APPENDIX B
AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND DISSOLUTION
("Agreement") is made as of November 30, 1995, between
PaineWebber RMA Money Fund, Inc., a Maryland corporation ("PW
Corporation"), on behalf of PaineWebber RMA Money Market
Portfolio, a segregated portfolio of assets ("series") thereof
("Acquiring Fund"), and PaineWebber/Xxxxxx, Xxxxxxx Cash Reserve
Fund, Inc., a Maryland corporation ("Target"). (Acquiring Fund
and Target are sometimes referred to herein individually as a
"Fund" and collectively as the "Funds," and PW Corporation and
Target are sometimes referred to herein individually as an
"Investment Company" and collectively as the "Investment
Companies.")
The transactions provided for herein (collectively
"Reorganization") involve the transfer to Acquiring Fund of
Target's assets solely in exchange for voting shares of common
stock in Acquiring Fund ("Acquiring Fund Shares") and the assumption
by Acquiring Fund of Target's liabilities, followed by the
constructive distribution of the Acquiring Fund Shares to the
holders of shares of common stock in Target ("Target Shares") in
exchange therefor. All agreements, representations, actions, and
obligations described herein made or to be taken or undertaken by
Acquiring Fund are made and shall be taken or undertaken by PW
Corporation on its behalf.
In consideration of the mutual promises herein, the parties
covenant and agree as follows:
1. PLAN OF REORGANIZATION AND DISSOLUTION OF TARGET
1.1. Target agrees to assign, sell, convey, transfer, and
deliver all of its assets described in paragraph 1.2 ("Assets")
to Acquiring Fund. Acquiring Fund agrees in exchange therefor --
(a) to issue and deliver to Target the number of full
and fractional Acquiring Fund Shares determined by dividing
the net value of Target (computed as set forth in paragraph
2.1) by the net asset value (computed as set forth in
paragraph 2.2) ("NAV") of an Acquiring Fund Share; and
(b) to assume all of Target's liabilities described in
paragraph 1.3 ("Liabilities").
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Such transactions shall take place at the Closing (as defined in
paragraph 3.1).
1.2. The Assets shall include, without limitation, all
cash, cash equivalents, securities, receivables (including
interest and dividends receivable), claims and rights of action,
rights to register shares under applicable securities laws, books
and records, deferred and prepaid expenses shown as assets on
Target's books, and other property owned by Target at the
Effective Time (as defined in paragraph 3.1). After the Investment
Companies' boards of directors resolved to engage in the Reorganization,
Target encouraged its individual retirement account and qualified
retirement plan shareholders to redeem their Target Shares or exchange their
Target Shares for shares in another investment company, and prior to the date
hereof substantially all of them did so; accordingly, the Assets do not
include any amount paid to those shareholders as redemption proceeds.
1.3. The Liabilities shall include (except as otherwise
provided herein) all of Target's liabilities, debts, obligations,
and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not arising in the ordinary
course of business, whether or not determinable at the Effective
Time, and whether or not specifically referred to in this Agreement,
including without limitation Target's share of the expenses
described in paragraph 7.2. Notwithstanding the foregoing,
Target agrees to use its best efforts to discharge all of its
known Liabilities prior to the Effective Time.
1.4. Before the Effective Time, Target shall declare and
pay to its shareholders a dividend in an amount large enough so
that it will have distributed substantially all (and in any event
not less than 90%) of its investment company taxable income
(computed without regard to any deduction for dividends paid) for
the current taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is
reasonably practicable), Target shall constructively distribute
the Acquiring Fund Shares received by it pursuant to paragraph
1.1 to Target's shareholders of record, determined as of the
Effective Time (collectively "Shareholders" and individually a
"Shareholder"), in exchange for their Target Shares. Such
distribution shall be accomplished by the Funds' transfer agent
("Transfer Agent") opening accounts on Acquiring Fund's share
transfer books in the Shareholders' names and transferring such
Acquiring Fund Shares thereto. Each Shareholder's account shall
be credited with the respective pro rata number of full and
fractional (rounded to the third decimal place) Acquiring Fund
Shares due that Shareholder. All outstanding Target Shares,
including any represented by certificates, shall simultaneously
be canceled on Target's share transfer records. Acquiring Fund
shall not issue certificates representing the Acquiring Fund
Shares in connection with the Reorganization.
1.6. As soon as reasonably practicable after distribution
of the Acquiring Fund Shares pursuant to paragraph 1.6, Target
shall be dissolved and any further actions shall be taken in
connection therewith as required by applicable law (including
Target's filing
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of Articles of Transfer, effective as of the Effective Time, with
the State Department of Assessments and Taxation of Maryland
("Department")).
1.7. Any reporting responsibility of Target to a public
authority is and shall remain its responsibility up to and
including the date on which it is dissolved.
1.8. Any transfer taxes payable upon issuance of Acquiring
Fund Shares in a name other than that of the registered holder on
Target's books of the Target Shares constructively exchanged
therefor shall be paid by the person to whom such Acquiring Fund
Shares are to be issued, as a condition of such transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(a), Target's net value
shall be (a) the value of the Assets computed as of 12:00 noon on
the date of the Closing ("Valuation Time"), using the valuation
procedures set forth in Target's then-current prospectus and
statement of additional information less (b) the amount of the
Liabilities as of the Valuation Time.
2.2. For purposes of paragraph 1.1(a), the NAV of an
Acquiring Fund Share shall be computed as of the Valuation Time,
using the valuation procedures set forth in Acquiring Fund's
then-current prospectus and statement of additional information.
2.3. All computations pursuant to paragraphs 2.1 and 2.2
shall be made by or under the direction of Xxxxxxxx Xxxxxxxx
Asset Management Inc. ("Xxxxxxxx Xxxxxxxx").
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts
necessary to consummate the same ("Closing"), shall occur at the
Funds' principal office on February 20, 1996, or at such other
place and/or on such other date as the parties may agree. All
acts taking place at the Closing shall be deemed to take place
simultaneously as of 12:00 noon on the date thereof or at such
other time as the parties may agree ("Effective Time"). If,
immediately before the Valuation Time, (a) the New York Stock
Exchange, Inc. ("NYSE") is closed to trading or trading thereon
is restricted or (b) trading or the reporting of trading on the
NYSE or elsewhere is disrupted, so that accurate appraisal of the
net value of Target and the NAV per Acquiring Fund Share is
impracticable, the Effective Time shall be postponed until the
first business day after the day when such trading shall have
been fully resumed and such reporting shall have been restored.
3.2. Target shall deliver to PW Corporation at the Closing
a schedule of the Assets as of the Effective Time, which shall
set forth for all portfolio securities included therein their
adjusted
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tax basis and holding period by lot. Target's custodian
shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets held by the custodian will be
transferred to Acquiring Fund at the Effective Time and (b) all
necessary taxes in conjunction with the delivery of the Assets,
including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made.
3.3. Target shall deliver to PW Corporation at the Closing
a list of the names and addresses of the Shareholders and the
number of outstanding Target Shares owned by each Shareholder,
all as of the Effective Time, certified by the Secretary or
Assistant Secretary of Target. The Transfer Agent shall deliver
at the Closing a certificate as to the opening on Acquiring
Fund's share transfer books of accounts in the Shareholders'
names. PW Corporation shall issue and deliver a confirmation to
Target evidencing the Acquiring Fund Shares to be credited to
Target at the Effective Time or provide evidence satisfactory to
Target that such Acquiring Fund Shares have been credited to
Target's account on Acquiring Fund's books. At the Closing, each
party shall deliver to the other such bills of sale, checks,
assignments, stock certificates, receipts, or other documents as
the other party or its counsel may reasonably request.
3.4. Each Investment Company shall deliver to the other at
the Closing a certificate executed in its name by its President
or a Vice President in form and substance satisfactory to the
recipient and dated the Effective Time, to the effect that the
representations and warranties it made in this Agreement are true
and correct at the Effective Time except as they may be affected
by the transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Target represents and warrants as follows:
4.1.1. Target is a corporation duly organized, validly
existing, and in good standing under the laws of the State
of Maryland, and a copy of its Articles of Incorporation is
on file with the Department;
4.1.2. Target is duly registered as an open-end
management investment company under the Investment Company
Act of 1940 ("1940 Act"), and such registration will be in
full force and effect at the Effective Time;
4.1.3. At the Closing, Target will have good and
marketable title to the Assets and full right, power, and
authority to sell, assign, transfer, and deliver the Assets
free of any liens or other encumbrances; and upon delivery
and payment for the Assets, Acquiring Fund will acquire good
and marketable title thereto;
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4.1.4. Target's current prospectus and statement of
additional information conform in all material respects to
the applicable requirements of the Securities Act of 1933
("1933 Act") and the 1940 Act and the rules and regulations
thereunder and do not include 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;
4.1.5. Target is not in violation of, and the
execution and delivery of this Agreement and consummation of
the transactions contemplated hereby will not conflict with
or violate, Maryland law or any provision of Target's
Articles of Incorporation or By-Laws or of any agreement,
instrument, lease, or other undertaking to which Target is a
party or by which it is bound or result in the acceleration
of any obligation, or the imposition of any penalty, under
any agreement, judgment, or decree to which Target is a
party or by which it is bound, except as previously
disclosed in writing to and accepted by PW Corporation;
4.1.6. Except as disclosed in writing to and accepted
by PW Corporation, all material contracts and other
commitments of or applicable to Target (other than this
Agreement and investment contracts) will be terminated, or
provision for discharge of any liabilities of Target
thereunder will be made, at or prior to the Effective Time,
without either Fund's incurring any liability or penalty
with respect thereto and without diminishing or releasing
any rights Target may have had with respect to actions taken
or omitted to be taken by any other party thereto prior to
the Closing;
4.1.7. Except as otherwise disclosed in writing to and
accepted by PW Corporation, no litigation, administrative
proceeding, or investigation of or before any court or
governmental body is presently pending or (to Target's
knowledge) threatened against Target or any of its
properties or assets that, if adversely determined, would
materially and adversely affect Target's financial condition
or the conduct of its business; Target knows of no facts
that might form the basis for the institution of any such
litigation, proceeding, or investigation and is not a party
to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially
or adversely affects its business or its ability to
consummate the transactions contemplated hereby;
4.1.8. The execution, delivery, and performance of
this Agreement have been duly authorized as of the date
hereof by all necessary action on the part of Target's board
of directors, which has made the determinations required by
Rule 17a-8(a) under the 1940 Act; and, subject to approval
by Target's shareholders and receipt of any necessary
exemptive relief or no-action assurances requested from the
Securities and Ex-
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change Commission ("SEC") or its staff with respect to
sections 17(a) and 17(d) of the 1940 Act, this
Agreement will constitute a valid and legally binding
obligation of Target, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium,
and similar laws relating to or affecting creditors' rights
and by general principles of equity;
4.1.9. At the Effective Time, the performance of this
Agreement shall have been duly authorized by all necessary
action by Target's shareholders;
4.1.10. No governmental consents, approvals,
authorizations, or filings are required under the 1933 Act,
the Securities Exchange Act of 1934 ("1934 Act"), or the
1940 Act for the execution or performance of this Agreement
by Target, except for (a) the filing with the SEC of a
registration statement by PW Corporation on Form N-14
relating to the Acquiring Fund Shares issuable hereunder,
and any supplement or amendment thereto ("Registration
Statement"), including therein a prospectus/proxy statement
("Proxy Statement"), (b) receipt of the exemptive relief
referenced in subparagraph 4.1.8, and (c) such consents,
approvals, authorizations, and filings as have been made or
received or as may be required subsequent to the Effective
Time;
4.1.11. On the effective date of the Registration
Statement, at the time of the shareholders' meeting referred
to in paragraph 5.2, and at the Effective Time, the Proxy
Statement will (a) comply in all material respects with the
applicable provisions of the 1933 Act, the 1934 Act, and the
1940 Act and the regulations thereunder and (b) not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which such statements were made, not misleading;
provided that the foregoing shall not apply to statements in
or omissions from the Proxy Statement made in reliance on
and in conformity with information furnished by PW
Corporation for use therein;
4.1.12. Target qualified for treatment as a regulated
investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended ("Code") ("RIC") for each
past taxable year since it commenced operations and will
continue to meet all the requirements for such qualification
for its current taxable year; and it has no earnings and
profits accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it. The Assets
shall be invested at all times through the Effective Time in
a manner that ensures compliance with the foregoing; and
4.1.13. Target will be dissolved as soon as reasonably
practicable after the Reorganization.
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4.2. Acquiring Fund represents and warrants as follows:
4.2.1. PW Corporation is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Maryland, and a copy of its Articles of
Incorporation is on file with the Department;
4.2.2. PW Corporation is duly registered as an open-
end management investment company under the 1940 Act, and
such registration will be in full force and effect at the
Effective Time;
4.2.3. Acquiring Fund is a duly established and designated
series of PW Corporation;
4.2.4. No consideration other than Acquiring Fund
Shares (and Acquiring Fund's assumption of the Liabilities)
will be issued in exchange for the Assets in the
Reorganization;
4.2.5. The Acquiring Fund Shares to be issued and
delivered to Target hereunder will, at the Effective Time,
have been duly authorized and, when issued and delivered as
provided herein, will be duly and validly issued and
outstanding shares of Acquiring Fund, fully paid and non-
assessable. Except as contemplated by this Agreement,
Acquiring Fund does not have outstanding any options,
warrants, or other rights to subscribe for or purchase any
of its shares, nor is there outstanding any security
convertible into any of its shares;
4.2.6. Acquiring Fund's current prospectus and
statement of additional information conform in all material
respects to the applicable requirements of the 1933 Act and
the 1940 Act and the rules and regulations thereunder and do
not include 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;
4.2.7. Acquiring Fund is not in violation of, and the
execution and delivery of this Agreement and consummation of
the transactions contemplated hereby will not conflict with
or violate, Maryland law or any provision of PW
Corporation's Articles of Incorporation or By-Laws or of any
provision of any agreement, instrument, lease, or other
undertaking to which Acquiring Fund is a party or by which
it is bound or result in the acceleration of any obligation,
or the imposition of any penalty, under any agreement,
judgment, or decree to which Acquiring Fund is a party or by
which it is bound, except as previously disclosed in writing
to and accepted by Target;
4.2.8. Except as otherwise disclosed in writing to and
accepted by Target, no litigation, administrative
proceeding, or investigation of or before any court or
governmental body is presently pending or (to Acquiring
Fund's knowledge)
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threatened against PW Corporation with respect to
Acquiring Fund or any of its properties or assets that,
if adversely determined, would materially and adversely
affect Acquiring Fund's financial condition or the
conduct of its business; Acquiring Fund knows of no facts
that might form the basis for the institution of any such
litigation, proceeding, or investigation and is not a party
to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially
or adversely affects its business or its ability to
consummate the transactions contemplated hereby;
4.2.9. The execution, delivery, and performance of
this Agreement have been duly authorized as of the date
hereof by all necessary action on the part of PW
Corporation's board of directors, which has made the
determinations required by Rule 17a-8(a) under the 1940 Act;
and, subject to receipt of any necessary exemptive relief or
no-action assurances requested from the SEC or its staff
with respect to sections 17(a) and 17(d) of the 1940 Act,
this Agreement will constitute a valid and legally binding
obligation of Acquiring Fund, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium,
and similar laws relating to or affecting creditors' rights
and by general principles of equity;
4.2.10. No governmental consents, approvals,
authorizations, or filings are required under the 1933 Act,
the 1934 Act, or the 1940 Act for the execution or
performance of this Agreement by PW Corporation, except for
(a) the filing with the SEC of the Registration Statement,
(b) receipt of the exemptive relief referenced in
subparagraph 4.2.9, and (c) such consents, approvals,
authorizations, and filings as have been made or received or
as may be required subsequent to the Effective Time;
4.2.11. On the effective date of the Registration
Statement, at the time of the shareholders' meeting referred
to in paragraph 5.2, and at the Effective Time, the Proxy
Statement will (a) comply in all material respects with the
applicable provisions of the 1933 Act, the 1934 Act, and the
1940 Act and the regulations thereunder and (b) not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which such statements were made, not misleading;
provided that the foregoing shall not apply to statements in
or omissions from the Proxy Statement made in reliance on
and in conformity with information furnished by Target for
use therein; and
4.2.12. Acquiring Fund is a "fund" as defined in
section 851(h)(2) of the Code; it qualified for treatment as
a RIC for each past taxable year since it commenced
operations and will continue to meet all the requirements
for such qualification for its current taxable year;
Acquiring Fund intends to continue to meet all such
requirements for the next taxable year;
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and it has no earnings and profits accumulated in any
taxable year in which the provisions of Subchapter M did
not apply to it.
5. COVENANTS
5.1. Each Fund covenants to operate its respective business
in the ordinary course between the date hereof and the Closing,
it being understood that (a) such ordinary course will include
declaring and paying customary dividends and other distributions
and such changes in operations as are contemplated by each Fund's
normal business activities and (b) each Fund will retain
exclusive control of the composition of its portfolio until the
Closing.
5.2. Target covenants to call a shareholders' meeting to
consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated
hereby.
5.3. Target covenants that the Acquiring Fund Shares to be
delivered hereunder are not being acquired for the purpose of
making any distribution thereof, other than in accordance with
the terms hereof.
5.4. Target covenants that it will assist PW Corporation in
obtaining such information as PW Corporation reasonably requests
concerning the beneficial ownership of Target Shares.
5.5. Target covenants that Target's books and records
(including all books and records required to be maintained under the
1940 Act and the rules and regulations thereunder) will be turned
over to PW Corporation at the Closing.
5.6. Each Fund covenants to cooperate in preparing the
Proxy Statement in compliance with applicable federal securities
laws.
5.7. Each Fund covenants that it will, from time to time,
as and when requested by the other Fund, execute and deliver or
cause to be executed and delivered all such assignments and other
instruments, and will take or cause to be taken such further
action, as the other Fund may deem necessary or desirable in
order to vest in, and confirm to, (a) Acquiring Fund, title to
and possession of all the Assets, and (b) Target, title to and
possession of the Acquiring Fund Shares to be delivered
hereunder, and otherwise to carry out the intent and purpose
hereof.
5.8. PW Corporation covenants to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933
Act, the 1940 Act, and such state securities laws it may deem
appropriate in order to continue its operations after the
Effective Time.
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5.9. Subject to this Agreement, each Fund covenants to take
or cause to be taken all actions, and to do or cause to be done
all things, reasonably necessary, proper, or advisable to consummate
and effectuate the transactions contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to
(a) performance by the other Fund of all the obligations to be
performed hereunder at or before the Effective Time, (b) all
representations and warranties of the other Fund contained herein
being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions
contemplated hereby, as of the Effective Time, with the same
force and effect as if made at and as of the Effective Time, and
(c) the following further conditions that, at or before the
Effective Time:
6.1. This Agreement and the transactions contemplated
hereby shall have been duly adopted and approved by Target's
board of directors and shall have been approved by Target's
shareholders in accordance with applicable law.
6.2. All necessary filings shall have been made with the
SEC and state securities authorities, and no order or directive
shall have been received that any other or further action is
required to permit the parties to carry out the transactions
contemplated hereby. The Registration Statement shall have
become effective under the 1933 Act, no stop orders suspending
the effectiveness thereof shall have been issued, and the SEC
shall not have issued an unfavorable report with respect to the
Reorganization under section 25(b) of the 1940 Act nor instituted
any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940
Act. All consents, orders, and permits of federal, state, and
local regulatory authorities (including the SEC and state
securities authorities) deemed necessary by either Fund to permit
consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where
failure to obtain same would not involve a risk of a material
adverse effect on the assets or properties of either Fund,
provided that either Fund may for itself waive any of such
conditions.
6.3. At the Effective Time, no action, suit, or other
proceeding shall be pending before any court or governmental agency
in which it is sought to restrain or prohibit, or to obtain
damages or other relief in connection with, the transactions
contemplated hereby.
6.4. Target shall have received an opinion of Xxxxxxxxxxx &
Xxxxxxxx LLP, counsel to PW Corporation, substantially to the
effect that:
6.4.1. Acquiring Fund is a duly established series of
PW Corporation, a corporation duly organized and validly
existing
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under the laws of the State of Maryland with power
under its Articles of Incorporation to own all of its
properties and assets and, to the knowledge of such counsel,
to carry on its business as presently conducted;
6.4.2. This Agreement (a) has been duly authorized,
executed, and delivered by PW Corporation on behalf of
Acquiring Fund and (b) assuming due authorization, execution,
and delivery of this Agreement by Target, is a valid and
legally binding obligation of PW Corporation with respect to
Acquiring Fund, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar
laws relating to or affecting creditors' rights and by
general principles of equity;
6.4.3. The Acquiring Fund Shares to be issued and
distributed to the Shareholders under this Agreement, assuming
their due delivery as contemplated by this Agreement, will
be duly authorized and validly issued and outstanding and
fully paid and non-assessable, and no shareholder of
Acquiring Fund has any preemptive right to subscribe for or
purchase such shares;
6.4.4. The execution and delivery of this Agreement
did not, and the consummation of the transactions
contemplated hereby will not, materially violate PW
Corporation's Articles of Incorporation or By-Laws or any
provision of any agreement (known to such counsel, without
any independent inquiry or investigation) to which PW
Corporation (with respect to Acquiring Fund) is a party or
by which it is bound or (to the knowledge of such counsel,
without any independent inquiry or investigation) result in
the acceleration of any obligation, or the imposition of any
penalty, under any agreement, judgment, or decree to which
PW Corporation (with respect to Acquiring Fund) is a party
or by which it is bound, except as set forth in such opinion
or as previously disclosed in writing to and accepted by
Target;
6.4.5. To the knowledge of such counsel (without any
independent inquiry or investigation), no consent, approval,
authorization, or order of any court or governmental
authority is required for the consummation by PW Corporation
on behalf of Acquiring Fund of the transactions contemplated
herein, except such as have been obtained under the 1933
Act, the 1934 Act, and the 1940 Act and such as may be
required under state securities laws, and except for the
filing of Articles of Transfer with the Department;
6.4.6. PW Corporation is registered with the SEC as an
investment company, and to the knowledge of such counsel no
order has been issued or proceeding instituted to suspend
such registration; and
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6.4.7. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any
court or governmental body is pending or threatened as to PW
Corporation (with respect to Acquiring Fund) or any of its
properties or assets attributable or allocable to Acquiring
Fund and (b) PW Corporation (with respect to Acquiring Fund)
is not party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that
materially and adversely affects Acquiring Fund's business,
except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by Target.
In rendering such opinion, such counsel may (i) rely, as to
matters governed by the laws of the State of Maryland, on an
opinion of competent Maryland counsel, (ii) make assumptions
regarding the authenticity, genuineness, and/or conformity of
documents and copies thereof without independent verification
thereof, (iii) limit such opinion to applicable federal and state
law, and (iv) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such firm who have
devoted substantive attention to matters directly related to this
Agreement and the Reorganization.
6.5. PW Corporation shall have received an opinion of
Stroock & Stroock & Xxxxx, counsel to Target, substantially to
the effect that:
6.5.1. Target is a corporation duly organized and
validly existing under the laws of the State of Maryland
with power under its Articles of Incorporation to own all of
its properties and assets and, to the knowledge of such
counsel, to carry on its business as presently conducted;
6.5.2. This Agreement (a) has been duly authorized,
executed, and delivered by Target and (b) assuming due
authorization, execution, and delivery of this Agreement by
PW Corporation on behalf of Acquiring Fund, is a valid and
legally binding obligation of Target, enforceable in
accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of
equity;
6.5.3. The execution and delivery of this Agreement
did not, and the consummation of the transactions
contemplated hereby will not, materially violate Target's
Articles of Incorporation or By-Laws or any provision of any
agreement (known to such counsel, without any independent
inquiry or investigation) to which Target is a party or by
which it is bound or (to the knowledge of such counsel,
without any independent inquiry or investigation) result in
the acceleration of any obligation, or the imposition of any
penalty, under any agreement, judgment, or decree to which
Target is a party or by which it is bound, except as set
forth in such
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opinion or as previously disclosed in writing to and
accepted by PW Corporation;
6.5.4. To the knowledge of such counsel (without any
independent inquiry or investigation), no consent, approval,
authorization, or order of any court or governmental
authority is required for the consummation by Target of the
transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act
and such as may be required under state securities laws, and
except for the filing of Articles of Transfer with the
Department;
6.5.5. Target is registered with the SEC as an
investment company, and to the knowledge of such counsel no order
has been issued or proceeding instituted to suspend such
registration; and
6.5.6. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any
court or governmental body is pending or threatened as to
Target or any of its properties or assets and (b) Target is
not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that
materially and adversely affects its business, except as set
forth in such opinion or as otherwise disclosed in writing
to and accepted by PW Corporation.
In rendering such opinion, such counsel may (i) rely, as to
matters governed by the laws of the State of Maryland, on an
opinion of competent Maryland counsel, (ii) make assumptions
regarding the authenticity, genuineness, and/or conformity of
documents and copies thereof without independent verification
thereof, (iii) limit such opinion to applicable federal and state
law, and (iv) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such firm who have
devoted substantive attention to matters directly related to this
Agreement and the Reorganization.
6.6. PW Corporation shall have received an opinion of
Xxxxxxxxxxx & Xxxxxxxx LLP, its counsel, addressed to and in form and
substance satisfactory to it, and Target shall have received an
opinion of Stroock & Stroock & Xxxxx, its counsel, addressed to
and in form and substance satisfactory to it, each as to the
federal income tax treatment of the Reorganization. In rendering its
tax opinion, each counsel may rely as to factual matters, exclusively
and without independent verification, on the representations made in
this Agreement (or in separate letters addressed to such counsel) and
the certificates delivered pursuant to paragraph 3.4.
At any time before the Closing, (a) Acquiring Fund may waive any
of the foregoing conditions if, in the judgment of PW
Corporation's board of directors, such waiver will not have a
material adverse effect on its shareholders' interests, and
(b) Target may waive any of the foregoing conditions if, in the
judgment of its board of directors, such waiver will not have a
material adverse effect on the Shareholders' interests.
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7. POSTPONEMENT OF CLOSING
7.1. If the difference between the NAVs per share of the
Funds equals or exceeds $.0025 at the Valuation Time, or such
earlier or later day and time as the parties may agree and set
forth in writing signed by their duly authorized officers, as
computed by using the market values of the Funds' assets in
accordance with the policies and procedures established by the
Funds (or as otherwise mutually determined by the Investment
Companies' boards of directors), either Fund may postpone the
Closing until such time as such per share NAV difference is less
than $.0025.
7.2. If, as of the Valuation Time, Xxxxxxxx Xxxxxxxx, as
Target's investment adviser, reasonably determines that consummation
of the Reorganization will result in recognition to Target
for federal income tax purposes of gain or loss of $.0010 or more
per share, the Closing shall be postponed until the first date on
which, as of 12:00 noon, Xxxxxxxx Xxxxxxxx shall determine that
such recognition of gain or loss will be less that $.0010 per
share, in which event 12:00 noon on such date shall be the Valuation
Time, unless the parties otherwise agree.
8. BROKERAGE FEES AND EXPENSES
8.1. Each Investment Company represents and warrants to the
other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for
herein.
8.2. Except as otherwise provided herein, all expenses
incurred in connection with the transactions contemplated by this
Agreement (whether or not they are consummated) will be borne by
the Funds proportionately, as follows: each such expense will be
borne by the Funds in proportion to their respective net assets
as of the close of business on the last business day of the month
in which such expense was incurred. Such expenses include:
(a) expenses incurred in connection with entering into and
carrying out the provisions of this Agreement; (b) expenses
associated with the preparation and filing of the Registration
Statement; (c) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable
state securities laws to qualify the Acquiring Fund Shares to be
issued in connection herewith in each state in which Target's
shareholders are resident as of the date of the mailing of the
Proxy Statement to such shareholders; (d) printing and postage
expenses; (e) legal and accounting fees; and (f) solicitation
costs.
9. ENTIRE AGREEMENT; SURVIVAL
Neither party has made any representation, warranty, or
covenant not set forth herein, and this Agreement constitutes the
entire agreement between the parties. The representations,
warranties, and covenants contained herein or in any document
delivered
B-14
pursuant hereto or in connection herewith shall survive the Closing.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or prior to
the Effective Time, whether before or after approval by Target's
shareholders:
10.1. By either Fund (a) in the event of the other Fund's
material breach of any representation, warranty, or covenant
contained herein to be performed at or prior to the Effective
Time, (b) if a condition to its obligations has not been met and
it reasonably appears that such condition will not or cannot be
met, or (c) if the Closing has not occurred on or before June 30,
1996; or
10.2. By the parties' mutual agreement.
In the event of termination under paragraphs 10.1.(c) or 10.2,
there shall be no liability for damages on the part of either
Fund, or the directors or officers of either Investment Company,
to the other Fund.
11. AMENDMENT
This Agreement may be amended, modified, or supplemented at
any time, notwithstanding approval thereof by Target's shareholders,
in such manner as may be mutually agreed upon in writing by
the parties; provided that following such approval no such amendment
shall have a material adverse effect on the Shareholders' interests.
12. MISCELLANEOUS
12.1. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland;
provided that, in the case of any conflict between such laws and the
federal securities laws, the latter shall govern.
12.2. Nothing expressed or implied herein is intended or
shall be construed to confer upon or give any person, firm,
trust, or corporation other than the parties and their respective
successors and assigns any rights or remedies under or by reason
of this Agreement.
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IN WITNESS WHEREOF, each party has caused this Agreement to
be executed by its duly authorized officer.
ATTEST: PAINEWEBBER RMA MONEY FUND, INC.
on behalf of its series,
PAINEWEBBER RMA MONEY MARKET
PORTFOLIO
By:
------------------- ----------------------------------
Assistant Secretary Vice President
ATTEST: PAINEWEBBER/XXXXXX, XXXXXXX
CASH RESERVE FUND, INC.
By:
------------------- ----------------------------------
Assistant Secretary Vice President
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