Exhibit No. EX-99.4.a.
AGREEMENT AND PLAN OF ACQUISITION
THIS AGREEMENT AND PLAN OF ACQUISITION (the "Plan") is made as of this 16th
day of June, 2006, by and among: (i) Lincoln National Income Fund, Inc.
("Acquired Fund"), a corporation incorporated under the laws of the State of
Maryland and a closed-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"), with its principal
place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000; (ii) Delaware
Group Income Funds ("Acquiring Trust"), on behalf of its series Delaware
Corporate Bond Fund ("Acquiring Fund"), a statutory trust formed under the laws
of the State of Delaware and an open-end management investment company
registered under the 1940 Act, with its principal place of business at Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000; and (iii) Delaware Management Company
("DMC"), a series of Delaware Management Business Trust, a statutory trust
formed under the laws of the State of Delaware, with its principal place of
business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
REORGANIZATION
The reorganization (hereinafter referred to as the "Reorganization") will
consist of (i) the acquisition by Acquiring Trust, on behalf of Acquiring Fund,
of substantially all of the property, assets and goodwill of Acquired Fund in
exchange solely for full and fractional shares of beneficial interest, without
par value, of Acquiring Fund - Class A Shares ("Acquiring Fund Shares"); (ii)
the distribution of Acquiring Fund Shares to the shareholders of Acquired Fund
according to their respective interests in liquidation of Acquired Fund; and
(iii) the dissolution of Acquired Fund as soon as is practicable after the
closing (as defined in Section 3, hereinafter called the "Closing"), all upon
and subject to the terms and conditions of this Plan hereinafter set forth.
AGREEMENT
In order to consummate the Plan and the Reorganization and in consideration
of the premises and of the covenants and agreements hereinafter set forth, and
intending to be legally bound, the parties hereto covenant and agree as follows:
1. Sale and Transfer of Assets, Liquidation and Dissolution of Acquired Fund.
(a) Subject to the terms and conditions of this Plan, and in reliance on
the representations and warranties of Acquiring Trust, on behalf of
Acquiring Fund, herein contained, and in consideration of the delivery
by Acquiring Trust, on behalf of Acquiring Fund, of the number of
Acquiring Fund Shares hereinafter provided, Acquired Fund agrees that
it will convey, transfer and deliver to Acquiring Trust, on behalf of
Acquiring Fund, at the Closing all of Acquired Fund's then existing
assets, free and clear of all liens, encumbrances and claims
whatsoever (other than shareholders' rights of redemption, if any),
except for cash, bank deposits or cash equivalent securities in an
estimated amount necessary to: (i) pay the costs and expenses of
carrying out this Plan (including, but not limited to, fees of counsel
and accountants, and expenses of its liquidation and dissolution
contemplated hereunder), which costs and expenses shall be established
on Acquired Fund's books as liability reserves; (ii) discharge its
unpaid liabilities on its books at the Closing date (as defined in
Section 3, hereinafter called the "Closing Date"), including, but not
limited to, its income dividends and capital gains distributions, if
any, payable for the period prior to, and through, the Closing Date
and excluding those liabilities that would otherwise be discharged at
a later date in the ordinary course of business; and (iii) pay such
contingent liabilities as the Board of Directors of Acquired Fund (the
"Acquired Fund Board") shall reasonably deem to exist against Acquired
Fund, if any, at the Closing Date, for which contingent and other
appropriate liability reserves shall be established on Acquired Fund's
books (hereinafter "Net Assets"). Acquired Fund shall also retain any
and all rights that it may have over and against any person that may
have arisen up to and including the close of business on the Closing
Date.
(b) Subject to the terms and conditions of this Plan, and in reliance on
the representations and warranties of Acquired Fund herein contained,
and in consideration of such sale, conveyance, transfer and delivery,
Acquiring Trust, on behalf of Acquiring Fund, agrees at the Closing to
deliver to Acquired Fund the number of Acquiring Fund Shares
determined by: (i) dividing the net asset value per share of the
Acquired Fund by (ii) the net asset value per share of the Acquiring
Fund Shares, and (iii) multiplying the resulting quotient by the
number of outstanding Acquired Fund shares. All such values shall be
determined in the manner and as of the time set forth in Section 2
hereof.
(c) Immediately following the Closing, Acquired Fund shall effect a
liquidating distribution of the Acquiring Fund Shares received by
Acquired Fund pursuant to this Section 1, together with any other
assets, pro rata to Acquired Fund's shareholders of record as of the
close of business on the Closing Date. Such liquidating distribution
shall be accomplished by the establishment of accounts on the share
records of Acquiring Fund of the type and in the amounts due such
shareholders based on their respective holdings as of the close of
business on the Closing Date. Fractional Acquiring Fund Shares shall
be carried to the third decimal place. As promptly as is practicable
after the Closing, each holder of any outstanding certificate or
certificates representing common stock of Acquired Fund ("Acquired
Fund Shares") shall be entitled to surrender the same to the transfer
agent for Acquiring Trust, on behalf of Acquiring Fund, in exchange
for the number of Acquiring Fund Shares into which the Acquired Fund
Shares theretofore represented by the certificate or certificates so
surrendered shall have been converted. Until so surrendered, each
outstanding certificate which, prior to the Closing, represented
Acquired Fund Shares shall be deemed for all Acquiring Trust's
purposes to evidence ownership of the number of Acquiring Fund Shares
into which the Acquired Fund Shares (which prior to the Closing were
represented thereby) have been converted. Promptly following the
Closing and the liquidating distribution of the Acquiring Fund Shares
(and any resolution of litigation or other contingent liabilities),
Acquired Fund shall be dissolved.
2. Valuation.
(a) The value of Acquired Fund's Net Assets to be acquired by Acquiring
Trust, on behalf of Acquiring Fund, hereunder shall be computed as of
4:00 p.m. Eastern time on the Closing Date in a manner consistent with
the valuation procedures described in Acquired Fund's registration
statement on Form N-2 dated April 25, 1994, as such disclosures have
been amended to date by any: (i) amendments to Acquired Fund's Form
N-2 filed with the U.S. Securities and Exchange Commission (the
"SEC"); (ii) press releases issued on behalf of Acquired Fund; and
(iii) Acquired Fund annual or semi-annual reports sent to shareholders
pursuant to Section 30 of the 1940 Act (together, the "Acquired Fund
Disclosure Documents").
(b) The net asset value per Acquired Fund Share shall be determined to the
second decimal place as of 4:00 p.m. Eastern time on the Closing Date
in a manner consistent with the valuation procedures described in
Acquired Fund's Disclosure Documents.
(c) The net asset value of a share of beneficial interest of Acquiring
Fund Shares shall be determined to the second decimal place as of 4:00
p.m. Eastern time on the Closing Date in a manner consistent with the
valuation procedures described in Acquiring Fund's currently effective
prospectus.
3. Closing Date
The Closing Date shall be June 16, 2006, or such later date as the parties
may mutually agree. The Closing shall take place at the principal office of
Acquiring Trust at 5:00 p.m. Eastern time, on the Closing Date. Acquired Fund
shall have provided for delivery as of the Closing of those Net Assets of
Acquired Fund to be transferred to the account of Acquiring Fund's custodian,
JPMorgan Xxxxx Xxxx, 0 Xxxxx XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000.
Acquired Fund shall also deliver at the Closing a list of names and addresses of
the shareholders of record of its Acquired Fund Shares and the number of full
and fractional shares of common stock of Acquired Fund Shares owned by each such
shareholder, indicating thereon which such shares are represented by outstanding
certificates and which by book-entry accounts, all as of 4:00 p.m. Eastern time
on the Closing Date, certified by its transfer agent or by its President or a
Vice President to the best of its or his or her knowledge and belief. Acquiring
Trust, on behalf of Acquiring Fund, shall issue and deliver a certificate or
certificates evidencing the Acquiring Fund Shares to be delivered to the account
of Acquired Fund at said transfer agent registered in such manner as the
officers of Acquired Fund may request, or provide evidence satisfactory to
Acquired Fund that such Acquiring Fund Shares have been registered in an account
on the books of Acquiring Trust, on behalf of Acquiring Fund, in such manner as
the officers of Acquired Fund may request.
4. Representations and Warranties by Acquiring Trust, on Behalf of Acquiring
Fund.
Acquiring Trust, on behalf of Acquiring Fund, represents and warrants to
Acquired Fund that:
(a) Acquiring Trust is a statutory trust formed under the laws of the
State of Delaware on September 29, 1999, and is validly existing under
the laws of that State. Acquiring Trust is duly registered under the
1940 Act as an open-end, management investment company and all of the
Acquiring Fund Shares sold were sold pursuant to an effective
registration statement filed under the Securities Act of 1933, as
amended (the "1933 Act"), except for those shares sold pursuant to the
private offering exemption for the purpose of raising the required
initial capital.
(b) Acquiring Trust is authorized to issue an unlimited number of shares
of beneficial interest of Acquiring Fund, without par value, each
outstanding share of which is fully paid, non-assessable, freely
transferable and has full voting rights. Shares of beneficial interest
of Acquiring Fund are further divided into five classes of shares, of
which Acquiring Fund Shares is one, and an unlimited number of shares
of beneficial interest, without par value, have been allocated and
designated to Acquiring Fund Shares.
(c) The audited financial statements appearing in Acquiring Trust's Annual
Report to Shareholders for the fiscal year ended July 31, 2005,
audited by Ernst & Young, LLP, a copy of which has been delivered to
Acquired Fund, fairly present the financial position of Acquiring Fund
as of the respective dates indicated and the results of its operations
for the periods indicated in conformity with generally accepted
accounting principles applied on a consistent basis.
(d) The books and records of Acquiring Trust accurately summarize the
accounting data represented and contain no material omissions with
respect to the business and operations of Acquiring Fund.
(e) Acquiring Trust has the necessary power and authority to conduct its
business as such business is now being conducted.
(f) Acquiring Trust is not a party to or obligated under any provision of
its Declaration of Trust or its By-laws (together, as each has been
amended to date, the "Acquiring Trust Documents"), or any contract or
any other commitment or obligation, and is not subject to any order or
decree, that would be violated by its execution of or performance
under this Plan.
(g) Acquiring Trust has elected to be treated as a regulated investment
company ("RIC") for federal income tax purposes under Part I of
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and it has qualified as a RIC for each taxable year since its
inception and will qualify as a RIC as of the Closing Date, and
consummation of the transactions contemplated by the Plan will not
cause it to fail to be qualified as a RIC as of the Closing Date.
(h) Acquiring Trust is not under jurisdiction of a Court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
5. Representations and Warranties by Acquired Fund.
Acquired Fund represents and warrants to Acquiring Trust that:
(a) Acquired Fund is a corporation incorporated under the laws of the
State of Maryland on January 29, 1976, and is validly existing under
the laws of that State. Acquired Fund is duly registered under the
1940 Act as a closed-end management investment company and all of the
Acquired Fund Shares sold were sold in compliance in all material
respects with applicable registration requirements of the 1933 Act.
(b) Acquired Fund is authorized to issue ten million (10,000,000) shares
of common stock of Acquired Fund, par value $0.001 per share, each
outstanding share of which is fully paid, non-assessable, freely
transferable and has full voting rights. Acquired Fund currently
issues shares of one (1) class, and it has not designated any series
of shares.
(c) The audited financial statements appearing in Acquired Fund's Annual
Report to Shareholders for the fiscal year ended December 31, 2005,
audited by Ernst & Young, LLP, a copy of which has been delivered to
Acquiring Trust, fairly present the financial position of Acquired
Fund as of the respective dates indicated and the results of its
operations for the periods indicated in conformity with generally
accepted accounting principles applied on a consistent basis.
(d) The books and records of Acquired Fund accurately summarize the
accounting data represented and contain no material omissions with
respect to the business and operations of Acquired Fund.
(e) Acquired Fund has the necessary power and authority to conduct its
business as such business is now being conducted.
(f) Acquired Fund is not a party to or obligated under any provision of
its Articles of Incorporation, as amended or supplemented from time to
time, or its By-Laws (together, as each has been amended to date, the
"Acquired Fund Corporate Documents"), or any contract or any other
commitment or obligation, and is not subject to any order or decree,
that would be violated by its execution of or performance under this
Plan.
(g) Acquired Fund has elected to be treated as a RIC for federal income
tax purposes under Part I of Subchapter M of the Code, and it has
qualified as a RIC for each taxable year since its inception and will
qualify as a RIC as of the Closing Date, and consummation of the
transactions contemplated by the Plan will not cause it to fail to be
qualified as a RIC as of the Closing Date.
(h) Acquired Fund is not under jurisdiction of a Court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
6. Representations and Warranties by Acquired Fund and Acquiring Trust, on
Behalf of Acquiring Fund.
Acquired Fund and Acquiring Trust, on behalf of Acquiring Fund, each
represents and warrants to the other that:
(a) The statement of assets and liabilities to be furnished by it as of
4:00 p.m. Eastern time on the Closing Date, for the purpose of
determining the number of Acquiring Fund Shares to be issued pursuant
to Section 1 of this Plan, will accurately reflect its Net Assets in
the case of Acquired Fund and its net assets in the case of Acquiring
Fund and the outstanding Acquired Fund Shares and Acquiring Fund
Shares, respectively, as of such date, in conformity with generally
accepted accounting principles applied on a consistent basis.
(b) At the Closing, it will have good and marketable title to all of the
securities and other assets shown on the statement of assets and
liabilities referred to in (a) above, free and clear of all liens or
encumbrances of any nature whatsoever, except such imperfections of
title or encumbrances as do not materially detract from the value or
use of the assets subject thereto, or materially affect title thereto.
(c) Except as has been previously disclosed in the Acquired Fund
Disclosure Documents or in Acquiring Fund's currently effective
prospectus, there is no material suit, judicial action, or legal or
administrative proceeding pending or threatened against Acquired Fund
or Acquiring Fund, respectively.
(d) There are no known actual or proposed deficiency assessments with
respect to any taxes payable by it.
(e) The execution, delivery and performance of this Plan have been duly
authorized by all necessary action of the Board of Trustees of
Acquiring Trust (the "Acquiring Trust Board") or the Acquired Fund
Board, respectively, and this Plan constitutes a valid and binding
obligation enforceable in accordance with its terms.
(f) It anticipates that the consummation of this Plan will not cause
either Acquired Fund or Acquiring Fund to fail to conform to the
requirements of Subchapter M of the Code for federal income taxation
as a RIC at the end of its fiscal year.
(g) It has the necessary power and authority to conduct its business as
such business is now being conducted.
7. Covenants of Acquired Fund and Acquiring Trust, on Behalf of Acquiring
Fund.
(a) Acquired Fund and Acquiring Trust, on behalf of Acquiring Fund, each
covenants to operate its respective business as presently conducted
between the date hereof and the Closing.
(b) Acquired Fund undertakes that it will not acquire Acquiring Fund
Shares for the purpose of making distributions thereof to anyone other
than Acquired Fund's shareholders.
(c) Acquired Fund undertakes that, if this Plan is consummated, it will
dissolve its corporate existence, file an application pursuant to
Section 8(f) of the 1940 Act for an order declaring that it has ceased
to be an investment company and take the necessary actions, including
making the necessary filings, to withdraw its shares from listing on
those stock exchanges on which Acquired Fund Shares are listed as of
the Closing Date.
(d) Acquired Fund and Acquiring Trust, on behalf of Acquiring Fund, each
agrees that, by the Closing, all of its federal and other tax returns
and reports required by law to be filed on or before such date shall
have been filed, and all federal and other taxes shown as due on said
returns shall have either been paid or had adequate liability reserves
created for the payment of such taxes.
(e) At the Closing, Acquired Fund will provide Acquiring Trust a copy of
the shareholder ledger accounts, certified by Acquired Fund's transfer
agent or its President or a Vice President to the best of its or his
or her knowledge and belief, for all of the shareholders of record of
Acquired Fund Shares as of 4:00 p.m. Eastern time on the Closing Date
who are to become shareholders of Acquiring Fund as a result of the
transfer of assets that is the subject of this Plan.
(f) Acquired Fund agrees to mail to each of its shareholders of record
entitled to vote at the meeting of its shareholders at which action on
this Plan is to be considered, in sufficient time to comply with
requirements as to notice thereof, a combined Prospectus and Proxy
Statement that complies in all material respects with the applicable
provisions of Section 14(a) of the Securities Exchange Act of 1934, as
amended, and Section 20(a) of the 1940 Act, and the rules and
regulations, respectively, thereunder.
(g) Acquiring Trust, on behalf of Acquiring Fund, will file with the SEC a
registration statement on Form N-14 under the 1933 Act relating to
Acquiring Fund Shares issuable hereunder (the "Acquiring Fund N-14
Registration Statement"), and will use its best efforts to provide
that the Acquiring Fund N-14 Registration Statement becomes effective
as promptly as is practicable. At the time it becomes effective, the
Acquiring Fund N-14 Registration Statement will (i) comply in all
material respects with the applicable provisions of the 1933 Act, and
the rules and regulations promulgated thereunder; and (ii) not contain
any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. At the time the Acquiring Fund N-14
Registration Statement becomes effective, at the time of Acquired
Fund's shareholders' meeting to consider this Plan, and at the Closing
Date, the Prospectus and Statement of Additional Information included
in the Acquiring Fund N-14 Registration Statement will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) Acquired Fund and Acquiring Trust, on behalf of Acquiring Fund, each
agrees that, before the Closing, it will deliver to the other party a
copy of the resolutions, adopted and approved by the appropriate
action of its Board, certified by its President, a Vice President or
an equivalent officer of Acquired Fund or Acquiring Trust,
respectively, approving the imposition by Acquiring Trust of a 2%
redemption fee on those Acquiring Fund Shares issued as part of the
Reorganization pursuant to this Plan to Acquired Fund shareholders in
exchange for their Acquired Fund Shares that are redeemed or exchanged
out of Acquiring Fund within three (3) months after the Closing Date.
8. Conditions Precedent to be Fulfilled by Acquired Fund and Acquiring Trust,
on Behalf of Acquiring Fund.
The consummation of this Plan hereunder shall be subject to the following
respective conditions:
(a) That: (i) all the representations and warranties of the other party
contained herein shall be true and correct as of the Closing with the
same effect as though made as of and at such date; (ii) the other
party shall have performed all obligations required by this Plan to be
performed by it prior to the Closing; and (iii) the other party shall
have delivered to such party a certificate signed by its President, a
Vice President or an equivalent officer to the foregoing effect.
(b) That each party shall have delivered to the other party a copy of the
resolutions approving the Plan adopted and approved by the appropriate
action of the Acquired Fund Board or Acquiring Trust Board, as
appropriate, certified by its President, a Vice President or an
equivalent officer of Acquired Fund or Acquiring Trust, respectively.
(c) That the SEC shall not have issued an unfavorable management report
under Section 25(b) of the 1940 Act or instituted or threatened to
institute any proceeding seeking to enjoin consummation of the Plan
under Section 25(c) of the 1940 Act. And, further, no other legal,
administrative or other proceeding shall have been instituted or
threatened that would materially affect the financial condition of
either party or would prohibit the transactions contemplated hereby.
(d) That this Plan and the Reorganization contemplated hereby shall have
been adopted and approved by the appropriate action of the
shareholders of Acquired Fund at an annual or special meeting or any
adjournment thereof.
(e) That a distribution or distributions shall have been declared for
Acquired Fund prior to the Closing Date that, together with all
previous distributions, shall have the effect of distributing to its
shareholders (i) all of its ordinary income and all of its capital
gain net income, if any, for the period from the close of its last
fiscal year to 4:00 p.m. Eastern time on the Closing Date; and (ii)
any undistributed ordinary income and capital gain net income from any
period to the extent not otherwise declared for distribution. Capital
gain net income has the meaning given such term by Section 1222(a) of
the Code.
(f) That there shall be delivered to Acquired Fund and Acquiring Trust an
opinion from Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP, counsel to Acquired
Fund and Acquiring Trust, to the effect that, provided the acquisition
contemplated hereby is carried out in accordance with this Plan and
the laws of the State of Maryland and the State of Delaware, and based
upon certificates of the officers of Acquired Fund and Acquiring Trust
with regard to matters of fact:
(1) The acquisition by Acquiring Trust, on behalf of Acquiring Fund,
of substantially all the assets of Acquired Fund as provided for
herein in exchange for Acquiring Fund Shares followed by the
distribution by Acquired Fund to its shareholders of Acquiring
Fund Shares in complete liquidation of Acquired Fund will qualify
as a reorganization within the meaning of Section 368(a)(1) of
the Code, and Acquired Fund and Acquiring Trust, on behalf of
Acquiring Fund, will each be a "party to the reorganization"
within the meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by Acquired Fund upon the
transfer of substantially all of its assets to Acquiring Fund in
exchange solely for voting shares of Acquiring Fund (Sections
361(a) and 357(a) of the Code);
(3) No gain or loss will be recognized by Acquiring Fund upon the
receipt of substantially all of the assets of Acquired Fund in
exchange solely for voting shares of Acquiring Fund (Section
1032(a) of the Code);
(4) No gain or loss will be recognized by Acquired Fund upon the
distribution of Acquiring Fund Shares to its shareholders in
liquidation of Acquired Fund (in pursuance of the Plan) (Section
361(c)(1) of the Code);
(5) The basis of the assets of Acquired Fund received by Acquiring
Fund will be the same as the basis of such assets to Acquired
Fund immediately prior to the Reorganization (Section 362(b) of
the Code);
(6) The holding period of the assets of Acquired Fund received by
Acquiring Fund will include the period during which such assets
were held by Acquired Fund (Section 1223(2) of the Code);
(7) No gain or loss will be recognized to the shareholders of
Acquired Fund upon the exchange of their shares in Acquired Fund
for voting shares of Acquiring Fund, including fractional shares
to which they may be entitled (Section 354(a) of the Code);
(8) The basis of Acquiring Fund Shares received by the shareholders
of Acquired Fund shall be the same as the basis of the Acquired
Fund Shares exchanged therefor (Section 358(a)(1) of the Code);
(9) The holding period of Acquiring Fund Shares received by
shareholders of Acquired Fund (including fractional shares to
which they may be entitled) will include the holding period of
the Acquired Fund Shares surrendered in exchange therefor,
provided that the Acquired Fund Shares were held as a capital
asset on the effective date of the exchange (Section 1223(1) of
the Code); and
(10) Acquiring Fund will succeed to and take into account as of the
date of the transfer (as defined in Section 1.381(b)-1(b) of the
regulations issued by the United States Treasury ("Treasury
Regulations")) the items of Acquired Fund described in Section
381(c) of the Code, subject to the conditions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and the
Treasury Regulations.
(g) That there shall be delivered to Acquiring Trust an opinion in form
and substance satisfactory to it from Xxxxxxxx Ronon Xxxxxxx & Xxxxx,
LLP, counsel to Acquired Fund, to the effect that, subject in all
respects to the effects of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws now or hereafter
affecting generally the enforcement of creditors' rights:
(1) Acquired Fund is a corporation incorporated under the laws of the
State of Maryland on January 29, 1976, and is a validly existing
corporation and in good standing under the laws of that state;
(2) Acquired Fund is authorized to issue ten million (10,000,000)
shares of common stock, par value $0.001 per share. Acquired Fund
currently issues shares of one (1) class and it has not
designated any series of shares. Assuming that the initial shares
of common stock of Acquired Fund were issued in accordance with
the 1940 Act and the Acquired Fund Corporate Documents, and that
all other outstanding shares of Acquired Fund were sold, issued
and paid for in compliance in all material respects with
applicable registration requirements of the 1933 Act, each such
outstanding share is fully paid, non-assessable, freely
transferable and has full voting rights in accordance with the
terms of the Acquired Fund Corporate Documents;
(3) Acquired Fund is a closed-end investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in the Acquired Fund Disclosure Documents,
such counsel does not know of any material suit, action or legal
or administrative proceeding pending or threatened against
Acquired Fund, the unfavorable outcome of which would materially
and adversely affect Acquired Fund;
(5) All corporate actions required to be taken by Acquired Fund to
authorize this Plan and to effect the Reorganization contemplated
hereby have been duly authorized by all necessary action on the
part of Acquired Fund; and
(6) The execution, delivery or performance of this Plan by Acquired
Fund will not violate any provision of the Acquired Fund
Corporate Documents, or the provisions of any agreement or other
instrument known to such counsel to which Acquired Fund is a
party or by which Acquired Fund is otherwise bound; this Plan is
the legal, valid and binding obligation of Acquired Fund and is
enforceable against Acquired Fund in accordance with its terms.
In giving the opinions set forth above, this counsel may state that it
is relying on certificates of the officers of Acquired Fund with
regard to matters of fact, and certain certifications and written
statements of governmental officials with respect to the good standing
of Acquired Fund.
(h) That there shall be delivered to Acquired Fund an opinion in form and
substance satisfactory to it from Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP,
counsel to Acquiring Trust, to the effect that, subject in all
respects to the effects of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws now or hereafter
affecting generally the enforcement of creditors' rights:
(1) Acquiring Trust is a statutory trust formed under the laws of the
State of Delaware on September 29, 1999 and is a validly existing
statutory trust and in good standing under the laws of that
State;
(2) Acquiring Trust is authorized to issue an unlimited number of
shares of beneficial interest of Acquiring Fund, without par
value. Shares of beneficial interest of Acquiring Fund are
further divided into five classes of shares, of which Acquiring
Fund Shares is one, and an unlimited number of shares of
beneficial interest, without par value, has been allocated and
designated to Acquiring Fund Shares. Assuming that the initial
Acquiring Fund Shares of beneficial interest were issued in
accordance in all material respects with the 1940 Act and the
Acquiring Trust Documents, and that all other outstanding shares
of Acquiring Fund were sold, issued and paid for in accordance in
all material respects with the terms of Acquiring Fund's
prospectus in effect at the time of such sales, each such
outstanding share is fully paid, non-assessable, freely
transferable and has full voting rights in accordance with the
terms of the Acquiring Trust Documents;
(3) Acquiring Trust is an open-end investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in Acquiring Fund's currently effective
prospectus, such counsel does not know of any material suit,
action or legal or administrative proceeding pending or
threatened against Acquiring Trust, the unfavorable outcome of
which would materially and adversely affect Acquiring Fund;
(5) Acquiring Fund Shares to be issued pursuant to the terms of this
Plan have been duly authorized and, when issued and delivered as
provided in this Plan, will have been validly issued and fully
paid and will be non-assessable by Acquiring Trust;
(6) All trust actions required to be taken by Acquiring Trust to
authorize this Plan and to effect the Reorganization contemplated
hereby have been duly authorized by all necessary action on the
part of Acquiring Trust;
(7) The execution, delivery or performance of this Plan by Acquiring
Trust, on behalf of Acquiring Fund, will not violate any
provision of the Acquiring Trust Documents, or the provisions of
any agreement or other instrument known to such counsel to which
Acquiring Trust, on behalf of Acquiring Fund, is a party or by
which Acquiring Trust, on behalf of Acquiring Fund, is otherwise
bound; this Plan is the legal, valid and binding obligation of
Acquiring Trust, on behalf of Acquiring Fund, and is enforceable
against Acquiring Trust, on behalf of Acquiring Fund, in
accordance with its terms; and
(8) The Acquiring Fund N-14 Registration Statement has been declared
or, by operation of rule, has become effective under the 1933
Act, and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of such Registration Statement has
been issued, and no proceedings for such purpose have been
instituted or are pending before or threatened by the SEC under
the 1933 Act, and nothing has come to counsel's attention that
causes it to believe that, at the time the Acquiring Fund N-14
Registration Statement became effective, or at the Closing, such
Registration Statement (except for the financial statements and
other financial and statistical data included therein, as to
which counsel need not express an opinion), contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and such counsel knows of no legal or
government proceedings required to be described in the Acquiring
Fund N-14 Registration Statement, or of any contract or document
of a character required to be described in the Acquiring Fund
N-14 Registration Statement that is not described as required.
In giving the opinions set forth above, this counsel may state that it
is relying on certificates of the officers of Acquiring Trust with
regard to matters of fact, and certain certifications and written
statements of governmental officials with respect to the good standing
of Acquiring Trust.
(i) That Acquired Fund shall have received a certificate from the
President or a Vice President of Acquiring Trust to the effect that,
to the best knowledge and belief of such officer, the statements
contained in the Acquiring Fund N-14 Registration Statement, at the
time the Acquiring Fund N-14 Registration Statement became effective,
at the date of the signing of this Plan, and at the Closing, did 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 not misleading.
(j) That the Acquiring Fund N-14 Registration Statement with respect to
Acquiring Fund Shares to be delivered to Acquired Fund's shareholders
in accordance with this Plan shall have become effective, and no stop
order suspending the effectiveness of the Acquiring Fund N-14
Registration Statement or any amendment or supplement thereto, shall
have been issued prior to the Closing Date or shall be in effect at
Closing, and no proceedings for the issuance of such an order shall be
pending or threatened on that date.
(k) That Acquiring Fund Shares to be delivered hereunder shall be eligible
for sale with each state commission or agency with which such
eligibility is required in order to permit Acquiring Fund Shares
lawfully to be delivered to each holder of Acquired Fund Shares.
(l) That, at the Closing, there shall be transferred to Acquiring Trust,
on behalf of Acquiring Fund, aggregate Net Assets of Acquired Fund
comprising at least 90% in fair market value of the total net assets
and 70% of the fair market value of the total gross assets recorded on
the books of Acquired Fund on the Closing Date.
(m) That there be delivered to Acquiring Trust information concerning the
tax basis of Acquired Fund in all securities transferred to Acquiring
Trust, on behalf of Acquiring Fund, together with shareholder
information including the names, addresses and taxpayer identification
numbers of the shareholders of Acquired Fund as of the Closing Date,
the number of shares held by each shareholder, the dividend
reinvestment elections applicable to each shareholder, and the backup
withholding and nonresident alien withholding certifications, notices
or records on file with Acquired Fund with respect to each
shareholder.
(n) That all consents of other parties, and all other consents, orders and
permits of federal, state and local regulatory authorities (including
those of the SEC and of state Blue Sky securities authorities,
including any necessary "no-action" positions or exemptive orders from
such federal and state authorities), required to permit consummation
of the Reorganization 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 Acquired Fund or Acquiring Fund.
9. Fees and Expenses; Indemnification of Acquired Fund Directors.
(a) Acquired Fund and Acquiring Trust, on behalf of Acquiring Fund, each
represents and warrants to the other that there are no broker or
finders' fees payable by it in connection with the transactions
provided for herein.
(b) The expenses of entering into and carrying out the provisions of this
Plan shall be borne one-third each by Acquiring Fund, Acquired Fund
and DMC; provided, however, that DMC shall bear an additional $20,000
of Acquiring Fund's Reorganization-related expenses.
(c) DMC will, at its expense, maintain in full force and effect for a
period of at least three years from the Closing Date one or more
directors and officers errors and omissions liability insurance
policies ("D&O/E&O insurance policies") which provide liability
insurance coverage to all of the then current Directors of the
Acquired Fund on the Closing Date in an amount at least equal to
$3,000,000.
(d) DMC shall indemnify each person serving as a Director of the Acquired
Fund on the Closing Date to the fullest extent consistent with state
law and the 1940 Act. Without limitation of the foregoing, DMC shall
indemnify each such person who was or is a party or is threatened to
be made a party to any proceedings, by reason of alleged acts or
omissions within the scope of his or her service as a Director of the
Acquired Fund, against judgments, fines, penalties, settlements and
reasonable expenses (including attorneys' fees and any amount relating
to a settlement) actually incurred by him or her in connection with
such proceeding to the maximum extent consistent with state law and
the 1940 Act.
10. Termination; Postponement; Waiver; Order.
(a) Anything contained in this Plan to the contrary notwithstanding, this
Plan may be terminated and the Reorganization abandoned at any time
(whether before or after approval thereof by the shareholders of
Acquired Fund) prior to the Closing, or the Closing may be postponed
as follows:
(1) by mutual consent of Acquired Fund and Acquiring Trust;
(2) by Acquiring Trust if any condition of its obligations set forth
in Section 8 has not been fulfilled or waived; or
(3) by Acquired Fund if any condition of its obligations set forth in
Section 8 has not been fulfilled or waived.
An election by Acquired Fund or Acquiring Trust to terminate this Plan
and to abandon the Reorganization shall be exercised by the Acquired
Fund Board or the Acquiring Trust Board, respectively.
(b) If the transactions contemplated by this Plan have not been
consummated by December 31, 2006, the Plan shall automatically
terminate on that date, unless a later date is agreed to by both the
Acquired Fund Board and the Acquiring Trust Board.
(c) In the event of termination of this Plan pursuant to the provisions
hereof, the Plan shall become void and have no further effect, and
neither Acquired Fund nor Acquiring Trust, nor their trustees,
directors, officers or agents or the shareholders of Acquired Fund or
Acquiring Trust shall have any liability in respect of this Plan.
(d) At any time prior to the Closing, any of the terms or conditions of
this Plan may be waived by the party who is entitled to the benefit
thereof by action taken by the Acquiring Trust Board or Acquired Fund
Board, as the case may be, if, in the judgment of such Board, such
action or waiver will not have a material adverse effect on the
benefits intended under this Plan to its shareholders, on behalf of
whom such action is taken.
(e) The respective representations and warranties contained in Sections 4
through 6 hereof shall expire with and be terminated by the
Reorganization, and neither Acquired Fund nor Acquiring Trust, nor any
of their officers, trustees, directors, agents or shareholders shall
have any liability with respect to such representations or warranties
after the Closing. This provision shall not protect any officer,
trustee, director, agent or shareholder of Acquired Fund or Acquiring
Trust against any liability to the entity for which that officer,
trustee, director, agent or shareholder so acts or to its shareholders
to which that officer, trustee, director, agent or shareholder would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties in the conduct of
such office.
(f) If any order or orders of the SEC with respect to this Plan shall be
issued prior to the Closing and shall impose any terms or conditions
that are determined by action of the Acquired Fund Board and the
Acquiring Trust Board to be acceptable, such terms and conditions
shall be binding as if a part of this Plan without further vote or
approval of the shareholders of Acquired Fund, unless such terms and
conditions shall result in a change in the method of computing the
number of Acquiring Fund Shares to be issued to Acquired Fund in which
event, unless such terms and conditions shall have been included in
the proxy solicitation material furnished to the shareholders of
Acquired Fund prior to the meeting at which the transactions
contemplated by this Plan shall have been approved, this Plan shall
not be consummated and shall terminate unless Acquired Fund shall
promptly call a special meeting of its shareholders at which such
conditions so imposed shall be submitted for approval.
11. Entire Agreement and Amendments.
This Plan embodies the entire agreement between the parties and there are
no agreements, understandings, restrictions or warranties relating to the
transactions contemplated by this Plan other than those set forth herein or
herein provided for. This Plan may be amended only by mutual consent of the
parties in writing. Neither this Plan nor any interest herein may be assigned
without the prior written consent of the other parties.
12. Counterparts.
This Plan may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts together shall
constitute but one instrument.
13. Notices.
(a) Any notice, report or demand required or permitted by any provision of
this Plan shall be in writing and shall be deemed to have been given
to Acquired Fund if delivered or mailed, first class postage prepaid,
addressed to Lincoln National Income Fund, Inc., at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Secretary.
(b) Any notice, report or demand required or permitted by any provision of
this Plan shall be in writing and shall be deemed to have been given
to Acquiring Trust if delivered or mailed, first class postage
prepaid, addressed to Delaware Group Income Funds, at Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Secretary.
14. Governing Law.
This Plan shall be governed by and carried out in accordance with the laws
of the State of Delaware.
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IN WITNESS WHEREOF, Acquired Fund, Acquiring Trust, on behalf of Acquiring
Fund, and DMC have each caused this Plan to be executed on its behalf by its
duly authorized officers, all as of the date and year first-above written.
LINCOLN NATIONAL INCOME
FUND, INC.
Attest:/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Secretary Title: President
DELAWARE GROUP INCOME FUNDS,
on behalf of Delaware Corporate Bond
Fund
Attest:/s/ Xxxxx X. Xxxxxx By:/s/Xxxxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: Senior Vice President/
Chief Financial Officer
DELAWARE MANAGEMENT COMPANY,
a series of Delaware
Management Business Trust
Attest:/s/ Xxxxx X. Xxxxxx By:/s/Xxxxxxx X. Xxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Secretary Title: Executive Vice President
