AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of June 4, 2009
(this "Agreement"), is made by and between RMR Asia Pacific Real Estate Fund,
a Massachusetts business trust and registered closed end management
investment company, File No. 811-21856 (the "Target Fund"), and
New RMR Asia Pacific Real Estate Fund, a Delaware statutory trust
and registered closed end management investment company, File No. 811-22260
(the "Acquiring Fund" and together with the "Target Fund", the "Funds"
and each individually, a "Fund").
WHEREAS, the Acquiring Fund has proposed to enter into the
Reorganization (as defined below) with the Target Fund;
WHEREAS, the Boards of Trustees of the Funds have determined
that participation in the Reorganization is in the best interests of
each respective Fund;
WHEREAS, the parties intend that the transaction contemplated
by this Agreement qualify as a "reorganization" within the meaning
of Section 368(a) of the Code (as defined below); and
WHEREAS, the Acquiring Fund is also proposing to enter into
a reorganization with RMR Asia Real Estate Fund, a registered closed
end management investment company, File No. 811-22007 (the "Sister Fund"),
pursuant to a separate agreement and plan of reorganization;
NOW, THEREFORE, in order to consummate the Reorganization and in
consideration of the respective representations, warranties, covenants
and agreements hereinafter set forth, and intending to be legally bound,
each Fund hereby agrees as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "1940 Act" means the Investment Company Act of 1940, as
amended.
(d) "Acquiring Fund" shall have the meaning assigned to such
term in the preamble.
(e) "Acquiring Fund Closing Financial Statements" shall have
the meaning assigned to such term in Section 2(d).
(f) "Acquiring Fund Common Shares" shall have the meaning
assigned to such term in Section 2(k).
(g) "Agreement" shall have the meaning assigned to such term
in the preamble.
(h) "Closing Date" shall have the meaning assigned to such
term in Section 8(a).
(i) "Code" means the Internal Revenue Code of 1986, as amended.
(j) "Commission" means the Securities and Exchange Commission.
(k) "Fund" or "Funds" shall have the meaning assigned to such
terms in the preamble.
(l) "GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time and applied
consistently throughout the periods involved.
(m) "Indemnified Party" shall have the meaning assigned to
such term in Section 13(a).
(n) "Indemnitor" shall have the meaning assigned to such term
in Section 13(a).
(o) "Loss" or "Losses" shall have the meanings assigned to
such terms in Section 13(a).
(p) "NYSE Amex" means NYSE Amex LLC.
(q) "Proxy Statement/Prospectus" shall have the meaning
assigned to such term in Section 2(j).
(r) "Registration Statement" shall have the meaning assigned
to such term in Section 2(j).
(s) "Reorganization" shall have the meaning assigned to such
term in Section 4(a).
(t) "RIC" means a regulated investment company under Section
851 of the Code.
(u) "Shareholder Meeting" shall have the meaning assigned to
such term in Section 2(j).
(v) "Sister Fund" shall have the meaning assigned to such term
in the recitals.
(w) "Skadden" means Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
(x) "Target Fund" shall have the meaning assigned to such
term in the preamble.
(y) "Target Fund Closing Financial Statements" shall have
the meaning assigned to such term in Section 3(e).
(z) "Target Fund Common Shares" shall have the meaning
assigned to such term in Section 3(m).
(aa) "Target Fund Investments" means (i) the investments of
the Target Fund shown on the schedule of its investments as of the
Valuation Date furnished to the Acquiring Fund and (ii) all other
assets owned by the Target Fund or liabilities incurred as of the
Valuation Date.
(bb) "Valuation Date" shall be 4:00 p.m., Eastern Time, on
June 16, 2009, or such earlier or later day and time as may be
mutually agreed upon in writing by the parties hereto.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND.
The Acquiring Fund represents and warrants to, and agrees
with, the Target Fund that:
(a) The Acquiring Fund is a trust, with transferable shares,
duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and has the power and
authority to own all of its assets and to carry out this Agreement.
The Acquiring Fund has all necessary federal, state and local
authorizations to carry on its business as it is now being conducted
or proposed to be conducted and to carry out this Agreement.
(b) The Acquiring Fund is duly registered under the 1940 Act
as a non-diversified, closed end management investment company and
such registration has not been revoked or rescinded and is in full
force and effect.
(c) The Acquiring Fund 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, and this Agreement
constitutes a valid and binding contract enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto.
(d) An unaudited statement of assets, liabilities and capital
of the Acquiring Fund and an unaudited schedule of investments of the
Acquiring Fund, in each case, with values determined as provided in
Section 5 of this Agreement, each as of the Valuation Date (together,
the "Acquiring Fund Closing Financial Statements"), will be furnished
to the Target Fund, at or prior to the Closing Date, for the purpose
of determining the number of Acquiring Fund Common Shares to be issued
to the Target Fund pursuant to Section 5 hereof; the Acquiring Fund
Closing Financial Statements will fairly present the financial position
of the Acquiring Fund as of the Valuation Date in conformity with GAAP.
(e) There are no material legal, administrative or other
proceedings pending or, to the knowledge of the Acquiring Fund, threatened
against it which assert liability on the part of the Acquiring Fund or
which materially affect its financial condition or its ability to
consummate the Reorganization. The Acquiring Fund is not charged with
nor, to the best of its knowledge, does any person presently intend
to charge it with, or to recommend that it be charged with, any
violation of any provisions of any federal, state or local law or
regulation or administrative ruling to which it is bound.
(f) There are no material contracts outstanding to which the
Acquiring Fund is a party that have not been disclosed in the
Registration Statement or that have not otherwise been disclosed to
the Target Fund.
(g) The execution, delivery and performance of this Agreement
by the Acquiring Fund do not, and the consummation of the transactions
contemplated hereby will not, constitute or result in a breach or
violation of, or a default under, (i) the governing documents of the
Acquiring Fund, (ii) any contract or other commitment or obligation
binding upon the Acquiring Fund, after giving effect to any agreement
of the Funds to amend such contract or other commitment or obligation
to cure any potential violation as a condition precedent to the
Reorganization or (iii) any order or decree binding upon the Acquiring
Fund.
(h) The Acquiring Fund has no known liabilities of a material
amount, contingent or otherwise, other than those shown on the Acquiring
Fund Closing Financial Statements, those incurred in the ordinary
course of its business as an investment company, and those incurred in
connection with the Reorganization. As of the Valuation Date, the
Acquiring Fund will advise the Target Fund in writing of all known
liabilities, contingent or otherwise, whether or not incurred in the
ordinary course of business, existing or accrued as of such time, not
otherwise disclosed in the Acquiring Fund Closing Financial Statements.
(i) No consent, approval, authorization or order of any court or
government authority is required for the consummation by the Acquiring
Fund of the Reorganization, except such as may be required under the 1933
Act, the 1934 Act and the 1940 Act or state securities laws (which term
as used herein shall include the laws of the District of Columbia and
Puerto Rico).
(j) The registration statement filed by the Acquiring Fund on
Form N-14, which includes the proxy statement of the Target Fund with
respect to the transactions contemplated herein (the "Proxy
Statement/Prospectus"), and any documents included or incorporated by
reference therein and any supplement or amendment thereto (collectively,
as so amended or supplemented, the "Registration Statement"), on the
effective date of the Registration Statement, at the time of the special
meeting of the shareholders of the Target Fund called to vote on this
Agreement and the Reorganization (the "Shareholder Meeting") and at the
Closing Date (i) complied or will comply in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the
rules and regulations thereunder and (ii) did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; and the Proxy Statement/Prospectus included therein did not
or will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that no representation or warranty is made by the
Acquiring Fund with respect to statements made or incorporated by
reference in the Registration Statement or Proxy Statement/Prospectus
based on information supplied by the Target Fund or the Sister Fund for
inclusion or incorporation by reference therein, or based on information
which is not included or incorporated by reference in such documents
but which should have been disclosed pursuant to Section 3(l).
(k) The Acquiring Fund is authorized to issue an unlimited number
of common shares of beneficial interest, par value $.001 per share
(the "Acquiring Fund Common Shares").
(l) The Acquiring Fund Common Shares to be issued to the
Target Fund pursuant to this Agreement will have been duly authorized
and, when issued and transferred pursuant to this Agreement, will be
legally and validly issued and will be fully paid, nonassessable and
will have full voting rights, and no shareholder of the Acquiring
Fund will have any preemptive right of subscription or purchase in
respect thereof.
(m) The Acquiring Fund, subject to the Registration Statement
having been declared effective and the filing of the Proxy
Statement/Prospectus under Rule 497, has taken all required action
under the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder to make the public offering and consummate
the sale of the Acquiring Fund Common Shares as contemplated by this
Agreement.
(n) At or prior to the Closing Date, the Acquiring Fund will
have obtained any and all regulatory, trustee and shareholder approvals
necessary to issue the Acquiring Fund Common Shares to the Target Fund.
(o) The Acquiring Fund has filed, or intends to file, or
has obtained extensions to file, all federal, state and local tax
returns which are required to be filed by it, and has paid or has
obtained extensions to pay, all federal, state and local taxes shown
on said returns to be due and owing and all assessments received
by it, up to and including the taxable year in which the Closing
Date occurs. All tax liabilities of the Acquiring Fund have been
adequately provided for on its books, and no tax deficiency or
liability of the Acquiring Fund has been asserted and no question
with respect thereto has been raised by the Internal Revenue
Service or by any state or local tax authority for taxes in excess
of those already paid, up to and including the taxable year in
which the Closing Date occurs.
(p) The Acquiring Fund has (i) elected to qualify and has
qualified as a RIC as of and since its inception, (ii) been a RIC
at all times since the end of its first taxable year when it so
qualified, (iii) qualifies and will continue to qualify as a RIC and
(iv) satisfied the distribution requirements imposed by the Code
for each of its taxable years.
(q) The Acquiring Fund has no plan or intention to sell
or otherwise dispose of the Target Fund Investments, except for
dispositions made in the ordinary course of business.
3. REPRESENTATIONS AND WARRANTIES OF THE TARGET FUND.
The Target Fund represents and warrants to, and agrees
with, the Acquiring Fund that:
(a) The Target Fund is a trust, with transferable shares,
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and has the power
and authority to own all of its assets and to carry out this Agreement.
The Target Fund has all necessary federal, state and local
authorizations to carry on its business as it is now being conducted
and to carry out this Agreement.
(b) The Target Fund is duly registered under the 1940 Act
as a non-diversified, closed end management investment company,
and such registration has not been revoked or rescinded and is in
full force and effect.
(c) The Target Fund has full power and authority to enter
into and perform its obligations under this Agreement, subject,
in the case of consummation of the Reorganization, to the approval
and adoption of this Agreement and the Reorganization by the
shareholders of the Target Fund as described in Section 9(a) hereof.
The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of its Board of Trustees
and this Agreement constitutes a valid and binding contract
enforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto.
(d) The Target Fund has furnished the Acquiring Fund with
the Target Fund's Annual Report to Shareholders for the year ended
December 31, 2008, and the audited financial statements appearing
therein fairly present the financial position of the Target Fund as
of the respective dates indicated, in conformity with GAAP.
(e) An unaudited statement of assets, liabilities and capital
of the Target Fund and an unaudited schedule of investments of the
Target Fund (which shall include dates of acquisition and tax costs),
in each case, with values determined as provided in Section 5 of
this Agreement, each as of the Valuation Date (together, the "Target
Fund Closing Financial Statements"), will be furnished to the Acquiring
Fund at or prior to the Closing Date for the purpose of determining
the number of Acquiring Fund Common Shares to be issued to the Target
Fund pursuant to Section 5 hereof; the Target Fund Closing Financial
Statements will fairly present the financial position of the Target
Fund as of the Valuation Date in conformity with GAAP.
(f) Other than as disclosed in the Registration Statement,
there are no material legal, administrative or other proceedings
pending or, to the knowledge of the Target Fund, threatened against
it which assert liability on the part of the Target Fund or which
materially affect its financial condition or its ability to consummate
the Reorganization. The Target Fund is not charged with nor, to
the best of its knowledge, does any person presently intend to
charge it with, or to recommend that it be charged with, any violation
of any provisions of any federal, state or local law or regulation
or administrative ruling to which it is bound.
(g) There are no material contracts outstanding to which the
Target Fund is a party that have not been disclosed in the Registration
Statement or that have not otherwise been disclosed to the Acquiring Fund.
(h) The execution, delivery and performance of this Agreement
by the Target Fund do not, and the consummation of the transaction
contemplated hereby will not, constitute or result in a breach or
violation of, or a default under, (i) the governing documents of
the Target Fund, (ii) any contract or other commitment or obligation
binding upon the Target Fund or (iii) any order or decree binding
upon the Target Fund.
(i) Other than as disclosed in the Registration Statement, the
Target Fund has no known liabilities of a material amount, contingent
or otherwise, other than those shown on the Target Fund Closing
Financial Statements, those incurred in the ordinary course of its
business as an investment company and those incurred in connection with
the Reorganization. As of the Valuation Date, the Target Fund will
advise the Acquiring Fund in writing of all known liabilities,
contingent or otherwise, whether or not incurred in the ordinary
course of business, existing or accrued as of such time, not otherwise
disclosed in the Target Fund Closing Financial Statements.
(j) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by the
Target Fund of the Reorganization, except such as may be required
under the 1933 Act, the 1934 Act and the 1940 Act or state securities
laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico).
(k) At both the Valuation Date and the Closing Date, the
Target Fund will have full right, power and authority to sell,
assign, transfer and deliver the Target Fund Investments. At the
Closing Date, subject only to the obligation to deliver the
Target Fund Investments as contemplated by this Agreement, the
Target Fund will have good and marketable title to all of the Target
Fund Investments, and the Acquiring Fund will acquire all of the
Target Fund Investments free and clear of any encumbrances, liens
or security interests and without any restrictions upon the transfer
thereof (except those imposed by the federal or state securities laws
and those imperfections of title or encumbrances as do not materially
detract from the value or use of the Target Fund Investments or
materially affect title thereto).
(l) The Registration Statement, on the effective date of
the Registration Statement, at the time of the Shareholder Meeting
and on the Closing Date (i) complied or will comply in all material
respects with the provisions of the 1933 Act, the 1934 Act and
the 1940 Act and the rules and regulations thereunder and (ii)
did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
and the Proxy Statement/Prospectus included therein did not or
will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty
is made by the Target Fund with respect to statements made or
incorporated by reference in the Registration Statement or Proxy
Statement/Prospectus based on information supplied by the
Acquiring Fund or the Sister Fund for inclusion or incorporation
by reference therein, or based on information which is not included
or incorporated by reference in such documents but which should have
been disclosed pursuant to Section 2(j).
(m) The Target Fund is authorized to issue an unlimited
number of common shares of beneficial interest, par value $.001
per share (the "Target Fund Common Shares"), 1,755,000 shares of
which are outstanding on the date hereof. Each outstanding Target
Fund Common Share is duly authorized, validly issued, fully paid,
nonassessable, and has full voting rights, subject, in the case of
the nonassessability of such shares, to certain decisions of the
Supreme Judicial Court of The Commonwealth of Massachusetts holding
that shareholders of a Massachusetts business trust may, in certain
circumstances, be assessed or held personally liable as partners
for the obligations of a Massachusetts business trust. Other than
the outstanding Target Fund Common Shares, there are no outstanding
(i) shares of capital stock or other voting securities of the Target
Fund, (ii) stock appreciation rights, phantom stock units, restricted
stock grants or contingent stock grants which grant awards of
any of the foregoing, (iii) bonds, debentures, notes or other
indebtedness of the Target Fund having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote)
on any matters on which shareholders of the Target Fund may vote,
(iv) securities of the Target Fund convertible into or exchangeable
for shares of capital stock or voting securities of the Target Fund,
(v) options or other rights to acquire from the Target Fund, or
obligations of the Target Fund to issue any, capital stock, voting
securities or securities convertible into or exchangeable for capital
stock or voting securities of the Target Fund or (vi) equity equivalent
interests in the ownership or earnings of the Target Fund.
(n) All of the issued and outstanding Target Fund Common
Shares were offered for sale and sold in conformity with all applicable
federal and state securities laws.
(o) The Target Fund has filed, or intends to file, or has
obtained extensions to file, all federal, state and local tax returns
which are required to be filed by it, and has paid or has obtained
extensions to pay, all federal, state and local taxes shown on said
returns to be due and owing and all assessments received by it, up to
and including the taxable year in which the Closing Date occurs. All
tax liabilities of the Target Fund have been adequately provided for
on its books, and no tax deficiency or liability of the Target Fund has
been asserted and no question with respect thereto has been raised by
the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the
taxable year in which the Closing Date occurs.
(p) The Target Fund (i) has elected to qualify and has qualified
as a RIC as of and since its inception, (ii) has been a RIC at all
times since the end of its first taxable year when it so qualified,
(iii) qualifies and will continue to qualify as a RIC for its taxable
year ending upon its liquidation and dissolution and (iv) has satisfied
the distribution requirements imposed by the Code for each of its
taxable years.
(q) The books and records of the Target Fund made available to
the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect
to the operations of the Target Fund.
(r) The Target Fund will not sell or otherwise dispose of any
of the Acquiring Fund Common Shares to be received in the Reorganization,
except for the distribution to the shareholders of the Target Fund, as
provided in this Agreement.
4. THE REORGANIZATION.
(a) Subject to the receipt of the requisite approvals of the
shareholders of the Target Fund, and to the other terms and conditions
contained herein, the Target Fund agrees to convey, transfer and
deliver to the Acquiring Fund and the Acquiring Fund agrees to acquire
from the Target Fund, on the Closing Date, all of the Target Fund
Investments (including interest accrued as of the Valuation Date on
debt instruments), and assume all of the liabilities of the Target Fund,
in exchange for that number and type of Acquiring Fund Common Shares
determined as provided in Section 5 of this Agreement
(the "Reorganization"). On the Closing Date, the Target Fund Common
Shares shall be cancelled on the books of the Target Fund, will be
null and void, and shall represent only the right to receive,
subject to the terms and conditions of this Agreement, Acquiring
Fund Common Shares, and, if not paid prior to the Reorganization,
any dividends payable with respect to such Target Fund Common Shares
pursuant to Section 4(c) herein. Pursuant to this Agreement, as
soon as practicable after the Closing Date, the Target Fund will
distribute (or cause to be distributed) all Acquiring Fund Common
Shares it has received pursuant to the terms of this Agreement to
its shareholders pro rata in exchange for their Target Fund Common
Shares. Such distributions shall be accomplished by the opening of
shareholder accounts on the share ledger records of the Acquiring
Fund in the names of and in the amounts due to the holders of Target
Fund Common Shares based on their respective holdings in the Target
Fund as of the Valuation Date.
(b) If it is mutually determined by the parties hereto that the
portfolios of the Target Fund and the Acquiring Fund, when aggregated,
would contain investments exceeding certain percentage limitations set
forth in the Acquiring Fund's investment policies and restrictions, the
Target Fund, if requested by the Acquiring Fund, will dispose of a
sufficient amount of such investments as may be necessary to avoid
violating such limitations as of the Closing Date. Notwithstanding
the foregoing, (i) nothing herein will require the Target Fund to dispose
of any portfolio securities or other investments, if, in the
reasonable judgment of the Target Fund's Board of Trustees or investment
advisor, such disposition would create more than an insignificant
risk that the Reorganization would not be treated as a "reorganization"
described in Section 368(a) of the Code for federal income tax purposes
or would otherwise not be in the best interests of the Target Fund and
(ii) nothing will permit the Target Fund to dispose of any portfolio
securities or other investments if, in the reasonable judgment of the
Acquiring Fund's Board of Trustees or investment advisor, such
disposition would create more than an insignificant risk that the
Reorganization would not be treated as a "reorganization" described
in Section 368(a) of the Code for federal income tax purposes or would
otherwise not be in the best interests of the Acquiring Fund.
(c) Prior to the Closing Date, the Target Fund shall declare
and pay on or immediately before the Closing Date a dividend or
dividends which, together with all such previous dividends, shall
have the effect of distributing to its shareholders all of its net
investment company taxable income to and including the Closing Date,
if any (computed without regard to any deduction for dividends paid),
and all of its net capital gain, if any, realized to and including
the Closing Date.
(d) The Target Fund will promptly pay or cause to be paid to
the Acquiring Fund any interest the Target Fund receives on or after
the Closing Date with respect to any of the Target Fund Investments
transferred to the Acquiring Fund hereunder.
(e) Recourse for liabilities assumed from the Target Fund by
the Acquiring Fund in the Reorganization will be limited to the net
assets acquired by the Acquiring Fund. The known liabilities of the
Target Fund, as of the Valuation Date, shall be confirmed to the
Acquiring Fund pursuant to Section 3(i) of this Agreement.
(f) The Target Fund will cause its existence to be terminated
following the Closing Date by (i) terminating its registration under
the 1940 Act, (ii) delisting from NYSE Amex, (iii) terminating its
organization and voluntarily dissolving and liquidating in accordance
with Massachusetts law and (iv) withdrawing its authority to do
business in any state where it is required to do so.
5. ISSUANCE AND VALUATION OF ACQUIRING FUND COMMON SHARES IN THE
REORGANIZATION.
(a) On the Closing Date, Acquiring Fund Common Shares shall
be issued by the Acquiring Fund to the Target Fund in exchange for
such assets of the Target Fund as follows: on the Closing Date, the
Acquiring Fund will issue to the Target Fund a number of Acquiring
Fund Common Shares, the aggregate net asset value of which will equal
the aggregate net asset value of the Target Fund Common Shares,
determined as set forth in this Section 5.
(b) The net asset value of each of the Funds shall be determined
in accordance with the regular procedures of the Acquiring Fund,
and no formula will be used to adjust the net asset value so determined
of any Fund to take into account differences in realized and
unrealized gains and losses. The value of the Target Fund Investments
to be transferred to the Acquiring Fund shall be determined pursuant
to the regular procedures of the Acquiring Fund. Values in all
cases shall be determined as of the Valuation Date.
(c) The net asset value per share of the Target Fund Common
Shares shall be determined in accordance with this Section 5 on the
Valuation Date, and the net asset value per share of the Acquiring
Fund Common Shares shall be determined in accordance with this Section
5 immediately after giving effect to the Reorganization. For purposes
of determining the net asset value of a Target Fund Common Share and
an Acquiring Fund Common Share, the value of the securities held by
the applicable Fund plus any cash or other assets (including interest
accrued but not yet received) minus all liabilities (including accrued
and incurred expenses as allocated pursuant to Section 6 hereof)
outstanding at such time.
(d) The Acquiring Fund shall issue to the Target Fund separate
certificates or evidence of book entry for the Acquiring Fund Common
Shares, each registered in the names provided by the Target Fund or
in the name of the Target Fund. The Target Fund shall then distribute
the Acquiring Fund Common Shares to the holders of Target Fund Common
Shares by delivering the Acquiring Fund Common Shares to Xxxxx Fargo
Bank, N.A., as the transfer agent and registrar for the Acquiring Fund
Common Shares, for distribution to the holders of Target Fund Common
Shares on the basis of such holder's proportionate interest in the
aggregate net asset value of the Target Fund Common Shares. All
issued and outstanding Target Fund Common Shares will be cancelled
on the books of the Target Fund and will be null and void as of the
Closing Date.
6. PAYMENT OF EXPENSES.
(a) Each of the Acquiring Fund and the Target Fund will pay
its own expenses incurred in connection with the Reorganization,
whether or not consummated. With respect to expenses incurred in
connection with the Reorganization and the reorganization of the
Sister Fund with the Acquiring Fund that are attributable to the
Target Fund and the Sister Fund, such expenses shall be allocated
in proportion to the net asset values attributable to the common
shares of the Target Fund and the Sister Fund. Neither the Funds,
the Sister Fund, nor RMR Advisors, Inc., the Funds' and the Sister
Fund's investment adviser, will pay any expenses of the shareholders
arising out of or in connection with the Reorganization.
(b) Notwithstanding anything herein to the contrary, if for
any reason the Reorganization is not consummated, except for the
payment of expenses as provided in this Section 6, no party shall
be liable to any other party for any damages resulting therefrom,
including, without limitation, consequential damages.
7. COVENANTS OF THE FUNDS.
(a) The Target Fund covenants to operate its business as
presently conducted between the date hereof and the Closing Date.
The Acquiring Fund covenants not to commence business operations
(except to the extent contemplated herein or necessary or
appropriate to consummate the purposes and intent of this Agreement
and the separate agreement and plan of reorganization that it
has entered into with the Sister Fund) prior to the completion of
the Reorganization on the Closing Date.
(b) The Acquiring Fund will file the Registration Statement
with the Commission and will use its reasonable best efforts to
cause the Registration Statement to become effective as promptly as
practicable. Each Fund agrees to cooperate fully with the other,
and each will furnish to the other the information relating to itself
to be set forth in the Registration Statement as required by the 1933
Act, the 1934 Act and the 1940 Act, and the rules and regulations
thereunder and any applicable state securities laws.
(c) The Acquiring Fund shall use its reasonable best efforts
to cause the Acquiring Fund Common Shares to be issued in the
Reorganization to be approved for listing on NYSE Amex prior to the
Closing Date.
(d) The Target Fund shall mail to its shareholders of record
entitled to vote at the Shareholder Meeting, in sufficient time to
comply with requirements as to notice thereof, the Proxy
Statement/Prospectus.
(e) The Target Fund shall duly take all lawful action to call,
give notice of, convene and hold the Shareholder Meeting on a date
determined in accordance with the mutual agreement of the Funds for
the purpose of obtaining the requisite shareholder vote with
respect to this Agreement and the Reorganization and shall take
all lawful action to solicit the approval and adoption of this
Agreement and the Reorganization by its shareholders.
(f) Each of the Funds agrees that, by the Closing Date, all
of its federal and other tax returns and reports required to be
filed on or before such date shall have been filed and all taxes
shown on said returns to be due and owing either shall have been
paid or adequate liability reserves shall have been provided for
the payment of such taxes.
The intention of the parties is that the transaction contemplated
by this Agreement will qualify as a "reorganization" within the
meaning of Section 368(a) of the Code. Neither Fund shall take any
action or cause any action to be taken (including, without limitation,
the filing of any tax return) that is inconsistent with such
treatment or results in the failure of the transaction to qualify as
a reorganization within the meaning of Section 368(a) of the Code. At
or prior to the Closing Date, each Fund will take such action, or
cause such action to be taken, as is reasonably necessary to enable
Skadden, as special U.S. federal income tax counsel to the Acquiring
Fund, to render the tax opinion required herein (including, without
limitation, each party's execution of representations reasonably requested
by and addressed to Skadden).
In connection with this covenant, the Funds agree to cooperate
with each other in filing any tax return, amended return or claim for
refund, determining a liability for taxes or a right to a refund of
taxes or participating in or conducting any audit or other proceeding
in respect of taxes. The Acquiring Fund agrees to retain for a period
of 10 years following the Closing Date all returns, schedules and work
papers and all material records or other documents relating to tax matters
of the Target Fund for the taxable period first ending after the
Closing Date and for all prior taxable periods.
After the Closing Date, the Target Fund shall prepare, or
cause its agents to prepare, any federal, state or local tax returns
required to be filed by such Fund with respect to its final taxable year
ending with its complete liquidation and dissolution and for any
prior periods or taxable years and further shall cause such tax returns
to be duly filed with the appropriate taxing authorities.
(g) The Target Fund agrees that following the consummation of
the Reorganization, it will terminate its organization and dissolve
and liquidate in accordance with Massachusetts law and any other
applicable law, it will not make any distributions of any Acquiring
Fund Common Shares other than to its shareholders as provided herein
and without first paying or adequately providing for the payment of
all of its respective liabilities not assumed by the Acquiring Fund,
if any, and on and after the Closing Date it shall not conduct any
business except in connection with its termination or as otherwise
expressly provided herein.
(h) The Target Fund undertakes that if the Reorganization is
consummated, it will file an application pursuant to Section 8(f)
of the 1940 Act for an order declaring that the Target Fund has
ceased to be a registered investment company.
(i) Following the consummation of the Reorganization, the
Acquiring Fund will conduct its business as a non-diversified, closed
end management investment company registered under the 1940 Act.
8. CLOSING DATE.
(a) Delivery of the Target Fund Investments and the Acquiring
Fund Common Shares to be issued as provided in this Agreement, shall
be made at such place and time as the Funds shall mutually agree on
the Valuation Date, the date and time upon which such delivery is to
take place being referred to herein as the "Closing Date." To the
extent that any Target Fund Investments, for any reason, are not
transferable on the Closing Date, the Target Fund shall cause such
Target Fund Investments to be transferred to the Acquiring Fund's
account with its custodian at the earliest practicable date thereafter.
(b) The Target Fund will deliver to the Acquiring Fund on
the Closing Date confirmation or other adequate evidence as to
the tax basis of the Target Fund Investments delivered to the
Acquiring Fund hereunder.
(c) As soon as practicable after the close of business on
the Closing Date, the Target Fund shall deliver to the Acquiring
Fund a list of the names and addresses of all of the shareholders
of record of the Target Fund on the Closing Date and the number of
Target Fund Common Shares owned by each such shareholder, certified
to the best of its knowledge and belief by the transfer agent for
the Target Fund Common Shares or by its President.
9. CONDITIONS TO EACH FUND'S OBLIGATION TO EFFECT THE REORGANIZATION.
The respective obligations of each Fund to consummate the
Reorganization shall be subject to the satisfaction of each of the
following conditions:
(a) That this Agreement shall have been adopted, and the
Reorganization shall have been approved, by the affirmative vote
of the holders of a majority of the Target Fund Common Shares present
in person or represented by proxy at the Shareholder Meeting that
vote at the Shareholder Meeting.
(b) That the Board of Trustees of the Acquiring Fund shall
have approved the issuance of additional Acquiring Fund Common Shares
in an amount determined in accordance with Section 5 of this
Agreement and such shares shall have been approved for listing on
NYSE Amex.
(c) That there shall not be any material litigation pending
with respect to the matters contemplated by this Agreement.
(d) That the Registration Statement shall have become
effective under the 1933 Act, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of
the Acquiring Fund, be contemplated by the Commission.
10. CONDITIONS TO THE TARGET FUND'S OBLIGATION TO EFFECT THE
REORGANIZATION.
The obligations of the Target Fund to consummate the
Reorganization shall be subject to the satisfaction of each of
the following additional conditions:
(a) That the Acquiring Fund shall have delivered to the
Target Fund a copy of the resolution duly adopted by its Board
of Trustees approving this Agreement, certified by its Secretary.
(b) That the Acquiring Fund shall have delivered to the
Target Fund a copy of the resolution duly adopted by its Board
of Trustees approving the issuance of additional Acquiring Fund
Common Shares pursuant to this Agreement, certified by its
Secretary.
(c) That the Acquiring Fund shall have furnished to the
Target Fund the Acquiring Fund Closing Financial Statements,
certified on the Acquiring Fund's behalf by its President (or
any Vice President) or its Treasurer.
(d) That the Acquiring Fund shall have furnished to the
Target Fund a certificate signed by the Acquiring Fund's President
(or any Vice President) or its Treasurer, dated as of the Closing
Date, certifying that, as of the Valuation Date and as of the
Closing Date, all representations and warranties of the Acquiring
Fund made in this Agreement that are not qualified by materiality
are true and correct in all material respects or, if qualified
by materiality, are true and correct in all respects, in each
case, with the same effect as if made at and as of such dates,
and that the Acquiring Fund has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or
satisfied at or prior to such dates.
(e) That the Target Fund shall have obtained an opinion
from Skadden, special U.S. federal income tax counsel for the
Acquiring Fund, dated as of the Closing Date, addressed to the
Target Fund, that the consummation of the transactions set forth
in this Agreement complies with the requirements of a reorganization
as described in Section 368(a) of the Code.
11. CONDITIONS TO THE ACQUIRING FUND'S OBLIGATION TO EFFECT THE
REORGANIZATION.
The obligations of the Acquiring Fund hereunder shall be subject
to the following additional conditions:
(a) That the Target Fund shall have delivered to the
Acquiring Fund a copy of the resolution duly adopted by its
Board of Trustees approving this Agreement, and a certificate
setting forth the vote of the holders of Target Fund Common
Shares obtained at the Shareholder Meeting, each certified by
its Secretary.
(b) That the Target Fund shall have furnished to the Acquiring
Fund the Target Fund Closing Financial Statements, certified on the
Target Fund's behalf by its President (or any Vice President) or its
Treasurer, and a certificate signed by such Fund's President
(or any Vice President) or its Treasurer, dated as of the Closing Date,
certifying that as of the Valuation Date and as of the Closing
Date there has been no material adverse change in the financial
position of the Target Fund since the date of such Fund's most recent
Annual Report, other than changes in the Target Fund Investments
since that date or changes in the market value of the Target Fund
Investments.
(c) That the Target Fund shall have furnished to the Acquiring
Fund a certificate signed by such Fund's President (or any Vice President)
or its Treasurer, dated the Closing Date, certifying that as
of the Valuation Date and as of the Closing Date all representations
and warranties of the Target Fund made in this Agreement that
are not qualified by materiality are true and correct in all material
respects or, if qualified by materiality, are true and correct in all
respects, in each case, with the same effect as if made at and as of
such dates, and that the Target Fund has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied at or prior to such dates.
(d) That the Acquiring Fund shall have obtained an opinion
from Skadden, as special U.S. federal income tax counsel for the
Acquiring Fund, dated as of the Closing Date, addressed to the
Acquiring Fund, that the consummation of the transactions set
forth in this Agreement complies with the requirements of a
reorganization as described in Section 368(a) of the Code.
12. TERMINATION, POSTPONEMENT AND WAIVERS.
(a) Notwithstanding anything contained in this Agreement
to the contrary, this Agreement may be terminated and the Reorganization
abandoned at any time (whether before or after adoption thereof
by the shareholders of the Target Fund) prior to the Closing Date,
or the Closing Date may be postponed, (i) by mutual written consent
of the Boards of Trustees of the Funds, (ii) by the Board of
Trustees of the Target Fund if any condition of the Target Fund's
obligations set forth in Section 10 of this Agreement has not been
fulfilled or waived by such board; or (iii) by the Board of Trustees
of the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 11 of this Agreement has not been
fulfilled or waived by such board.
(b) If the transactions contemplated by this Agreement have
not been consummated by December 31, 2009, this Agreement
automatically shall terminate on that date, unless a later date
is mutually agreed to in writing by the Boards of Trustees
of the Funds.
(c) In the event this Agreement is terminated pursuant to
the provisions hereof, the same shall become void and have no
further effect, and there shall not be any liability on the part
of any Fund or its respective directors, trustees, officers, agents
or shareholders in respect of this Agreement, except that the
provisions of Section 6, this Section 12, Section 13 and Section 14
shall survive such termination.
(d) 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 any Fund (whichever is entitled to the benefit thereof), if,
in the judgment of such board after consultation with its counsel,
such waiver will not have a material adverse effect on the benefits
to the shareholders of such Fund intended under this Agreement.
(e) The respective representations and warranties contained
in Sections 2 and 3 of this Agreement shall expire with, and be
terminated by, the consummation of the Reorganization, and neither
Fund nor any of its respective officers, trustees, agents or shareholders
shall have any liability with respect to such representations or
warranties after the Closing Date. This provision shall not protect
any officer, trustee, agent or shareholder of either Fund against
any liability to the entity for which that officer, trustee, agent
or shareholder so acts or to its shareholders, to which that officer,
trustee, agent or shareholder otherwise would be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless
disregard of his or her duties in the conduct of such office.
(f) If any order or orders of the Commission with respect to
this Agreement shall be issued prior to the Closing Date that impose
any terms or conditions that are determined by action of the boards
of trustees of the Funds to be acceptable, such terms and conditions
shall be binding as if a part of this Agreement without further vote
or approval of the shareholders of the Target Fund, unless such terms
and conditions shall result in a change in the method of computing
the number of Acquiring Fund Common Shares to be issued to the Target
Fund, in which event, unless such terms and conditions shall have been
included in the proxy solicitation materials furnished to the
shareholders of the Target Fund prior to the Shareholder Meeting,
this Agreement shall not be consummated and shall terminate unless
the Target Fund promptly shall call a special meeting of shareholders
at which such conditions so imposed shall be submitted for approval.
13. INDEMNIFICATION.
(a) Each party (an "Indemnitor") shall indemnify and hold the
other and its officers, trustees, agents and persons controlled by or
controlling any of them (each an "Indemnified Party") harmless from
and against any and all losses, damages, liabilities, claims, demands,
judgments, settlements, deficiencies, taxes, assessments, charges,
costs and expenses of any nature whatsoever (including reasonable
attorneys' fees) including amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, and counsel fees reasonably
incurred by such Indemnified Party in connection with the defense or
disposition of any claim, action, suit or other proceeding, whether
civil or criminal, before any court or administrative or investigative
body in which such Indemnified Party may be or may have been involved
as a party or otherwise or with which such Indemnified Party may be or
may have been threatened (each, a "Loss" and collectively, "Losses")
arising out of or related to any claim of a breach of any covenant
made herein by the Indemnitor, provided, however, that no Indemnified
Party shall be indemnified hereunder against any Losses arising
directly from such Indemnified Party's (i) willful misfeasance, (ii)
bad faith, (iii) gross negligence or (iv) reckless disregard of the
duties involved in the conduct of such Indemnified Party's position.
(b) The Indemnified Party shall use its reasonable best efforts
to minimize any liabilities, damages, deficiencies, claims, judgments,
assessments, costs and expenses in respect of which indemnity may
be sought hereunder. The Indemnified Party shall give written notice
to Indemnitor within the earlier of 10 days of receipt of written notice
to Indemnified Party or 30 days from discovery by Indemnified Party
of any matters which may give rise to a claim for indemnification or
reimbursement under this Agreement. The failure to give such notice shall
not affect the right of Indemnified Party to indemnity hereunder unless
such failure has materially and adversely affected the rights of the
Indemnitor. At any time after 10 days from the giving of such notice,
Indemnified Party may, at its option, resist, settle or otherwise
compromise, or pay such claim unless it shall have received notice
from Indemnitor that Indemnitor intends, at Indemnitor's sole cost
and expense, to assume the defense of any such matter, in which case
Indemnified Party shall have the right, at no cost or expense to
Indemnitor, to participate in such defense. If Indemnitor does not
assume the defense of such matter, and in any event until Indemnitor
states in writing that it will assume the defense, Indemnitor shall
pay all costs of Indemnified Party arising out of the defense until
the defense is assumed; provided, however, that Indemnified Party shall
consult with Indemnitor and obtain Indemnitor's prior written consent
to any payment or settlement of any such claim. Indemnitor shall keep
Indemnified Party fully apprised at all times as to the status of the
defense. If Indemnitor does not assume the defense, Indemnified Party
shall keep Indemnitor apprised at all times as to the status of the
defense. Following indemnification as provided for hereunder, Indemnitor
shall be subrogated to all rights of Indemnified Party with respect
to all third parties, firms or corporations relating to the matter for
which indemnification has been made.
14. OTHER MATTERS.
(a) All covenants, agreements, representations and warranties
made under this Agreement and any certificates delivered pursuant to
this Agreement shall be deemed to have been material and relied upon
by each of the parties, notwithstanding any investigation made by them
or on their behalf.
(b) All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally or sent by
registered mail or certified mail, postage prepaid. Notice to the
Target Fund shall be addressed to the Target Fund c/o RMR Funds, 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: General
Counsel, or at such other address as the Target Fund may designate
by written notice to the Acquiring Fund. Notice to the Acquiring Fund
shall be addressed to the Acquiring Fund x/x XXX Xxxxx, 000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: General Counsel, or
at such other address and to the attention of such other person as
the Acquiring Fund may designate by written notice to the Target Fund.
Any notice shall be deemed to have been served or given as of the
date such notice is delivered personally or mailed as provided herein.
(c) This Agreement supersedes all previous correspondence and
oral communications between the Funds regarding the Reorganization,
constitutes the only understanding with respect to the Reorganization,
may not be changed except in a writing executed by each Fund and
shall be governed by and construed in accordance with the laws of the
State of Delaware (without giving effect to choice of
law principles thereof).
(d) This Agreement may be amended or modified by the parties
hereto prior to the Closing Date, by action taken or authorized by
their respective boards of trustees, at any time before or after
adoption of this Agreement and approval of the Reorganization by the
Target Fund's shareholders, but, after any such adoption and
approval, no amendment or modification shall be made which by
law requires further approval by such shareholders without such
further approval. This Agreement may not be amended or modified
except by an instrument in writing signed on behalf of each of the
parties hereto.
(e) This Agreement is not intended to confer upon any person
other than the parties hereto (or their respective successors
and assigns) any rights, remedies, obligations or liabilities hereunder.
If any provision of this Agreement shall be held or made invalid
by a statute, rule, regulation, decision of a tribunal or
otherwise, the remainder of this Agreement shall not be affected
thereby and, to such extent, the provisions of this Agreement shall
be deemed severable, provided that, this Agreement shall be
deemed modified to give effect to the fullest extent permitted
under applicable law to the intentions of the parties as reflected
by this Agreement prior to the invalidity of such provision.
(f) It is expressly agreed that the obligations of the
Funds hereunder shall not be binding upon any of their respective
trustees, shareholders, nominees, officers, agents, or employees
personally, but shall bind only the trust property of the respective
Fund as provided in such Fund's Agreement and Declaration of Trust.
The execution and delivery of this Agreement has been authorized by
the Board of Trustees of each Fund and signed by authorized officers
of each Fund, acting as such, and neither such authorization by such
trustees, nor such execution and delivery by such officers shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust
property of each Fund as provided in such Funds' Agreement and
Declaration of Trust.
(g) This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be deemed to be an
original but all such counterparts together shall constitute but one
instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have hereunto caused this
Agreement to be executed and delivered by their duly authorized
officers as of the day and year first written above.
RMR ASIA PACIFIC REAL ESTATE FUND
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Trustee, President and Principal Executive Officer
NEW RMR ASIA PACIFIC REAL ESTATE FUND
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Trustee, President and Principal Executive Officer
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