Exhibit 77M
AGREEMENT AND ARTICLES OF MERGER
between
Third Avenue Value Fund, Inc.
(a Maryland Corporation)
and
Third Avenue Trust
(a Delaware Business Trust)
AGREEMENT AND ARTICLES OF MERGER, dated as of the 15th day of January, 1997
(hereinafter referred to as the "Agreement"), by and between Third Avenue
Trust, a Delaware business trust having its principal office in Wilmington,
Delaware (hereinafter referred to as "Third Avenue Delaware" or the
"Surviving Trust"), and Third Avenue Value Fund, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (hereinafter
referred to as "Third Avenue Maryland"), said business entities being
hereinafter sometimes collectively referred to as the "Constituent Funds."
BACKGROUND
1.1 Authorized Shares. Third Avenue Delaware is a business trust duly
organized and existing under the laws of the State of Delaware,
having been formed on October 31 , 1996 under Title 12, Delaware
Code, Part V, Chapter 38, the Delaware Business Trust Law (1988), and
has authorized an unlimited number of shares of beneficial interest,
par value $.001 per share.
Third Avenue Delaware has authorized and allocated an unlimited
number of shares of beneficial interest to one series, and may in the
future create additional series of beneficial interest.
Third Avenue Maryland is a corporation duly organized and existing
under the law of the State of Maryland, having been incorporated on
November 27, 1989 under the General Corporation Law of the State of
Maryland, and has authorized capital stock consisting of 200 million
shares of common stock, par value $.001 per share with an aggregate
par value of two million dollars ($2,000,000).
Third Avenue Delaware has one share of beneficial interest issued and
outstanding which is held by Third Avenue Maryland.
1.2 Offices. The principal office of Third Avenue Maryland in the State
of Maryland is located at The Corporation Trust Incorporated, 00
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. The resident agent of Third
Avenue Maryland in the State of Maryland is The Corporation Trust
Incorporated.
The principal office of Third Avenue Delaware in the State of Delaware
is located in C/O The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. The resident agent of Third Avenue
Delaware in the State of Delaware is The Corporation Trust Company.
Neither Third Avenue Maryland nor Third Avenue Delaware own any
interests in real property located in Maryland.
The address and principal place of business of Third Avenue Delaware
and Third Avenue Maryland is 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
1.3 Authorization. The terms and conditions of the transaction set
forth in this Agreement were advised, authorized, and approved by
Third Avenue Maryland in the manner and by the vote required by its
Articles of Incorporation and the laws of the State of Maryland and
by Third Avenue Delaware in the manner and by the vote required by
its Agreement and Declaration of Trust and the laws of the State of
Delaware. The Board of Directors of Third Avenue Maryland and the
Board of Trustees of Third Avenue Delaware have, by resolutions
duly adopted, approved this Agreement and the merger of Third Avenue
Maryland into the Surviving Trust as being advisable and in the best
interests of their respective business entities and shareholders.
The Board of Directors of Third Avenue Maryland and the Board of
Trustees of Third Avenue Delaware directed the submission of this
Agreement to their respective shareholders. Under the terms of the
Merger, as set forth herein, on the Effective Date of the Merger,
Third Avenue Delaware will distribute shares to the shareholders of
Third Avenue Maryland.
The Board of Directors of Third Avenue Maryland and the Board of
Trustees of Third Avenue Delaware have adopted this Agreement as a Plan
of Reorganization intended to qualify as such under the provisions of
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter contained, and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I - THE MERGER
1.1 Third Avenue Maryland and Third Avenue Delaware agree that Third
Avenue Maryland shall be merged into Third Avenue Delaware
(hereinafter the "Merger"). Third Avenue Delaware shall be the
Surviving Trust and shall be governed by the laws of the State of
Delaware. The terms and conditions of the merger and the mode of
carrying the same into effect are as set forth in this Agreement.
1.2 The Agreement and Declaration of Trust of Third Avenue Delaware as it
shall exist on the Effective Date of the Merger (as hereinafter
defined) shall constitute the Agreement and Declaration of Trust of
the Surviving Trust.
1.3 The Bylaws of Third Avenue Delaware as they exist on the Effective
Date of the Merger shall constitute the Bylaws of the Surviving
Trust.
1.4 The Trustees of Third Avenue Delaware on the Effective Date of the
Merger shall constitute the Board of Trustees of Third Avenue
Delaware and shall hold office until their successors are elected and
shall qualify or until their earlier resignation, death or removal.
1.5 Price Waterhouse LLP shall continue as auditors to report upon the
financial statements of the Surviving Trust.
ARTICLE II - CONVERSION OF SHARES AND EXCHANGE RATIO
2.1 Upon the effective date of the Merger, shareholders of Third Avenue
Maryland will receive shares of Third Avenue Delaware in exchange for
their shares in Third Avenue Maryland. The manner and basis of
converting the issued and outstanding shares of the common stock of
Third Avenue Maryland into the shares of beneficial interest of Third
Avenue Delaware shall be as follows:
(a) Immediately following the Effective Date, as defined in
Article III herein, Third Avenue Delaware will establish
open accounts on its stock records for the Initial Series
in the names of the shareholders of record of Third
Avenue Maryland as of the close of business on the
Effective Date and credit to such accounts the exact
number of full and fractional shares of the Initial
Series such shareholder held in Third Avenue Maryland on
the Effective Date. Fractional shares of the Initial
Series will be carried to the third decimal place. On
the Effective Date, the net asset value per share of the
Initial Series shall be deemed to be the same as the net
asset value per share of Third Avenue Maryland. As
promptly as practicable after the Effective Date, each
stockholder of record of Third Avenue Maryland shall be
sent at that stockholder's address of record, a statement
indicating the number of shares of the Initial Series
which have been credited to his or her account.
Simultaneously with the crediting of the shares of the
Initial Series to the shareholders of record of Third
Avenue Maryland, the shares of the Third Avenue Maryland
held by such shareholders shall be canceled.
(b) On the Effective Date, the share of the Initial Series
heretofore held by Third Avenue Maryland shall be redeemed and
canceled by Third Avenue Delaware.
2.2 Each of the shares of beneficial interest of the Initial Series of
Third Avenue Delaware issued and outstanding on the Effective Date of
the Merger shall remain issued and outstanding and unaltered by the
terms of this Agreement.
2.3 On the Effective Date, each share of Third Avenue Maryland which has
been authorized but is unissued and not outstanding, will become a
share of the Initial Series of Third Avenue Delaware.
ARTICLE III - EFFECTIVE DATE OF THE MERGER
3.1 The Merger shall become effective when, subject to the terms and
conditions hereof, the following actions shall have in all respects
been completed:
(i) this Agreement shall have been adopted by the shareholders of
Third Avenue Maryland in accordance with the requirements of
the laws of the State of Maryland, which adoption shall have
been certified thereon by the Secretary or an Assistant
Secretary of Third Avenue Maryland;
(ii) this Agreement, certified as aforesaid, shall have been
executed, acknowledged and filed in accordance with the
requirements of the laws of the State of Maryland;
(iii) this Agreement shall have been approved and adopted by Third
Avenue Delaware in accordance with the requirements of the laws
of the State of Delaware; and
(iv) Third Avenue Maryland, as sole shareholder of Third Avenue
Delaware, shall have elected the Trustees of Third Avenue
Delaware with outstanding shareholders on the record date
relating to approval of the Agreement.
The effective time of the Merger shall be the close of business of
Third Avenue Delaware on the date this Agreement is filed in
accordance with the requirements of the law of the State of Maryland.
The date and time when the Merger shall become effective as aforesaid
is herein referred to as the "Effective Date of the Merger."
3.2 On the Effective Date of the Merger, the separate existence of Third
Avenue Maryland shall cease, except to the extent, if any, continued
by Statute. All the assets, rights, privileges, powers and
franchises of Third Avenue Maryland and all debts due on whatever
account to it, shall be taken and deemed to be transferred to and
vested in Third Avenue Delaware without further act or deed; and all
such assets, rights, privileges, powers and franchises shall be
thereafter as completely the property of Third Avenue Delaware as
they were of Third Avenue Maryland; and the title to and interest in
any real estate vested by deed, lease or otherwise, unto either of
the Constituent Funds, shall not revert or be in any way impaired.
Third Avenue Delaware shall be responsible for all the liabilities
and obligations of Third Avenue Maryland, but the liabilities of the
Constituent Funds or of their shareholders, directors, trustees, or
officers shall not be affected by the Merger, nor shall the right of
the creditors thereof or any persons dealing with such business
entities, or any liens upon the property of such business entities,
be impaired by the Merger, and any claim existing or action or
proceeding pending by or against either of such business entities may
be prosecuted to judgment as if the Merger had not taken place, or
Third Avenue Delaware may be proceeded against or substituted in
place of Third Avenue Maryland. Except as otherwise specifically set
forth in this Agreement, the identity, existence, purposes, powers,
franchise, rights, immunities and liabilities of Third Avenue
Delaware and of Third Avenue Maryland shall continue unaffected and
unimpaired by the Merger. Unless otherwise agreed to by the parties
thereto, all contractual obligations to which Third Avenue Maryland
is subject prior to the merger shall become contractual obligations
of the Initial Series of Third Avenue Delaware.
3.3 Prior to the Effective Date of the Merger, the Constituent Funds
shall take such action as shall be necessary or appropriate in order
to effect the Merger. In case at any time after the Effective Date
of the Merger, Third Avenue Delaware shall determine that any further
conveyance, assignment or other documents or any further action is
necessary or desirable to vest in or confirm to Third Avenue Delaware
full title to all the properties, assets, rights, privileges, and
franchises of the Constituent Funds, the officers, directors and
trustees of the Constituent Funds, at the expense of the Initial
Series of Third Avenue Delaware, shall execute and deliver all such
instruments and take all such action as Third Avenue Delaware may
determine to be necessary or desirable in order to vest in and
confirm to Third Avenue Delaware 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.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
4.1 Each of the Constituent Funds represents and warrants to the other
that:
(a) Such Fund is duly organized and existing in good standing under
the laws of its jurisdiction of incorporation or organization,
respectively.
(b) Such Fund is duly registered as an open-end management company
under the Investment Company Act of 1940 or in the case of Third
Avenue Delaware, will be so registered no later than the
Effective Date of the Merger.
(c) It has full power and authority to carry on its business as it is
presently being conducted and to enter into the Merger.
(d) 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.
(e) At the Effective Date of the Merger, 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.
(f) All of its presently outstanding shares are validly issued, fully
paid and non-assessable.
(g) Immediately prior to the Effective Date of the Merger, Third
Avenue Maryland will have valid and unencumbered title to its
cash, securities, and other assets, if any, except to the extent
the Initial Series consents to taking to the subject to any
encumbrance.
(h) The audited financial statements of Third Avenue Maryland for its
most recent fiscal year, appearing in its registration statement
on Form N-1A, and interim unaudited financial statements, fairly
present the financial position of such Corporation as of the
respective dates indicated thereon, and the results of its
operations and changes in net assets for the respective periods
indicated, in conformity with generally accepted accounting
principles applied on a consistent basis.
ARTICLE V - CONDITIONS
5.1 The obligations of each of the Constituent Funds to consummate the
Merger shall be subject to the following conditions:
(a) The representations and warranties of the other Fund contained
herein shall be true as of and at the Effective Date of the
Merger and with the same effect as though made at such date and
such other Constituent Fund shall have performed all obligations
required by this Agreement to be performed by it prior to the
Effective Date;
(b) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions
as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been
received;
(c) A post-effective amendment to the Registration Statement of Third
Avenue Maryland on Form N-1A under the Securities Act of 1933,
relating to the shares of the Initial Series of Third Avenue
Delaware issuable hereunder, shall have been filed by Third
Avenue Delaware with the Commission and such Registration
Statement shall have become effective, and no stop-order
suspending the effectiveness of the Registration Statement shall
have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission (other than any
such stop-order, proceeding or threatened proceeding which shall
have been withdrawn or terminated);
(d) The Commission shall not have issued an unfavorable advisory
report under Section 25(b) of the Investment Company Act of 1940
nor instituted any proceeding seeking to enjoin consummation of
the reorganization under Section 25(c) of the Investment Company
Act of 1940.
(e) Third Avenue Maryland has mailed to each shareholder of record of
Third Avenue Maryland entitled to vote at the meeting of
shareholders at which action on this Agreement is to be
considered, a Proxy Statement which complies in all material
respects with the applicable provisions of the Federal securities
laws and the rules and regulations thereunder.
(f) Each party shall have received an opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx, New York, New York, to the effect that the
Merger contemplated by this Agreement qualifies as a
"reorganization" under Section 368(a)(1) of the Internal Revenue
Code of 1986, as amended, and as such: (1) no gain or loss will
be recognized by either Constituent Fund or to the shareholders
thereof; (2) the basis of the shares of beneficial interest of
the Initial Series of Third Avenue Delaware received by Third
Avenue Maryland shareholders will be the same as the basis of the
shares of Third Avenue Maryland surrendered in exchange therefor;
and (3) the holding period of the shares of beneficial interest
of the Initial Series of Third Avenue Delaware received by Third
Avenue Maryland shareholders will include the holding period of
Third Avenue Maryland stock surrendered in exchange therefor,
provided that Third Avenue Maryland stock was held as a capital
asset on the date of the exchange.
(g) Each party shall have received an opinion from Skadden, Arps,
Slate, Xxxxxxx & Xxxx or Miles & Stockbridge in form and
substance satisfactory to it, relating to its authority to engage
in the transactions contemplated hereby and to the effect (i)
that this Agreement and the merger contemplated thereby and the
execution thereof have been duly authorized and approved by all
requisite action of Third Avenue Maryland and Third Avenue
Delaware, respectively, and this Agreement has been duly executed
and delivered by Third Avenue Maryland and Third Avenue Delaware,
respectively, and is a legal, valid and binding agreement of each
such party in accordance with its terms; (ii) the shares of
beneficial interest of the Initial Series of Third Avenue
Delaware to be issued pursuant to the terms of this Agreement,
have been duly authorized and, when issued and delivered as
provided in this Agreement, will have been validly issued and
fully paid and will be nonassessable; (iii) Third Avenue Maryland
is duly organized, validly existing and in good standing under
the laws of the State of Maryland and Third Avenue Delaware is
duly organized and validly existing under the laws of the State
of Delaware.
(h) The shares of beneficial interest of the Initial Shares of Third
Avenue Delaware shall have been duly qualified for offering to
the public in those states of the United States and jurisdictions
in which they are presently qualified, so as to permit the
transfers contemplated by this Agreement to be consummated.
(i) The holders of at least a majority of the outstanding shares of
common stock of Third Avenue Maryland shall have voted in favor
of the adoption of this Agreement and the Merger at an annual or
special meeting or any adjournment thereof.
ARTICLE VI - COVENANTS
6.1 Third Avenue Maryland shall distribute all declared but unpaid
dividends to its shareholders prior to the Effective Date of the
Merger.
ARTICLE VII - TERMINATION
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 shareholders of the
Constituent Funds) prior to the Effective Date of the Merger:
(a) by mutual consent of the Constituent Funds; or
(b) on and after January 1, 1997, by either of the Constituent Funds
if any condition set forth in Article V hereof has not been
fulfilled or waived by it.
7.2 An election by a Constituent Fund to terminate this Agreement and
abandon the Merger shall be exercised by a majority vote of its Board
of Directors or Board of Trustees, respectively.
7.3 At any time prior to the filing of this Agreement, any of the terms
or conditions of this Agreement may be waived by the Constituent Fund
entitled to the benefit thereof by action taken by its Board of
Directors or Board of Trustees, respectively, or its President if, in
the good faith judgment of such Board, such waiver will not have a
material adverse effect on the benefits intended under this agreement
to the shareholders of the Constituent Fund on behalf of which such
action is taken.
7.4 The respective representations and warranties of the Constituent Funds
contained in Article IV hereof shall expire with, and be terminated
by, the Merger, and neither the respective Constituent Funds nor any
of their directors or trustees, respectively, or officers shall be
under any liability with respect to any such representations or
warranties after the Effective Date of the Merger. This provision
shall not protect any director or trustee, respectively, or officer
of either of the Constituent Funds against any liability to such Fund
or to its shareholders to which he would otherwise by subject.
ARTICLE VIII - MISCELLANEOUS
8.1 This Agreement constitutes the entire agreement between the parties
and there are no agreements, understandings, restrictions or
warranties between the parties other than those set forth herein or
herein provided for.
8.2 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 one instrument.
IN WITNESS THEREOF, each of the Constituent Funds has caused this
Agreement and Articles of Merger to be executed on its behalf by its
President and its corporate seal to be affixed thereto and attested by its
Secretary all as of the day and year first above written.
Attest: THIRD AVENUE VALUE FUND, INC.
a Maryland corporation
By:
Xxx X. Xxxxxxxxx, Secretary Xxxxxx X. Xxxxxxx, President
Attest: __________________________
a Delaware business trust
By:
Xxx X. Xxxxxxxxx, Secretary Xxxxxx X. Xxxxxxx, President
