AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this
1st day of April, 2005, by and between Xxxx Xxxxxxx World Fund, a Massachusetts
business trust (the "Trust") on behalf of its series, Xxxx Xxxxxxx Health
Sciences Fund (the "Acquiring Fund") and Xxxx Xxxxxxx World Fund, a
Massachusetts business trust (as defined above, the "Trust"), on behalf of its
series, Xxxx Xxxxxxx Biotechnology Fund (the "Acquired Fund"), each with their
principal place of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000. The Acquiring Fund and the Acquired Fund are sometimes referred to
collectively herein as the "Funds" and individually as a "Fund".
This Agreement is intended to be and is adopted as a plan of
"reorganization," as such term is used in Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"). The reorganization will consist
of: (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund in exchange solely for (A) the issuance of Class A shares, Class B shares
and Class C shares of beneficial interest of the Acquiring Fund (the "Acquiring
Fund Shares") to the Acquired Fund and (B) the assumption by the Acquiring Fund
of all of the liabilities of the Acquired Fund, followed by (2) the distribution
by the Acquired Fund, on or promptly after the Closing Date hereinafter referred
to, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation and termination of the Acquired Fund as provided herein, all upon
the terms and conditions set forth in this Agreement.
In consideration of the premises of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ISSUANCE OF ACQUIRING FUND SHARES; LIQUIDATION OF THE
ACQUIRED FUND
1.1 The Acquired Fund will transfer all of its assets (consisting, without
limitation, of portfolio securities and instruments, dividends and
interest receivables, cash and other assets), as set forth in the
statement of assets and liabilities referred to in Paragraph 7.2
hereof (the "Statement of Assets and Liabilities"), to the Acquiring
Fund free and clear of all liens and encumbrances, except as otherwise
provided herein, in exchange for (i) the assumption by the Acquiring
Fund of the known and unknown liabilities of the Acquired Fund,
including the liabilities set forth in the Statement of Assets and
Liabilities (the "Acquired Fund Liabilities"), which shall be assigned
and transferred to the Acquiring Fund by the Acquired Fund and assumed
by the Acquiring Fund, and (ii) delivery by the Acquiring Fund to the
Acquired Fund, for distribution pro rata by the Acquired Fund to its
shareholders in proportion to their respective ownership of Class A,
Class B and Class C shares of beneficial interest of the Acquired
Fund, as of the close of business on June 10, 2005 (the "Closing
Date"), of a number of the Acquiring Fund Shares having an aggregate
net asset value equal, in the case of each class of Acquiring Fund
Shares, to the value of the assets, less such liabilities (herein
referred to as the "net value of the assets") attributable to the
applicable class, assumed, assigned and delivered, all determined as
provided in Paragraph 2.1 hereof and as of a date and time as
specified therein. Such transactions shall take place at the Closing,
as defined in Paragraph 3.1 hereof. All computations shall be provided
by The Bank of New York (the "Custodian"), as custodian and pricing
agent for the Acquiring Fund and the Acquired Fund.
1.2 The Acquired Fund has provided the Acquiring Fund with a list of the
current securities holdings of the Acquired Fund as of the date of
execution of this Agreement. The Acquired Fund reserves the right to
sell any of these securities (except to the extent sales may be
limited by representations made in connection with issuance of the tax
opinion provided for in paragraph 8.6 hereof) but will not, without
the prior approval of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring
Fund is permitted to invest.
1.3 Xxxx Xxxxxxx Advisers, LLC, the investment adviser to the Acquiring
Fund and the Acquired Fund, will bear the expenses allocable to each
fund in connection with the transactions contemplated by this
Agreement, whether or not the transactions contemplated hereby are
consummated.
1.4 On or as soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Fund will liquidate and
distribute pro rata to shareholders of record (the "Acquired Fund
shareholders"), determined as of the close of regular trading on the
New York Stock Exchange on the Closing Date, the Acquiring Fund Shares
received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Such
liquidation and distribution will be accomplished by the transfer of
the Acquiring Fund Shares then credited to the account of the Acquired
Fund on the books of the Acquiring Fund, to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund
shareholders and representing the respective pro rata number and class
of Acquiring Fund Shares due such shareholders. Acquired Fund
shareholders who own Class A shares of the Acquired Fund will receive
Class A Acquiring Fund Shares. Acquired Fund shareholders who own
Class B shares of the Acquired Fund will receive Class B Acquiring
Fund Shares. Acquired Fund shareholders who own Class C shares of the
Acquired Fund will receive Class C Acquiring Fund Shares. The
Acquiring Fund shall not issue certificates representing Acquiring
Fund Shares in connection with such exchange.
1.5 The Acquired Fund shareholders holding certificates representing their
ownership of shares of beneficial interest of the Acquired Fund shall
surrender such certificates or deliver an affidavit with respect to
lost certificates in such form and accompanied by such surety bonds as
the Acquired Fund may require (collectively, an "Affidavit"), to Xxxx
Xxxxxxx Signature Services, Inc. prior to the Closing Date. Any
Acquired Fund share certificate which remains outstanding on the
Closing Date shall be deemed to be canceled, shall no longer evidence
ownership of shares of beneficial interest of the Acquired Fund and
shall evidence ownership of Acquiring Fund Shares. Unless and until
any such certificate shall be so surrendered or an Affidavit relating
thereto shall be delivered, dividends and other distributions payable
by the Acquiring Fund subsequent to the Liquidation Date with respect
to Acquiring Fund Shares shall be paid to the holder of such
certificate(s), but such shareholders may not redeem or transfer
Acquiring Fund Shares received in the reorganization. The Acquiring
Fund will not issue share certificates in the reorganization.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund shares on
the books of the Acquired Fund as of that time shall, as a condition
of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.7 The existence of the Acquired Fund shall be terminated as promptly as
practicable following the Liquidation Date.
1.8 Any reporting responsibility of the Acquired Fund, including, but not
limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the Securities and Exchange
Commission (the "Commission"), any state securities commissions, and
any federal, state or local tax authorities or any other relevant
regulatory authority, is and shall remain the responsibility of the
Acquired Fund.
2. VALUATION
2.1 The net asset values of the Class A, Class B and Class C Acquiring
Fund Shares and the net values of the assets and liabilities of the
Acquired Fund attributable to its Class A, Class B and Class C shares
to be transferred shall, in each case, be determined as of the close
of business (4:00 p.m. Boston time) on the Closing Date. The net asset
values of the Class A, Class B and Class C Acquiring Fund Shares shall
be computed by the Custodian in the manner set forth in the Acquiring
Fund's Declaration of Trust as amended and restated (the
"Declaration"), or By-Laws and the Acquiring Fund's then-current
prospectus and statement of additional information and shall be
computed in each case to not fewer than four decimal places. The net
value of the assets of the Acquired Fund attributable to its Class A,
Class B and Class C shares to be transferred shall be computed by the
Custodian by calculating the value of the assets of each class
transferred by the Acquired Fund and by subtracting therefrom the
amount of the liabilities of each class assigned and transferred to
and assumed by the Acquiring Fund on the Closing Date, said assets and
liabilities to be valued in the manner set forth in the Acquired
Fund's then current prospectus and statement of additional information
and shall be computed in each case to not fewer than four decimal
places.
2.2 The number of shares of each class of Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the
Acquired Fund's assets shall be determined by dividing the value of
the Acquired Fund's assets attributable to that class, less the
liabilities attributable to that class assumed by the Acquiring Fund,
by the Acquiring Fund's net asset value per share of the same class,
all as determined in accordance with Paragraph 2.1 hereof.
2.3 All computations of value shall be made by the Custodian in accordance
with its regular practice as pricing agent for the Funds.
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3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be June 10, 2005 or such other date on or
before September 30, 2005 as the parties may agree. The closing of the
reorganization (the "Closing") shall be held as of 5:00 p.m. at the
offices of the Trust, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, or at such other time and/or place as the parties may agree.
3.2 Portfolio securities that are not held in book-entry form in the name
of the Custodian as record holder for the Acquired Fund shall be
presented by the Acquired Fund to the Custodian for examination no
later than three business days preceding the Closing Date. Portfolio
securities which are not held in book-entry form shall be delivered by
the Acquired Fund to the Custodian for the account of the Acquiring
Fund on the Closing Date, duly endorsed in proper form for transfer,
in such condition as to constitute good delivery thereof in accordance
with the custom of brokers, and shall be accompanied by all necessary
federal and state stock transfer stamps or a check for the appropriate
purchase price thereof. Portfolio securities held of record by the
Custodian in book-entry form on behalf of the Acquired Fund shall be
delivered to the Acquiring Fund by the Custodian by recording the
transfer of beneficial ownership thereof on its records. The cash
delivered shall be in the form of currency or by the Custodian
crediting the Acquiring Fund's account maintained with the Custodian
with immediately available funds.
3.3 In the event that on the Closing Date (a) the New York Stock Exchange
shall be closed to trading or trading thereon shall be restricted or
(b) trading or the reporting of trading on said Exchange or elsewhere
shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable,
the Closing Date shall be postponed until the first business day after
the day when trading shall have been fully resumed and reporting shall
have been restored; provided that if trading shall not be fully
resumed and reporting restored on or before August 31, 2005, this
Agreement may be terminated by the Acquiring Fund or by the Acquired
Fund upon the giving of written notice to the other party.
3.4 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup
withholding and nonresident alien withholding status of the Acquired
Fund shareholders and the number of outstanding shares of each class
of beneficial interest of the Acquired Fund owned by each such
shareholder, all as of the close of business on the Closing Date,
certified by its Treasurer, Secretary or other authorized officer (the
"Shareholder List"). The Acquiring Fund shall issue and deliver to the
Acquired Fund a confirmation evidencing the Acquiring Fund Shares to
be credited on the Closing Date, or provide evidence satisfactory to
the Acquired Fund that such Acquiring Fund Shares have been credited
to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, stock certificates, receipts or other documents
as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Trust on behalf of the Acquired Fund represents, warrants and
covenants to the Acquiring Fund as follows:
(a) The Trust is a business trust, duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Massachusetts and has the power to own all of its properties and
assets and, subject to approval by the shareholders of the Acquired
Fund, to carry out the transactions contemplated by this Agreement.
Neither the Trust nor the Acquired Fund is required to qualify to do
business in any jurisdiction in which it is not so qualified or where
failure to qualify would subject it to any material liability or
disability. The Trust 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;
(b) The Trust is a registered investment company classified as a
management company and its registration with the Commission as an
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), is in full force and effect. The Acquired
Fund is a non-diversified series of the Trust;
(c) The Trust and the Acquired Fund are not, and the execution,
delivery and performance of their obligations under this Agreement
will not result, in violation of any provision of the Trust's
Declaration of Trust, as amended and restated (as defined above, the
"Declaration") or By-Laws or of any agreement, indenture, instrument,
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contract, lease or other undertaking to which the Trust or the
Acquired Fund is a party or by which it is bound;
(d) Except as otherwise disclosed in writing and accepted by the
Acquiring Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust or the Acquired Fund or any of
the Acquired Fund's properties or assets. The Trust knows of no facts
which might form the basis for the institution of such proceedings,
and neither the Trust nor the Acquired Fund is a party to or subject
to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquired
Fund's business or its ability to consummate the transactions herein
contemplated;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase of
securities entered into in the ordinary course of business and
consistent with its obligations under this Agreement) which will not
be terminated without liability to the Acquired Fund at or prior to
the Closing Date;
(f) The audited statement of assets and liabilities, including the
schedule of investments, of the Acquired Fund as of October 31, 2004
and the related statement of operations (copies of which have been
furnished to the Acquiring Fund), present fairly in all material
respects the financial condition of the Acquired Fund as of October
31, 2004 and the results of its operations for the period then ended
in accordance with generally accepted accounting principles
consistently applied, and there were no known actual or contingent
liabilities of the Acquired Fund as of the respective dates thereof
not disclosed therein;
(g) Since October 31, 2004, there has not been any material adverse
change in the Acquired Fund's financial condition, assets,
liabilities, or business other than changes occurring in the ordinary
course of business, or any incurrence by the Acquired Fund of
indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund;
(h) At the date hereof and by the Closing Date, all federal, state and
other tax returns and reports, including information returns and payee
statements, of the Acquired Fund required by law to have been filed or
furnished by such dates shall have been filed or furnished, and all
federal, state and other taxes, interest and penalties shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Acquired Fund's knowledge no such
return is currently under audit and no assessment has been asserted
with respect to such returns or reports;
(i) The Acquired Fund has qualified for the favorable tax treatment as
a regulated investment company for each taxable year of its operation
and the Acquired Fund will qualify as such as of the Closing Date with
respect to its taxable year ending on the Closing Date;
(j) The authorized capital of the Acquired Fund consists of an
unlimited number of shares of beneficial interest, no par value. All
issued and outstanding shares of beneficial interest of the Acquired
Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable by the Trust. All of the
issued and outstanding shares of beneficial interest of the Acquired
Fund will, at the time of Closing, be held by the persons and in the
amounts and classes set forth in the Shareholder List submitted to the
Acquiring Fund pursuant to Paragraph 3.4 hereof. The Acquired Fund
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares of beneficial interest,
nor is there outstanding any security convertible into any of its
shares of beneficial interest;
(k) At the Closing Date, the Acquired Fund will have good and
marketable title to the assets to be transferred to the Acquiring Fund
pursuant to Paragraph 1.1 hereof, and full right, power and authority
to sell, assign, transfer and deliver such assets hereunder, and upon
delivery and payment for such assets, the Acquiring Fund will acquire
good and marketable title thereto subject to no restrictions on the
full transfer thereof, including such restrictions as might arise
under the Securities Act of 1933, as amended (the "1933 Act");
(l) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Trust,
on behalf of the Acquired Fund, and this Agreement constitutes a valid
and binding obligation of the Acquired Fund enforceable in accordance
with its terms, subject to the approval of the Acquired Fund's
shareholders;
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(m) The information to be furnished by the Acquired Fund to the
Acquiring Fund for use in applications for orders, registration
statements, proxy materials and other documents which may be necessary
in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations thereunder
applicable thereto;
(n) The proxy statement of the Acquired Fund (the "Proxy Statement")
to be included in the Registration Statement referred to in Paragraph
5.7 hereof (other than written information furnished by the Acquiring
Fund for inclusion therein, as covered by the Acquiring Fund's
warranty in Paragraph 4.2(m) hereof), on the effective date of the
Registration Statement, on the date of the meeting of the Acquired
Fund shareholders and on the Closing Date, shall 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 misleading;
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this Agreement;
(p) All of the issued and outstanding shares of beneficial interest of
the Acquired Fund have been offered for sale and sold in conformity
with all applicable federal and state securities laws;
(q) The Class A, Class B, and Class C prospectus of the Acquired Fund,
dated [March 1, 2005], (the "Acquired Fund Prospectus"), furnished to
the Acquiring Fund, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and
(r) The Acquired Fund Tax Representation Certificate to be delivered
by the Acquired Fund to the Acquiring Fund at Closing pursuant to
Section 7.5 (the "Acquired Fund Tax Representation Certificate") will
not on the Closing Date contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein not misleading.
4.2 The Trust on behalf of the Acquiring Fund represents, warrants and
covenants to the Acquired Fund as follows:
(a) The Trust is a business trust duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts
and has the power to own all of its properties and assets and to carry
out the Agreement. Neither the Trust nor the Acquiring Fund is
required to qualify to do business in any jurisdiction in which it is
not so qualified or where failure to qualify would subject it to any
material liability or disability. The Trust 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;
(b) The Trust is a registered investment company classified as a
management company and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect. The
Acquiring Fund is a non-diversified series of the Trust;
(c) The Class A, Class B, and Class C prospectus of the Acquiring Fund
dated March 1, 2005 (the "Acquiring Fund Prospectus") and statement of
additional information for Class A, Class B and Class C shares of the
Acquiring Fund, dated March 1, 2005, and any amendments or supplements
thereto on or prior to the Closing Date, and the Registration
Statement on Form N-14 filed in connection with this Agreement (the
"Registration Statement") (other than written information furnished by
the Acquired Fund for inclusion therein, as covered by the Acquired
Fund's warranty in Paragraph 4.1(m) hereof) will conform 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, the Acquiring Fund Prospectus does not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and the Registration Statement will not include any untrue
statement of 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 misleading;
(d) At the Closing Date, the Trust, on behalf of the Acquiring Fund.
will have good and marketable title to the assets of the Acquiring
Fund;
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(e) The Trust and the Acquiring Fund are not, and the execution,
delivery and performance of their obligations under this Agreement
will not result in a violation of any provisions of the Trust's
Declaration, or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Trust or the
Acquiring Fund is a party or by which the Trust or the Acquiring Fund
is bound;
(f) Except as otherwise disclosed in writing and accepted by the
Acquired Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust or the Acquiring Fund or any
of the Acquiring Fund's properties or assets. The Trust knows of no
facts which might form the basis for the institution of such
proceedings, and neither the Trust nor the Acquiring Fund is a party
to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects
the Acquiring Fund's business or its ability to consummate the
transactions herein contemplated;
(g) The audited statement of assets and liabilities, including the
schedule of investments, of the Acquiring Fund as of October 31, 2004
and the related statement of operations for each such period (copies
of which have been furnished to the Acquired Fund), present fairly in
all material respects the financial condition of the Acquiring Fund as
of October 31, 2004, the results of its operations for the period then
ended in accordance with generally accepted accounting principles
consistently applied, and there were no known actual or contingent
liabilities of the Acquiring Fund as of the respective dates thereof
not disclosed therein;
(h) Since October 31, 2004, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by the Trust on behalf of the
Acquiring Fund of indebtedness maturing more than one year from the
date such indebtedness was incurred, except as disclosed to and
accepted by the Acquired Fund;
(i) Each of the Acquiring Fund and its predecessors has qualified for
the favorable tax treatment as a regulated investment company for each
taxable year of its operation and the Acquiring Fund will continue to
qualify as such as of the Closing Date and thereafter;
(j) The authorized capital of the Trust consists of an unlimited
number of shares of beneficial interest, no par value per share. All
issued and outstanding shares of beneficial interest of the Acquiring
Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable by the Trust. The Acquiring
Fund does not have outstanding any options, warrants or other rights
to subscribe for or purchase any of its shares of beneficial interest,
nor is there outstanding any security convertible into any of its
shares of beneficial interest;
(k) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Trust on
behalf of the Acquiring Fund, and this Agreement constitutes a valid
and binding obligation of the Acquiring Fund enforceable in accordance
with its terms;
(l) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund pursuant to the terms of this Agreement, when so issued
and delivered, will be duly and validly issued shares of beneficial
interest of the Acquiring Fund and will be fully paid and
nonassessable by the Trust;
(m) The information to be furnished by the Acquiring Fund for use in
applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations applicable thereto;
(n) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by the Agreement,
except for the registration of the Acquiring Fund Shares under the
1933 Act and the 1940 Act; and
(o) The Acquiring Fund Tax Representation Certificate to be delivered
by the Acquiring Fund to the Acquired Fund at Closing pursuant to
Section 6.3 (the "Acquiring Fund Tax Representation Certificate") will
not on the Closing Date contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein not misleading.
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5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 Except as expressly contemplated herein to the contrary, the Trust, on
behalf of the Acquired Fund, and the Trust, on behalf of the Acquiring
Fund, will operate their respective businesses in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include customary dividends and
distributions and any other distributions necessary or desirable to
avoid federal income or excise taxes.
5.2 The Trust on behalf of the Acquired Fund will call a meeting of the
Acquired Fund shareholders to consider and act upon this Agreement and
to take all other action necessary to obtain approval of the
transactions contemplated herein.
5.3 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired by the Acquired Fund for the
purpose of making any distribution thereof other than in accordance
with the terms of this Agreement.
5.4 The Trust, on behalf of the Acquired Fund, will provide such
information within its possession or reasonably obtainable as the
Trust on behalf of the Acquiring Fund requests concerning the
beneficial ownership of the Acquired Fund's shares of beneficial
interest.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund each shall take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate the transactions contemplated by this
Agreement.
5.6 The Trust, on behalf of the Acquired Fund, shall furnish to the Trust,
on behalf of the Acquiring Fund, on the Closing Date the Statement of
Assets and Liabilities of the Acquired Fund as of the Closing Date,
which statement shall be prepared in accordance with generally
accepted accounting principles consistently applied and shall be
certified by the Acquired Fund's Treasurer or Assistant Treasurer. As
promptly as practicable but in any case within 60 days after the
Closing Date, the Acquired Fund shall furnish to the Acquiring Fund,
in such form as is reasonably satisfactory to the Trust, a statement
of the earnings and profits of the Acquired Fund for federal income
tax purposes and of any capital loss carryovers and other items that
will be carried over to the Acquiring Fund as a result of Section 381
of the Code, and which statement will be certified by the President of
the Acquired Fund.
5.7 The Trust on behalf of the Acquiring Fund will prepare and file with
the Commission the Registration Statement in compliance with the 1933
Act and the 1940 Act in connection with the issuance of the Acquiring
Fund Shares as contemplated herein.
5.8 The Trust on behalf of the Acquired Fund will prepare a Proxy
Statement, to be included in the Registration Statement in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and the 1940 Act and the rules and regulations
thereunder (collectively, the "Acts") in connection with the special
meeting of shareholders of the Acquired Fund to consider approval of
this Agreement.
5.9 Neither the Acquired Fund nor the Acquiring Fund shall take any action
that is inconsistent with the representations set forth in, with
respect to the Acquired Fund, the Acquired Fund Tax Representation
Certificate, and with respect to the Acquiring Fund, the Acquiring
Fund Tax Representation Certificate, to the extent such action would
prevent the reorganization from qualifying as a "reorganization" under
Section 368(a) of the Code. The parties hereby adopt this Agreement as
a "plan of reorganization" within the meaning of Section 1.368-2(g)
and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within
the meaning of Section 1313(a) of the Code or otherwise, the parties
hereto shall treat and report the transactions contemplated hereby as
a reorganization within the meaning of Section 368(a)(1)(C) of the
Code, and shall not take any position inconsistent with such
treatment.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST ON BEHALF OF THE
ACQUIRED FUND
The obligations of the Trust on behalf of the Acquired Fund to complete the
transactions provided for herein shall be, at its election, subject to the
performance by the Trust on behalf of the Acquiring Fund of all the
obligations to be performed by it hereunder on or before the Closing Date,
and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Trust on behalf of the
Acquiring Fund contained in this Agreement shall be true and correct
in all material respects as of the date hereof and, except as they may
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be affected by the transactions contemplated by this Agreement, as of
the Closing Date with the same force and effect as if made on and as
of the Closing Date;
6.2 The Trust on behalf of the Acquiring Fund shall have delivered to the
Trust on behalf of the Acquired Fund a certificate executed in its
name by the Trust's President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Trust
on behalf of the Acquired Fund and dated as of the Closing Date, to
the effect that the representations and warranties of the Trust on
behalf of the Acquiring Fund made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such
other matters as the Trust on behalf of the Acquired Fund shall
reasonably request; and
6.3 The Acquiring Fund shall have delivered to the Acquired Fund an
Acquiring Fund Tax Representation Certificate in a form acceptable to
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, the Acquired Fund and the
Acquiring Fund concerning certain tax-related matters with respect to
the Acquiring Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST ON BEHALF OF THE
ACQUIRING FUND
The obligations of the Trust on behalf of the Acquiring Fund to complete
the transactions provided for herein shall be, at its election, subject to
the performance by the Trust on behalf of the Acquired Fund of all the
obligations to be performed by it hereunder on or before the Closing Date
and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Trust on behalf of the
Acquired Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of
the Closing Date;
7.2 The Trust on behalf of the Acquired Fund shall have delivered to the
Trust on behalf of the Acquiring Fund the Statement of Assets and
Liabilities of the Acquired Fund, together with a list of its
portfolio securities showing the federal income tax bases and holding
periods of such securities, as of the Closing Date, certified by the
Treasurer or Assistant Treasurer of the Acquired Fund;
7.3 The Trust on behalf of the Acquired Fund shall have delivered to the
Trust on behalf of the Acquiring Fund on the Closing Date a
certificate executed in the name of the Acquired Fund by a President
or Vice President and a Treasurer or Assistant Treasurer of the
Acquired Fund, in form and substance satisfactory to the Trust on
behalf of the Acquiring Fund and dated as of the Closing Date, to the
effect that the representations and warranties of the Acquired Fund in
this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Trust on behalf of
the Acquiring Fund shall reasonably request;
7.4 At or prior to the Closing Date, the Acquired Fund's investment
adviser, or an affiliate thereof, shall have made all payments, or
applied all credits, to the Acquired Fund required by any applicable
contractual [or voluntary] expense limitation; and
7.5 The Acquired Fund shall have delivered to the Acquiring Fund an
Acquired Fund Tax Representation Certificate in a form acceptable to
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, the Acquired Fund and the
Acquiring Fund concerning certain tax-related matters with respect to
the Acquired Fund.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST, ON BEHALF OF THE
ACQUIRED FUND, AND THE TRUST, ON BEHALF OF THE ACQUIRING FUND
The obligations hereunder of the Trust, on behalf of the Acquired Fund, and
the Trust, on behalf of the Acquiring Fund, are each subject to the further
conditions that on or before the Closing Date:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding
shares of beneficial interest of the Acquired Fund in accordance with
the provisions of the Trust 's Declaration and By-Laws, and certified
copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders shall have been delivered by the Acquired Fund to
the Trust on behalf of the Acquiring Fund;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought
to restrain or prohibit, or obtain changes or other relief in
connection with, this Agreement or the transactions contemplated
herein;
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8.3 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 their "no-action" positions) deemed
necessary by the Trust, on behalf of the Acquiring Fund, and the
Trust, on behalf of the Acquired Fund, to permit consummation, in all
material respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order
or permit would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may waive any such conditions for
itself;
8.4 The Registration Statement shall have become effective under the 1933
Act and the 1940 Act and no stop orders suspending the effectiveness
thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated under
the 1933 Act or the 1940 Act;
8.5 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for
dividends paid under Section 561 of the Code, all of its investment
company taxable income (as defined in Section 852(b)(2) of the Code
determined without regard to Section 852(b)(2)(D) of the Code) for its
taxable year ending on the Closing Date, all of the excess of (i) its
interest income excludable from gross income under Section 103(a) of
the Code over (ii) its deductions disallowed under Sections 265 and
171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections
852(b)(3)(A) and (C) of the Code), after reduction by any available
capital loss carryforward, for its taxable year ending on the Closing
Date; and
8.6 The parties shall have received an opinion of Xxxxxx Xxxxxx Xxxxxxxxx
Xxxx and Xxxx LLP, satisfactory to the Trust, on behalf of the
Acquired Fund, and the Trust, on behalf of the Acquiring Fund,
substantially to the effect that for federal income tax purposes the
acquisition by the Acquiring Fund of all of the assets of the Acquired
Fund solely in exchange for the issuance of Acquiring Fund Shares to
the Acquired Fund and the assumption of all of the Acquired Fund
Liabilities by the Acquiring Fund, followed by the distribution by the
Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund
Shares to the shareholders of the Acquired Fund in exchange for their
shares of beneficial interest of the Acquired Fund and the termination
of the Acquired Fund, will constitute a "reorganization" within the
meaning of Section 368(a) of the Code. Notwithstanding anything herein
to the contrary, neither the Trust, on behalf of the Acquiring Fund,
nor the Trust, on behalf of the Acquired Fund, may waive the
conditions set forth in this Paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust, on behalf of the Acquiring Fund, and the Trust, on behalf
of the Acquired Fund, represent and warrants that there are no brokers
or finders entitled to receive any payments in connection with the
transactions provided for herein.
9.2 Xxxx Xxxxxxx Advisers, LLC, the investment adviser to the Acquiring
Fund and the Acquired Fund, will bear the expenses allocable to each
fund in connection with transactions contemplated by this Agreement,
whether or not the transaction contemplated hereby are consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust, on behalf of the Acquiring Fund, and the Trust, on behalf
of the Acquired Fund, agree that neither party has made any
representation, warranty or covenant not set forth herein or referred
to in Paragraph 4 hereof 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 survive the consummation of the transactions
contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Trust,
on behalf of the Acquiring Fund, and the Trust, on behalf of the
Acquired Fund. In addition, either party may at its option terminate
this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or
prior to the Closing Date;
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(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which
reasonably appears will not or cannot be met;
(c) by resolution of the Trust's Board of Trustees, on behalf of the
Acquiring Fund, if circumstances should develop that, in the good
faith opinion of such Board, make proceeding with the Agreement not in
the best interests of the Acquiring Fund's shareholders; or
(d) by resolution of the Trust's Board of Trustees, on behalf of the
Acquired Fund, if circumstances should develop that, in the good faith
opinion of such Board, make proceeding with the Agreement not in the
best interests of the Acquired Fund's shareholders.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Trust, the Acquiring Fund, or the Acquired
Fund, or the Trustees or officers of the Trust, but each party shall
bear the expenses incurred by it incidental to the preparation and
carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon by the authorized officers of the Trust.
However, following the meeting of shareholders of the Acquired Fund held
pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions regarding the method for determining the
number of Acquiring Fund Shares to be received by the Acquired Fund
shareholders under this Agreement to the detriment of such shareholders
without their further approval; provided that nothing contained in this
Article 12 shall be construed to prohibit the parties from amending this
Agreement to change the Closing Date.
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
prepaid telegraph, telecopy or certified mail addressed to the Acquiring
Fund or to the Acquired Fund, each at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: President, and, in either case, with copies
to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esq.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 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.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
14.4 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 prior written consent of the other
party. 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.
14.5 All persons dealing with the Trust must look solely to the property of
the Trust for the enforcement of any claims against the Trust. The
Trustees, officers, agents and shareholders of the Trust assume no
personal liability for obligations entered into on behalf of the
Trust. None of the other series of the Trust shall be responsible for
any obligations assumed by or on behalf of the Acquiring Fund or the
Acquired Fund under this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and has caused its corporate seal to be affixed hereto.
XXXX XXXXXXX WORLD FUND
On behalf of
XXXX XXXXXXX BIOTECHNOLOGY FUND
BY: /s/Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Assistant Secretary
XXXX XXXXXXX WORLD FUND
On behalf of
XXXX XXXXXXX HEALTH SCIENCES FUND
By: /s/Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Assistant Secretary
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