AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
TABLE OF CONTENTS
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1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR SHARES OF THE
ACQUIRING FUND AND ASSUMPTION OF LIABILITIES, IF ANY; LIQUIDATION OF THE
ACQUIRED FUND........................................................................ 1
2. CLOSING AND CLOSING DATE............................................................... 3
3. REPRESENTATIONS AND WARRANTIES......................................................... 3
4. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.................................. 9
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF ADMIRAL FUNDS................................... 10
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXX TRUST................................. 12
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXX TRUST AND ADMIRAL FUNDS....... 13
8. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES............................................... 16
9. TERMINATION............................................................................ 16
10. AMENDMENT.............................................................................. 16
11. NOTICES................................................................................ 17
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT...................................... 17
13. BROKERAGE FEES AND EXPENSES............................................................ 17
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AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION ("Agreement") is made
as of the 30th day of April, 1998 by and between the Xxxxx Advantage Funds (the
"Xxxxx Trust"), an Ohio business trust on behalf of its sole series, which will
adopt the name "The Golden Rainbow Fund" (the "Acquiring Fund") and Flagship
Admiral Funds Inc., a Maryland corporation (the "Admiral Funds"), on behalf of
its series, The Golden Rainbow A Xxxxx Advised Mutual Fund (the "Acquired
Fund"). The Acquiring Fund maintains its principal place of business at 0000
Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxx 00000. The Acquired Fund maintains its
principal place of business at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
This Agreement is intended to be, and is adopted as, a plan of
reorganization (the "Reorganization") pursuant to Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"). The
Reorganization will be effected by (i) transferring all of the Acquired Fund's
assets to the Acquiring Fund, in exchange for the Acquiring Fund assuming all of
the Acquired Fund's liabilities and duties and issuing to the Acquired Fund the
number of shares of the Acquiring Fund equal to the number and value of shares
of the Acquired Fund; (ii) the Acquired Fund distributing to each shareholder of
the Acquired Fund, Acquiring Fund shares (including fractional shares) equal in
number and value to the shares held by each Acquired Fund shareholder; and (iii)
the cancellation of the outstanding shares of the Acquired Fund and the
subsequent termination of the Acquired Fund. The cancellation of the outstanding
shares of the Acquired Fund will be effected pursuant to an amendment to the
charter of Admiral Funds to be adopted by Admiral Funds in accordance with the
Maryland General Corporation Law.
In consideration of the covenants and agreements set forth herein, the
parties covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR SHARES OF THE
ACQUIRING FUND AND ASSUMPTION OF LIABILITIES, IF ANY; LIQUIDATION OF THE
ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired
Fund agrees to sell, assign, transfer and deliver to the Acquiring
Fund, as of the close of business on the Closing Date (the "Effective
Time"), all of its assets as set forth in paragraph 1.2, free and
clear of all liens and encumbrances, except as otherwise provided
herein, and in exchange therefor the Acquiring Fund agrees (a) to
assume all of the liabilities, if any, of the Acquired Fund, as set
forth in paragraph 1.3 and (b) to issue and deliver to the Acquired
Fund, for distribution to the Acquired Fund's shareholders in
accordance with paragraph 1.4, the number of shares of the Acquiring
Fund ("Acquiring Fund Shares") equal to the aggregate number and value
of shares (including fractional shares) of the Acquired Fund of the
class designated Class A then outstanding ("Acquired Fund Shares"),
all determined in the manner and as of the date and time provided in
paragraph 2. Such transactions shall take place at the closing
provided for in paragraph 2.1 (the "Closing").
1.2 Except as otherwise provided herein, as of the Effective Time, the
Acquiring Fund shall acquire the assets of the Acquired Fund
(consisting without limitation of all cash, cash equivalents,
portfolio securities, receivables (including interest and dividends
receivable) and any deferred or prepaid expenses shown as assets) as
set forth in the Statement of Net Assets referred to in paragraph 6.3
as of the Closing Date, claims and rights of action and rights to
registered shares under applicable securities laws. The Acquired Fund
has no plan or intent to sell or otherwise dispose of any of its
assets, other than in the ordinary course of business.
1.3 Except as otherwise provided herein, as of the Effective Time, the
Acquiring Fund will assume from the Acquired Fund all debts,
liabilities, obligations and duties of the Acquired Fund of whatever
kind or nature, whether absolute, accrued, contingent or otherwise,
arising in the ordinary course of business, whether or not
determinable as of the Effective Time and whether or not specifically
referred to in this Agreement.
1.4 On the Closing Date, the Acquired Fund will liquidate and distribute
to its common shareholders of record determined as of the Effective
Time, Acquiring Fund Shares received by the Acquired Fund pursuant to
paragraph 1.1 equal in number and value to Acquired Fund Shares then
owned by a shareholder, in exchange for and cancellation of the
shareholder's Acquired Fund Shares. Acquiring Fund Shares will be
issued so that the Acquired Fund's shareholders will receive Acquiring
Fund Shares of the class designated Class A. Such liquidation and
distribution will be accomplished by opening accounts on the books of
the Acquiring Fund in the names of the shareholders of the Acquired
Fund and crediting to each account the number of Acquiring Fund Shares
equal to the number and value of Acquired Fund Shares owned of record
by the shareholder at the Effective Time. As of the Effective Time,
all outstanding shares of the Acquired Fund shall simultaneously be
canceled on the Acquired Fund's share transfer books. The Acquiring
Fund shall not issue certificates representing Acquiring Fund Shares.
1.5 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund shares
surrendered in exchange therefor on the books of the Acquired Fund as
of that time shall be paid by the person to whom such Acquiring Fund
Shares are to be issued as a condition to the registration of such
transfer.
1.6 Any reporting responsibility of the Acquired Fund with the Securities
and Exchange Commission (the "Commission"), or any state securities
commission is and shall remain the responsibility of the Acquired Fund
up to and including the Closing Date.
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1.7 Promptly following the Effective Time, the Acquired Fund will
terminate and Admiral Funds shall take any further reasonable actions
necessary to effectuate the Reorganization.
1.8 The Admiral Funds agrees that any rights it has to the use of the name
"The Golden Rainbow Fund A Xxxxx Advised Mutual Fund" or any
derivation thereof shall immediately terminate at Closing, except as
shall be required by the Admiral Funds to effectuate the purpose of
this Agreement. Notwithstanding the preceding sentence, the Admiral
Funds may use such name after the Effective Time for routine filing
purposes or where otherwise required by a third party unrelated to or
unaffiliated with the Admiral Funds, and the Admiral Funds shall not
be required to amend its Charter or By-Laws in respect of this
paragraph 1.8.
2. CLOSING AND CLOSING DATE
2.1 The Closing Date shall be on such date as the parties may agree in
writing. All acts taking place at the Closing shall be deemed to take
place simultaneously as of the Effective Time unless otherwise
provided. The Closing shall be at such place as the parties may agree.
2.2 State Street Bank, as custodian for the Acquired Fund, shall deliver
to the Acquiring Fund at the Closing a certificate of an authorized
officer stating that (a) the Acquired Fund's portfolio securities,
cash and any other assets have been transferred in proper form to the
Acquiring Fund's Custodian on the Closing Date and (b) all necessary
taxes, if any, have been paid, or provision for payment has been made,
in conjunction with the delivery of portfolio securities.
2.3 The Acquired Fund shall deliver to the Acquiring Fund on or prior to
the Liquidation Date a list of the names, addresses and taxpayer
identification numbers of its shareholders and the number of
outstanding Acquired Fund Shares owned by each such shareholder (the
"Shareholder Lists"), all as of the Effective Time, certified by the
Secretary or Assistant Secretary of the Acquired Fund. The Acquiring
Fund shall issue and deliver to the Acquired Fund at the Closing a
confirmation or other evidence satisfactory to the Acquired Fund that
Acquiring Fund Shares have been or will be 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, receipts and other documents as such other party or its
counsel may reasonably request to effect the transactions contemplated
by this Agreement.
3. REPRESENTATIONS AND WARRANTIES
3.1 Admiral Funds represents and warrants as follows:
3.1.1 Admiral Funds is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland
and has the power
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to own all of its properties and assets and, subject to
approval of the shareholders of the Acquired Fund, to carry out
the Agreement.
3.1.2 Admiral Funds is an open-end diversified management investment
company duly registered under the Investment Company Act, and
such registration is in full force and effect. The Acquired
Fund is a duly established and designated series of Admiral
Funds.
3.1.3 Admiral Funds is not, and the execution, delivery and
performance of this Agreement will not result, in violation of
any Maryland law or any provision of the Charter or By-Laws of
Admiral Funds or of any material agreement, indenture,
instrument, contract, lease or other undertaking to which
Admiral Funds is a party or by which Admiral Funds is bound.
3.1.4 Admiral Funds has no material contracts or other commitments
with respect to the Acquired Fund (except this Agreement) that
will not be terminated on or prior to the Closing Date without
any liability or penalty to the Acquired Fund or the Acquiring
Fund.
3.1.5 No litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending
or, to Admiral Funds' knowledge, threatened against the
Acquired Fund or any of its properties or assets. Admiral Funds
knows of no facts that might form the basis for the institution
of such proceedings, and Admiral Funds is not a party to or
subject to the provisions of any order, decree or judgment of
any court or governmental body that materially and adversely
affects its business relating to the Acquired Fund or its
ability to consummate the transactions herein contemplated.
3.1.6 The audited Statement of Net Assets, Statement of Operations,
Statement of Changes in Net Assets, Financial Highlights and
Portfolio of Investments of the Acquired Fund at June 30, 1997
and for the period then ended and the unaudited Statements of
Net Assets, Statements of Operations, Statements of Changes in
Net Assets, Financial Highlights and Portfolios of Investments
of the Acquired Fund at December 31, 1997 and for the periods
then ended (copies of which have been furnished to the
Acquiring Fund) have been prepared in accordance with generally
accepted accounting principles consistently applied and present
fairly, in all material respects, the financial condition of
the Acquired Fund as of such date, and there are no known
material liabilities of the Acquired Fund (contingent or
otherwise) not disclosed therein.
3.1.7 Since June 30, 1997, there has not been any materially 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
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year from the date such indebtedness was incurred, except as
set forth in Schedule 3.1.7. For the purposes of this paragraph
3.1.7, a decline in net asset value or net asset value per
share of the Acquired Fund as a result of changes in the value
of investments held by the Acquired Fund or a distribution or
payment of dividends shall not constitute a materially adverse
change.
3.1.8 All federal, state and other tax returns and reports of the
Acquired Fund required by law to have been filed or furnished
by the date hereof have been filed or furnished, and all
federal, state and other taxes, interest and penalties shown as
due on said returns and reports have been paid insofar as due,
or provision has been made for the payment thereof, and, to the
best of Admiral Funds' knowledge, no such return is currently
under audit and no assessment has been asserted with respect to
such returns or reports.
3.1.9 The Acquired Fund has qualified as a regulated investment
company under Subchapter M of the Internal Revenue Code (a
"RIC") for each of its taxable years and intends to so qualify
for the current taxable year.
3.1.10 The authorized capital of the Acquired Fund consists of
100,000,000 common shares, par value $.001 per share, of which
21,250,000 are a sub-class designated as "The Golden Rainbow A
Xxxxx Advised Mutual Fund - Class A" ("Class A Shares"). All
issued and outstanding shares of the Acquired Fund are Class A
Shares, and are duly and validly issued and outstanding, fully
paid and non-assessable. All issued and outstanding shares of
the Acquired Fund will, at the time of the Closing, be held by
the persons and in the amounts set forth in the applicable
Shareholder List submitted to the Acquiring Fund in accordance
with the provisions of paragraph 2.3. The Acquired Fund does
not have outstanding any options, warrants or other rights to
subscribe for or purchase any shares of the Acquired Fund, nor
is there outstanding any security convertible into shares of
the Acquired Fund.
3.1.11 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 and full right, power
and authority to sell, assign, transfer and deliver such assets
hereunder free of any liens or other encumbrances, and, upon
delivery and payment for such assets, the Acquiring Fund will
acquire good and marketable title thereto.
3.1.12 The execution, delivery and performance of this Agreement has
been duly authorized by the Board of Directors of Admiral Funds
(including the determinations required by Rule 17a-8(a) under
the Investment Company Act of 1940 (the "Investment Company
Act")) and by all necessary action,
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other than approval by the shareholders of the Acquired Fund,
on the part of Admiral Funds, and, subject to shareholder
approval, this Agreement constitutes a valid and binding
obligation of Admiral Funds enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general available principles.
3.1.13 The information furnished and to be furnished by Admiral Funds
for use in applications for exemptive orders, registration
statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated
hereby is, and shall be, accurate and complete in all material
respects and is in compliance, and shall comply, in all
material respects with applicable federal securities and other
laws and regulations.
3.1.14 On the Closing Date, the Acquired Fund's Prospectus and
Statement of Additional Information and, at the time of the
Special Meeting of the Acquired Fund's shareholders, the proxy
statement prepared in accordance with the terms of the Transfer
Agreement dated April 30, 1998 by and between Xxxxx Investment
Research, Inc. and Nuveen Advisory Corp. (the "Proxy
Statement") insofar as it refers to the Admiral Fund and the
Acquired Fund (a) will comply in all material respects with the
provisions and regulations of the Securities Exchange Act of
1934, (the "1934 Act") the Securities Act of 1933 (the "1933
Act") and the Investment Company Act and the rules and
regulations thereunder and (b) will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the
representations and warranties in this paragraph 3.1.14 shall
not apply to statements in or omissions from the Proxy
Statement made in reliance upon and in conformity with
information furnished by the Acquiring Fund for use therein.
3.1.15 No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
Admiral Funds of the transactions contemplated by this
Agreement, except such as have been obtained under the 1933
Act, the 1934 Act and the Investment Company Act, and such as
may be required under state laws and the filing and acceptance
for record of articles of transfer under Maryland law.
3.1.16 There are no broker's or finder's fees payable on behalf of the
Acquired Fund in connection with the transactions provided for
herein.
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3.1.17 The Acquiring Fund Shares are not being acquired for the
purpose of making any distribution thereof, other than in
accordance with the terms hereof.
3.2 The Xxxxx Trust represents and warrants as follows:
3.2.1 The Xxxxx Trust is a business trust duly organized, validly
existing and in good standing under the laws of the State of
Ohio and has the power to own all of its properties and assets
and to carry out the Agreement.
3.2.2 The Xxxxx Trust is an open-end diversified management
investment company that has filed a Form N-1A with the
Commission.
3.2.3 The Xxxxx Trust is not, and the execution, delivery and
performance of this Agreement will not result, in any violation
of Ohio law or any provision of the Declaration of Trust or By-
Laws of the Xxxxx Trust or of any material agreement,
indenture, instrument, contract, lease or other undertaking to
which the Xxxxx Trust is a party or by which the Xxxxx Trust is
bound.
3.2.4 No litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending
or, to the knowledge of the Xxxxx Trust, threatened against the
Acquiring Fund or any of its properties or assets. The Xxxxx
Trust knows of no facts that might form the basis for the
institution of such proceedings, and the Xxxxx Trust is not a
party to or subject to the provisions of any order, decree or
judgment of any court or governmental body that materially and
adversely affects its business relating to the Acquiring Fund
or its ability to consummate the transactions herein
contemplated.
3.2.5 The authorized capital of the Acquiring Fund consists of an
unlimited number of shares of beneficial interest. Prior to the
Closing Date, the Acquiring Fund has not issued any Acquiring
Fund Shares (except those shares issued and redeemed pursuant
to Section 7.6) and all Acquiring Fund Shares to be issued in
exchange for the net assets of the Acquired Fund pursuant to
this Agreement will be when so issued, duly and validly issued
and outstanding, fully paid and non-assessable. Except as
contemplated by this Agreement, the Acquiring Fund does not
have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Fund Shares, nor is
there outstanding any security convertible into any Acquiring
Fund Shares.
3.2.6 The execution, delivery and performance of this Agreement has
been duly authorized by the Board of Trustees of the Xxxxx
Trust (including the determinations required by Rule 17a-8(a)
under the Investment Company Act) and by all necessary action
on the part of the Xxxxx Trust, and this
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Agreement constitutes a valid and binding obligation of the
Xxxxx Trust enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equitable
principles.
3.2.7 The information furnished and to be furnished by the Xxxxx
Trust for use in applications for exemptive orders,
registration statements, proxy materials and other documents
which may be necessary in connection with the transactions
contemplated hereby is, and shall be, accurate and complete in
all material respects and is in compliance, and shall comply,
in all material respects with applicable federal securities and
other laws and regulations.
3.2.8 On the effective date of the Registration Statement referred to
in paragraph 4.5, at the time of the meeting of the Acquired
Fund shareholders and on the Closing Date, the Registration
Statement and the Proxy Statement, insofar as it refers to the
Xxxxx Trust or the Acquiring Fund (a) will comply in all
material respects with the 1934 Act, the 1933 Act and the
Investment Company Act and the rules and regulations thereunder
and (b) will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties in this paragraph 3.2.8 shall not apply to
statements in or omissions from the Proxy Statement and the
Registration Statement made in reliance upon and in conformity
with information furnished by the Acquired Fund for use
therein.
3.2.9 No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Xxxxx Trust of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934
Act and the Investment Company Act, and such as may be required
under state laws and the filing and acceptance for record of
articles of transfer under Maryland law.
3.2.10 There are no broker's or finder's fees payable on behalf of the
Acquiring Fund in connection with the transactions provided for
herein.
3.2.11 The Acquiring Fund has no plan or intention to sell or
otherwise dispose of any of the assets of the Acquired Fund
transferred to the Acquiring Fund pursuant to the
Reorganization (the "Assets"), except for dispositions made in
the ordinary course of its business as a RIC and dispositions
necessary to maintain its status as a RIC, and expects to
retain substantially all of the Assets in the same form as it
receives them in the
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Reorganization, unless and until subsequent investment
circumstances reasonably suggest the desirability of change or it
becomes necessary to make dispositions to maintain RIC status.
4. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
4.1 The Xxxxx Trust and Admiral Funds each will operate its respective
business in the ordinary course between the date hereof and the
Closing Date, it being understood that the ordinary course of business
will include declaring and paying customary dividends and other
distributions.
4.2 Admiral Funds will call a meeting of shareholders of the Acquired Fund
to consider and act upon this Agreement and the transactions
contemplated herein and to take all other action necessary to obtain
approval of the transactions contemplated hereby.
4.3 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund's shares.
4.4 Subject to the provisions of this Agreement, Admiral Funds and the
Xxxxx Trust each will take or cause to be taken all action, and will
do or cause to be done all things, reasonably necessary, proper or
advisable to consummate and make effective the transactions
contemplated by this Agreement.
4.5 Admiral Funds will prepare and file with the Commission the Proxy
Statement, and the Xxxxx Trust will prepare and file with the
Commission an amendment to its registration statement on Form N-1A
relating to the Acquiring Fund Shares to be issued hereunder (together
with any amendments thereof and supplements thereto, the "Registration
Statement"), in compliance in all material respects with the 1933 Act,
the 1934 Act and the Investment Company Act and the rules and
regulations thereunder.
4.6 Each of Admiral Funds and the Xxxxx Trust will, from time to time, as
and when requested by the other, execute and deliver or cause to be
executed and delivered all such assignments and other instruments, and
will take or cause to be taken such further action, as the other may
deem necessary or desirable in order to (a) vest in and confirm to the
Acquiring Fund title to and possession of all the assets of the
Acquired Fund to be sold, assigned, transferred and delivered to the
Acquiring Fund pursuant to this Agreement, (b) vest in and confirm to
the Acquired Fund title to and possession of all the Acquiring Fund
Shares to be transferred to the Acquired Fund pursuant to this
Agreement, (c) assume all of the Acquired Fund's liabilities in
accordance with this Agreement, and (d) otherwise to carry out the
intent and purpose of this Agreement.
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4.7 The Xxxxx Trust will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the Investment
Company Act and such of the state Blue Sky or other laws as it may
deem appropriate in order to continue its operations after the Closing
Date.
4.8 For a period of three years from the Closing Date, the Xxxxx Trust
covenants that at least 75% of the members of its board of trustees
shall not be interested persons of Xxxxx Investment Research, Inc. or
Nuveen Advisory Corp. For a period of two years beginning immediately
after the Closing, the Acquiring Fund will not enter into, participate
in, or allow to continue any arrangement that would constitute an
"unfair burden" within the meaning of Section 15(f) of the Investment
Company Act.
4.9 The Acquiring Fund intends to qualify as a RIC for the current taxable
year.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF ADMIRAL FUNDS
The obligations of Admiral Funds to consummate the transactions provided for
herein shall, at its election, be subject to the performance by the Xxxxx Trust
of all the obligations to be performed by it hereunder on or before the Closing
Date and the following further conditions.
5.1 All representations and warranties of the Xxxxx Trust 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.
5.2 The Xxxxx Trust shall have delivered to Admiral Funds a certificate
executed in its name by the President or a Vice President of the Xxxxx
Trust, in form and substance satisfactory to Admiral Funds and dated
as of the Closing Date, to the effect that the representations and
warranties of the Xxxxx Trust 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 Admiral Funds shall reasonably request.
5.3 The Acquired Fund shall have received an opinion from Xxxxx, Cummins &
Xxxxx Co., L.P.A., counsel to the Xxxxx Trust, dated as of the Closing
Date, and relying upon such opinions of other counsel and certificates
of public authorities and officers of the Xxxxx Trust as Xxxxx,
Cummins & Xxxxx Co., L.P.A. deems appropriate, to the effect that:
5.3.1 The Xxxxx Trust has been duly organized and is validly existing
as a business trust in good standing under the laws of the
State of Ohio with requisite power and authority to own its
properties and, to the knowledge of such counsel, to carry on
its business as presently conducted;
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5.3.2 This Agreement has been duly authorized, executed and delivered
by the Xxxxx Trust and, assuming due authorization, execution
and delivery of the Agreement by Admiral Funds, constitutes a
valid and binding obligation of the Xxxxx Trust enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equitable principles;
5.3.3 The Acquiring Fund Shares to be distributed to shareholders of
the Acquired Fund in an amount equal in number and value to the
shares then owned by an Acquired Fund shareholder will, when
issued, as contemplated by this Agreement, be validly issued
and outstanding and fully paid and non-assessable (except to
the extent set forth in the Proxy Statement) and free of
preemptive rights;
5.3.4 Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby violate
(i) the Xxxxx Trust's Declaration of Trust or By-Laws or (ii)
any federal securities law of the United States or the laws of
the State of Ohio applicable to the Xxxxx Trust; provided,
however, that such counsel may state that it expresses no
opinion with respect to federal or state securities anti-fraud
laws or fraudulent transfer laws; and provided further that,
insofar as performance by the Xxxxx Trust of its obligations
under this Agreement is concerned, such counsel may state that
it expresses no opinion as to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability relating to or affecting creditors' rights;
5.3.5 To the knowledge of counsel (without any independent inquiry or
investigation) all regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Xxxxx Trust under the federal laws of the United States, the
laws of the State of Ohio and for the consummation of the
transactions contemplated by this Agreement have been obtained
or made;
5.3.6 The Xxxxx Trust has been registered with the Commission as an
investment company and, to the knowledge of such counsel, no
order has been issued or proceeding instituted to suspend such
registration; and
5.3.7 To the knowledge of such counsel, (a) no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Xxxxx Trust or any of its properties or assets, and
(b) the Xxxxx Trust is not a party to or subject to the
provision of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its
business.
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6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXX TRUST
The obligations of the Xxxxx Trust to consummate the transactions provided for
herein with respect to Admiral Funds shall, at its election, be subject to the
performance by Admiral Funds of all the obligations to be performed by it
hereunder on or before the Closing Date and the following further conditions:
6.1 All representations and warranties of Admiral Funds 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.
6.2 Admiral Funds shall have delivered to the Xxxxx Trust a certificate
executed in its name by the President or a Vice President of Admiral
Funds, in form and substance satisfactory to the Xxxxx Trust and dated
as of the Closing Date, to the effect that the representations and
warranties of Admiral Funds 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 Xxxxx Trust shall reasonably request.
6.3 Admiral Funds shall have delivered to the Xxxxx Trust on the Closing
Date a Statement of Net Assets, which Statement shall be prepared in
accordance with generally accepted accounting principles consistently
applied, together with a list of its portfolio securities showing the
adjusted tax bases and holding periods of such securities as of the
Closing Date, certified by the Treasurer of Admiral Funds.
6.4 The Xxxxx Trust shall have received an opinion from Xxxx, Xxxx &
Xxxxx, special counsel to Admiral Funds relating to paragraphs 6.4.1
through 6.4.3 and 6.4.6, and from Xxxxxxx Xxxxxxxxx, Esq., Vice
President and Assistant Secretary of Nuveen Advisory Corp. relating to
paragraphs 6.4.4 and 6.4.5, each opinion dated as of the Closing Date
and relying upon such opinions of local counsel and certificates of
public authorities and officers of Admiral Funds as each deem
appropriate, to the effect that:
6.4.1 Admiral Funds has been duly organized and is validly existing
as a corporation in good standing under the laws of the State
of Maryland with requisite corporate power to own its
properties and, to the knowledge of such counsel, to carry on
its business as presently conducted;
6.4.2 This Agreement has been duly authorized, executed and delivered
by Admiral Funds and, assuming due authorization, execution and
delivery of the Agreement by Xxxxx Trust, constitutes a valid
and binding obligation of the Admiral Funds, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium
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and similar laws of general applicability relating to or
affecting creditors' rights and to general equitable
principles;
6.4.3 Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby violate
(i) Admiral Funds' Charter or By-Laws or (ii) any federal
securities law of the United States, the laws of the State of
Illinois or the laws of the State of Maryland applicable to
Admiral Funds; provided, however, that such counsel may state
that it expresses no opinion with respect to federal or state
securities anti-fraud laws or fraudulent transfer laws; and
provided further that, insofar as performance by Admiral Funds
of its obligations under this Agreement is concerned, such
counsel may state that it expresses no opinion as to
bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability relating to or affecting
creditors' rights;
6.4.4 To the knowledge of counsel (without any independent inquiry or
investigation) all regulatory consents, authorizations,
approvals and filings required to be obtained or made by
Admiral Funds under the federal laws of the United States, and
the laws of the State of Maryland for the consummation of the
transactions contemplated by this Agreement have been obtained
or made;
6.4.5 Admiral Funds has been registered with the Commission as an
investment company, and, to the knowledge of such counsel, no
order has been issued or proceeding instituted to suspend such
registration; and
6.4.6 To the knowledge of such counsel, (a) no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to Admiral Funds or any of its properties or assets, and (b)
Admiral Funds is not a party to or subject to the provision of
any order, decree or judgment of any court or governmental
body, which materially and adversely affects its business.
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE XXXXX TRUST AND ADMIRAL
FUNDS
The obligations of the Xxxxx Trust and Admiral Funds hereunder are subject to
the further conditions that on or before the Closing Date:
7.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite votes of (a) the Board of Trustees of
the Xxxxx Trust and the Board of Directors of Admiral Funds, including
the determinations required by Rule 17a-8(a) under the Investment
Company Act and (b) the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of Admiral Funds'
Charter and By-Laws, and each of Xxxxx Trust and Admiral
13
Funds shall have delivered certified copies of the resolutions
evidencing such approvals to the other.
7.2 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 damages or other relief in
connection with, this Agreement or the transactions contemplated
herein.
7.3 All consents of other parties and all consents, orders and permits of
federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky or securities authorities,
including "no-action" positions of such federal or state authorities)
deemed necessary by the Xxxxx Trust or Admiral Funds 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
materially adverse effect on the assets or properties of the Acquiring
Fund or the Acquired Fund; provided that either party hereto may waive
any part of this condition as to itself.
7.4 The Registration Statement shall have become effective under the 1933
Act, and no stop order suspending the effectiveness thereof shall have
been issued, and, to the best knowledge of the Xxxxx Trust, no
investigation or proceeding under the 1933 Act for that purpose shall
have been instituted or be pending, threatened or contemplated.
7.5 The Xxxxx Trust and Admiral Funds shall have received an opinion of
Xxxx, Xxxx & Xxxxx reasonably satisfactory to the Xxxxx Trust and
Admiral Funds and based upon such reasonably requested representations
and warranties as requested by counsel, substantially to the effect
that, for federal income tax purposes:
7.5.1 The acquisition by the Acquiring Fund of all the assets of the
Acquired Fund in exchange solely for Acquiring Fund Shares and
the assumption by the Acquiring Fund of the Acquired Fund's
liabilities, if any, followed by the distribution by the
Acquired Fund of the Acquiring Fund Shares to the shareholders
of the Acquired Fund in exchange for their Acquired Fund shares
in complete liquidation of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1) of the
Internal Revenue Code, and the Acquiring Fund and the Acquired
Fund each will be "a party to a reorganization" within the
meaning of Section 368(b) of the Internal Revenue Code;
7.5.2 The Acquired Fund's shareholders will recognize no gain or loss
upon the exchange of all of their Acquired Fund shares for
Acquiring Fund Shares in complete liquidation of the Acquired
Fund;
7.5.3 No gain or loss will be recognized by the Acquired Fund upon
the transfer of all its assets to the Acquiring Fund in
exchange solely for Acquiring
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Fund Shares and the assumption by the Acquiring Fund of the
Acquired Fund's liabilities, if any, and with respect to the
subsequent distribution of those Acquiring Fund Shares to the
Acquired Fund shareholders in complete liquidation of the
Acquired Fund;
7.5.4 No gain or loss will be recognized by the Acquiring Fund upon
the acquisition of all the Acquired Fund's assets in exchange
solely for Acquiring Fund Shares and the assumption of the
Acquired Fund's liabilities, if any;
7.5.5 The basis of the assets acquired by the Acquiring Fund will be,
in each instance, the same as the basis of those assets when
held by the Acquired Fund immediately before the transfer, and
the holding period of such assets acquired by the Acquiring
Fund will include the holding period thereof when held by the
Acquired Fund;
7.5.6 The basis of the Acquiring Fund Shares to be received by the
Acquired Fund's shareholders upon liquidation of the Acquired
Fund will be, in each instance, the same as the basis of the
Acquired Fund shares surrendered in exchange;
7.5.7 The holding period of the Acquiring Fund Shares to be received
by the Acquired Fund's shareholders will include the period
during which the Acquired Fund shares to be surrendered in
exchange therefor were held; provided such Acquired Fund shares
were held as capital assets by those shareholders on the date
of the exchange;
7.5.8 For purposes of Section 381 of the Code, the Acquiring Fund
will be treated as if there had been no Reorganization.
Accordingly, the Reorganization will not result in the
termination of the Acquired Fund's taxable year. The Acquired
Fund's tax attributes enumerated in Section 381(c) of the Code
will be taken into account by the Acquiring Fund as if there
had been no Reorganization, and the part of the Acquired Fund's
taxable year before the Reorganization will be included in the
Acquiring Fund's taxable year after the Reorganization.
7.6 Prior to the Closing (i) the Board of Trustees of the Xxxxx Trust
shall have authorized the issuance of, and the Acquiring Fund shall
have issued, one Acquiring Fund Share to Xxxxx Investment Research,
Inc. in consideration of the payment of $1.00 for the purpose of
enabling Xxxxx Investment Research, Inc. to vote on the matters
referred to in paragraph 7.7 and (ii) after such vote, Xxxxx
Investment Research, Inc. shall redeem the shares so issued.
7.7 The Xxxxx Trust (on behalf of and with respect to the Acquiring Fund)
shall have entered into a Management Agreement with Xxxxx Investment
Research, Inc., a Distribution Agreement and a Plan of Distribution
with CW Fund Distributors,
15
Inc., a Transfer Agency Agreement and an Administration Agreement with
Countrywide Fund Services, Inc. and a Custody Agreement with Star
Bank, N.A. Each such agreement shall have been approved by Xxxxx
Trust's Board of Trustees and, to the extent required by law, by such
of those trustees who are not "interested persons" thereof (as defined
in the Investment Company Act) and by Xxxxx Investment Research, Inc.
as the sole shareholder of the Acquiring Fund.
8. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
8.1 This Agreement constitutes the entire agreement between the Xxxxx
Trust and Admiral Funds.
8.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall
terminate at Closing.
9. TERMINATION
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval of the shareholders of the Acquired Fund:
9.1 By mutual agreement of the Xxxxx Trust and Admiral Funds; or
9.2 Upon written notice to the other party, by either the Xxxxx Trust or
Admiral Funds, if a condition to the obligations of the party
exercising its right to terminate shall not have been met and it
reasonably appears that it will not or cannot be met.
In the event of any such termination, there shall be no liability for damages on
the part of either the Xxxxx Trust or Admiral Funds or any Director, Trustee or
officer of either the Xxxxx Trust or Admiral Funds.
10. AMENDMENT
This Agreement may be amended, modified or supplemented only in writing by the
parties; provided, however, that following the shareholder's meeting called by
Admiral Funds pursuant to paragraph 4.2, no such amendment may have the effect
of changing the provisions for determining the number of Acquiring Fund Shares
to be distributed to the Acquired Fund's shareholders under this Agreement
without their further approval and the further approval of the Boards of
Directors or Trustees of the Xxxxx Trust and Admiral Funds (including the
determinations required by Rule 17a-8(a) under the Investment Company Act), and
provided further that nothing contained in this paragraph 10 shall be construed
as requiring additional approval to amend this Agreement to change the Closing
Date or the Effective Time.
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11. NOTICES
Any notice, report, demand or other communication required or permitted by any
provision of this Agreement shall be in writing and shall be given by hand
delivery, prepaid certified mail or overnight delivery service addressed to:
Xxxxx Trust, c/o Xxxxx Xxxxx, Ph.D., Xxxxx Investment Research, Inc., X.X. Xxx
0, Xxxxx, Xxxx 00000.
Admiral Funds, c/o Xxxx Nuveen & Co. Incorporated, 000 Xxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Berkshire.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
12.1 The 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.
12.2 This Agreement may be executed in any number of counterparts, each of
which will be deemed an original.
12.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
12.4 This Agreement shall bind and inure to the benefit of the parties and
their respective successors and assigns, and 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
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation other than the
parties and their respective successors and assigns any rights or
remedies under or by reason of this Agreement.
12.5 All persons dealing with the Acquiring Fund must look solely to the
property of the Acquiring Fund for the enforcement of any claims
against the Acquiring Fund as neither the Trustees, officers, agents
or shareholders of the Acquiring Fund assume any personal liability
for obligations entered into on behalf of the Acquiring Fund.
13. BROKERAGE FEES AND EXPENSES
13.1 The Xxxxx Trust on behalf of the Acquiring Fund and Admiral Funds on
behalf of the Acquired Fund each represent and warrant to each other
that there are no brokers or finders entitled to receive any payments
in connection with the transactions provided for herein.
13.2 In connection with the Reorganization, the Acquiring Fund will not
bear any of the expenses of the Acquired Fund or its shareholders, nor
will the Acquired Fund
17
bear any of the expenses of the Acquiring Fund or its shareholders,
other than expenses directly and solely related to the Reorganization.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by the President or Vice President of each party.
FLAGSHIP ADMIRAL FUNDS INC. THE XXXXX ADVANTAGE FUNDS
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxx
--------------------- ------------------
Xxxxxxx Xxxxxxxxx Xxxxx X. Xxxxx
Its: Vice President and Secretary Its: President
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