AGREEMENT AND PLAN OF REORGANIZATION
January 31, 2012
In order to consummate the reorganization
contemplated herein (the "Reorganization") and in
consideration of the promises and the covenants and agreements
hereinafter set forth, and intending to be legally bound,
BlackRock Strategic Equity Dividend Trust (the "Target Fund"),
a registered, diversified closed-end investment company, File
No. 811-21493, and BlackRock Enhanced Equity Dividend Trust
(the "Acquiring Fund", and, together with the Target Fund, the
"Funds"), a registered, diversified closed-end investment
company, File No. 811-21784, each hereby agree as follows:
1. 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 statutory trust duly
organized, validly existing and in good standing in conformity
with the laws of the State of Delaware, and has the power 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 and to carry out this Agreement.
(b) The Acquiring Fund is duly registered under the
Investment Company Act of 1940, as amended (the "1940 Act"),
as a 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such registration has not been revoked or rescinded and is in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 provided or made available
(including by electronic format) to the Target Fund the
Acquiring Fund's Annual Report to Shareholders for the most
recent fiscal year, and the audited financial statements
appearing therein, having been audited by Deloitte & Touche
LLP, independent registered public accounting firm, fairly
present the financial position of the Acquiring Fund as of the
respective dates indicated, in conformity with accounting
principles generally accepted in the United States applied on
a consistent basis.
(d) An unaudited statement of assets, liabilities and
capital of the Acquiring Fund and an unaudited schedule of
investments of the Acquiring Fund, each as of the Valuation
Time (as defined in Section 3(e) herein), will be provided or
made available (including by electronic format) furnished to
the Target Fund, at or prior to the Closing Date (as defined
in Section 7(a) herein), for the purpose of determining the
number of Acquiring Fund Common Shares (as defined in Section
1(l) herein) to be issued pursuant to Section 6 of this
Agreement; each will fairly present the financial position of
the Acquiring Fund as of the Valuation Time (as defined in
Section 3(e)) in conformity with generally accepted accounting
principles applied on a consistent basis.
(e) 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 the Acquiring
Fund's Board of Trustees, and this Agreement constitutes a
valid and binding contract of the Acquiring Fund enforceable
against the Acquiring Fund 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.
(f) 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 or, to the best of its
knowledge, threatened with any violation or investigation of
any possible violation of any provisions of any federal, state
or local law or regulation or administrative ruling relating
to any aspect of its business.
(g) The Acquiring Fund is not obligated under any
provision of its Agreement and Declaration of Trust or its
Bylaws, each as amended to the date hereof, and is not a party
to any contract or other commitment or obligation, and is not
subject to any order or decree, which would be violated by its
execution of or performance under this Agreement, except
insofar as the Funds have mutually agreed to amend such
contract or other commitment or obligation to cure any
potential violation as a condition precedent to the
Reorganization.
(h) There are no material contracts outstanding to which
the Acquiring Fund is a party that have not been disclosed in
the N-14 Registration Statement (as defined in subsection (k)
below) or that will not otherwise be disclosed to the Target
Fund prior to the Valuation Time.
(i) The Acquiring Fund has no known liabilities of a
material amount, contingent or otherwise, other than those
shown on its statements of assets, liabilities and capital
referred to in subsection (d) above, 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 Time, the Acquiring Fund will advise the Target
Fund of all known liabilities, contingent or otherwise,
whether or not incurred in the ordinary course of business,
existing or accrued as of such time, except to the extent
disclosed in the financial statements referred to in
subsection (d) above or to the extent already known by the
Target Fund.
(j) 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 Securities Act of 1933, as amended
(the "1933 Act"), the Securities Exchange Act of 1934, as
amended (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) each of which will have
been obtained on or prior to the Closing Date.
(k) The registration statement filed by the Acquiring
Fund on Form N-14, which includes the proxy statement of the
Target Fund and the Acquiring Fund with respect to the
transactions contemplated herein (the "Joint Proxy
Statement/Prospectus"), and any supplement or amendment
thereto or to the documents therein (as amended or
supplemented, the "N-14 Registration Statement"), on its
effective date, at the time of the shareholders' meetings
referred to in Section 8(a) of this Agreement and at the
Closing Date, insofar as it relates to the Acquiring Fund, (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 not misleading; and
the Joint 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 the light of the circumstances under
which they were made, not misleading; provided, however, that
the representations and warranties in this subsection only
shall apply to statements in or omissions from the N-14
Registration Statement made in reliance upon and in conformity
with information furnished by the Acquiring Fund for use in
the N-14 Registration Statement.
(l) The Acquiring Fund is authorized to issue an
unlimited number of common shares, par value $0.001 per share
(the "Acquiring Fund Common Shares"). Each outstanding
Acquiring Fund Common Share is fully paid and nonassessable
and has full voting rights.
(m) 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 delivered pursuant to this
Agreement, will be legally and validly issued, will be fully
paid and 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.
(n) At or prior to the Closing Date, the Acquiring Fund
Common Shares to be transferred to the Target Fund for
distribution to the shareholders of the Target Fund on the
Closing Date will be duly qualified for offering to the public
in all states of the United States in which the sale of shares
of the Funds presently are qualified, and there will be a
sufficient number of such shares registered under the 1933 Act
to permit the transfers contemplated by this Agreement to be
consummated.
(o) 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.
(p) 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.
(q) The Acquiring Fund has elected to qualify and has
qualified as a regulated investment company within the meaning
of Section 851 of the Internal Revenue Code of 1986, as
amended (the "Code") for each of its taxable years since its
inception; and has satisfied the RIC distribution requirements
imposed by Section 852 of the Code for each of its taxable
years.
2. 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 statutory trust duly organized,
validly existing and in good standing in conformity with the
laws of the State of Delaware, and has the power 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
Investment Company Act of 1940 as a 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 8(a) hereof. The execution, delivery and
performance of this Agreement has been duly authorized by all
necessary action of the Target Funds Board of Trustees and
this Agreement constitutes a valid and binding contract of the
Target Fund enforceable against the Target Fund 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 provided or made available
(including by electronic format) to the Acquiring Fund the
Target Fund's Annual Report to Shareholders for the most
recent fiscal year, and the audited financial statements
appearing therein, having been audited by Deloitte & Touche
LLP, independent registered public accounting firm, fairly
present the financial position of the Target Fund as of the
respective dates indicated, in conformity with accounting
principles generally accepted in the United States applied on
a consistent basis.
(e) An unaudited statement of assets, liabilities and
capital of the Target Fund and an unaudited schedule of
investments of the Target Fund, each as of the Valuation Time
(as defined in Section 3(e)), will be provided or made
available (including by electronic format) to the Acquiring
Fund at or prior to the Closing Date for the purpose of
determining the number of shares of Acquiring Fund Common
Shares to be issued to the Target Fund pursuant to Section 3
of this Agreement; each will fairly present the financial
position of the Target Fund as of the Valuation Time (as
defined in Section 3(e)) in conformity with generally accepted
accounting principles applied on a consistent basis.
(f) 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 or, to the best of its
knowledge, threatened with any violation or investigation of
any possible violation of any provisions of any federal, state
or local law or regulation or administrative ruling relating
to any aspect of its business.
(g) There are no material contracts outstanding to which
the Target Fund is a party that have not been disclosed in the
N-14 Registration Statement or will not otherwise be disclosed
to the Acquiring Fund prior to the Valuation Time.
(h) The Target Fund is not obligated under any provision
of its Agreement and Declaration of Trust or its Bylaws, each
as amended to the date hereof, or a party to any contract or
other commitment or obligation, and is not subject to any
order or decree which would be violated by its execution of or
performance under this Agreement, except insofar as the Funds
have mutually agreed to amend such contract or other
commitment or obligation to cure any potential violation as a
condition precedent to the Reorganization.
(i) The Target Fund has no known liabilities of a
material amount, contingent or otherwise, other than those
shown on its statements of assets, liabilities and capital
referred to in subsection (e) above, 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 Time, the Target Fund will advise the Acquiring
Fund of all known liabilities, contingent or otherwise,
whether or not incurred in the ordinary course of business,
existing or accrued as of such time, except to the extent
disclosed in subsection (e) above or to the extent already
known by the Acquiring Fund.
(j) 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.
(k) At both the Valuation Time and the Closing Date, the
Target Fund will have full right, power and authority to sell,
assign, transfer and deliver the Target Fund Investments. As
used in this Agreement, the term "Target Fund Investments"
shall mean (i) the investments of the Target Fund shown on the
schedule of its investments as of the Valuation Time furnished
to the Acquiring Fund; and (ii) all other assets owned by the
Target Fund or liabilities incurred as of the Valuation Time.
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) 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, the
1940 Act or state securities laws (which term as used herein
shall include the laws of the District of Columbia and Puerto
Rico) each of which will have been obtained on or prior to the
Closing Date.
(m) The N-14 Registration Statement, on its effective
date, at the time of the shareholders' meetings called to vote
on this Agreement and on the Closing Date, insofar as it
relates to the Target Fund (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 Joint 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 the light of the circumstances under which they
were made, not misleading; provided, however, that the
representations and warranties in this subsection shall apply
only to statements in or omissions from the N-14 Registration
Statement made in reliance upon and in conformity with
information furnished by the Target Fund for use in the N-14
Registration Statement.
(n) The Target Fund is authorized to issue an unlimited
number of common shares, par value $0.001 per share (the
"Target Fund Common Shares"). Each outstanding Target Fund
Common Share is fully paid and nonassessable and has full
voting rights.
(o) 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.
(p) 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.
(q) The Target Fund will not sell or otherwise dispose
of any of the Acquiring Fund Common Shares to be received in
the Reorganization, except in distribution to the shareholders
of the Target Fund as provided in Section 3 of this Agreement.
(r) The Target Fund has elected to qualify and has
qualified as a regulated investment company within the meaning
of Section 851 of the Code for each of its taxable years since
its inception; and has satisfied the RIC distribution
requirements imposed by Section 852 of the Code for each of
its taxable years.
3. THE REORGANIZATION.
(a) Subject to receiving the requisite approvals of the
shareholders of the Funds, 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 Time on debt instruments), and
assume substantially all of the liabilities of the Target Fund,
in exchange for that number of Acquiring Fund Common Shares
provided in Section 4 of this Agreement. Pursuant to this
Agreement, as soon as practicable after the Closing Date, the
Target Fund will distribute all Acquiring Fund Common Shares
received by it to its shareholders 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 amounts due
the shareholders of the Target Fund based on their respective
holdings in the Target Fund as of the Valuation Time.
(b) If it is determined that the portfolios of the
Target Fund and the Acquiring Fund, when aggregated, would
contain investments exceeding certain percentage limitations
imposed upon the Acquiring Fund with respect to such
investments, 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
portfolios, securities or other investments, if, in the
reasonable judgment of the Target Fund's Trustees or
investment adviser, such disposition would adversely affect
the tax-free nature of the Reorganization for U.S. 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 Trustees or investment adviser, such disposition would
adversely affect the tax-free nature of the Reorganization for
U.S. 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 a dividend or dividends which, together with all such
previous dividends, shall have the effect of distributing to
its shareholders (i) all of its investment company taxable
income to and including the Closing Date, if any (computed
without regard to any deduction for dividends paid), (ii) all
of its net capital gain, if any, recognized to and including
the Closing Date and (iii) the excess of its interest income
excludable from gross income under Section 103(a) of the Code,
if any, over its deductions disallowed under Sections 265 and
171(a)(2) of the Code for the period to and including the
Closing Date.
(d) The Target Fund will 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) The Valuation Time shall be 4:00 p.m., Eastern time,
on the full business day proceeding the Closing Date or at
such other time and date agreed to by the Funds on a date
mutually agreed upon in writing (the "Valuation Time").
(f) 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 Time,
shall be confirmed to the Acquiring Fund pursuant to Section
2(i) of this Agreement.
(g) The Target Fund will be terminated as soon as
practicable following the Closing Date by terminating its
registration under the 1940 Act and dissolving under Delaware
law and will withdraw its authority to do business in any
state where it is registered.
(h) For U.S. federal income tax purposes, this Agreement
will constitute a plan of reorganization within the meaning of
United States Treasury Regulations Section 1.368-2(g).
4. ISSUANCE AND VALUATION OF ACQUIRING FUND COMMON SHARES IN
THE REORGANIZATION.
A number of Acquiring Fund Common Shares with an
aggregate net asset value equal to the value of the assets of
the Target Fund acquired in the Reorganization determined as
hereinafter provided, reduced by the amount of liabilities of
the Target Fund assumed by the Acquiring Fund in the
Reorganization, shall be issued by the Acquiring Fund to the
Target Fund in exchange for such assets of the Target Fund,
which shall be determined as set forth below.
The net asset value of each of the Funds and the
values of their assets and the amounts of their liabilities
shall be determined as of the Valuation Time in accordance
with the regular procedures of the investment adviser, 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. Such valuation and
determination shall be made by the Acquiring Fund in
cooperation with the Target Fund and shall be confirmed in
writing by the Acquiring Fund to the Target Fund. For
purposes of determining the net asset value per share of each
Fund's Common Shares, 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 expenses) shall be divided by the total
number of Target Fund Common Shares or Acquiring Fund Common
Shares, as the case may be, outstanding at such time. The
Acquiring Fund shall issue to the Target Fund certificates or
share deposit receipts for the Acquiring Fund Common Shares
registered 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 redelivering the
certificates or share deposit receipts evidencing ownership of
the Acquiring Fund Common Shares to 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.
With respect to any Target Fund shareholder holding
certificates evidencing ownership of Target Fund Common Shares
as of the Closing Date, and subject to the Acquiring Fund
being informed thereof in writing by the Target Fund, the
Acquiring Fund will not permit such shareholder to receive new
certificates evidencing ownership of the Acquiring Fund Common
Shares until notified by the Target Fund or its agent that
such shareholder has surrendered his or her outstanding
certificates evidencing ownership of Target Fund Common Shares
or, in the event of lost certificates, posted adequate bond.
The Target Fund, at its own expense, will request its
shareholders to surrender their outstanding certificates
evidencing ownership of Target Fund Common Shares or post
adequate bond therefor.
No fractional shares of Acquiring Fund Common Shares
will be issued to holders of Target Fund Common Shares unless
such shares are held in a Dividend Reinvestment Plan account.
In lieu thereof, the Acquiring Fund's transfer agent will
aggregate all fractional Acquiring Fund Common Shares to be
issued in connection with the Reorganization (other than those
issued to a Dividend Reinvestment Plan account) and sell the
resulting full shares on the New York Stock Exchange at the
current market price for Acquiring Fund Common Shares for the
account of all holders of such fractional interests, and each
such holder will receive such holder's pro rata share of the
proceeds of such sale upon surrender of such holder's
certificates representing Acquiring Fund Common Shares.
5. PAYMENT OF EXPENSES.
(a) The Target Fund, the Acquiring Fund and any other
closed-end investment company that sells substantially all of
its assets to the Acquiring Fund on or about the Closing Date
(for purposes of this Section 5(a) only, a "Fund") will bear
expenses incurred in connection with the Reorganization,
including but not limited to, costs related to the preparation
and distribution of materials distributed to each Fund's Board
of Trustees, expenses incurred in connection with the
preparation of the Agreement and Plan of Reorganization and a
registration statement on Form N-14, the printing and
distribution of the Joint Proxy Statement/Prospectus and any
other materials required to be distributed to shareholders,
SEC and state securities commission filing fees and legal and
audit fees in connection with the Reorganization, legal fees
incurred preparing each Fund's board materials, attending each
Fund's board meetings and preparing the minutes, auditing fees
associated with each Fund's financial statements, stock
exchange fees, transfer agency fees, portfolio transfer taxes
(if any) and any similar expenses incurred in connection with
the Reorganization, which will be borne directly by the
respective Fund incurring the expense or allocated among the
Funds based upon some reasonable methodology as appropriate.
Neither the Funds nor the Investment Adviser will pay any
expenses of shareholders arising out of or in connection with
the Reorganization.
6. COVENANTS OF THE FUNDS.
(a) Each Fund covenants to operate its business as
presently conducted between the date hereof and the Closing
Date.
(b) The Target Fund agrees that following the
consummation of the Reorganization, it will dissolve in
accordance with the laws of the State of Delaware and any
other applicable law, it will not make any distributions of
any Acquiring Fund Common Shares other than to its
shareholders 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.
(c) 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.
(d) The Acquiring Fund will file the N-14 Registration
Statement with the Securities and Exchange Commission (the
"SEC") and will use its best efforts to provide that the N-14
Registration Statement becomes 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 N-14 Registration
Statement as required by the 1933 Act, the 1934 Act the 1940
Act, and the rules and regulations thereunder and the state
securities laws.
(e) 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.
(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 as due on said returns either have been paid
or adequate liability reserves 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 the Acquiring Fund nor the Target 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, the Acquiring Fund and the Target Fund will take
such action, or cause such action to be taken, as is
reasonably necessary to enable Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP ("Skadden"), special counsel to the Funds, 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 ten 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 each of such Fund's 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 for any prior periods or taxable years and
further shall cause such tax returns to be duly filed with the
appropriate taxing authorities. Notwithstanding the
aforementioned provisions of this subsection, any expenses
incurred by the Target Fund (other than for payment of taxes)
in connection with the preparation and filing of said tax
returns after the Closing Date shall be borne by such Fund to
the extent such expenses have been accrued by such Fund in the
ordinary course without regard to the Reorganization; any
excess expenses shall be borne by the investment adviser or an
affiliate thereof.
(g) Each Fund agrees to mail to its shareholders of
record entitled to vote at the special meeting of shareholders
at which action is to be considered regarding this Agreement,
in sufficient time to comply with requirements as to notice
thereof, a combined proxy statement and prospectus which
complies in all material respects with the applicable
provisions of Section 14(a) of the 1934 Act and Section 20(a)
of the 1940 Act, and the rules and regulations, respectively,
thereunder.
(h) Following the consummation of the Reorganization,
the Acquiring Fund will continue its business as a diversified,
closed-end management investment company registered under the
1940 Act.
(i) 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 the New
York Stock Exchange prior to the Closing Date.
7. CLOSING DATE.
(a) Delivery of the assets of the Target Fund to be
transferred, together with any other Target Fund Investments,
and the Acquiring Fund Common Shares to be issued as provided
in this Agreement, shall be made on the date specified as the
closing date in the N-14 Registration Statement, or at such
other time and date agreed to by the Funds, 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 or make
available (including by electronic format) 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 or by its President.
8. CONDITIONS OF THE TARGET FUND.
The obligations of the Target Fund hereunder shall
be subject to the following conditions:
(a) That this Agreement shall have been adopted, and the
Reorganization shall have been approved, by the affirmative
vote of two-thirds of the members of the Board of Trustees of
the Target Fund and by an affirmative vote of shareholders of
the Target Fund representing the lesser of (i) 67% of the
common shares represented at the special meeting of
shareholders at which more than 50% of the outstanding common
shares are represented or (ii) more than 50% of the
outstanding common shares of the Target Fund; and that the
Acquiring Fund shall have made available to the Target Fund a
copy of the resolution approving this Agreement adopted by the
Board of Trustees of the Acquiring Fund, and a certificate
setting forth the vote of holders of Acquiring Fund Common
Shares approving the issuance of additional Acquiring Fund
Common Shares, each certified by its Secretary.
(b) That the Acquiring Fund shall have provided or made
available (including by electronic format) to the Target Fund
a statement of assets, liabilities and capital, with values
determined as provided in Section 4 of this Agreement,
together with a schedule of the Acquiring Fund's investments,
all as of the Valuation Time, certified on the Acquiring
Fund's behalf by its President (or any Vice President) or its
Treasurer, and a certificate signed by the Acquiring Fund's
President (or any Vice President) and its Treasurer, dated as
of the Closing Date, certifying that as of the Valuation Time
and as of the Closing Date there has been no material adverse
change in the financial position of the Acquiring Fund since
the date of the Acquiring Fund's most recent Annual or Semi-
Annual Report, as applicable, other than changes in its
portfolio securities since that date or changes in the market
value of its portfolio securities.
(c) 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 Time
and as of the Closing Date, all representations and warranties
of the Acquiring Fund made in this Agreement are true and
correct in all material respects 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 each of such dates.
(d) That there shall not be any material litigation
pending with respect to the matters contemplated by this
Agreement.
(e) The Target Fund shall have received the opinion of
Skadden, acting as special counsel for the Acquiring Fund,
dated as of the Closing Date, addressed to the Target Fund,
substantially in the form and to the effect that:
(i) the Acquiring Fund is validly existing and in
good standing under the laws of the State of Delaware;
(ii) the Acquiring Fund is registered as a closed-end
management investment company under the 1940 Act;
(iii) the Acquiring Fund has the power and
authority to execute, deliver and perform all of its
obligations under this Agreement under the laws of the
State of Delaware, the execution and delivery and the
consummation by the Acquiring Fund of the transactions
contemplated hereby have been duly authorized by all
requisite action of the Acquiring Fund under the laws of
the State of Delaware, and this Agreement has been duly
executed and delivered by the Acquiring Fund under the
laws of the State of Delaware;
(iv) this Agreement constitutes a valid and binding
obligation of the Acquiring Fund (assuming this
Agreement is a valid and binding obligation of the other
party hereto);
(v) the execution and delivery by the Acquiring Fund
of this Agreement and the performance by the Acquiring
Fund of its obligations under this Agreement do not
conflict with the Agreement and Declaration of Trust or
the Bylaws of the Acquiring Fund;
(vi) neither the execution, delivery or performance
by the Acquiring Fund of this Agreement nor the
compliance by the Acquiring Fund with the terms and
provisions hereof contravene any provision of the laws
of the State of Delaware or the federal laws of the
United States;
(vii) no governmental approval, which has not
been obtained or taken and is not in full force and
effect, is required to authorize, or is required in
connection with, the execution or delivery of this
Agreement by the Acquiring Fund or the enforceability of
this Agreement against the Acquiring Fund; and
(viii) the Acquiring Fund Common Shares have each
been duly authorized and, upon issuance thereof in
accordance with this Agreement, each will be validly
issued, fully paid and nonassessable.
(f) That the Target Fund shall have obtained an opinion
from Skadden, special 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
comply with the requirements of a reorganization as described
in Section 368(a) of the Code.
(g) That all proceedings taken by each of the Funds and
its counsel in connection with the Reorganization and all
documents incidental thereto shall be satisfactory in form and
substance to the others.
(h) That the N-14 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
SEC.
9. CONDITIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund hereunder
shall be subject to the following conditions:
(a) That this Agreement shall have been adopted, and the
Reorganization and issuance of Acquired Fund Common Shares in
connection therewith shall have been approved, by the Board of
Trustees of the Acquiring Fund and that the issuance of
additional Acquiring Fund Common Shares shall have been
approved by the affirmative vote of a majority of votes cast,
where total votes cast represented over 50% of all securities
entitled to vote; and the Target Fund shall have made
available to the Acquiring Fund a copy of the resolution
approving this Agreement adopted by the Target Fund's Board of
Trustees, and a certificate setting forth the vote of the
holders of Target Fund Common Shares obtained, each certified
by its Secretary.
(b) That the Target Fund shall have provided or made
available (including by electronic format) to the Acquiring
Fund a statement of its assets, liabilities and capital, with
values determined as provided in Section 4 of this Agreement,
together with a schedule of investments with their respective
dates of acquisition and tax costs, all as of the Valuation
Time, certified on the Target Fund's behalf by its President
(or any Vice President) or its Treasurer, and a certificate
signed by the Target Fund's President (or any Vice President)
or its Treasurer, dated as of the Closing Date, certifying
that as of the Valuation Time 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 the Target Fund's most
recent Annual Report or Semi-Annual Report, as applicable,
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 the Target Fund's
President (or any Vice President) or its Treasurer, dated the
Closing Date, certifying that as of the Valuation Time and as
of the Closing Date all representations and warranties of the
Target Fund made in this Agreement are true and correct in all
material respects with the same effect as if made at and as of
such dates and 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 there shall not be any material litigation
pending with respect to the matters contemplated by this
Agreement.
(e) That the Acquiring Fund shall have received the
opinion of Skadden, acting as special counsel for the Target
Fund, dated as of the Closing Date, addressed to the Acquiring
Fund, substantially in the form and to the effect that:
(i) the Target Fund is validly existing and in good
standing under the laws of the State of Delaware;
(ii) the Target Fund is registered as a closed-end
management investment company under the 1940 Act;
(iii) the Target Fund has the power and authority
to execute, deliver and perform all of its obligations
under this Agreement under the laws of the State of
Delaware, the execution and delivery and the
consummation by the Target Fund of the transactions
contemplated hereby have been duly authorized by all
requisite action of the Target Fund under the laws of
the State of Delaware, and this Agreement has been duly
executed and delivered by the Target Fund under the laws
of the State of Delaware;
(iv) this Agreement constitutes a valid and binding
obligation of the Target Fund (assuming this Agreement
is a valid and binding obligation of the other party
hereto);
(v) the execution and delivery by the Target Fund of
this Agreement and the performance by the Target Fund of
its obligations under this Agreement do not conflict
with the charter or the Bylaws of the Target Fund;
(vi) neither the execution, delivery or performance
by the Target Fund of this Agreement nor the compliance
by the Target Fund with the terms and provisions hereof
contravene any provision of the laws of the State of
Delaware or the federal laws of the United States; and
(vii) no governmental approval, which has not
been obtained or taken and is not in full force and
effect, is required to authorize, or is required in
connection with, the execution or delivery of this
Agreement by the Target Fund or the enforceability of
this Agreement against the Target Fund.
(f) That the Acquiring Fund shall have obtained an
opinion from Skadden, special counsel for the Target Fund,
dated as of the Closing Date, addressed to the Acquiring Fund,
that the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as
described in Section 368(a) of the Code.
(g) That the N-14 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 Target Fund, be contemplated by the
SEC.
(h) That all proceedings taken by the Target Fund and
its counsel in connection with the Reorganization and all
documents incidental thereto shall be satisfactory in form and
substance to the Acquiring Fund.
(i) That prior to the Closing Date the Target Fund shall
have declared a dividend or dividends which, together with all
such previous dividends, shall have the effect of distributing
to its shareholders (i) all of its investment company taxable
income for the period to and including the Closing Date, if
any (computed without regard to any deduction for dividends
paid), (ii) all of its net capital gain, if any, recognized to
and including the Closing Date and (iii) the excess of its
interest income excludable from gross income under Section
103(a) of the Code, if any, over its deductions disallowed
under Sections 265 and 171(a)(2) of the Code for the period to
and including the Closing Date.
10. 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 Funds) prior to
the Closing Date, or the Closing Date may be postponed, (i) by
mutual 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 8 of this
Agreement has not been fulfilled or waived by such Board of
Trustees, or (iii) by the Board of Trustees of the Acquiring
Fund if any condition of the Acquiring Fund's obligations set
forth in Section 9 of this Agreement has not been fulfilled or
waived by such Board of Trustees.
(b) If the transactions contemplated by this Agreement
have not been consummated by December 31, 2012, this Agreement
automatically shall terminate on that date, unless a later
date is mutually agreed to by the Boards of Trustees of the
Funds.
(c) In the event of termination of this Agreement
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 persons who are their
Trustees, trustees, officers, agents or shareholders in
respect of this Agreement.
(d) At any time prior to the Closing Date, any of the
terms or conditions of this Agreement may be waived by a Fund
(whichever is entitled to the benefit thereof), if, in the
judgment of such Fund after consultation with its counsel,
such action or waiver will not have a material adverse effect
on the benefits intended under this Agreement to the
shareholders of their respective fund, on behalf of which such
action is taken.
(e) The respective representations and warranties
contained in Sections 1 and 2 of this Agreement shall expire
with, and be terminated by, the consummation of the
Reorganization, and neither Fund nor any of its 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 the duties in the conduct
of such office.
(f) If any order or orders of the SEC with respect to
this Agreement shall be issued prior to the Closing Date and
shall impose any terms or conditions which 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 Funds 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 Acquired
Funds, as applicable, in which event, unless such terms and
conditions shall have been included in the proxy solicitation
materials furnished to the shareholders of the Funds prior to
the meetings at which the Reorganization shall have been
approved, this Agreement shall not be consummated and shall
terminate unless the Funds promptly shall call a special
meeting of shareholders at which such conditions so imposed
shall be submitted for approval.
11. 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 the 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 the Indemnified Party may be or may have been
involved as a party or otherwise or with which such the
Indemnified Party may be or may have been threatened
(collectively, the "Losses") arising out of or related to any
claim of a breach of any representation, warranty or covenant
made herein by the Indemnitor; provided, however, that no
Indemnified Party shall be indemnified hereunder against any
Losses arising directly from such the 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 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
ten days of receipt of written notice to the Indemnified Party
or 30 days from discovery by the 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 the Indemnified Party to
indemnity hereunder unless such failure has materially and
adversely affected the rights of the Indemnitor; provided that
in any event such notice shall have been given prior to the
expiration of the Survival Period. At any time after ten days
from the giving of such notice, the Indemnified Party may, at
its option, resist, settle or otherwise compromise, or pay
such claim unless it shall have received notice from the
Indemnitor that the Indemnitor intends, at the Indemnitor's
sole cost and expense, to assume the defense of any such
matter, in which case the Indemnified Party shall have the
right, at no cost or expense to the Indemnitor, to participate
in such defense. If the Indemnitor does not assume the
defense of such matter, and in any event until the Indemnitor
states in writing that it will assume the defense, the
Indemnitor shall pay all costs of the Indemnified Party
arising out of the defense until the defense is assumed;
provided, however, that the Indemnified Party shall consult
with the Indemnitor and obtain indemnitor's prior written
consent to any payment or settlement of any such claim. The
Indemnitor shall keep the Indemnified Party fully apprised at
all times as to the status of the defense. If the Indemnitor
does not assume the defense, the Indemnified Party shall keep
the Indemnitor apprised at all times as to the status of the
defense. Following indemnification as provided for hereunder,
the Indemnitor shall be subrogated to all rights of the
Indemnified Party with respect to all third parties, firms or
corporations relating to the matter for which indemnification
has been made.
12. 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 BlackRock Strategic Equity Dividend Trust c/o BlackRock
Advisors, LLC, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxx X. Xxxxxxx, Esq., Secretary of the Target Fund,
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 BlackRock Enhanced Equity Dividend
Trust c/o BlackRock Advisors, LLC, 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Xxx X. Xxxxxxx. Esq., Secretary of
the Acquiring Fund, 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.
(c) This Agreement supersedes all previous
correspondence and oral communications between the parties
regarding the Reorganization, constitutes the only
understanding with respect to the Reorganization, may not be
changed except by a letter of agreement signed by each party
and shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made
and to be performed in said state.
(d) 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 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 party as reflected by this Agreement
prior to the invalidity of such provision.
(e) 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 property of
the respective Fund. The execution and delivery of this
Agreement has been authorized by the 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.
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.
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.
BLACKROCK STRATEGIC EQUITY
DIVIDEND TRUST
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President
BLACKROCK ENHANCED EQUITY
DIVIDEND TRUST
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President
