Sub-Item 77 Q1(g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (Agreement) is made as
of this 3rd day of March, 2010, by and among Aberdeen Funds,a
Delaware statutory trust (the Aberdeen Trust), with its
principal place of business at 0000 Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, on behalf of the following of
its separate series: Aberdeen Asia-Pacific (ex-Japan) Equity
Institutional Fund, Aberdeen International Equity Institutional
Fund, Aberdeen Small Cap Fund and Aberdeen Core Income Fund (each,
an Acquiring Fund), and Pacific Capital Funds, a Massachusetts
business trust (the Pacific Capital Trust), with its principal
place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxx 00000, on behalf of the following of its separate series:
New Asia Growth Fund, International Stock Fund, Small Cap Fund
and High Grade Core Fixed Income Fund (each, an Acquired Fund).
Aberdeen Asset Management Inc. (AAMI), a Delaware corporation,
joins this agreement solely for purposes of paragraphs
1.6, 5.1, 9.2, 14, 16.4, 16.5 and 16.6. The Bank of Hawaii
(BOH), a Hawaii banking corporation, joins this Agreement solely
for purposes of paragraphs 1.6, 5.1, 5.4, 9.2, 14, 16.4, 16.5 and
16.6.
WHEREAS, each Acquired Fund and each Acquiring Fund is a series of
an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the 1940 Act);
WHEREAS, Aberdeen Core Income Fund is an existing series of the
Aberdeen Trust, but has had no assets and has carried on no
business activities prior to the date first shown above and
will have had no assets and will have carried on no business
activities prior to the consummation of the transaction
described herein;
WHEREAS, each of Aberdeen Asia-Pacific (ex-Japan) Equity Institutional
Fund, Aberdeen International Equity Institutional Fund and Aberdeen
Small Cap Fund (each, an Operating Acquiring Fund) is an existing
series of the Aberdeen Trust and has carried on, and will continue
to carry on, the business of an open-end management investment
company registered under the 1940 Act, and has, and will continue to
have, following the consummation of the transaction described herein,
assets consisting primarily of equity securities;
WHEREAS, the following chart shows each Acquiring Fund and its
classes of shares of beneficial interest (no par value) (Acquiring
Fund Shares) and the corresponding Acquired Fund with its classes
of shares of beneficial interest (no par value) (Acquired Fund Shares):
Acquiring Fund, each a series of Corresponding Acquired Fund,
Aberdeen Funds each a series of Pacific Capital
Aberdeen Asia-Pacific (ex-Japan) Funds New Asia Growth Fund
Equity Institutional Fund
Institutional Service Class Class A
Institutional Service Class Class B
Institutional Service Class Class C
Institutional Class Class Y
Aberdeen International Equity International Stock Fund
Institutional Fund
Institutional Service Class Class A
Institutional Service Class Class B
Institutional Service Class Class C
Institutional Class Class Y
Aberdeen Small Cap Fund Small Cap Fund
Class A Class A
Class A Class B
Class C Class C
Institutional Class Class Y
Aberdeen Core Income Fund High Grade Core Fixed Income Fund
Class A Class A
Class A Class B
Class C Class C
Institutional Class Class Y
WHEREAS, throughout this Agreement, the term Acquiring Fund Shares
should be read to include each class of shares of the applicable
Acquiring Fund and each reference to Acquiring Fund Shares in
connection with an Acquired Fund should be read to include each
class of the particular Acquiring Fund that corresponds to the
relevant class of the Acquired Fund;
WHEREAS, this Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)
of the United States Internal Revenue Code of 1986, as amended (Code);
WHEREAS, each reorganization, redomiciliation and liquidation
contemplated hereby will consist of (1) the sale, assignment,
transfer and delivery of all of the property and assets of an
Acquired Fund to the corresponding Acquiring Fund in exchange
solely for the Acquiring Fund Shares as described herein,
(2) the assumption by the Acquiring Fund of all liabilities
of the Acquired Fund, and (3) the distribution of the Acquiring
Fund Shares to the shareholders of the Acquired Fund in complete
liquidation of the Acquired Fund, as provided herein
(Reorganization), all upon the terms and conditions hereinafter
set forth in this Agreement;
WHEREAS, each Acquired Fund owns securities that generally are
assets of the character in which the corresponding Acquiring
Fund is permitted to invest;
WHEREAS, the Board of Trustees of the Aberdeen Trust has determined,
with respect to each Acquiring Fund, that the sale, assignment,
transfer and delivery of all of the property and assets of the
corresponding Acquired Fund for Acquiring Fund Shares and the
assumption of all liabilities of the Acquired Fund by the
Acquiring Fund is in the best interests of the Acquiring Fund
and its shareholders and that the interests of the existing
shareholders of the Acquiring Fund would not be diluted as a
result of this transaction; and
WHEREAS, the Board of Trustees of the Pacific Capital Trust has
determined that the sale, assignment, transfer and delivery of
all of the property and assets of each Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of
each Acquired Fund by the corresponding Acquiring Fund is in the
best interests of the Acquired Fund and its shareholders and that
the interests of the existing shareholders of the Acquired Fund
would not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth and intending to be
legally bound hereby,the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF EACH ACQUIRED FUND TO THE CORRESPONDING
ACQUIRING FUND IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION
OF ALL ACQUIRED FUND LIABILITIES BY THE CORRESPONDING ACQUIRING FUND
AND THE LIQUIDATION OF EACH ACQUIRED FUND
1.1 Subject to the requisite approval of each Acquired Funds
shareholders (Acquired Fund Shareholders) and the other terms and
conditions herein set forth, including paragraph 15.1, and on the
basis of the representations and warranties contained herein, each
Acquired Fund agrees to sell, assign, transfer and deliver all of
its property and assets, as set forth in paragraph 1.2, to the
corresponding Acquiring Fund, and each Acquiring Fund agrees in
exchange therefor:
(i) to deliver to the corresponding Acquired Fund the number of
full and fractional Acquiring Fund Shares of each relevant class
equal in value to the value of each corresponding class of the
corresponding Acquired Fund as of the time and date set forth
in paragraph 3; and
(ii) to assume all liabilities of the Acquired Fund, as set
forth in paragraph 1.2. Transactions described in paragraph
1.1(i) and (ii) shall take place on the date of the closing
provided for in paragraph 3.1
(Closing Date).
1.2. The property and assets of each Acquired Fund to be
acquired by the corresponding Acquiring Fund shall consist of
all assets and property, including, without limitation, all
rights, cash, securities, commodities and futures interests
and dividends or interests receivable that are owned by the
Acquired Fund and any deferred or prepaid expenses shown as
an asset on the books of the Acquired Fund on the Valuation
Date as defined in paragraph 2.1 excluding the estimated costs
of extinguishing any Excluded Liability (as defined below) and
cash in an amount necessary to pay any dividends pursuant
to sub-paragraph 6.3 (collectively, with respect to each
Acquired Fund separately, Assets). Each Acquiring Fund shall
assume only those liabilities, expenses, costs, charges and
reserves reflected on a Statement of Assets and Liabilities of
the corresponding Acquired Fund prepared on behalf of the
Acquired Fund, as of the Valuation Date, in accordance with
generally accepted accounting principles consistently applied
from the prior audited period, except for the Acquired Funds
Excluded Liabilities (as defined below), if any, pursuant to
this Agreement (collectively, with respect to each Acquired Fund
separately, Liabilities).Each Acquiring Fund shall assume only
those Liabilities of the corresponding Acquired Fund reflected
in such Statement of Assets and Liabilities and shall not assume
any other liabilities, whether absolute or contingent, known or
unknown, accrued or unaccrued, all of which shall remain the
obligation of the Acquired Fund. Each Acquired Fund will use its
best efforts to discharge all known Liabilities prior to or at
the Valuation Date (as defined in paragraph 2.1) to the extent
permissible and consistent with its own investment objectives
and policies. If prior to the Closing Date, the Aberdeen Trust
identifies a Liability that the Aberdeen Trust and the Pacific
Capital Trust, on behalf of an Acquired Fund, mutually agree
should not be assumed by the Aberdeen Trust, such Liability shall
be excluded from the definition of Liabilities hereunder and shall
be listed on a Schedule of Excluded Liabilities to be signed by
the Aberdeen Trust and the Pacific Capital Trust at the Closing
(the Excluded Liabilities). Certain Liabilities that would
otherwise be listed as Excluded Liabilities may be assumed by
the Aberdeen Trust on behalf of an Acquiring Fund, on the
condition that the Aberdeen Trust and the relevant Acquiring
Fund be indemnified in writing to their reasonable satisfaction
by BOH or its affiliates against any and all losses, claims,
damages or liability to which the Aberdeen Trust and the
Acquiring Fund may become subject as a result of assuming such
Liability.
1.3. Immediately following the action contemplated by paragraph 1.1,
each Acquired Fund will (a) distribute to its shareholders of record
with respect to each class of Acquired Fund Shares as of the Closing
Date (Acquired Fund Shareholders),on a pro rata basis within that
class, the Acquiring Fund Shares of the corresponding class received
by the Acquired Fund pursuant to paragraph 1.1 and (b) as soon as
reasonably practicable thereafter, completely liquidate. Such
distribution and liquidation will be accomplished, with respect to each
class of Acquired Fund Shares, by the transfer of the corresponding
Acquiring Fund Shares then credited to the account of each Acquired
Fund on the books of the applicable Acquiring Fund to open accounts
on the share records of the applicable Acquiring Fund in the names
of the Acquired Fund Shareholders. An Acquiring Fund shall not issue
certificates representing any class of Acquiring Fund Shares in
connection with such exchange. The aggregate net asset value of each
class of Acquiring Fund Shares to be so credited to each corresponding
class of Acquired Fund Shareholders shall, with respect to each class,
be equal to the aggregate net asset value of the Acquired Fund Shares
of that class owned by Acquired Fund Shareholders on the Valuation
Date.All issued and outstanding Acquired Fund Shares will
simultaneously be redeemed and canceled on the books of the Acquired
Fund. The Acquired Funds will be dissolved in accordance with the
laws of Massachusetts as soon as practicable following the Closing
Date.
1.4. Ownership of Acquiring Fund Shares will be shown on the books of
each Acquiring Funds Transfer Agent, as defined in paragraph 3.3.
1.5. Any reporting responsibility of an Acquired Fund, including, but
not limited to, the responsibility for filing regulatory reports, tax
returns, or other documents with the Securities and Exchange
Commission (Commission), any state securities commission, and any
federal, state or local tax authorities or any other relevant
regulatory authority, is and shall remain the responsibility of the
Acquired Fund.
0.0.Xx least fifteen business days prior to the Valuation Date, BOH,
on behalf of each Acquired Fund, will provide AAMI with a schedule
of the Assets held by such Acquired Fund. At least ten business
days prior to the Valuation Date, AAMI, on behalf of each Acquiring
Fund will advise BOH of any investments of the corresponding
Acquired Fund shown on the Acquired Funds schedule of securities
which such Acquiring Fund would not be permitted to hold (i) under
its investment objective, principal investment strategies or
investment restrictions; (ii) under applicable law; or (iii) because
the transfer of such investments would result in material operational
or administrative difficulties to such Acquiring Fund in connection
with facilitating the orderly transition of such Acquired Funds
Assets.Under such circumstances, to the extent practicable, an
Acquired Fund will, if requested by an Acquiring Fund and, to the
extent permissible and consistent with its own investment objectives
and policies and the fiduciary duties of the investment adviser
responsible for the portfolio management of the Acquired Fund,
dispose of such investments prior to the Valuation Date. In
addition,if it is determined that the portfolios of an Acquired
Fund and the corresponding Acquiring Fund, when aggregated,
would contain investments exceeding certain percentage limitations
to which the Acquiring Fund is or will be subject with respect
to such investments, to the extent practicable, the Acquired
Fund will, if requested by the Acquiring Fund and, to the
extent permissible and consistent with its own investment
objectives and policies and the fiduciary duties of the investment
adviser responsible for the portfolio management of the Acquired
Fund, dispose of and/or reinvest a sufficient amount of such
investments as may be necessary to avoid violating such limitations
as of the Valuation Date. Notwithstanding the foregoing, nothing
herein will require an Acquired Fund to dispose of any Assets,
if, in the reasonable judgment of the Acquired Funds investment
adviser, such disposition would adversely affect the tax-free
nature of the Reorganization for federal income tax purposes or
would otherwise not be in the best interests of the Acquired Fund.
2. VALUATION
2.1 The value of the Assets of each Acquired Fund shall be the
value of such Assets as of the close of business of the New York
Stock Exchange and after the declaration of any dividends on the
business day immediately preceding the Closing Date, or in the case
of High Grade Core Fixed Income Fund on the Closing Date if such
date is a business day (such time and date being hereinafter called
the Valuation Date), computed using the valuation procedures set forth
in the then-current prospectus and statement of additional
information with respect to each Acquiring Fund and the valuation
procedures established by the Aberdeen Trusts Board of Trustees
(such procedures, the Aberdeen Trust Valuation Procedures).
2.2 All computations of value shall be made by Citi Fund Services
Ohio, Inc., in its capacity as sub-administrator for each Acquired
Fund, and shall be subject to review by each Acquiring Funds
sub-administrator, Citi Fund Services Ohio, Inc. or a successor 3
sub-administrator, and by each Acquiring Funds independent
accountants. The Pacific Capital Trust and the Aberdeen Trust
agree to use all commercially reasonable efforts to resolve prior
to the Valuation Date any material pricing differences between the
prices of portfolio securities determined in accordance with the
pricing policies and procedures of an Acquired Fund and those
determined in accordance with the pricing policies and procedures
of its corresponding Acquiring Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date for each Reorganization shall, subject to
paragraph 15.1, be such date as an authorized officer of each of
the parties may agree, subject to the satisfaction or waiver of
the conditions in this Agreement and which date shall in no event be
later than July 20, 2010. All acts taking place at the closing of
the transactions provided for in this Agreement (the Closing) shall,
subject to the satisfaction or waiver of the conditions in this
Agreement, be deemed to take place simultaneously as of immediately
before the opening of business on the Closing Date unless otherwise
agreed to by the parties. The Closing shall be held at the offices
of Xxxxxxx Xxxx & Xxxxxxxxx LLP at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000 or at such other place as an authorized officer
of each of the parties may agree. To the extent any Acquired Funds
Assets are for any reason not transferred on the Closing Date, subject
to paragraph 15.1, such Acquired Fund shall cause such Acquired Funds
Assets to be transferred in accordance with this Agreement at the .
earliest practicable date thereafter.
3.2 The Pacific Capital Trust shall direct The Bank of New York
Mellon, as custodian for the Acquired Fund (Custodian), to
deliver to the Aberdeen Trust, on behalf of each Acquiring Fund,
at the Closing, a certificate of an authorized officer stating
that (i) the Assets of each Acquired Fund have been delivered
in proper form to the corresponding Acquiring Fund within two
business days prior to or on the Closing Date, and (ii) all
necessary taxes in connection withthe delivery of the Assets
of each Acquired Fund, including all applicable federal and
state stock transfer stamps, if any, have been paid or
provision for payment has been made. Each Acquired Funds
portfolio securities represented by a certificate or other
written instrument shall be presented by the Custodian to the
applicable Acquiring Funds custodian. Such presentation
shall be made for examination no later than five business
days preceding the Closing Date, and such certificates and
other written instruments shall be transferred and delivered
by each Acquired Fund as of the Closing Date for the account
of the corresponding Acquiring Fund duly endorsed in proper
form for transfer in such condition as to constitute good
delivery thereof. The Custodian shall deliver to the applicable
Acquiring Funds custodian the Assets of each Acquired Fund as
of the Closing Date by book entry, in accordance with the
customary practices of the Custodian and of each securities
depository, in accordance with Rule 17f-4, Rule 17f-5 or
Rule 17f-7, as the case may be, under the 1940 Act. The cash
to be transferred by each Acquired Fund shall be delivered by
wire transfer of federal funds on the Closing Date.
3.3 The Pacific Capital Trust or its transfer agent (the Transfer
Agent) shall deliver to the Aberdeen Trust, on behalf of each
Acquiring Fund, at the Closing a certificate of an authorized officer
stating that its records contain the name and address of each
Acquired Fund Shareholder and the number and percentage ownership
of each outstanding class of shares owned by each such shareholder
immediately prior to the Closing. The Aberdeen Trust shall deliver
to the Secretary of the Pacific Capital Trust, on behalf of the
corresponding Acquired Fund, a confirmation evidencing that (a)
the appropriate numberof Acquiring Fund Shares have been credited
to the Acquired Funds account on the books of the applicable
Acquiring Fund pursuant to paragraph 1.1 prior to the actions
contemplated by paragraph 1.3, (b) the appropriate number of
Acquiring Fund Shares have been credited to the accounts of the
Acquired Fund Shareholders on the books of the applicable Acquiring
Fund pursuant to paragraph 1.4 and (c) the information set out in
clause (a) and (b) was provided by the Aberdeen Trusts transfer
agent. At the Closing each Acquired Fund shall deliver to the
corresponding Acquiring Fund such bills of sale, checks,
assignments, share certificates, if any,receipts or other documents
as the corresponding Acquiring Fund or its counsel may reasonably
request.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities
of an Acquiring Fund or the corresponding Acquired Fund (each, an
Exchange) shall be closed to trading or trading thereupon shall be
restricted, or (b) trading or the reporting of trading on such
Exchange or elsewhere shall be disrupted so that, in the judgment
of either an appropriate officer of the Aberdeen Trust or an
appropriate officer of the Pacific Capital Trust, accurate appraisal
of the value of the net assets of the Acquired Fund or the
Acquiring Fund is impracticable, the Valuation Date and 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 or such later dates as may be mutually agreed in
writing by an authorized officer of each party.
4 REPRESENTATIONS AND WARRANTIES
4.1. Except as has been fully disclosed to the applicable
corresponding Acquiring Fund prior to the date of this Agreement
in a written instrument executed by an officer of the Pacific
Capital Trust, the Pacific Capital Trust, on behalf of each
Acquired Fund, severally and not jointly, represents and
warrants to the Aberdeen Trust as follows:
(a) Each Acquired Fund is duly organized as a series of the Pacific
Capital Trust, which is a business trust duly organized, validly
existing, and in good standing under the laws of the Commonwealth of
Massachusetts with the power under the Pacific Capital Trusts
Declaration of Trust to own all of its Assets and to carry on its
business as it is now being conducted. Each Acquired Fund is
qualified as a foreign association or business trust in every
jurisdiction where required, except to the extent that failure to
so qualify would not have a material adverse effect on the Acquired
Fund.Each Acquired Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to
carry on its business as now being conducted and to carry out
this Agreement;
(b) The Pacific Capital Trust is a duly registered investment
company classified as a management company of the open-end type,
and its registration with the Commission as an investment company
under the
1940 Act, and the registration of each class of Acquired Fund
Shares under the Securities Act of 1933, as amended (1933 Act),
is in full force and effect with respect to each Acquired Fund;
(c) 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 by this Agreement,
except such as may be required under the 1933 Act, the Securities
Exchange Act of 0000 (xxx 0000 Xxx), the 1940 Act, state securities
or blue sky laws (which term as used herein shall include the laws
of the (District of Columbia and of Puerto Rico) and the
Xxxx-Xxxxx-Xxxxxx Act, which shall have been obtained on or prior
to the Closing Date;
(d) Each Acquired Funds current prospectus and statement
of additional information (collectively, as amended or supplemented
from time to time, the Acquired Fund Prospectus) and current
shareholder reports (true and correct copies of which have been
delivered to the Aberdeen Trust) and each prospectus, statement
of additional information and shareholder report of each Acquired
Fund used during the three years prior to the date of this Agreement
conform or conformed at the time of its use in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and
the rules and regulations of the Commission thereunder and do not
include any untrue statement of a material fact or omit to state
any material fact relating to the Acquired Fund required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially
misleading;
(e) On the Valuation Date, each Acquired Fund will have good and
marketable title to the Assets of the Acquired Fund and full right,
power, and authority to sell, assign, transfer and deliver such
Assets hereunder free of any liens or other encumbrances, and upon
delivery and payment for such Assets, the Aberdeen Trust, on
behalf of each Acquiring Fund, will acquire good and marketable
title thereto, subject to no restrictions on the full transfer
thereof, excluding such restrictions as might arise under the
1933 Act or as disclosed to the Aberdeen Trust;
(f) Each Acquired Fund is not engaged currently, and the
execution, delivery and performance of this Agreement by the
Acquired Fund will not result, in a material violation of the
Pacific Capital Trusts Declaration of Trust or By-Laws or of
any agreement, indenture, instrument, contract, lease or other
undertaking to which the Pacific Capital Trust, on behalf of each
Acquired Fund, is a party or by which it is bound;
(g) The execution, delivery and performance of this Agreement
will not result in the acceleration of any obligation, or the
imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or
decree to which the Pacific Capital Trust, on behalf of each
Acquired Fund, is a party or by which it is bound;
(h) No litigation or administrative proceeding or investigation
of or before any court, governmental body or regulatory agency
is presently pending or, to the PacificCapital Trusts knowledge,
threatened against the Pacific Capital Trust, with respect to
any Acquired Fund or any of the Acquired Funds properties or
assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its
business.
The Pacific Capital Trust, on behalf of each Acquired Fund, knows
of no facts which might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions
of any order, decree or judgment of any court, governmental body or
regulatory agency which materially and adversely affects any Acquired
Funds business or its ability to consummate the transactions herein
contemplated;
(i) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of each
Acquired Fund at July 31, 2009 have been audited by KPMG LLP, an
independent registered public accounting firm, and are in
accordance with accounting principles generally accepted in the
United States of America (GAAP) consistently applied, and such
statements (copies of which have been furnished to the applicable
Acquiring Fund) present fairly, in all material respects, the
financial condition of the Acquired Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities
of the Acquired Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
(j) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of each
Acquired Fund at January 31, 2010 (unaudited) are, or will be when
sent to Acquired Fund Shareholders in the regular course, in
accordance with GAAP consistently applied, and such statements
(copies of which have been, or will be, furnished to the Aberdeen
Trust) present or will present fairly, in all material respects, the
financial condition of the Acquired Fund as of such date in accordance
with GAAP, including all known contingent liabilities of the Acquired
Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date;
(k) Since July 31, 2009, there has not been any material adverse
change in any Acquired Funds financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred. For the purposes of this subparagraph (k), a decline in net
asset value per share of Acquired Fund Shares due to declines in
market values of securities held by the Acquired Fund, the
discharge of Acquired Fund liabilities, or the redemption of
Acquired Fund Shares by shareholders of the Acquired Fund shall
not constitute a material adverse change;
(l) On the Closing Date, all federal and other tax returns, dividend
reporting forms, and other tax-related reports of each Acquired Fund
required by law to have been filed by such date (including any
extensions) shall have been filed and are or will be correct in all
material respects, and all federal and other taxes shown as due or
required to be shown as due on said returns and reports shall have
been paid or provision shall have been made for the payment thereof
and, to the Acquired Funds knowledge, no such return is currently
under audit; no assessment has been asserted with respect to such
returns; and there are no levies, liens or other encumbrances related
to taxes existing or known to the Acquired Fund to be threatened or
pending with respect to the Assets of the Acquired Fund;
(m) For each taxable year of its operation (including, with respect
to each of New Asia Growth Fund, International Stock Fund and Small
Cap Fund, the taxable year on the Closing Date, and with respect to
High Grade Core Fixed Income Fund, the portion of its taxable year
ending July 31, 2010 that has transpired up until and including the
Closing Date), each Acquired Fund has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to and
has computed (or will compute) its federal income tax under Section
852 of the Code and will have declared a dividend or dividends prior
to or as of the Valuation Date that, together with all previous
dividends, shall have the effect of distributing to its shareholders
all of its investment company taxable income (determined without
regard to the dividends paid deduction) and all of its net capital
gain, if any, for the period from the close of its last fiscal year
to the close of business on the Closing Date and for any prior period;
(n) All issued and outstanding Acquired Fund Shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the applicable Acquired Fund and have
been offered and sold in every state, territory and the District of
Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and applicable state
securities laws. All of the issued and outstanding Acquired Fund
Shares will, at the time of Closing, be held of record by the
persons and in the amounts set forth in the records of the Transfer
Agent, on behalf of the applicable Acquired Fund, as provided in
paragraph 3.3. Each Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any
of the Acquired Fund Shares, nor is there outstanding any security
convertible into any of the Acquired Fund Shares, other than (i)
rights of reinvestment of dividends and capital gains distributions
of the Acquired Fund and (ii) rights of exchange of shares of the
other series of the Pacific Capital Trust into shares of the
Acquired Fund;
(o) The execution, delivery and performance of this Agreement, and
the transactions contemplated herein, have been duly authorized by
all necessary action, if any, on the part of the Trustees of the
Pacific Capital Trust, on behalf of each Acquired Fund, and, subject
to the approval of the Acquired Fund Shareholders, this Agreement
constitutes a valid and binding obligation of each Acquired Fund,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors rights and to general equity
principles;
(p) The information relating to each Acquired Fund furnished by the
Acquired Fund for use in registration statements, proxy materials
and other documents filed or to be filed with any federal, state or
local regulatory or self-regulatory authority that are necessary in
connection with the transactions contemplated hereby is and will be
accurate and complete in all material respects and will comply in all
material respects with federal securities laws and regulations
thereunder applicable thereto;
(q) As of the date of this Agreement, each Acquired Fund has provided
the Aberdeen Trust with information relating to the Acquired Fund
reasonably necessary for the preparation of a prospectus, including
the proxy statement of the Acquired Fund (the Prospectus/Proxy
Statement), to be included in a Registration Statement on Form N-14
of the Aberdeen Trust (the Registration Statement), in compliance
with the 1933 Act, the 1934 Act and the 1940 Act in connection with
the meeting of shareholders of the Acquired Fund to approve this
Agreement and the transactions contemplated hereby. As of the
effective date of the Registration Statement, the date of the meeting
of shareholders of each Acquired Fund and the Closing Date, such
information provided by any Acquired Fund will 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 were made, not
materially misleading; provided, however, that the representations
and warranties in this subparagraph (q) shall not apply to statements
in or omissions from the Prospectus/Proxy Statement made in reliance
upon and in conformity with information that was furnished by the
Aberdeen Trust or an Acquiring Fund for use therein;
(r) There are no material contracts outstanding to which an Acquired
Fund is a party, other than as disclosed in the Acquired Fund
Prospectus or in the Registration Statement;
(s) There have been no miscalculations of the net asset value of an
Acquired Fund or the net asset value per share of any class or series
of shares during the twelve-month period preceding the date hereof
that have not been remedied in accordance with industry practice which,
individually or in the aggregate, would have a material adverse effect
on such Acquired Fund or its Assets, and all such calculations have
been made in accordance with the applicable provisions of the 1940
Act;
(t) The minute books and other similar records of the Pacific Capital
Trust as made available to the Aberdeen Trust prior to the execution
of this Agreement contain a true and complete record in all material
respects of all actions taken at all meetings and by all written
consents in lieu of meetings of the shareholders and of its Board of
Trustees and any committees of the Board of Trustees. The stock
transfer ledgers and other similar records of an Acquired Fund as
made available to the Aberdeen Trust prior to the execution of this
Agreement accurately reflect all record transfers prior to the
execution of this Agreement in the shares of the Acquired Fund.
Any other books and records of an Acquired Fund as made available to
the Aberdeen Trust are true and correct in all material respects and
contain no material omissions with respect to the business and
operations of the Acquired Fund.
(u) The Pacific Capital Trust and each Acquired Fund have maintained,
or caused to be maintained on its behalf, in all material respects,
all books and records required of a registered investment company in
compliance with the requirements of Section 31 of the 1940 Act and
rules thereunder and such books and records are true and correct in
all material respects;
(v) The Pacific Capital Trust has adopted and implemented written
policies and procedures in accordance with Rule 38a-1 under the 1940
Act relating to the Acquired Funds;
(w) No Acquired Fund has any unamortized or unpaid organizational
fees or expenses;
(x) The Pacific Capital Trust represents that the Acquiring Fund
Shares to be issued hereunder are not being acquired for the purpose
of making any distribution thereof, other than as contemplated by
this Agreement; and
(y) Each Acquired Funds investment operations from inception to the
date hereof have been in compliance in all material respects with the
investment policies and investment restrictions set forth in each
Acquired Funds prospectus, except as previously disclosed in writing
to and accepted by the applicable Acquiring Fund.
4.2. Except as has been fully disclosed to the applicable
corresponding Acquired Fund prior to the date of this Agreement in a
written instrument executed by an officer of the Aberdeen Trust, the
Aberdeen Trust, on behalf of each Acquiring Fund, severally and not
jointly, represents and warrants to the Pacific Capital Trust as
follows:
(a) Each Acquiring Fund is duly organized as a series of the
Aberdeen Trust, which is a statutory trust duly organized,
validly existing, and in good standing under the laws of the State
of Delaware with the power under the Aberdeen Trusts Agreement and
Declaration of Trust to own all of its properties and assets and to
carry on its business as contemplated by this Agreement. Each
Acquiring Fund is qualified as a foreign association or business
trust in every jurisdiction where required, except to the extent
that failure to so qualify would not have a material adverse effect
on the Acquiring Fund. Each Acquiring Fund has all necessary federal,
state and local authorizations to own all of its properties and assets
and to carry on its business as now being conducted and to carry out
this Agreement;
(b) The Aberdeen Trust is a duly registered investment company
classified as a management company of the open-end type, and its
registration with the Commission as an investment company under
the 1940 Act and the registration of each class of Acquiring Fund
Shares under the 1933 Act is in full effect with respect to each
Acquiring Fund and will be in full force and effect with respect
to each Acquiring Fund as of the Closing Date;
(c) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by any
Acquiring Fund of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the 1934 Act, the
1940 Act, state securities or blue sky laws (which term as used
herein shall include the laws of the District of Columbia and of
(Puerto Rico) and the Xxxx-Xxxxx-Xxxxxx Act, which shall have been
obtained on or prior to the Closing Date;
(d) Each Acquiring Funds current prospectus and statement of
additional information (collectively, as amended or supplemented from
time to time, the Acquiring Fund Prospectus) and current
shareholder reports (true and correct copies of which have been
delivered to Pacific Capital Trust) conform or conformed at the time
of its use in all material respects to the applicable requirements of
the 1933 Act and the 1940 Act and the rules and regulations of the
Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact relating to the
Acquiring Fund required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not materially misleading;
(e) On the Valuation Date and the Closing Date, each Acquiring Fund
will have good and marketable title to its assets, free and clear of
any liens or other encumbrances, except those liens or encumbrances as
to which the Acquiring Fund has received notice and documentation
prior to the Closing Date;
(f) Each Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Agreement by the Acquiring Fund will
not result, in a material violation of the Aberdeen Trusts Agreement
and Declaration of Trust or By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which the Aberdeen
Trust, on behalf of each Acquiring Fund, is a party or by which it is
bound;
(g) The execution, delivery and performance of this Agreement will
not result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Aberdeen Trust, on behalf of
each Acquiring Fund, is a party or by which it is bound;
(h) No litigation or administrative proceeding or investigation of or
before any court, governmental body or regulatory agency is presently
pending or, to the Aberdeen Trusts knowledge, threatened against the
Aberdeen Trust, with respect to any Acquiring Fund or any of the
Acquiring Funds properties or assets, that, if adversely determined,
would materially and adversely affect any Acquiring Funds financial
condition or the conduct of its business. The Aberdeen Trust, on
behalf of each Acquiring Fund, knows of no facts which might form the
basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court
governmental body or regulatory agency which materially and adversely
affects any Acquiring Funds business or its ability to consummate the
transactions herein contemplated;
(i) Each Acquiring Funds current prospectus and statement of
additional information and each Operating Acquiring Funds shareholder
reports (true and correct copies of which have been delivered to the
Pacific Capital Trust) and each prospectus, statement of additional
information and shareholder report of the Acquiring Fund used during
the three years prior to the date of this Agreement conform or
conformed at the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or did not
at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(j) The Statement of Assets and Liabilities, Statements of Operations
and changes in Net Assets, and Schedule of Investments of each
Operating Acquiring Fund at October 31, 2009 have been audited by KPMG
LLP, an independent registered public accounting firm, and are in
accordance with GAAP consistently applied, and such statements (copies
of which have been furnished to the Pacific Capital Trust) present
fairly, in all material respects, the financial condition of the
Operating Acquiring Fund as of such date in accordance with GAAP,
and there are no known contingent liabilities of the Operating
Acquiring Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(k) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Schedule of Investments of each
Operating Acquiring Fund at April 30, 2010 (unaudited) are, or will be
when sent to Acquired Fund Shareholders in the regular course, in
accordance with GAAP consistently applied, and such statements
(copies of which have been, or will be, furnished to the Pacific
Capital Trust if available prior to the Closing Date) present or will
present fairly, in all material respects, the financial condition of
the Operating Acquiring Fund as of such date in accordance with GAAP,
including all known contingent liabilities of the Operating Acquiring
Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date;
(l) Since October 31, 2009, there has not been any material adverse
change in any Operating Acquiring Funds financial condition, assets,
liabilities or business, other than changes occurring in the ordinary
course of business, or any incurrence by the Operating Acquiring Fund
of indebtedness maturing more than one year from the date such
indebtedness was incurred. For the purposes of this subparagraph (l),
a decline in net asset value per share of Operating Acquiring Fund
Shares due to declines in market values of securities held by the
Operating Acquiring Fund, the discharge of Operating Acquiring Fund
liabilities, or the redemption of Operating Acquiring Fund Shares by
shareholders of the Operating Acquiring Fund shall not constitute a
material adverse change;
(m) On the Closing Date, all federal and other tax returns, dividend
reporting forms, and other tax-related reports of each Operating
Acquiring Fund required by law to have been filed by such date
(including any extensions) shall have been filed and are or will be
correct in all material respects, and all federal and other taxes
shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for
the payment thereof and, to the Operating Acquiring Funds knowledge,
no such return is currently under audit; no assessment has been
asserted with respect to such returns; and there are no levies,
liens or other encumbrances related to taxes existing or known to the
Operating Acquiring Fund to be threatened or pending with respect
to the Assets of the Operating Acquiring Fund;
(n) Aberdeen Core Income Fund has not yet commenced operations.
Aberdeen Core Income Fund has not yet filed its first federal
income tax return and, thus, has not yet elected to be treated
as a regulated investment company for federal income tax purposes.
However, upon filing its first federal income tax return at the
completion of its first taxable year, Aberdeen Core Income Fund will
elect to be a regulated investment company and until such time will
take all steps necessary to ensure that it qualifies for taxation as
a regulated investment company under Sections 851 and 852 of the Code.
Aberdeen Core Income Fund will have no current or accumulated earnings
and profits as of the Closing Date. To the knowledge of the Aberdeen
Trust, Aberdeen Core Income Fund will meet the requirements of
Subchapter M of the Code for qualification as a regulated investment
company from and including the taxable year that includes the Closing
Date and will be eligible to, and will, compute its federal income
tax under Section 852 of the Code;
(o) Each Operating Acquiring Fund has elected to qualify and has
qualified as a regulated investment company under Subchapter M of
the Code as of and since its first taxable year; has been a
regulated investment company under the Code at all times since
the end of its first taxable year when it so qualified; qualifies
and will continue to qualify as a regulated investment company
under the Code through the Closing Date and expects to continue to
so qualify thereafter; and has satisfied the distribution requirements
imposed by the Code for each of its taxable years and expects to
continue to satisfy them;
(p) All issued and outstanding shares of each Operating Acquiring
Fund are, and on the Closing Date will be, and each Acquiring Funds
shares will be upon consummation of the Reorganization, duly and
validly issued and outstanding, fully paid and non-assessable by the
Aberdeen Trust and will have been offered and sold in every state,
territory and the District of Columbia in compliance in all material
respects with applicable registration requirements of the 1933 Act
and applicable state securities laws. Each Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe
for or purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any Acquiring Fund Shares;
(q) The execution, delivery and performance of this Agreement, and
the transactions contemplated herein, has been duly authorized by
all necessary action, if any, on the part of the Trustees of the
Aberdeen Trust, on behalf of each Acquiring Fund, and this
Agreement constitutes a valid and binding obligation of each
Acquiring Fund, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors
rights and to general equity principles;
(r) As of the effective date of the Registration Statement, the
date of the meeting of shareholders of each Acquired Fund and the
Closing Date, the Prospectus/Proxy Statement, including the documents
contained or incorporated therein by reference (insofar as it relates
to the Aberdeen Trust and any Acquiring Fund) will 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
were made, not materially misleading; provided, however, that the
representations and warranties in this subparagraph (r) shall not
apply to statements in or omissions from the Prospectus/Proxy
Statement made in reliance upon and in conformity with information
that was furnished by the Pacific Capital Trust or an Acquired Fund
for use therein;
(s) Prior to the Closing Date, Aberdeen Core Income Fund will have
carried on no business activity, will have had no assets or
liabilities and will have no issued or outstanding shares;
(t) There are no material contracts outstanding to which an Acquiring
Fund is a party, other than as disclosed in the Acquiring Fund
Prospectus or in the Registration Statement;
(u) There have been no miscalculations of the net asset value of an
Acquiring Fund or the net asset value per share of any class or series
of shares during the twelve-month period preceding the date hereof that
have not been remedied in accordance with industry practice which,
individually or in the aggregate, would have a material adverse effect
on such Acquiring Fund or its assets, and all such calculations have
been made in accordance with the applicable provisions of the 1940
Act;
(v) The Aberdeen Trust has adopted and implemented written policies
and procedures in accordance with Rule 38a-1 under the 1940 Act
relating to the Acquiring Funds;
(w) Each of Aberdeen Asia-Pacific (ex-Japan) Equity Institutional
Funds, Aberdeen International Equity Institutional Funds and Aberdeen
Small Cap Funds investment operations have been in compliance in all
material respects with the investment policies and investment
restrictions set forth in its prospectus, in the case of Aberdeen
Asia-Pacific (ex-Japan) Equity Institutional Fund from inception to
the date hereof, in the case Aberdeen International Equity
Institutional Fund from July 20, 2009 to the date hereof, and in the
case of Aberdeen Small Cap Fund from June 23, 2008 to the date hereof,
except, in each case, as previously disclosed in writing to and
accepted by the Pacific Capital Trust on behalf of the applicable
Acquired Fund;
(x) The copy of the Aberdeen Trust Valuation Procedures that the
Aberdeen Trust has provided to the Pacific Capital Trust is an
accurate and complete statement of such Procedures as of the date
that such copy was so provided, and such Procedures shall not be
revised, amended or otherwise changed before the Valuation Date except
to the extent that the Aberdeen Trust determines to be necessary or
appropriate in the ordinary course of its business and upon providing
the Pacific Capital Trust with an accurate and complete copy of any
such revision, amendment or other change.
5. COVENANTS OF THE PARTIES.
5.1. Each Acquired Fund and Operating Acquiring Fund will operate
its business in the ordinary course between the date hereof and the
Closing Date, it being understood that, with respect to each Acquired
Fund and Operating Acquiring Fund, such ordinary course of business
will include purchases and sales of portfolio securities and other
instruments, sales and redemptions of Acquired Fund Shares or
Operating Acquiring Fund Shares, as applicable, and regular and
customary periodic dividends and distributions, and with respect
to Aberdeen Core Income Fund, it shall be limited to such actions as
are customary to the organization of a new series prior to its
commencement of operations. In order to facilitate the transfer of
Assets at the Closing Date, AAMI may request in writing that BOH use
its commercially reasonable best efforts, subject to BOHs fiduciary
duty and that of any investment sub-adviser to an Acquired Fund, to
limit or cease portfolio trading on behalf of an Acquired Fund for a
period of up to three days prior to the Valuation Date. BOH agrees
that it will accommodate such requests to the extent such trading
restrictions are consistent with the investment objectives, policies
and strategies of the applicable Acquired Fund and consistent with
fulfilling its fiduciary obligations as an investment adviser.
5.2. Each Acquired Fund will call a meeting of the Acquired Fund
Shareholders as soon as practicable after the date of filing the
Prospectus/Proxy Statement to be held prior to the Closing Date to
consider and act upon this Agreement and to take all other action
necessary to obtain the required shareholder approval of the
transactions contemplated hereby. In the event that any Acquired
Fund receives insufficient votes from shareholders, the meeting may
be adjourned as permitted under the Pacific Capital Trusts
Declaration of Trust, Bylaws, applicable law and the Acquired
Funds Prospectus/Proxy Statement in order to permit further
solicitation of proxies.
5.3. In connection with the Acquired Fund Shareholders meetings
referred to in paragraph 5.2, the Aberdeen Trust, with the
assistance of each Acquired Fund, will prepare the Registration
Statement and Prospectus/Proxy Statement for such meeting, which
the Aberdeen Trust will file for registration under the 1933 Act
of the Acquiring Fund Shares to be distributed to Acquired Fund
Shareholders pursuant hereto, all in compliance with the applicable
requirements of the 1933 Act, the 1934 Act and the 1940 Act.
5.4. The Pacific Capital Trust, each of the Acquired Funds, the
Aberdeen Trust and each of the Acquiring Funds will cooperate with
the others, and each will furnish to the others the information
relating to itself required by the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder to be set forth
in the Registration Statement, including the Prospectus/Proxy
Statement. Without limiting the foregoing, each Acquired Fund and
BOH will assist the Acquiring Funds in obtaining such information
as the Acquiring Funds reasonably request concerning the beneficial
ownership of Acquired Fund Shares and will assist the Acquiring
Funds and AAMI in obtaining copies of any books and records of
the Acquired Funds from their service providers reasonably
requested by the Aberdeen Trust or AAMI. In addition, the Aberdeen
Trust and the Pacific Capital Trust will provide each other and their
respective representatives with such cooperation, assistance and
information as either of them reasonably may request of the other
in filing any tax returns, amended return or claim for refund,
determining a liability for taxes or a right to a refund of taxes or
participating in or conducting any audit or other proceeding in
respect of taxes, or in determining the financial reporting of any
tax position.
5.5. As promptly as practicable, but in any case within sixty days
after the Closing Date, each Acquired Fund shall furnish the
applicable Acquiring Fund, in such form as is reasonably
satisfactory to such Acquiring Fund, a statement of the earnings
and profits of such Acquired Fund for federal income tax purposes
that will be carried over by such Acquiring Fund as a result of
Section 381 of the Code, and which will be reviewed by KPMG LLP
and certified by such Acquired Funds President and Treasurer or
Chief Financial Officer.
5.6. Each Acquiring Fund will use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act,
the 1940 Act and such of the state securities or blue sky laws as
it may deem appropriate in order to continue its operations after
the Closing Date.
5.7. The Pacific Capital Trust, on behalf of each Acquired Fund,
agrees that the liquidation of each Acquired Fund will be effected
in the manner provided in the Pacific Capital Trusts Declaration
of Trust and Bylaws in accordance with applicable law, and that
on and after the Closing Date, each Acquired Fund shall not
conduct any business except in connection with its liquidation.
5.8. It is the intention of the parties that the transaction
contemplated by this Agreement will qualify as a reorganization
with the meaning of Section 368(a) of the Code. None of the
parties to this Agreement 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 with the meaning of Section 368(a) of the Code.
5.9. Each Acquiring Fund and each Acquired Fund will use its
commercially reasonable efforts to fulfill or obtain the
fulfillment of the conditions precedent to effect the
transactions contemplated by this Agreement as promptly as
practicable. The Pacific Capital Trust and the Aberdeen
Trust shall each use commercially reasonable efforts to make its
officers available upon reasonable notice at reasonable times to
provide explanation of any documents or information
provided under this Agreement to the extent such officer is
familiar with such documents or information.
5.10. The Pacific Capital Trust and the Aberdeen Trust will
execute and deliver or cause to be executed and delivered all
such assignments and other instruments and will take or cause
to be taken such further action as may be necessary or reasonably
desirable in order to vest in and confirm (a) each Acquired Funds
title to and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) each Acquiring Funds title to and possession of all
the Assets.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND
The obligations of the Aberdeen Trust and each Acquiring Fund to
complete the transactions provided for herein shall be subject, at
their election, to the performance by the Pacific Capital Trust and
the applicable Acquired Fund of all the obligations to be performed
by them hereunder on or before the Closing Date and, in addition
thereto, to the following further conditions:
6.1. The Pacific Capital Trust and each Acquired Fund shall have
delivered to the applicable Acquiring Fund a certificate executed
on their behalf by the Pacific Capital Trusts President or any Vice
President and its Chief Financial Officer, Treasurer or Assistant
Treasurer, in form and substance reasonably satisfactory to the
Aberdeen Trust and dated as of the Closing Date, to the effect that
the representations and warranties of the Pacific Capital Trust and
each Acquired Fund made in this Agreement are true and correct at
and as of the Closing Date (except for such representations and
warranties required to be true and correct as of another date, which
representation and warranty shall be true and correct as of such other
date), except as they may be affected by the transactions contemplated
by this Agreement, and that the Pacific Capital Trust and each
Acquired Fund have complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed or
satisfied under this Agreement at or prior to the Closing Date.
6.2. The Pacific Capital Trust, on behalf of each Acquired Fund, shall
have furnished to the Aberdeen Trust a statement of the Acquired Funds
assets and liabilities, with values determined as provided in Section 2
of this Agreement, together with a list of investments with their
respective tax costs, all as of the Valuation Date, certified by the
Pacific Capital Trusts Chief Financial Officer, Treasurer or Assistant
Treasurer. This information will present fairly the financial position
and Assets of each Acquired Fund as of the Valuation Date in conformity
with GAAP applied on a consistent basis, and there will be no material
contingent liabilities of any Acquired Fund not disclosed in such
information.
6.3. Prior to the Closing Date each Acquired Fund other than High
Grade Core Fixed Income Fund shall have declared a dividend or
dividends which, together with all previous such dividends, shall
have the effect of distributing to its stockholders all of its
investment company taxable income (computed without regard to any
deduction for dividends paid) for its taxable year ended July 31, 2009
and the short taxable year beginning August 1, 2009 and ending on the
Closing Date, and all of the Acquired Funds net capital gain
recognized in its taxable year ended July 31, 2009 and the short
taxable year beginning on August 1, 2009 and ending on the Closing
Date (after reduction for any capital loss carryover).
6.4. Each Acquiring Fund shall have received a favorable opinion of
Xxxxxxx XxXxxxxxx LLP, counsel to the Pacific Capital Trust for the
transactions contemplated hereby, dated the Closing Date, with such
assumptions and limitations as shall be in the opinion of Xxxxxxx
XxXxxxxxx LLP appropriate to render the opinions expressed therein,
and in a form satisfactory to the applicable Acquiring Fund, to the
following effect:
(a) The Pacific Capital Trust is a business trust organized and
validly existing under the laws of the Commonwealth of Massachusetts
and has power as a business trust to own all of its properties and
assets and to carry on its business as an open-end investment company
as described in the Registration Statement, and each Acquired Fund is
a series thereof duly constituted in accordance with the Declaration
of Trust and Bylaws of the Pacific Capital Trust.
(b) This Agreement has been duly authorized, executed and delivered
by the Pacific Capital Trust, on behalf of each Acquired Fund, and
assuming the due authorization, execution and delivery of this
Agreement by the Aberdeen Trust, on behalf of each Acquiring Fund,
is a valid and binding obligation of the Pacific Capital Trust and
each Acquired Fund enforceable against the Pacific Capital Trust and
each Acquired Fund in accordance with its terms, subject to such
counsels standard exceptions.
(c) Each Acquired Fund has the power as a business trust to sell,
assign, transfer and deliver the assets and the liabilities to be
transferred by it hereunder.
(d) The execution and delivery of this Agreement by the Pacific
Capital Trust on behalf of each Acquired Fund did not, and the
performance by the Pacific Capital Trust and each Acquired Fund of
their obligations hereunder will not, (i) violate the Pacific Capital
Trusts Declaration of Trust or Bylaws, (ii) violate any provisions of
applicable U.S. federal securities laws (excluding, however, antifraud
and other provisions with respect to disclosures of material
information) or (iii) violate any provision of any agreement disclosed
in or filed with the Acquired Fund Prospectus or Acquired Funds
Registration Statement on Form N-1A to which the Pacific Capital Trust
or any Acquired Fund is a party or by which it is bound or, to the
knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty under any judgment or
decree to which the Pacific Capital Trust or any Acquired Fund is a
party or by which it or its property is bound.
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any Massachusetts or federal court or
governmental authority is required for the consummation by the Pacific
Capital Trust or any Acquired Fund of the transactions contemplated by
this Agreement, except such as have been obtained.
(f) The Pacific Capital Trust is registered with the Securities and
Exchange Commission as an open-end management investment company under
the 1940 Act.
In addition, such counsel will confirm whether, as of the Closing
Date, it is representing the Pacific Capital Trust or any Acquired
Fund in any pending litigation in which the Pacific Capital Trust or
any Acquired Fund is a named defendant that challenges the validity or
the enforceability of the Agreement.
6.5. The Pacific Capital Trust shall have duly executed and delivered
to the Aberdeen Trust, on behalf of each Acquired Fund, such bills of
sale, assignments, certificates and other instruments of transfer,
including transfer instructions to each Acquired Funds custodian and
instructions to the Aberdeen Trusts transfer agent as the Aberdeen
Trust may reasonably deem necessary or desirable to evidence the
transfer to the Acquiring Fund by such Acquired Fund all of the right,
title and interest of such Acquired Fund in and to the respective
Assets of each Acquired Fund. In each case the Assets of each
Acquired Fund shall be accompanied by all necessary state stock
transfer stamps or cash for the appropriate purchase price therefor.
6.6. The Aberdeen Trust shall have received at the Closing: (i) a
certificate of an authorized signatory of The Bank of New York Mellon,
as custodian for the Pacific Capital Trust, stating that the Assets
of each Acquired Fund have been delivered to the Aberdeen Trust; (ii)
a certificate of an authorized signatory from the applicable custodian
for the Acquiring Funds, stating that the Assets of each Acquired Fund
has been received; (iii) a certificate of an authorized signatory of
the Pacific Capital Trust confirming that each Acquired Fund has
delivered its records containing the names and addresses of the record
holders of each Acquired Fund shares and the number and percentage (to
three decimal places) of ownership of each Acquired Fund owned by each
such holder as of the Valuation Date; (iv) a statement of the
respective tax basis of all investments to be transferred by each
Acquired Fund to the corresponding Acquiring Fund; and (v) the tax
books and records of each Acquired Fund for purposes of preparing any
tax returns required by law to be filed after the Closing Date.
6.7. The Aberdeen Trust, on behalf of each Acquiring Fund, shall have
received from KPMG LLP a letter addressed to the Aberdeen Trust, on
behalf of the applicable Acquiring Fund, dated as of the effective
date of the Registration Statement in form and substance satisfactory
to the Aberdeen Trust, on behalf of the applicable Acquiring Fund, to
the effect that:
(a) they are independent public accountants with respect to the
applicable Acquired Fund within the meaning of the 1933 Act and the
applicable regulations thereunder; and
(b) in their opinion, the financial statements and financial
highlights of the applicable Acquired Fund included or incorporated by
reference in the Registration Statement and reported on by them comply
as to form in all material aspects with the applicable accounting
requirements of the 1933 Act and the rules and regulations thereunder.
6.8. The Pacific Capital Trust, on behalf of each Acquired Fund, shall
have received from KPMG LLP a letter addressed to the Pacific Capital
Trust dated as of the effective date of the Registration Statement in
form and substance satisfactory to the Pacific Capital Trust, to the
effect that:
(a) they are independent public accountants with respect to the
applicable Acquiring Fund within the meaning of the 1933 Act and the
applicable regulations thereunder; and
(b) in their opinion, the financial statements and financial
highlights of the applicable Acquiring Fund included or incorporated
by reference in the Registration Statement and reported on by them
comply as to form in all material aspects with the applicable
accounting requirements of the 1933 Act and the rules and regulations
thereunder.
6.9. The Aberdeen Trust, on behalf of each Acquiring Fund, and the
Pacific Capital Trust, on behalf of each Acquired Fund, shall have
received from KPMG LLP a letter addressed to both parties and dated
as of the effective date of the Registration Statement in form and
substance satisfactory to each party, to the effect that: on the basis
of limited procedures agreed upon by the Aberdeen Trust, on behalf of
each Acquiring Fund, and the Pacific Capital Trust, on behalf of each
Acquired Fund, and described in such letter (but not an examination in
accordance with generally accepted auditing standards), specified
information relating to each Fund appearing in the Registration
Statement has been obtained from the accounting records of each Fund
or from schedules prepared by officers of each Fund having
responsibility for financial and reporting matters and such
information is in agreement with such records, schedules or
computations made therefrom.
6.10. The Aberdeen Trust, on behalf of each Acquiring Fund, shall
have received from KPMG LLP a letter addressed to the Aberdeen Trust,
on behalf of each Acquiring Fund, and dated as of the Closing Date
stating that, as of a date no more than three (3) business days prior
to the Closing Date, KPMG LLP performed limited procedures and that on
the basis of those procedures it confirmed the matters set forth in
paragraph 6.9.
6.11. The Pacific Capital Trusts agreements, on behalf of each
Acquired Fund, with each of its service providers shall have
terminated on or prior to the Closing Date with respect to each
Acquired Fund in compliance with their termination provisions without
being subject to a contractual penalty, and each of the Pacific
Capital Trust and the Aberdeen Trust shall have received assurances
that no claims for damages (liquidated or otherwise) will arise as a
result of such termination.
6.12. The Aberdeen Trust shall have completed to its satisfaction its
due diligence review of each Acquired Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRED FUND
The obligations of the Pacific Capital Trust and each Acquired Fund to
complete the transactions provided for herein shall be subject, at
their election, to the performance by the Aberdeen Trust and the
applicable Acquiring Fund of all the obligations to be performed by
them hereunder on or before the Closing Date and, in addition thereto,
to the following further conditions:
7.1. The Aberdeen Trust and each Acquiring Fund shall have delivered
to the applicable Acquired Fund a certificate executed on their behalf
by the Aberdeen Trusts President or any Vice President and its Chief
Financial Officer, Treasurer or Assistant Treasurer, in form and
substance reasonably satisfactory to the Acquired Fund and dated as of
the Closing Date, to the effect that the representations and
warranties of the Aberdeen Trust and each Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date (except
for such representations and warranties required to be true and
correct as of another date, which representation and warranty shall
be true and correct as of such other date), except as they may be
affected by the transactions contemplated by this Agreement, and that
the Aberdeen Trust and each Acquiring Fund have complied with all the
covenants and agreements and satisfied all of the conditions on their
parts to be performed or satisfied under this Agreement at or prior to
the Closing Date.
7.2. The Aberdeen Trust, on behalf of each Acquiring Fund, shall have
executed and delivered to the Pacific Capital Trust, on behalf of the
applicable Acquired Fund, an Assumption of Liabilities dated as of the
Closing Date pursuant to which each Acquiring Fund will assume all of
the Liabilities of the applicable Acquired Fund existing at the
Valuation Date in connection with the transactions contemplated by
this Agreement.
7.3. Each Acquired Fund shall have received a favorable opinion of
Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel to the Aberdeen Trust for the
transactions contemplated hereby, dated the Closing Date, with such
assumptions and limitations as shall be in the opinion of Xxxxxxx Xxxx
& Xxxxxxxxx LLP appropriate to render the opinions expressed therein,
and in a form satisfactory to the applicable Acquired Fund, which
opinion shall rely on a separate opinion of local counsel to the
extent it relates to the laws of the State of Delaware, to the
following effect:
(a) The Aberdeen Trust is a statutory trust duly organized and
validly existing under the laws of the State of Delaware and has power
to own all of its properties and assets and to carry on its business
as an open-end investment company as described in the Registration
Statement, and each Acquiring Fund is a separate series thereof duly
constituted in accordance with the Agreement and Declaration of Trust
and the Bylaws of the Aberdeen Trust and applicable law.
(b) This Agreement has been duly authorized, executed and delivered
by the Aberdeen Trust, on behalf of each Acquiring Fund, and assuming
the due authorization, execution and delivery of this Agreement by the
Pacific Capital Trust, on behalf of each Acquired Fund, is the valid
and binding obligation of the Aberdeen Trust and each Acquiring Fund
enforceable against the Aberdeen Trust and each Acquiring Fund in
accordance with its terms, subject to such counsels standard
exceptions.
(c) Each Acquiring Fund has the power to assume the liabilities to
be transferred to it hereunder.
(d) The execution and delivery of this Agreement by the Aberdeen
Trust on behalf of each Acquiring Fund did not, and the performance
by the Aberdeen Trust and each Acquiring Fund of their obligations
hereunder will not, (i) violate the Aberdeen Trusts Agreement and
Declaration of Trust or Bylaws, (ii) violate any provisions of
applicable U.S. federal securities laws (excluding, however, antifraud
and other provisions with respect to disclosures of material
information) or (iii) violate any provision of any agreement disclosed
in or filed with the Acquiring Fund Prospectus or Acquiring Funds
Registration Statement on Form N-1A to which the Aberdeen Trust or any
Acquiring Fund is a party or by which it is bound or, to the knowledge
of such counsel, result in the acceleration of any obligation or the
imposition of any penalty under any judgment or decree to which the
Aberdeen Trust or any Acquiring Fund is a party or by which it or its
property is bound.
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any Delaware or federal court or
governmental authority is required for the consummation by the Aberdeen
Trust or any Acquiring Fund of the transactions contemplated by this
Agreement except such as may be required under state securities or blue
sky laws or such as have been obtained.
(f) The Aberdeen Trust is registered with the Securities and Exchange
Commission as an open-end management investment company under the 1940
Act.
In addition, such counsel will confirm whether, as of the Closing Date,
it is representing the Aberdeen Trust or any Acquiring Fund in any
pending litigation in which the Aberdeen Trust or any Acquiring Fund is
a named defendant that challenges the validity or the enforceability of
the Agreement.
7.4. The Aberdeen Trust shall have duly executed and delivered to the
Pacific Capital Trust, on behalf of each Acquiring Fund, such
instrument of assumptions of liabilities and other instruments as an
Acquired Fund may reasonably deem necessary or desirable to evidence
the transactions contemplated by this Agreement, including the
assumption of all of the Liabilities of each Acquired Fund by the
Acquiring Fund into which it is being reorganized.
7.5. The Pacific Capital Trust shall have received from the Transfer
Agent a certificate stating that it has received from the Aberdeen
Trust the number of full and fractional Acquiring Fund Shares of each
relevant class equal in value to the value of each corresponding class
of the corresponding Acquired Fund as of the time and date set forth
in paragraph 3.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The respective obligations of the Aberdeen Trust, the Pacific Capital
Trust, each Acquired Fund and each Acquiring Fund hereunder are
subject to the further conditions that on or before the Closing
Date:
8.1. This Agreement shall have been approved by a majority of the
outstanding shares of each Acquired Fund in the manner required by the
Pacific Capital Trusts Declaration of Trust, Bylaws and applicable
law, and the parties shall have received reasonable evidence of each
such approval.
8.2. The Agreement, the transactions contemplated herein and the
filing of the Prospectus/Proxy Statement shall have been approved by
the Board of Trustees of the Aberdeen Trust and the Agreement and the
transactions contemplated herein shall have been approved by the Board
of Trustees of the Pacific Capital Trust, and each party shall have
delivered to the other a copy of the resolutions approving this
Agreement adopted by the other partys Board, certified by the
Secretary or an equivalent officer.
8.3. On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted
any proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act and,
to the knowledge of the parties hereto, no action, suit or other
proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or prohibit, or
obtain damages or other relief in connection with, this Agreement or
the transactions contemplated herein.
8.4. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including
those of the Commission and of state blue sky and securities
authorities) deemed necessary by the Aberdeen Trust and each Acquiring
Fund, or the Pacific Capital Trust and each Acquired Fund, to permit
consummation of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or
permit would not involve a risk of a material adverse effect on the
assets or properties of each Acquiring Fund or each Acquired Fund.
8.5. The Registration Statement shall have become effective under the
1933 Act and no stop order suspending the effectiveness thereof shall
have been issued and, to the knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the
0000 Xxx.
8.6. No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to the
knowledge of any party hereto, threatened against a party or any of its
properties or assets that, if adversely determined, would materially
and adversely affect its business or its ability to consummate the
transactions herein contemplated.
8.7. Each Acquired Fund and each applicable Acquiring Fund shall have
received a favorable opinion of Xxxxxxx Xxxx & Xxxxxxxxx LLP dated on
the Closing Date satisfactory to both parties substantially to the
effect that, on the basis of the existing provisions of the Code,
Treasury regulations promulgated thereunder, current administrative
rules, and court decisions, generally for federal income tax purposes:
(a) The acquisition by each Acquiring Fund of the assets of the
applicable Acquired Fund in exchange for such Acquiring Funds
assumption of the Liabilities of that Acquired Fund and issuance of
the Acquiring Fund Shares, followed by the distribution by that
Acquired Fund of such Acquiring Fund Shares to the shareholders of
such Acquired Fund in exchange for their shares of such Acquired Fund,
all as provided in Section 1 hereof, will constitute a reorganization
within the meaning of Section 368(a) of the Code, and such Acquired
Fund and Acquiring Fund will each be a party to a reorganization
within the meaning of Section 368(b) of the Code.
(b) Under Sections 361 and 357(a) of the Code, no gain or loss will
be recognized by any Acquired Fund (i) upon the transfer of its assets
to the applicable Acquiring Fund in exchange for the Acquiring Fund
Shares and the assumption by each Acquiring Fund of the Liabilities of
the applicable Acquired Fund or (ii) upon the distribution of the
Acquiring Fund Shares by each Acquired Fund to its shareholders in
liquidation, as contemplated in Section 1 hereof, except for any gain
or loss that may be required to be recognized solely as a result of
the close of an Acquired Funds taxable year due to the
Reorganization.
(c) Under Section 1032 of the Code, no gain or loss will be
recognized by any Acquiring Fund upon the receipt of the assets of the
applicable Acquired Fund in exchange for the assumption of the
Liabilities of such Acquired Fund and issuance of the Acquiring Fund
Shares as contemplated in Section 1 hereof.
(d) Under Section 362(b) of the Code, the tax basis of the assets of
each Acquired Fund acquired by the applicable Acquiring Fund will be
the same as the tax basis of such assets in the hands of such Acquired
Fund immediately prior to the transfer.
(e) Under Section 1223(2) of the Code, the holding periods of the
assets of each Acquired Fund in the hands of the applicable Acquiring
Fund will include the periods during which such assets were held by
such Acquired Fund.
(f) Under Section 354 of the Code, no gain or loss will be recognized
by Acquired Fund Shareholders upon the exchange of all of their
Acquired Fund Shares for the Acquiring Fund Shares.
(g) Under Section 358 of the Code, the aggregate tax basis of the
Acquiring Fund Shares to be received by each shareholder of the
Acquired Fund will be the same as the aggregate tax basis of Acquired
Fund Shares exchanged therefor.
(h) Under Section 1223(1) of the Code, an Acquired Fund Shareholders
holding period for the Acquiring Fund Shares to be received will
include the period during which Acquired Fund Shares exchanged
therefor were held, provided that the shareholder held Acquired Fund
Shares as a capital asset on the date of the exchange.
(i) Each Acquiring Fund will succeed to and take into account the
items of the applicable Acquired Fund described in Section 381(c) of
the Code.
The parties acknowledge that the opinion will be based on certain
factual certifications made by officers of the Pacific Capital Trust
and the Aberdeen Trust and will also be based on customary assumptions;
the opinion is not a guarantee that the tax consequences of the
Reorganization will be as described above; and there is no assurance
that the Internal Revenue Service or a court would agree with the
opinion.
8.8. With respect to each Acquired Fund individually, the
Reorganization of such Acquired Fund into its corresponding Acquiring
Fund and the material attributes of such Acquiring Fund, including,
but not limited to, its investment advisory agreement, each of its
investment sub-advisory agreements, Rule 12b-1 Plans, shareholder
service plans, sales charges, share classes, redemption fees,
distribution agreement, transfer agent agreement, custody agreement,
and independent registered public accounting firm, shall, in all
material respects, be in substantially the form as described in the
Prospectus/Proxy Statement.
8.9. At any time prior to the Closing, any of the foregoing
conditions of this Section 8 (except for paragraph 8.1 and paragraph
8.7) may be jointly waived by the Board of Trustees of the Pacific
Capital Trust and the Board of Trustees of the Aberdeen Trust, if, in
the judgment of the Board of Trustees of the Pacific Capital Trust,
such waiver will not have a material adverse effect on the interests
of the Acquired Fund Shareholders and, if, in the judgment of the
Board of Trustees of the Aberdeen Trust, such waiver will not have a
material adverse effect on the interests of the shareholders of each
Acquiring Fund.
8.10. All of the conditions to the closing of the transactions
contemplated by the Asset Purchase Agreement between BOH and AAMI,
dated March 3, 2010 (the Asset Purchase Agreement), shall be
satisfied or waived, and the closing of the transactions contemplated
by the Asset Purchase Agreement shall be consummated concurrently
with the Closing.
8.11. Prior to the Closing the investment portfolio of each Acquired
Fund, the Reorganization of which is being consummated as provided in
paragraph 15.1, has been restructured to align its portfolio with that
of the corresponding Acquiring Fund in a manner reasonably acceptable
to AAMI.
9. BROKERAGE FEES AND EXPENSES
9.1. The Aberdeen Trust, on behalf of each Acquiring Fund, and the
Pacific Capital Trust, on behalf of each Acquired Fund, represent and
warrant to each other that there are no brokers or finders entitled to
receive any payments in connection with the transactions provided for
herein.
9.2. The Pacific Capital Trust and its Acquired Funds and the Aberdeen
Trust and its Acquiring Funds will not bear any costs arising in
connection with the transactions contemplated by this Agreement. The
responsibility for payment of all of the costs arising in connection
with the transactions contemplated by this Agreement, whether or
not the transactions contemplated hereby are concluded, shall be borne
by AAMI, BOH, or their respective affiliates. The costs arising in
connection with the transactions contemplated by this Agreement shall
include, but not be limited to, costs associated with obtaining any
necessary order of exemption from the 1940 Act, if any, preparation of
the Prospectus/Proxy Statement, printing and distributing the
Prospectus/Proxy Statement, legal fees, accounting fees, securities
registration fees, brokerage commissions incurred in connection with
paragraph 1.6, all necessary taxes in connection with the delivery of
the Assets of each Acquired Fund, including all applicable federal and
state stock transfer stamps, and expenses of holding shareholders
meetings. Notwithstanding any of the foregoing, expenses will in any
event be paid by the party directly incurring such expenses if and to
the extent that the payment by another person of such expenses would
result in the disqualification of such party as a regulated investment
company or would prevent the Reorganization from qualifying as a
tax-free reorganization. For the avoidance of doubt and
notwithstanding anything to the contrary herein, the following
expenses incurred prior to Closing in connection with the
restructuring of an Acquired Funds portfolio to align it with the
corresponding Acquiring Funds portfolio shall be borne equally by
AAMI or its affiliates and BOH or its affiliates: (i) brokerage
commissions incurred in connection with such restructuring; and (ii)
any fees charged by an investment adviser or other consultant retained
by the Pacific Capital Trust to assist with such restructuring,
excluding any fees charged by a current subadviser of the applicable
Acquired Fund.
10. ENTIRE AGREEMENT; TERMINATION OF WARRANTIES
10.1. The Aberdeen Trust and the Pacific Capital Trust agree that
neither party has made any representation, warranty or covenant, on
behalf of either an Acquiring Fund or an Acquired Fund, respectively,
not set forth herein and that this Agreement constitutes the entire
agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall not survive the consummation of the transactions
contemplated hereunder. Notwithstanding the foregoing sentence, the
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned by resolution of the either the Board of Trustees of the
Aberdeen Trust or the Board of Trustees of the Pacific Capital Trust, at
any time prior to the Closing Date, if circumstances should develop that,
in the opinion of that Board, make proceeding with the Agreement
inadvisable with respect to any Acquiring Fund or any Acquired Fund,
respectively. In addition, this Agreement may be terminated at any
time prior to the Closing Date:
(a) by the written consent of each of the parties;
(b) by the Pacific Capital Trust (i) following a material breach by the
Aberdeen Trust of any of its representations, warranties or covenants
contained in this Agreement, provided that the Aberdeen Trust shall have
been given a period of 10 business days from the date of the
occurrence of such material breach to cure such breach and shall have
failed to do so; or (ii) upon the occurrence of an event which has a
material adverse effect upon the Aberdeen Trust or an Acquiring Fund;
(c) by the Aberdeen Trust (i) following a material breach by the
Pacific Capital Trust of any of its representations, warranties or
covenants contained in this Agreement, provided that the Pacific
Capital Trust shall have been given a period of 10 business days from
the date of the occurrence of such material breach to cure such breach
and shall have failed to do so; or (ii) upon the occurrence of an
event which has a material adverse effect upon the Pacific Capital
Trust or an Acquired Fund; or
(d) by either the Aberdeen Trust or the Pacific Capital Trust if the
Closing shall not have been consummated by July 20, 2010, provided the
right to terminate this Agreement under this paragraph 11(d) shall not
be available to any party whose failure to fulfill any material
obligation under this Agreement has been the cause of, or resulted in,
the failure of the Closing to occur on or before such date.
If a party terminates this Agreement in accordance with this Section
11, other than a termination under (b), (c) or (d) in connection with
a willful default, there shall be no liability for damages on the part
of any party, or the trustees, directors or officers of such party.
In the event of a termination under (b), (c) or (d) in connection with
a willful default, all remedies at law or in equity of the party
adversely affected shall survive.
At any time prior to the Closing Date, any of the terms or conditions
of this Agreement (except for paragraph 8.1, paragraph 8.7 and
paragraph 15.1) may be waived by either the Pacific Capital Trust or
the Aberdeen Trust, respectively (whichever is entitled to the benefit
thereof). Such waiver shall be in writing and authorized by an
officer of the waiving party. The failure of either party hereto to
enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part hereof or
the right of either party thereafter to enforce each and every such
xxxxxxxxx.Xx waiver of any breach of this Agreement shall be held to
be a waiver of any other or subsequent breach.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such
manner as may be deemed necessary or advisable by the authorized
officers of the Pacific Capital Trust and the Aberdeen Trust;
provided, however, that following the meeting of the shareholders of
each Acquired Fund called by the Acquired Funds pursuant to paragraph
5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring Fund
Shares to be issued to each corresponding class of Acquired Fund
Shareholders, under
this Agreement to the detriment of such shareholders without their
further approval; provided further that paragraph 15.1 shall not be
amended without the prior consent of AAMI and BOH.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, electronic delivery, personal service or prepaid or
certified mail addressed to:
To the Aberdeen Trust:
Aberdeen Funds
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. XxXxxxxxx, Esq.
To the Pacific Capital Trust:
Pacific Capital Funds
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: President
With a copy (which shall not constitute notice) to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
To AAMI:
Aberdeen Asset Management, Inc.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal
With a copy (which shall not constitute notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. XxXxxxxxx, Esq.
Xxxxx X. Boston, Esq.
To BOH:
Bank of Hawaii
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxxxxxx
With a copy (which shall not constitute notice) to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
14. PUBLICITY/CONFIDENTIALITY
14.1. Publicity. Any public announcements or similar publicity with
respect to this Agreement or the transactions contemplated herein will
be made at such time and in such manner as the parties mutually shall
agree in writing (which writing may include e-mail), provided that
nothing herein shall prevent either party from making such public
announcements as may be required by law, in which case the party
issuing such statement or communication shall use all reasonable
commercial efforts to advise the other party prior to such issuance.
14.2. Confidentiality. (a) The Pacific Capital Trust, the Aberdeen
Trust, BOH and AAMI (for purposes of this paragraph 14.2, the
Protected Persons) will hold, and will cause their board members,
officers, employees, representatives, agents and affiliates to hold,
in strict confidence, and not disclose to any other person, and not
use in any way except in connection with the transactions herein
contemplated, without the prior written consent of the other Protected
Persons, all confidential information obtained from the other
Protected Persons in connection with the transactions contemplated
by this Agreement, except such information may be disclosed: (i) to
governmental or regulatory bodies, and, where necessary, to any other
person in connection with the obtaining of consents or waivers as
contemplated by this Agreement; (ii) if required by court order or
decree or applicable law; (iii) if it is publicly available through no
act or failure to act of such party; (iv) it if was already known to
such party on a non-confidential basis on the date of receipt; (v)
during the course of or in connection with any litigation, government
investigation, arbitration, or other proceedings based upon or in
connection with the subject matter of this Agreement, including,
without limitation, the failure of the transactions contemplated
hereby to be consummated; or (vi) if it is otherwise expressly
provided for herein.
(b) In the event of a termination of this Agreement, the Pacific
Capital Trust, the Aberdeen Trust, BOH and AAMI agree that they along
with their employees, representative agents and affiliates shall, and
shall cause their affiliates to, except with the prior written consent
of the other Protected Persons, keep secret and retain in strict
confidence, and not use for the benefit of itself or themselves, nor
disclose to any other persons, any and all confidential or proprietary
information relating to the other Protected Persons and their related
parties and affiliates, whether obtained through their due diligence
investigation, this Agreement or otherwise, except such information
may be disclosed: (i) if required by court order or decree or
applicable law; (ii) if it is publicly available through no act or
failure to act of such party; (iii) if it was already known to such
party on a non-confidential basis on the date of receipt; (iv) during
the course of or in connection with any litigation, government
investigation, arbitration, or other proceedings based upon or in
connection with the subject matter of this Agreement, including,
without limitation, the failure of the transactions contemplated
hereby to be consummated; or (v) if it is otherwise expressly
provided for herein.
15. CONTINGENCY OF EACH REORGANIZATION ON CONSUMMATION OF OTHER
REORGANIZATIONS
15.1 For purposes of this paragraph 15.1, the Reorganization of each
of (i) the New Asia Growth Fund into the Aberdeen Asia-Pacific
(ex-Japan) Equity Institutional Fund, (ii) the International Stock
Fund into the Aberdeen International Equity Institutional Fund, and
(iii) the High Grade Core Fixed Income Fund into the Aberdeen Core
Income Fund shall be referred to collectively as the Fixed
Reorganizations, and the Reorganization of the Small Cap Fund into
the Aberdeen Small Cap Fund shall be referred to as the Small Cap
Reorganization. Each Reorganization is contingent upon the
consummation and validity of each other Reorganization, and the
provisions of this
Agreement shall be construed to effect this intent and in the event
that shareholders of a particular Acquired Fund that is a party to a
Reorganization do not approve the Reorganization relating to their
Acquired Fund, none of the Reorganizations referenced in this
Agreement will be consummated; provided, however, that
notwithstanding the foregoing, in the event that shareholders of the
Small Cap Fund do not approve the Small Cap Reorganization on or
prior to July 16, 2010, but shareholders of each Acquired Fund that
is a party to a Fixed Reorganization have approved the Fixed
Reorganization relating to their Acquired Fund, (x) the Fixed
Reorganizations will be consummated (subject to the satisfaction or
waiver of the conditions to this Agreement) and the Small Cap
Reorganization will not be consummated (y) the Closing (subject to
the satisfaction or waiver of the conditions to this Agreement to
be satisfied concurrently with the Closing, including the
consummation of the transactions contemplated by the Asset Purchase
Agreement) will take place on July 19, 2010 and (z) the parties
hereunder will have no further obligation to consummate the Small
Cap Reorganization.
16. HEADINGS; GOVERNING LAW; SEVERABILITY; ASSIGNMENT; LIMITATION OF
LIABILITY; COUNTERPARTS
16.1. The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
16.2. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to
its principles of conflicts of laws.
16.3. The warranties, representations, and agreements contained in
this Agreement made by the Pacific Capital Trust on behalf of each
of the Acquired Funds, are made on a several (and not joint, or
joint and several) basis. Similarly, the warranties, representations,
and agreements contained in this Agreement made by the Aberdeen Trust
on behalf of each of the Acquiring Funds, are made on a several (and
not joint, or joint and several) basis. The benefits and obligations
attendant to the Reorganization are severable with respect to each
Acquired Fund and its corresponding Acquiring Fund and the other
Acquired Funds and their corresponding Acquiring Funds participating
in the Reorganization. Shareholders of the Acquired Funds have no
rights under this Agreement with respect to the reorganization,
redomiciliation, and liquidation of any other Acquired Fund in which
they do not hold shares.
16.4. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of
the other parties. Nothing herein expressed or implied is intended
or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of
this Agreement.
16.5. The name Aberdeen Funds is the designation of the trustees
for the time being under an Amended and Restated Agreement and
Declaration of Trust dated December 12, 2007, as amended from time to
time, and all persons dealing with the Aberdeen Trust or an Acquiring
Fund must look solely to the property of the Aberdeen Trust or such
Acquiring Fund for the enforcement of any claims as none of its
trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Aberdeen
Trust. No portfolio of the Aberdeen Trust shall be liable for any
claims against any other portfolio of the Aberdeen Trust. Each
Acquired Fund, BOH and AAMI specifically acknowledge and agree that
any liability of the Aberdeen Trust under this Agreement with respect
to a particular Acquiring Fund of the Aberdeen Trust, or in connection
with the transactions contemplated herein with respect to a particular
Acquiring Fund, shall be discharged only out of the assets of the
particular Acquiring Fund and that no other portfolio of the Aberdeen
Trust shall be liable with respect thereto.
16.6. The name Pacific Capital Funds is the designation of the
trustees for the time being under a Declaration of Trust dated October
31, 1992, as amended from time to time, and all persons dealing with
the Pacific Capital Trust or an Acquired Fund must look solely to the
property of the Pacific Capital Trust or such Acquired Fund for the
enforcement of any claims as none of the directors, officers, agents
or shareholders assume any personal liability for obligations entered
into on behalf of Pacific Capital Trust. No portfolio of the Pacific
Capital Trust shall be liable for any claims against any other
portfolio of the Pacific Capital Trust. Each Acquiring Fund, BOH and
AAMI specifically acknowledge and agree that any liability of the
Pacific Capital Trust under this Agreement with respect to a
particular Acquired Fund of the Pacific Capital Trust, or in
onnection with the transactions contemplated herein with respect to a
particular Acquired Fund, shall be discharged only out of the assets
of the particular Acquired Fund and that no other portfolio of the
Pacific Capital Trust shall be liable with respect thereto.
16.7. This Agreement may be executed in one or more counterparts, all
of which counterparts shall together constitute one and the same
agreement.
***************
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President.
Aberdeen Funds,
on behalf of its series:
Aberdeen Asia-Pacific (ex-Japan) Equity Institutional Fund
Aberdeen International Equity Institutional Fund
Aberdeen Small Cap Fund
Aberdeen Core Income Fund
By:/s/ Lucia Sitar_________
Name: Xxxxx Xxxxx
Title: Vice President
Pacific Capital Funds,
on behalf of its series:
New Asia Growth Fund
International Stock Fund
Small Cap Fund
High Grade Core Fixed Income Fund
By:/s/ Xxxxxx X. Crowell___
Name: Xxxxxx X. Xxxxxxx
Title: President
Solely for purpose of paragraphs 1.6, 5.1, 9.2, 14, 16.4,
16.5 and 16.6
ABERDEEN ASSET MANAGEMENT INC.
By:/s/ Xxxxxxxx X. Nichols__
Name: Xxxxxxxx X. Xxxxxxx
Title: Director/Vice President
Solely for purpose of paragraphs 1.6, 5.1, 5.4, 9.2, 14, 16.4,
16.5 and 16.6
BANK OF HAWAII
By:/s/ Xxxxxxx X. Xxxxxxxx _
Name: Xxxxxxx X. Xxxxxxxx
Title: Sr. Executive Vice President
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