ii)
salaries and employee benefits including applicable employment and payroll
taxes, of its own administrative and executive personnel who are not affiliated
with Advisor, if any; (iii) brokerage commissions and other costs in connection
A-1
with the purchase or sale of securities; (iv) all taxes and corporate fees
payable by Funds to federal, state or other governmental agencies; (v) fees and
costs of its transfer agent, fund accounting and financial administration
service provider, custodian, registrar, independent legal counsel and auditors;
(vi) expenses of printing and mailing stock certificates, dividends, reports,
notices and proxy materials to its shareholders; (vii) fees and expenses
incident to the registration and maintenance of registration under the
Securities Act of 1933 of shares of Funds for public sale (other than costs of
printing prospectuses for prospective new shareholders) and the qualification of
its shares for offering and sale under state or other securities laws; (viii)
fees and expenses imposed on Funds under the 1940 Act; (ix) insurance premiums
for fidelity bonds and other coverage to its operations; (x) all expenses
incident to holding of meetings of its shareholders; (xi) fees and expenses of
directors who are not affiliated with Advisor; (xii) its pro rata share of fees
and dues of the Investment Company Institute; and(xiii) such non-recurring
expenses as may arise, including actions, suits or proceedings, affecting Funds
and the legal obligation which Funds may have to indemnify its officers and
directors with respect thereto.
3. COMPENSATION OF ADVISORS
As compensation in full for services rendered under this Agreement,
Funds will pay to Advisor a monthly fee determined as follows:
(1) With respect to all equity funds in the aggregate, other than the
Common Stock Fund:
0.70% per annum on the first $200 million of aggregate daily average net assets
of the equity funds in the aggregate, other than the Common Stock Fund;
0.65% per annum on the next $100 million of such assets;
0.60% per annum on the next $100 million of such assets;
0.55% per annum on such assets in excess of $400 million;
(2) With respect to the Common Stock Fund:
0.55% per annum on the aggregate daily average net assets of the Fund;
(3) With respect to all fixed income funds in the aggregate:
0.55% per annum on the first $200 million of aggregate daily average net assets
of the fixed income funds in the aggregate;
0.50% per annum on the next $200 million of such assets; and
0.45% per annum on such assets in excess of $400 million;
(4) With respect to all money market funds in the aggregate:
0.40% per annum on the first $300 million of daily average net assets of the
money market funds in the aggregate; and
0.35% per annum on such assets in excess of $300 million;
Of the initial portfolios, the Aggressive Growth, Growth, Common Stock,
Balanced, and World Funds shall for purposes of this Agreement, be deemed to be
"equity funds", and the Bond, Government Securities, and Tax-Free Income Funds
shall for purposes of this Agreement, be deemed to be "fixed income funds", and
the 100% U.S. Treasury Money Market Fund shall be a money market fund. New funds
shall be placed into one of the above classifications by agreement of Funds'
Board of Directors and Advisor at the time the new fund becomes subject to this
agreement.
The amounts payable to Advisors shall be based upon the value of the
net assets as of the close of business each day, computed in accordance with the
Articles of Incorporation of Funds. Such amounts shall be prorated among the
several classes of shares of Funds in proportion to their respective daily net
asset values and shall be paid monthly.
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4. GUARANTEE OF EXPENSE LIMITATION
If, for any fiscal year of Funds, expenses (including management fee
and costs incident to its regular and executive personnel, but excluding
interest, taxes, brokerage fees and, where permitted, extraordinary expense)
borne by Funds exceed expense limitations applicable to each class of shares of
Funds which are imposed by state securities regulators as such limitations may
be lowered or raised from time to time, Advisor guarantees that it will
reimburse Funds for any excess. The portion of any such reduction to be borne by
Advisor shall be deducted from the monthly investment advisory fee otherwise
payable to Advisor and, if such amount should exceed such monthly investment
advisory fees, Advisor agrees to repay to Fund annually before publication of
Funds' annual report to shareholders such sum as may be required to make up the
deficiency. For the purpose of this article, the term "fiscal year" shall
include the portion of the then current fiscal year which shall have elapsed at
the date of termination of this Investment Advisory Agreement.
5. PLACING OF PURCHASE AND SALE ORDERS
Advisor shall not deal as principal with Funds in the purchase and sale
of portfolio securities nor shall it receive any commissions or other
remuneration on the purchase or sale of portfolio securities by Funds.
Advisor is authorized and directed to place the orders for the purchase
and sale of portfolio securities by Funds and to supervise the executions
thereof. With respect to such transactions, whether through a broker as agent or
with a dealer as principal, Advisor's primary objective is to both obtain the
best price and execution of each transaction. Such orders may be placed with
qualified brokers and/or dealers who also provide investment information or
other services to Funds. Management shall report to the Directors of Funds at
least quarterly on said allocations of order and on the brokerage commissions
and/or dealer concessions involved, indicating to whom such allocations are made
and the basis thereof.
6. NONEXCLUSIVITY
Advisor's services to Funds hereunder are not to be deemed exclusive
and Advisor shall be free to render similar services to others, so long as its
services hereunder are not impaired thereby.
7. NATIONAL LIFE SERVICES
National Life Insurance Company and its subsidiaries may furnish to
Advisor, in order to better enable it to fulfill its obligations hereunder,
office space, personnel and other services as are requested by Advisor, in all
cases for a reasonable charge. Advisor will present the details of any such
arrangements to the Board of Directors of Funds.
8. AFFILIATIONS OF ADVISOR
It is understood that the directors and officers of Funds may be
directors or officers of Advisor or an entity under common control, including
National Life Insurance Company, Provident Mutual Life Insurance Company of
Philadelphia, or any affiliate of either, or otherwise be interested in Advisor,
and that the existence of such dual interest shall not affect the validity of
this Agreement or any transactions hereunder.
9. LIABILITY OF ADVISOR
In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of obligations or duties hereunder on the part of Advisor, it
shall not be subject to liability to Funds or to any stockholder of Funds for
any act or omission in the course of, or in connection with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
10. DURATION OF THIS AGREEMENT
This Agreement shall become effective upon the date set forth above and
shall continue in force and effect, unless terminated as hereinafter provided,
until November 30, 1993, and from year to year thereafter, provided such
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continuance is specifically approved at least annually by the Board of Directors
of Funds, including specific approval (i) by a majority of the Directors who are
not interested persons of a party to this Agreement (other than as Directors of
Funds) by votes cast in person at a meeting specifically called for such purpose
(Director vote) or (ii) as to each class of the issued and outstanding voting
securities (as defined in Section 2(a)(42) of the 0000 Xxx) of Funds by a vote
of a majority of such class and a Director vote.
11. TERMINATION
This Agreement may be terminated by Advisor at any time without penalty
upon giving Funds sixty (60) days' written notice (which notice may be waived by
Funds) and may be terminated by Funds, in its entirety or as to a specific
series of Funds, at any time without penalty upon giving Advisors sixty (60)
days' written notice (which notice may be waived by Advisor), provided that such
termination by Funds shall be approved by the vote of a majority of the Board of
Directors of Funds in office at the time or by the vote of a majority of the
outstanding voting securities of Funds, if such termination relates to the
investment advisory arrangements for all series of Funds, or by the vote of a
majority of the outstanding voting securities of a specific series of Funds, if
such termination relates to that series only. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for this purpose
having the meaning defined in Section 2(a)(4) of the 1940 Act.
12. NOTIFICATION OF CHANGES IN ADVISOR
Advisor will notify Funds of any change in the identities of the
partners of Advisor within a reasonable time after such change.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their corporate
seals to be hereunder affixed, all as of the day and year first above written.
Attest: SENTINEL GROUP FUNDS, INC.
Attest: SENTINEL ADVISORS COMPANY
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Amendment
The Investment Advisory Agreement by and between Sentinel Group Funds, Inc. and
Sentinel Advisors Company dated March 1, 1993 ("Agreement") is hereby amended as
of December __, 2005 to delete Paragraph 3 "Compensation of Advisors" and
replace it with the following:
"3. COMPENSATION OF ADVISOR
As compensation in full for services rendered under this Agreement,
Funds will pay to Advisor a monthly fee determined as follows:
FUND FEE
Balanced 0.55% per annum on the first $200
million of its average daily net assets; 0.50%
per annum on the next $200 million of such
assets; 0.45% per annum on the next $600
million of such assets; 0.40% per annum on the
next $1 billion of such assets; and 0.35% per
annum on such assets over $2 billion
Common Stock 0.70% per annum on the first $500 million of
the Fund's average daily net assets; 0.65% per
annum on the next $300 million of such assets;
0.60% per annum on the next $200 million of
such assets; 0.50% per annum on the next $1
billion of such assets; and 0.40% of such
assets over $2 billion
Government Securities(1) 0.55% per annum on the first $200 million of
the Fund's average daily net assets; 0.50% per
annum on the next $200 million of such assets;
0.45% per annum on the next $600 million of
such assets; 0.40% per annum on the next $1
billion of such assets; and 0.35% on such
assets in excess of $ 2 billion
International Equity 0.70% per annum on the first $500 million of
the Fund's average daily net assets; 0.65% per
annum on the next $300 million of such assets;
0.60% per annum on the next $200 million of
such assets; 0.50% per annum on the next $1
billion of such assets; and 0.40% of such
assets over $2 billion
Mid Cap Growth 0.70% per annum on the first $500 million of
the Fund's average daily net assets; 0.65% per
annum on the next $300 million of such assets;
0.60% per annum on the next $200 million of
such assets; 0.50% per annum on the next $1
billion of such assets; and 0.40% of such
assets over $2 billion
New York Tax-Free Income(1) 0.55% per annum on the first $200 million of
the Fund's average daily net assets; 0.50% per
annum on the next $200 million of such assets;
and 0.45% per annum on such assets in excess of
$400 million
A-5
FUND FEE
Short Maturity Government(1) 0.55% per annum on the first $200 million of
the Fund's average daily net assets; 0.50% per
annum on the next $200 million of such assets;
0.45% per annum on the next $600 million of
such assets; 0.40% per annum on the next $1
billion of such assets; and 0.35% on such
assets in excess of $ 2 billion
Small Company(1) 0.70% per annum on the first $200 million of
the Fund's average daily net assets; 0.65% per
annum on the next $100 million of such assets;
0.60% per annum on the next $100 million of
such assets; and 0.55% per annum on such assets
in excess of $400 million.
Tax-Free Income(1) 0.55% per annum on the first $200 million of
the Fund's average daily net assets; 0.50% per
annum on the next $200 million of such assets;
and 0.45% per annum on such assets in excess of
$400 million
U.S. Treasury Money Market 0.40% per annum on the first $300 million of
the Fund's average daily net assets; and 0.35%
per annum on such assets in excess of $300
million
(1)When determining the breakpoint for the advisory fee for the Government
Securities Fund, its assets are aggregated with the New York Tax-Free Income,
Short Maturity Government and Tax-Free Income Funds. In determining the
breakpoint for the advisory fee for the New York Tax-Free Income Fund, its
assets are aggregated with the Government Securities, Short Maturity Government
and Tax-Free Income Funds. In determining the breakpoint for the advisory fee
for the Short Maturity Government Fund, its assets are aggregated with the
Government Securities Fund, New York Tax-Free Income and Tax-Free Income Funds.
In determining the breakpoint for the advisory fee for the Small Company Fund,
its assets are aggregated with the Balanced, International Equity and Mid Cap
Growth Funds. In determining the breakpoint for the advisory fee for the
Tax-Free Income Fund, its assets are aggregated with the Government Securities,
New York Tax-Free Income and Short Maturity Government Funds.
The amounts payable to Advisor shall be based upon the value of the net assets
as of the close of business each day. Such amounts shall be prorated among the
several classes of shares of Funds in proportion to their respective daily net
asset values and shall be paid monthly."
The parties have executed this Amendment to the Agreement effective as of the
date first set forth above.
SENTINEL GROUP FUNDS, INC. SENTINEL ADVISORS COMPANY
---------------------------- --------------------------------
Signature Signature
---------------------------- --------------------------------
Name and Title Name and Title
A-6
Amendment
The Investment Advisory Agreement by and between Sentinel Group Funds, Inc. and
Sentinel Advisors Company dated March 1, 1993 ("Agreement") is hereby amended as
of _________ to add the following to Paragraph 3 "Compensation of Advisors":
"3. COMPENSATION OF ADVISOR
As compensation in full for services rendered under this Agreement,
Funds will pay to Advisor a monthly fee determined as follows:
FUND FEE
Capital Growth 0.70% per annum on the first $500 million of
the Fund's average daily net assets; 0.65% per
annum on the next $300 million of such assets;
0.60% per annum on the next $200 million of
such assets; 0.50% per annum on the next $1
billion of such assets; and 0.40% of such
assets over $2 billion
Growth Leaders 0.90% per annum on the first $500 million of
the Fund's average daily net assets; 0.85% per
annum on the next $300 million of such assets;
0.80% per annum on the next $200 million of
such assets; 0.70% per annum on the next $1
billion of such assets; and 0.60% of such
assets over $2 billion
The amounts payable to Advisor shall be based upon the value of the net assets
as of the close of business each day. Such amounts shall be paid monthly."
The parties have executed this Amendment to the Agreement effective as of the
date first set forth above.
SENTINEL GROUP FUNDS, INC. SENTINEL ADVISORS COMPANY
---------------------------- --------------------------------
Signature Signature
---------------------------- --------------------------------
Name and Title Name and Title
A-7
