AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is made as of
this ____ day of ______, 2000, by and between XxxxxXxxxxx.xxx Trust, a
Massachusetts business trust (the "SJTrust"), on behalf of its XxxxxXxxxxx.xxx
Market Leaders Growth Fund ("Growth Fund"), its XxxxxXxxxxx.xxx Pure Play
Internet Fund ("Internet Fund"), and its XxxxxXxxxxx.xxx Community Intelligence
Fund ("Community Fund"), and Trust for Investment Managers, a Delaware business
trust ("XXX"), on behalf of its XxxxxXxxxxx.xxx Market Leaders Growth Fund ("New
Growth Fund"), its XxxxxXxxxxx.xxx Pure Play Internet Fund ("New Internet
Fund"), and its XxxxxXxxxxx.xxx Community Intelligence Fund ("New Community
Fund").
WHEREAS, the parties wish to enter into a plan of reorganization (the
"Plan") which will consist, among other things, of the transfer of assets of the
Growth Fund to the New Growth Fund in exchange for shares of beneficial interest
of the New Growth Fund (the "New Growth Shares"), the transfer of assets of the
Internet Fund to the New Internet Fund in exchange for shares of beneficial
interest of the New Internet Fund (the "New Internet Shares"), and the transfer
of assets of the Community Fund to the New Community Fund in exchange for shares
of beneficial interest of the New Community Fund (the "New Community Shares");
WHEREAS, the Board of Trustees of the SJTrust, including a majority of the
Trustees who are not "interested persons" of the SJTrust, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), has determined that
the Plan is in the best interests of the shareholders of Growth Fund, Internet
Fund and Community Fund, respectively, and that their interests would not be
diluted as a result of the transactions contemplated thereby; and
WHEREAS, the Board of Trustees of XXX, including a majority of the Trustees
who are not "interested persons" of XXX, as defined in the 1940 Act, has
determined that the Plan is in the best interests of each of the sole
shareholders of New Growth Fund, New Internet Fund and New Community Fund,
respectively, each of which is a newly created series of XXX formed for the
specific purpose of entering into the Plan, and that the interests of each of
the sole shareholders of each of New Growth Fund, New Internet Fund and New
Community Fund would not be diluted as a result of the transactions contemplated
thereby.
NOW THEREFORE, in consideration of the agreements contained in this
Agreement, the parties agree as follows:
ARTICLE 1
TRANSFER OF ASSETS AND LIABILITIES
1.1 TRANSFER OF ASSETS AND LIABILITIES. Subject to the terms and conditions
set forth herein, on the Closing Date (as hereafter defined), Growth Fund shall
transfer all of its assets to New Growth Fund, Internet Fund shall transfer all
of its assets to New Internet Fund, and Community Fund shall transfer all of its
assets to New Community Fund. In exchange therefor, New Growth Fund shall assume
all of the liabilities of Growth Fund and deliver to Growth Fund a number of New
Growth Shares which is equal to (i) the aggregate net asset value of Growth Fund
at the close of business on the date preceding the Closing Date, divided by (ii)
the net asset value per share of New Growth Fund outstanding as of the close of
business on such day; New Internet Fund shall assume all of the liabilities of
Internet Fund and deliver to Internet Fund a number of New Internet Shares which
is equal to (i) the aggregate net asset value of Internet Fund at the close of
business on the day preceding the Closing Date, divided by (ii) the net asset
value per share of New Internet Fund outstanding as of the close of business on
such day; and New Community Fund shall assume all of the liabilities of
Community Fund and deliver to Community Fund a number of New Community Shares
which is equal to (i) the aggregate net asset value of Community Fund at the
close of business on the day preceding the Closing Date, divided by (ii) the net
asset value per share of New Community Fund outstanding as of the close of
business on such day.
1.2 LIQUIDATION OF GROWTH FUND, INTERNET FUND AND COMMUNITY FUND. Subject
to the terms and conditions set forth herein, on the Closing Date each of Growth
Fund, Internet Fund and Community Fund shall liquidate and shall distribute pro
rata to its shareholders of record, determined as of the close of business on
the day preceding the Closing Date, the New Growth Shares, New Internet Shares
and New Community Shares, respectively, received by it pursuant to Section 1.1.
1.3 NO ISSUANCE OF SHARE CERTIFICATES. The liquidation and distribution of
Growth Fund, Internet Fund and Community Fund provided for herein shall be
accomplished by opening accounts on the books of each of New Growth Fund, New
Internet Fund and New Community Fund, respectively, in the names of its
respective shareholders and transferring to its respective shareholders New
Growth Shares, New Internet Shares and New Community Shares, respectively,
credited to the account of Growth Fund, Internet Fund and Community Fund,
respectively, on the books of New Growth Fund, New Internet Fund and New
Community Fund. No certificates evidencing New Growth Shares, New Internet
Shares or New Community Shares shall be issued.
1.4 TIME AND DATE OF COMPUTATION. The number of Shares to be issued by New
Growth Fund to Growth Fund, New Internet Fund to Internet Fund, and New
Community Fund to Community Fund shall be computed as of 4:30 p.m. (Eastern
time) on the date preceding the Closing Date in accordance with the regular
practices of Growth Fund, Internet Fund, Community Fund and the SJTrust.
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1.5 CLOSING TIME AND PLACE. The Closing Date shall be ___________, 2000, or
such later date on which all of the conditions set forth in Article 2 have been
fulfilled or otherwise waived by the parties hereto, but in any event not later
than _____________, 2000, or such later date as the parties may mutually agree.
All acts taking place on the Closing Date shall be deemed to be taking place
simultaneously as of the commencement of business on the Closing Date, unless
otherwise provided. The closing of the reorganization contemplated by the Plan
(the "Closing") shall be held at 10:00 a.m. (Pacific time) at the offices of
XXX, 0000 Xxxx Xxxxxxxxx Xxx, Xxxxxxxx, Xxxxxxxxxx, or such other time and/or
place as the parties may mutually agree.
1.6 DELAY OF VALUATION. If on the day preceding the Closing Date (a) the
primary trading market for portfolio securities of either party is closed to
trading or trading thereon is restricted, or (b) trading or the reporting of
trading is disrupted so that an accurate appraisal of the value of the net
assets of either party and an accurate calculation of the number of shares held
by each shareholder 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.
1.7 TERMINATION OF GROWTH FUND, INTERNET FUND, COMMUNITY FUND AND SJTRUST.
As promptly as practicable after the Closing, each of Growth Fund, Internet
Fund, Community Fund and SJTrust shall dissolve.
ARTICLE 2
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE REORGANIZATION
The respective obligation of each party to effect the reorganization
contemplated by this Agreement is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
2.1 SHAREHOLDER APPROVAL. On or prior to the Closing Date, the shareholders
of Growth Fund, Internet Fund and Community Fund shall have approved the
transactions contemplated by this Agreement in accordance with the provisions of
Massachusetts law and the 1940 Act.
2.2 NO INJUNCTIONS OR RESTRAINTS. On the Closing Date, no action, suit or
other proceeding shall be pending before any court or government agency which
seeks to restrain or prohibit or obtain damages or other relief in connection
with this Agreement or the transactions contemplated hereby.
2.3 CONSENTS. All consents of the other party and all other consents,
orders and permits of Federal, state and local regulatory authorities deemed
necessary by the SJTrust to permit consummation, in all material respects, of
the transactions contemplated herein 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 either party or the
SJTrust.
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2.4 EFFECTIVE REGISTRATION STATEMENT. The Form N-1A Registration Statement
of XXX and the Form N-14 Registration Statement of XXX with respect to the New
Growth Shares, New Internet Shares and New Community Shares shall have become
effective and continue to be effective 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.
2.5 TAX OPINION. The parties shall have received an opinion of Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP substantially to the effect that for Federal
income tax purposes:
(a) The transfer of Growth Fund, Internet Fund and Community Fund assets
to New Growth Fund, New Internet Fund and New Community Fund,
respectively, in exchange for New Growth Shares, New Internet Shares
and New Community Shares, respectively, and the distribution of the
New Growth Shares, New Internet Shares and New Community Shares to the
shareholders of the Growth Fund, Internet Fund and Community Fund,
respectively, in liquidation of Growth Fund, Internet Fund and
Community Fund will constitute a "reorganization" (the
"Reorganization") within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended;
(b) No gain or loss will be recognized by New Growth Fund, New Internet
Fund and New Community Fund upon the receipt of the assets of Growth
Fund, Internet Fund and Community Fund, respectively, solely in
exchange for New Growth Shares, New Internet Shares and New Community
Shares, respectively;
(c) No gain or loss will be recognized by any of Growth Fund, Internet
Fund and Community Fund upon the transfer of its assets to New Growth
Fund, New Internet Fund and New Community Fund, respectively, in
exchange for New Growth Shares, New Internet Shares and New Community
Shares, respectively;
(d) No gain or loss will be recognized by any shareholder of Growth Fund,
Internet Fund and Community Fund upon exchange of its Growth Fund,
Internet Fund and Community Fund shares, for New Growth Shares, New
Internet Shares and New Community Shares, respectively;
(e) The tax basis of the assets of Growth Fund, Internet Fund and
Community Fund acquired by New Growth Fund, New Internet Fund and New
Community Fund, respectively, will be the same as the tax basis of
such assets to Growth Fund, Internet Fund and Community Fund,
respectively, immediately prior to the reorganization;
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(f) The tax basis of New Growth Shares, New Internet Shares and New
Community Shares received by each shareholder of Growth Fund, Internet
Fund and Community Fund, respectively, pursuant to the reorganization
will be the same as the tax basis of Growth Fund shares, Internet Fund
shares and Community Fund shares, respectively, held by such
shareholder immediately prior to the reorganization;
(g) The holding period of the assets of Growth Fund, Internet Fund and
Community Fund acquired by New Growth Fund, New Internet Fund and New
Community Fund, respectively will include the period during which
those assets were held by Growth Fund, Internet Fund and Community
Fund, respectively; and
(h) The holding period of the New Growth Shares, New Internet Shares and
New Community Shares to be received by each shareholder of Growth
Fund, Internet Fund and Community Fund will include the period during
which the Growth Fund shares, Internet Fund shares and Community Fund
shares exchanged therefor were held by such shareholder.
2.6 COVENANTS, REPRESENTATIONS AND WARRANTIES. Each party shall have
performed all of its covenants set forth in Article 4, and its representations
and warranties set forth in Article 3 shall be true and correct in all material
respects on and as of the Closing Date as if made on such date, and each of the
President of XXX and the President of the SJTrust shall have executed a
certificate to such effect.
2.7 STATEMENT OF ASSETS AND LIABILITIES. Each of Growth Fund, Internet Fund
and Community Fund shall have delivered to XXX on the Closing Date a statement
of its assets and liabilities, prepared in accordance with generally accepted
accounting principles consistently applied, together with a certificate of its
Treasurer or Assistant Treasurer as to its portfolio securities and the federal
income tax basis and holding period as of the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The parties represent and warrant as follows:
3.1 STRUCTURE AND STANDING. Each party represents and warrants that it is
duly organized as a series of a business trust, validly existing and in good
standing under the laws of the jurisdiction in which it is organized, and has
the power to own all of its properties and assets and conduct its business.
3.2 POWER. Each party represents and warrants that it has full power and
authority to enter into and perform its obligations under this Agreement; the
execution, delivery and performance of this Agreement has been duly authorized
by all necessary action of its Board of Trustees; this Agreement does not
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violate, and its performance will not result in violation of, any provision of
its Declaration of Trust, or any agreement, instrument or other undertaking to
which it is a party or by which it is bound; and this Agreement constitutes its
valid and binding contract enforceable in accordance with its terms, subject to
the effects of bankruptcy, moratorium, fraudulent conveyance and similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto.
3.3 LITIGATION. Each party represents and warrants that no litigation or
administrative proceeding or investigation of or before any court or
governmental body is currently pending against it and, to the best of its
knowledge, none is threatened against it or any of its properties or assets,
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; it knows of no facts which
might form the basis for the institution of such proceedings; and it is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated.
3.4 FUND ASSETS. Each of Growth Fund, Internet Fund and Community Fund
represents and warrants that on the Closing Date the assets received by New
Growth Fund, New Internet Fund and New Community Fund from Growth Fund, Internet
Fund and Community Fund, respectively, will be delivered to New Growth Fund, New
Internet Fund and New Community Fund, respectively, as provided in Section 1.1
free and clear of all liens, pledges, security interests, charges or other
encumbrances of any nature whatsoever created by Growth Fund, Internet Fund and
Community Fund and without any restriction upon the transfer thereof, except for
such liabilities assumed as provided in Section 1.1.
3.5 THE SHARES. Each of New Growth Fund, New Internet Fund and New
Community Fund represents and warrants that on the Closing Date (a) the New
Growth Shares, New Internet Shares and New Community Shares, respectively, to be
delivered to Growth Fund, Internet Fund and Community Fund as contemplated in
this Agreement will be duly authorized, validly issued, fully paid and
nonassessable; (b) no shareholder of New Growth Fund, New Internet Fund or New
Community Fund or any other series of XXX has any preemptive right to
subscription or purchase in respect thereof; (c) Growth Fund, Internet Fund and
Community Fund will acquire the New Growth Shares, New Internet Shares and New
Community Shares, respectively, free and clear of all liens, pledges, security
interests, charges or other encumbrances of any nature whatsoever created by XXX
and without any restriction on the transfer thereof; and (d) the New Growth
Shares, New Internet Shares and New Community Shares will be duly qualified for
offering to the public in all of the states of the United States in which such
qualification is required or an exemption from such requirement shall have been
obtained.
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3.6 TAX STATUS AND FILINGS. Each party represents and warrants that it has
satisfied the requirements of Subchapter M of the Code for treatment as a
regulated investment company and has elected to be treated as such; it has filed
or furnished all federal, state, and other tax returns and reports required by
law to have been filed or furnished, and it has paid or made provision for
payment of, so far as due, all federal, state and other taxes, interest and
penalties; that no such return is currently being audited; and that no
assessment has been asserted with respect to any such returns or reports.
3.7 ACCURACY OF INFORMATION. Each party represents and warrants that all
information furnished by it to the other party for use in any documents which
may be necessary in connection with the transactions contemplated by this
Agreement will be accurate and complete and will comply in all material respects
with federal securities and other laws and regulations applicable thereto.
3.8 ACQUISITION OF THE SHARES. Each of Growth Fund, Internet Fund and
Community Fund represents and warrants that the New Growth Shares, New Internet
Shares and New Community Shares, respectively, it acquires pursuant to this
Agreement are not being acquired for the purpose of making any distribution
thereof, except in accordance with the terms of this Agreement.
3.9 XXX TRUST. XXX represents and warrants that as of the Closing Date the
New Growth Fund, New Internet Fund and New Community Fund will have only nominal
assets and outstanding shares, solely for the purpose of voting on matters
related to the reorganization contemplated by the Plan.
3.10 SJTRUST FINANCIAL STATEMENTS. Growth Fund, Internet Fund and Community
Fund each represents and warrants that its Statement of Assets and Liabilities
of ______, 2000 provided to XXX has been prepared in accordance with generally
accepted accounting principles consistently applied, and fairly reflects its
financial condition as of such date, and there are no known contingent
liabilities of such party as of such date not disclosed therein.
3.11 NO ADVERSE CHANGES IN SJTRUST. Growth Fund, Internet Fund and
Community Fund each represents and warrants that since ______, 2000, there has
not been any material adverse change in its financial condition, assets,
liabilities or business other than changes occurring in the ordinary course of
business except as otherwise disclosed in writing to and accepted by XXX (for
the purposes of this paragraph, a decline in net asset value per share of a
party shall not constitute a material adverse change).
3.12 PROXY STATEMENT. Each party represents and warrants that the Combined
Proxy Statement and Prospectus contained in the Registration Statement on Form
N-14 to be used in connection with the transaction contemplated hereby (only
insofar as it relates to such party) will, on its effective date and on the
Closing Date, 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, in light of the circumstances under which such statements
were made, not materially misleading.
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ARTICLE 4
COVENANTS
4.1 CONDUCT OF BUSINESS. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Closing Date, each party shall operate its business in the ordinary course
except as contemplated by this Agreement.
4.2 SHAREHOLDERS MEETING. Each of Growth Fund, Internet Fund and Community
Fund shall call a special meeting of its shareholders as soon as possible for
the purpose of considering the reorganization contemplated by this Agreement.
4.3 PREPARATION OF COMBINED PROSPECTUS AND PROXY STATEMENT. As soon as
reasonably practicable after the execution of this Agreement, XXX shall prepare
and file with the United States Securities and Exchange Commission in form and
substance satisfactory to both parties, (a) an amendment to the Form N-1A
registration statement of XXX with respect to New Growth Fund, New Internet Fund
and New Community Fund, and (b) a combined prospectus and proxy statement on
Form N-14 with respect to the reorganization and shall use its best efforts to
provide that the combined prospectus and proxy statement can be distributed to
the shareholders of Growth Fund, Internet Fund and Community Fund as promptly
thereafter as practicable. As soon as reasonably practicable, the parties shall
also prepare and file any other related filings required under applicable state
securities laws.
4.4 FEES AND EXPENSES. Whether or not this Agreement is consummated, each
party shall bear its respective costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
4.5 PROVISION OF DOCUMENTS. Each party agrees that it will, from time to
time as and when reasonably requested by the other party, provide or cause to be
provided to the other party such information, execute and deliver or cause to be
executed and delivered to the other party such documents, and take or cause to
be taken such further action, as the other party may deem necessary in order to
carry out the intent of this Agreement.
4.6 SJTRUST LIABILITIES. SJTrust will use its best efforts to discharge all
of its financial liabilities and obligations prior to the Closing Date.
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ARTICLE 5
TERMINATION, AMENDMENT AND WAIVER
5.1 TERMINATION. This Agreement may be terminated by resolution of the
Board of Trustees of the SJTrust or the Board of Trustees of XXX at any time
prior to the Closing Date, if
(a) either party shall have breached any material provision of this
Agreement; or
(b) circumstances develop that, in the opinion of such Board, make
proceeding with the Plan inadvisable; or
(c) any governmental body shall have issued an order, decree or ruling
having the effect of permanently enjoining, restraining or otherwise
prohibiting the consummation of this Agreement.
5.2 EFFECT OF TERMINATION. In the event of any termination pursuant to
Section 5.1 (b) or (c), there shall be no liability for damage on the part of
either party to the other party.
5.3 AMENDMENT. This Agreement contains the entire agreement of the parties
with respect to the reorganization contemplated by the Plan and may be amended
prior to the Closing Date by the parties in writing at any time; provided,
however, that there shall not be any amendment that by law requires approval by
the shareholders of a party without obtaining such approval.
5.4 WAIVER. At any time prior to the Closing Date, any of the terms or
conditions of this Agreement may be waived by the Board of Trustees of the
SJTrust or the Board of Trustees of XXX, if, in its judgment after consultation
with legal counsel, such action or waiver will not have a material adverse
effect on the benefits intended under this Agreement to the shareholders of
Growth Fund, Internet Fund or Community Fund, or of New Growth Fund, New
Internet Fund, or New Community Fund, respectively.
ARTICLE 6
GENERAL PROVISIONS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware applicable to contracts made
and to be performed in such state..
6.2 ASSIGNMENT. This Agreement shall be binding upon 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 either party without the written consent of the other party. Nothing
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herein expressed or implied is intended or shall be construed to confer upon or
give any person other than the parties hereto and their respective successors
and assigns any rights or remedies under or by reason of this Agreement.
6.3 RECOURSE. All persons dealing with Growth Fund, Internet Fund,
Community Fund, New Growth Fund, New Internet Fund or New Community Fund (each a
"Fund" and together, the "Funds") must look solely to the property of such Fund
for the enforcement of any claims against such Fund, as neither the trustees,
directors, officers, agents nor shareholders of the Funds assume any personal
liability for obligations entered into on behalf of any of the Funds.
6.4 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 SJTrust at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Attention: President, or
XXX at 0000 Xxxx Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000,
Attention: President.
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
attested on its behalf by its duly authorized representatives as of the date
first above written.
XXXXXXXXXXX.XXX TRUST, on behalf of its
XxxxxXxxxxx.xxx Market Leaders Growth
Fund, XxxxxXxxxxx.xxx Pure-Play Internet
Fund and XxxxxXxxxxx.xxx Community
Intelligence Fund
Attest: By:
------------------------------------
Xxxxxxx X. Xxxx
President
---------------------------
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Secretary
TRUST FOR INVESTMENT MANAGERS, on behalf
of its XxxxxXxxxxx.xxx Market Leaders
Growth Fund, XxxxxXxxxxx.xxx Pure-Play
Internet Fund and XxxxxXxxxxx.xxx
Community Intelligence Fund
Attest: By:
------------------------------------
Xxxxxx X. Xxxxxxxxx
President
--------------------------
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Secretary
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