FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
this ___ day of ________ 2002, by and between Orbitex Life Sciences &
Biotechnology Fund, Inc. (the "Orbitex Fund"), and Saratoga Advantage Trust (the
"Saratoga Trust") on behalf of the Saratoga Health & Biotechnology Portfolio
(the "Saratoga Fund").
This Agreement is intended to be and is adopted as a plan of reorganization
within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization ("Reorganization") will consist of the
transfer of substantially all of the property, assets, and goodwill of the
Orbitex Fund to the Saratoga Fund in exchange solely for Class A shares of the
Saratoga Fund ("Saratoga Fund Shares"), followed by the distribution by the
Orbitex Fund, on or promptly after the Closing Date, (as defined herein), of the
Saratoga Fund Shares to the shareholders of the Orbitex Fund, the cancellation
of all of the outstanding shares of the Orbitex Fund ("Orbitex Fund Shares"),
and the liquidation and termination of the Orbitex Fund, all upon the terms and
conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ORBITEX FUND IN EXCHANGE FOR SARATOGA FUND SHARES
AND LIQUIDATION OF THE ORBITEX FUND
1.1 No later than the time of the closing of the Reorganization as provided in
Section 3.1 of this Agreement (the "Closing Time") on the Closing Date, the
Orbitex Fund shall transfer substantially all of its property and assets
(consisting, without limitation, of portfolio securities and instruments,
dividends and interest receivables, claims, cash, cash equivalents, deferred or
prepaid expenses shown as assets on the Orbitex Fund's books, goodwill and
intangible property, books and records, and other assets), as set forth in the
statement of assets and liabilities referred to in Section 8.2 hereof (the
"Statement of Assets and Liabilities"), to the Saratoga Fund free and clear of
all liens, encumbrances, and claims, except for cash or bank deposits in an
amount necessary: (a) to pay its costs and expenses of carrying out this
Agreement (including but not limited to fees of counsel and independent
accountants, and expenses of its liquidation and termination as a series of
Orbitex Fund contemplated hereunder); (b) to discharge all of the unpaid
liabilities (other than any unamortized organizational expenses) reflected on
its books and records at the Closing Date; and (c) to pay such contingent
liabilities, if any, as the Board of Directors of the Orbitex Fund shall
reasonably deem to exist against the Orbitex Fund at the Closing Date, for which
contingent and other appropriate liability reserves shall be established on the
Orbitex Fund's books. Any unspent portion of such cash or bank deposits retained
shall be delivered to the Saratoga Fund upon the satisfaction of all of the
foregoing liabilities, costs, and expenses of the Orbitex Fund. (The property
and assets to be transferred to the Saratoga Fund under this Agreement are
referred to herein as the " Orbitex Fund Net Assets"). In exchange for the
transfer of the Orbitex Fund Net Assets, the Saratoga Fund shall deliver to the
Orbitex Fund, for distribution pro rata by the Orbitex Fund to its shareholders
as of the close of business on the Closing Date, a number of Saratoga Fund
Shares having an aggregate net asset value equal to the value of the Orbitex
Fund Net Assets, all determined as provided in Section 2 of this Agreement and
as of the date and time specified therein.
1.2 The Orbitex Fund reserves the right to purchase or sell any of its
portfolio securities prior to the Closing Date, except to the extent such
purchases or sales may be limited by the representations made in connection with
the issuance of the tax opinion described in Section 8.9. hereof.
1.3 On or promptly after the Closing Date, the Orbitex Fund shall liquidate
and distribute pro rata to its shareholders of record at the Closing Time on the
Closing Date (the "Orbitex Fund Shareholders") the Saratoga Fund Shares received
by the Orbitex Fund pursuant to Section 1.1 of this Agreement. (The date of such
liquidation and distribution is referred to as the "Liquidation Date.") Such
liquidation and distribution shall be accomplished by the transfer agent for the
Saratoga Fund opening accounts on the share records of the Saratoga Fund in the
names of the Orbitex Fund Shareholders and transferring to each such Orbitex
Fund Shareholder account the pro rata number of the Saratoga Fund Shares due
each such Orbitex Fund Shareholder from the Saratoga Fund Shares then credited
to the account of the Orbitex Fund on the Saratoga Fund's books and records. The
Saratoga Fund shall not issue certificates representing Saratoga Fund Shares in
connection with such exchange, except in accordance with the procedures set
forth in the Saratoga Trust's current Prospectus and Statement of Additional
Information or as provided in Section 1.4 hereof.
1.4 The Orbitex Fund Shareholders holding certificates representing their
ownership of Orbitex Fund Shares may be requested to surrender such certificates
or deliver an affidavit with respect to lost certificates, in such form and
accompanied by such surety bonds as the Orbitex Fund may require (collectively,
an "Affidavit"), to the Orbitex Fund prior to the Closing Date. On the Closing
Date, any Orbitex Fund Share certificates that remain outstanding shall be
deemed to be canceled. The Saratoga Trust's transfer books with respect to the
Orbitex Fund shall be closed permanently as of the close of business on the day
immediately prior to the Closing Date. All unsurrendered Orbitex Fund Share
certificates shall no longer evidence ownership of common stock of the Orbitex
Fund and shall be deemed for all corporate purposes to evidence ownership of the
number of Saratoga Fund Shares into which the Orbitex Fund Shares were
effectively converted. Unless and until any such certificate shall be so
surrendered or an Affidavit relating thereto shall be delivered to the Saratoga
Fund, dividends and other distributions payable by the Saratoga Fund subsequent
to the Liquidation Date with respect to such Saratoga Fund Shares shall be paid
to the holders of such certificate(s), but such Orbitex Fund Shareholders may
not redeem or transfer Saratoga Fund Shares received in the Reorganization with
respect to unsurrendered Orbitex Fund Share certificates.
1.5 Any transfer taxes payable upon issuance of Saratoga Fund Shares in a
name other than the registered holder of the Saratoga Fund Shares on the books
of the Orbitex Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Saratoga Fund Shares are to be
issued and transferred.
1.6 As soon as practicable following the Liquidation Date, the Orbitex Fund
shall take all steps necessary to terminate its existence.
-2-
2. VALUATION
2.1 The net asset value of the Saratoga Fund Shares, and the value of the
Orbitex Fund Net Assets, shall in each case be determined as of the close of
regular trading on the New York Stock Exchange ("NYSE") on the third business
day following the receipt of the requisite approval by Orbitex Fund Shareholders
of this Agreement, or such earlier or later date after such approval as may be
mutually agreed upon in writing (such time and date being hereafter referred to
as the "Valuation Date") in accordance with the policies and procedures set
forth in the then-current Prospectus and Statement of Additional Information of
the Saratoga Trust with respect to the Saratoga Fund Shares and shall be
computed to not fewer than two (2) decimal places. The value of the Orbitex Fund
Net Assets shall be computed in accordance with the policies and procedures set
forth in the then-current Prospectus and Statement of Additional Information of
the Orbitex Fund with respect to the Orbitex Fund.
2.2 In the event that on the Valuation Date, (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be restricted or
(b) trading or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of both the Orbitex Fund and the Saratoga
Fund accurate appraisal of the value of the net assets of the Orbitex Fund or
the Saratoga Fund assets is impracticable, the Valuation Date shall be postponed
until the first business day after the day when trading shall have been fully
resumed without restriction or disruption and reporting shall have been
restored.
2.3 The number of Saratoga Fund Shares to be issued (including fractional
shares) in exchange for the Orbitex Fund Net Assets shall be determined by
dividing the value of the Orbitex Fund Net Assets by the Saratoga Fund's net
asset value per share, both as determined in accordance with Section 2.1 of this
Agreement.
2.4 All computations of value regarding the Orbitex Fund shall be provided
by Orbitex Fund Services, Inc., in its capacity as Fund Accountant for the
Orbitex Fund, and shall be certified by the Treasurer for the Orbitex Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall take place on the next business day following
the Valuation Date (the "Closing Date"). The Closing Time shall be at ________,
Eastern Time. or at such other time as the parties to this Agreement may agree.
The Closing shall be held at the offices of ___________________________, or at
such other place as the parties to this Agreement may agree. All actions taking
place on the Closing Date shall be deemed to take place simultaneously as of
________ a.m. Eastern Time on the Closing Date unless otherwise provided.
3.2 Portfolio securities that are not held in book-entry form (together
with cash or other assets) shall be transferred or delivered, as appropriate, by
Bank of New York (the "Custodian") or its agents or nominees from the Orbitex
Fund's accounts with the Custodian, to the accounts of the Saratoga Fund on the
Closing Date, in accordance with applicable custody provisions under the
Investment Company Act of 1940, as amended ("1940 Act"), and, as appropriate,
duly endorsed in proper form for transfer, in such condition as to constitute
good
-3-
delivery thereof. Such portfolio securities shall be accompanied by any
necessary federal and state stock transfer stamps or a check for the appropriate
purchase price of such stamps. Portfolio securities held of record by the
Custodian or its agents or nominees in book-entry form on behalf of the Orbitex
Fund shall be transferred to the Saratoga Fund by the Custodian by recording the
transfer of beneficial ownership thereof on its records and those of its agents
and nominees. Any cash of the Orbitex Fund delivered on the Closing Date shall
be in any form as is reasonably directed by the Saratoga Fund and shall be
delivered on the Closing Date by the Custodian crediting the Saratoga Fund's
account maintained with the Custodian with immediately available funds.
3.3 If any of the Orbitex Fund Net Assets, for any reason, are not
transferred on the Closing Date, the Orbitex Fund shall cause the Orbitex Fund
Net Assets to be transferred to the Saratoga Fund in accordance with this
Agreement at the earliest practicable date thereafter.
3.4 Orbitex Data Services, Inc., in its capacity as transfer agent for the
Orbitex Fund, shall deliver to the Saratoga Fund at the Closing Time a list of
the names, addresses, federal taxpayer identification numbers, and backup
withholding and nonresident alien withholding status of Orbitex Fund
Shareholders and the number and aggregate net asset value of outstanding shares
of common stock of the Orbitex Fund owned by each such Orbitex Fund Shareholder
all as of the close of regular trading on the NYSE on the Closing Date,
certified by an appropriate officer of Orbitex Data Services, Inc. (the
"Shareholder List"). The transfer agent for the Saratoga Fund, shall issue and
deliver to the Orbitex Fund a confirmation evidencing the Saratoga Fund Shares
to be credited to each Orbitex Fund Shareholder on the Liquidation Date, or
provide evidence satisfactory to the Orbitex Fund that such Saratoga Fund Shares
have been credited to each Orbitex Fund Shareholder's account on the books of
the Saratoga Fund. At the Closing, each Fund shall deliver to the other Fund
such bills of sale, checks, assignments, certificates, receipts, or other
documents as the other Fund or its counsel may reasonably request.
4. REPRESENTATIONS OF THE ORBITEX FUND
The Orbitex Fund represents and warrants to the Saratoga Fund as follows:
4.1 The Orbitex Fund is a duly organized closed-end, management investment
company, and its registration with the Securities and Exchange Commission (the
"SEC") as an investment company under the 1940 Act is in full force and effect.
4.2 The Orbitex Fund is a corporation that is duly organized, validly
existing, and in "good standing" under the laws of the State of Maryland, and
has the power to own all of its properties and assets and, subject to approval
of the Orbitex Fund Shareholders, to perform its obligations under this
Agreement and to consummate the transactions contemplated by this Agreement. The
Orbitex Fund is not required to qualify to do business in any jurisdiction in
which it is not so qualified or where failure to qualify would not subject it to
any material liability or disability. The Orbitex Fund has all necessary
federal, state, and local authorizations, consents, and approvals required, to
own all of its properties and assets and to carry on its business as now being
conducted and to consummate the transactions contemplated by this Agreement.
-4-
4.3 The execution, delivery, and performance of this Agreement has been
duly authorized by all necessary action on the part of the Orbitex Fund's Board
of Directors, and this Agreement constitutes a valid and binding obligation of
the Orbitex Fund, subject to the approval of the Orbitex Fund's Shareholders,
enforceable in accordance with the terms of this Agreement, subject as to
enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium,
and other similar laws of general applicability relating to or affecting
creditors' rights and to general trust principles.
4.4 The Orbitex Fund is not, and the execution, delivery, and performance
of this Agreement by the Orbitex Fund will not result, in violation of any
provision of its Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease, or other arrangement or undertaking to
which the Orbitex Fund is a party or by which it is bound.
4.5 The Orbitex Fund has elected to be treated as a regulated investment
company ("RIC") for federal income tax purposes under Part I of Subchapter M of
the Code, has qualified as a RIC and has been eligible to and has computed its
federal income tax under Section 852 of the Code for each taxable year of its
operations, and will continue to so qualify as a RIC and be eligible to and
compute its income tax as of the Closing Date and with respect to its final
taxable year ending upon its liquidation, and will have distributed all of its
investment company taxable income and net capital gain (as defined in the Code)
that has accrued through the Closing Date.
4.6 The financial statements of the Orbitex Fund for the last three fiscal
years (which were audited by its independent accountants), present fairly the
financial position of the Orbitex Fund as of the date indicated and the results
of its operations and changes in net assets for the respective stated periods
(in accordance with generally accepted accounting principles ("GAAP")
consistently applied).
4.7 Orbitex Fund's Prospectus February 28, 2002, and the corresponding
Statement of Additional Information of the same dates, and any supplements
thereto, do not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and any amended, revised, or new Prospectus or Statement of
Additional Information of Orbitex Fund or any supplement thereto, that is
hereafter filed with the SEC (copies of which documents shall be provided to the
Saratoga Fund promptly after such filing), shall not contain any untrue
statement of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
4.8 No material legal or administrative proceeding or investigation of or
before any court or governmental body is currently pending or, to its knowledge,
threatened as to the Orbitex Fund or any of its properties or assets. The
Orbitex Fund knows of no facts which might form the basis for the institution of
such proceedings. The Orbitex Fund is not party to or subject to the provisions
of any order, decree, or judgment of any court or governmental body which
materially and adversely affects their business or their ability to consummate
the transactions herein contemplated.
-5-
4.9 Orbitex Fund has furnished the Saratoga Fund with copies or
descriptions of all agreements or other arrangements to which Orbitex Fund, is a
party. Orbitex Fund has no material contracts or other commitments (other than
this Agreement or agreements for the purchase of securities entered into in the
ordinary course of business and consistent with its obligations under this
Agreement) which will not be terminated by the Orbitex Fund in accordance with
its terms at or prior to the Valuation Date.
4.10 The Orbitex Fund does not have any known liabilities, costs or
expenses of a material amount, contingent or otherwise, other than those
reflected in the financial statements referred to in Section 4.6 hereof and
those incurred in the ordinary course of business as a series of an investment
company since the dates of those financial statements. On the Closing Date,
Orbitex Fund shall advise the Saratoga Fund in writing of all of its known
liabilities, contingent or otherwise, whether or not incurred in the ordinary
course of business, existing or accrued at such time.
4.11 Since _________, 2002, there has not been any material adverse change
in the Orbitex Fund's financial condition, assets, liabilities, or business
other than changes occurring in the ordinary course of its business, other than
those that have been fully disclosed to the Saratoga Fund.
4.12 As of the date hereof, and by the Closing Date, all federal, state,
and other tax returns and reports, including information returns and payee
statements, of the Orbitex Fund required by law to have been filed or furnished
by such dates shall have been filed or furnished and shall be correct in all
material respects, or extensions concerning such tax returns and reports shall
have been obtained, and all federal, state, and other taxes, interest, and
penalties shall have been paid so far as due, or adequate provision shall have
been made on the Orbitex Fund's books for the payment thereof, and to the best
of the Orbitex Fund's knowledge no such tax return is currently under audit and
no tax deficiency or liability has been asserted with respect to such tax
returns or reports by the Internal Revenue Service or any state or local tax
authority.
4.13 As of the Closing Date, the Orbitex Fund shall have good and
marketable title to the Orbitex Fund Net Assets, and subject to approval by the
Orbitex Fund Shareholders, full right, power and authority to sell, assign,
transfer, and deliver such assets hereunder, and upon delivery and in payment
for such assets, the Saratoga Fund will acquire good and marketable title
thereto subject to no liens or encumbrances of any nature whatsoever or
restrictions on the ownership or transfer thereof, except (a) such imperfections
of title or encumbrances as do not materially detract from the value or use of
the assets subject thereto, or materially affect title thereto, or (b) such
restrictions as might arise under federal or state securities laws or the rules
and regulations thereunder.
4.14 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Orbitex Fund of
the transactions contemplated by this Agreement, except such as may be required
under the federal or state securities laws or the rules and regulations
thereunder.
4.15 The Combined Proxy Statement/Prospectus referred to in Section 6.7
hereof (the "Proxy Statement/Prospectus") and any Prospectus and Statement of
Additional Information of
-6-
the Orbitex Fund contained or incorporated by reference into the Form N-14
Registration Statement, and referred to in Section 6.7 hereof, any supplement or
amendment to such documents on the effective and clearance dates of the Form
N-14 Registration Statement, on the date of the Special Joint Meeting of
Shareholders, and on the Closing Date and only insofar as such Proxy
Statement/Prospectus and the Prospectus and Statement of Additional Information
relate to the Orbitex Fund or the transactions contemplated by this Agreement
and is based on information furnished by the Orbitex Fund for inclusion therein:
(a) shall comply in all material respects with the provisions of the Securities
Act of 1933 (the "1933 Act"), the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and the 1940 Act, the rules and regulations thereunder, and
all other applicable federal securities laws and rules and regulations
thereunder; and (b) shall 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 such
statements were made, not misleading.
4.16 All of the issued and outstanding shares of common stock of the
Orbitex Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable. All of the issued and outstanding
shares of common stock of the Orbitex Fund will, at the time of Closing, be held
by the persons and in the amounts set forth in the Shareholder List.
4.17 All of the issued and outstanding shares of common stock of the
Orbitex Fund have been offered for sale and sold in conformity, in all material
respects, with all applicable federal and state securities laws, including the
registration or exemption from registration of such shares, except as may have
been previously disclosed in writing to the Saratoga Fund.
4.18 The Orbitex Fund is not under the jurisdiction of a Court in Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
4.19 All information to be furnished by the Orbitex Fund for use in
preparing any application for orders, the Form N-14 Registration Statement
referred to in Section 6.7 hereof, and the Proxy Statement/Prospectus to be
included in the Form N-14 Registration Statement, proxy materials, and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto.
4.20 There is no indebtedness existing between the Orbitex Fund and the
Saratoga Fund that was issued, acquired, or will be settled at a discount.
4.21 The Orbitex Fund has valued and will continue to value its portfolio
securities and other assets in material compliance with all applicable legal
requirements.
5. REPRESENTATIONS OF THE SARATOGA FUND
The Saratoga Fund represents and warrants to the Orbitex Fund as follows:
5.1 The Saratoga Fund is or will be a duly organized series of Saratoga
Trust, which is a business trust duly organized, validly existing, and in "good
standing" under the Delaware
-7-
Business Trust Act of the State of Delaware (meaning it has filed its most
recent annual report and has not filed articles of dissolution) and has the
power to own all of its properties and assets and to perform its obligations
under this Agreement and to consummate the transactions contemplated herein. The
Saratoga Fund is not required to qualify to do business in any jurisdiction in
which it is not so qualified or where failure to qualify would subject it to any
material liability or disability. The Saratoga Fund has or intends to acquire
all necessary federal, state, and local authorizations, consents, and approvals
required to own all of its properties and assets and to carry on its business as
now being conducted and to consummate the transactions contemplated herein.
5.2 Saratoga Trust is a registered investment company classified as a
management company of the open-end diversified type and its registration with
the SEC as an investment company under the 1940 Act is in full force and effect.
The Saratoga Fund is a separate series of the Saratoga Trust for purposes of the
0000 Xxx.
5.3 The execution, delivery, and performance of this Agreement has been
duly authorized by all necessary action on the part of the Saratoga Trust Board
of Trustees on behalf of the Saratoga Fund, and this Agreement constitutes a
valid and binding obligation of the Saratoga Fund, enforceable in accordance
with the terms of this Agreement, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium, and other similar laws of
general applicability relating to or affecting creditors' rights and to general
trust principles.
5.4 The Saratoga Fund is not, and the execution, delivery, and performance
of this Agreement by the Saratoga Fund will not result in violation of any
provisions of the Declaration of Trust or By-Laws of Saratoga Trust or of any
agreement, indenture, instrument, contract, lease, or other arrangement or
undertaking to which the Saratoga Fund is a party or by which it is bound.
5.5 The Saratoga Fund has elected to be treated as a RIC for federal income
tax purposes under Part I of Subchapter M of the Code, have qualified as a RIC
and have been eligible to and have computed their federal income tax under
Section 852 of the Code for each taxable year since their inception, and will so
qualify as a RIC and be eligible to and compute their income tax for their
taxable year, including the Closing Date, in accordance with those provisions
applicable to RICs.
5.6 The financial statements of the Saratoga Fund, for the last three
fiscal years (which were audited by its independent accountants), present fairly
the financial position of the Saratoga Fund as of the dates indicated and the
results of their operations and changes in net assets for the respective stated
periods (in accordance with GAAP consistently applied).
5.7 The Prospectus of the Saratoga Trust with respect to the Saratoga Fund,
dated January 1, 2002, and the corresponding Statement of Additional Information
of the same date, and any supplements thereto, do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and any amended,
revised, or new Prospectus or Statement of Additional Information of the Trust
with respect to
-8-
the Saratoga Fund or any supplement thereto, that is hereafter filed with the
SEC (copies of which documents shall be provided to the Orbitex Fund promptly
after such filing), shall not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
5.8 No material legal or administrative proceeding, or investigation of or
before any court or governmental body is currently pending or, to its knowledge,
threatened as to the Saratoga Fund or any of its properties or assets. The
Saratoga Fund knows of no facts which might form the basis for the institution
of such proceedings. The Saratoga Fund are not a party to or subject to the
provisions of any order, decree, or judgment of any court or governmental body
which materially and adversely affects the Saratoga Fund's business or its
ability to consummate the transactions herein contemplated.
5.9 The Saratoga Fund does not have any known liabilities, costs or
expenses of a material amount, contingent or otherwise, other than those
reflected in the financial statements referred to in Section 5.6 hereof and
those incurred in the ordinary course of business as a series of an investment
company since the date of those financial statements. On the Closing Date,
Saratoga Trust shall advise the Orbitex Fund in writing of all of the Saratoga
Fund's known liabilities, contingent or otherwise, whether or not incurred in
the ordinary course of business, existing or accrued at such time.
5.10 Since ____________, 2002 there has not been any material adverse
change in the Saratoga Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of its business,
other than those that have been fully disclosed to the Orbitex Fund.
5.11 As of the date hereof, and by the Closing Date, all federal, state,
and other tax returns and reports, including information returns and payee
statements, of the Saratoga Fund required by law to have been filed or furnished
by such date shall have been filed or furnished and shall be correct in all
material respects, or extensions concerning such tax returns and reports shall
have been obtained, and all federal, state, and other taxes, interest, and
penalties shall have been paid so far as due, or adequate provision shall have
been made on the Saratoga Fund's books for the payment thereof, and to the best
of the Saratoga Fund's knowledge no such tax return is currently under audit and
no tax deficiency or liability has been asserted with respect to such tax
returns or reports by the Internal Revenue Service or any state or local tax
authority.
5.12 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Saratoga Fund of
the transactions contemplated by the Agreement, except for the registration of
the Saratoga Fund Shares under the Securities Act of 1933 (the "1933 Act"), or
as may otherwise be required under the federal and state securities laws or the
rules and regulations thereunder.
5.13 The Form N-14 Registration Statement and the Proxy
Statement/Prospectus referred to in Section 6.7 hereof (other than the portions
of such documents based on written information furnished by the Orbitex Fund for
inclusion or incorporation by reference therein as covered by the Orbitex Fund's
warranty in Section 4.15 and 4.19 hereof) and any Prospectus or
-9-
Statement of Additional Information of the Saratoga Trust with respect to the
Saratoga Fund contained or incorporated therein by reference, and any supplement
or amendment to the Form N-14 Registration Statement or any such Prospectus or
Statement of Additional Information, on the effective and clearance dates of the
Form N-14 Registration Statement, on the date of the Special Joint Meeting of
Shareholders, and on the Closing Date and only insofar as such Proxy
Statement/Prospectus and the Prospectus and Statement of Additional Information
relate to the Saratoga Fund or the transactions contemplated by this Agreement
and are based on information furnished by the Saratoga Fund for inclusion
therein: (a) shall comply in all material respects with the provisions of the
1933 Act, 1934 Act, and the 1940 Act, the rules and regulations thereunder, and
all other applicable federal securities laws and the rules and regulations
thereunder; and (b) shall 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 the
statements were made, not misleading.
5.14 All of the issued and outstanding shares of common stock of the
Saratoga Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable.
5.15 All of the issued and outstanding shares of common stock of the
Saratoga Fund have been offered for sale and sold in conformity, in all material
respects, with all applicable federal and state securities laws, including the
registration or exemption from registration of such shares, except as may
previously have been disclosed in writing to the Orbitex Fund.
5.16 The Saratoga Fund Shares to be issued and delivered to the Orbitex
Fund pursuant to the terms of this Agreement, when so issued and delivered, will
be duly and validly issued shares of common stock of the Saratoga Fund, will be
fully paid and nonassessable by the Saratoga Fund, or any successor provision,
and will be duly registered in conformity with all applicable federal securities
laws, and no shareholder of the Saratoga Fund shall have any option, warrant, or
preemptive right of subscription or purchase with respect thereto.
5.17 The Saratoga Fund is not under the jurisdiction of a Court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
5.18 All information to be furnished by the Saratoga Fund to the Orbitex
Fund for use in preparing the Proxy Statement/Prospectus, and other documents
which may be necessary in connection with the transactions contemplated hereby
shall be accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto.
5.19 There is no indebtedness existing between the Orbitex Fund and the
Saratoga Fund that was issued, acquired, or will be settled at a discount.
5.20 The Saratoga Fund do not own, directly or indirectly, nor have they
owned during the past five years, directly or indirectly, any stock of the
Orbitex Fund.
5.21 The Saratoga Fund has valued and will continue to value its portfolio
securities and other assets in material compliance with all applicable legal
requirements.
-10-
6. COVENANTS
6.1 Except as expressly contemplated herein to the contrary, each Fund
shall operate its business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of business will
include customary dividends and distributions and any other distribution
necessary or desirable to avoid federal income or excise taxes.
6.2 After the effective date of the Form N-14 Registration Statement
referred to in Section 6.7 hereof, and before the Closing Date and as a
condition thereto, the Board of Directors of the Orbitex Fund shall call, and
Orbitex Fund shall hold, a Special Joint Meeting of Shareholders to consider and
vote upon this Agreement and the transactions contemplated hereby and Orbitex
Fund shall take all other actions reasonably necessary to obtain approval of the
transactions contemplated herein.
6.3 The Orbitex Fund covenants that it shall not sell or otherwise dispose
of any of the Saratoga Fund Shares to be received in the transactions
contemplated herein, except in distribution to the Orbitex Fund Shareholders as
contemplated herein.
6.4 The Orbitex Fund shall provide such information within its possession
or reasonably obtainable as the Saratoga Fund may reasonably request concerning
the beneficial ownership of the Orbitex Fund Shares.
6.5 Subject to the provisions of this Agreement, the Saratoga Fund and the
Orbitex Fund shall take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper, or advisable to consummate the
transactions contemplated by this Agreement.
6.6 The Orbitex Fund shall furnish to the Saratoga Fund on the Closing Date
the Statement of the Assets and Liabilities of the Orbitex Fund as of the
Closing Date, which statement shall be prepared in accordance with GAAP
consistently applied and shall be certified by Orbitex Fund's Treasurer or
Assistant Treasurer. As promptly as practicable, but in any case within
forty-five (45) days after the Closing Date, the Orbitex Fund shall furnish to
the Saratoga Fund, in such form as is reasonably satisfactory to the Saratoga
Fund, a statement of the earnings and profits of the Orbitex Fund for federal
income tax purposes, and of any capital loss carryovers and other items that
will be carried over to the Saratoga Fund as a result of Section 381 of the
Code, which statement shall be certified by the Treasurer or Assistant Treasurer
of the Orbitex Fund. The Orbitex Fund covenants that it has no earnings and
profits that were accumulated by it or any entity during a taxable year when it
did not qualify as a RIC under the Code or, if it has such earnings and profits,
shall distribute them to its shareholders prior to the Closing Date.
6.7 The Saratoga Fund shall prepare and file with the SEC a Registration
Statement on Form N-14 (the "Form N-14 Registration Statement"), which shall
include the Proxy Statement/Prospectus, as promptly as practicable in connection
with the issuance of the Saratoga Fund Shares and the holding of the Special
Joint Meeting of Shareholders to consider approval of this Agreement as
contemplated herein and transactions contemplated thereunder. The Saratoga Fund
shall prepare any pro forma financial statement that may be required under
-11-
applicable law to be included in the Form N- 14 Registration Statement. The
Orbitex Fund shall provide the Saratoga Fund with all information about the
Orbitex Fund that is necessary to prepare the pro forma financial statements.
The Funds shall cooperate with each other and shall furnish each other with any
information relating to themselves that is required by the 1933 Act, the 1934
Act, and the 1940 Act, the rules and regulations thereunder, and applicable
state securities laws, to be included in the Form N-14 Registration Statement
and the Proxy Statement/Prospectus. 6.8 The Orbitex Fund shall deliver to the
Saratoga Fund at the Closing Date confirmation or other adequate evidence as to
the tax costs and holding periods of the assets and property of the Orbitex Fund
delivered to the Saratoga Fund in accordance with the terms of this Agreement.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ORBITEX FUND
The obligations of the Orbitex Fund hereunder shall be subject to the
following conditions precedent; provided, however, that the Orbitex Fund may, at
its option, waive compliance with any conditions precedent:
7.1 This agreement and the transactions contemplated by this Agreement
shall have been approved by the Board of Trustees of Saratoga Trust on behalf of
the Saratoga Fund in the manner required by Saratoga Trust's Declaration of
Trust and applicable law, and this Agreement, and the transactions contemplated
by this Agreement, shall have been approved by the Orbitex Fund Shareholders in
the manner required by the Orbitex Fund's Articles of Incorporation and By-Laws
and applicable law.
7.2 As of the Closing Date, there shall have been no material adverse
change in the financial position, assets, or liabilities of the Saratoga Fund
since the dates of the financial statements referred to in Section 5.6 of this
Agreement. For purposes of this Section 7.2, a decline in the net asset value
per share of the Saratoga Fund due to the effect of normal market conditions on
liquid securities shall not constitute a material adverse change.
7.3 All representations and warranties of Saratoga Trust or the Saratoga
Fund made in this Agreement, except as they may be affected by the transactions
contemplated by this Agreement, shall be true and correct in all material
respects as if made at and as of the Closing Date.
7.4 Saratoga Trust and the Saratoga Fund shall have performed and complied
in all material respects with their obligations, agreements, and covenants
required by this Agreement to be performed or complied with by each of them
prior to or at the Closing Date.
7.5 The Saratoga Fund shall have furnished the Orbitex Fund at the Closing
Date with a certificate or certificates of any of its officers as of the Closing
Date to the effect that the conditions precedent set forth in the Sections 7.2,
7.3, 7.4 and 7.9 hereof have been fulfilled.
-12-
7.6 The Orbitex Fund shall have received a legal opinion or opinions from
counsel, in form reasonably satisfactory to the Orbitex Fund, and dated as of
the Closing Date, to the effect that:
(a) The Saratoga Fund is a duly organized series of Saratoga Trust,
which is a business trust that is duly organized and validly existing under
the Delaware Business Trust Act of the State of Delaware;
(b) the shares of the Saratoga Fund that are issued and outstanding as
of the Closing Date, are duly authorized, validly issued, fully paid, and
non-assessable by the Saratoga Fund, and the Saratoga Fund Shares to be
delivered to the Orbitex Fund, as provided for by this Agreement, are duly
authorized and upon delivery pursuant to the terms of this Agreement will
be validly issued, fully paid and non-assessable by the Saratoga Fund, and
to such counsel's knowledge, no shareholder of the Saratoga Fund has any
option, warrant, or preemptive right to subscription or purchase in respect
thereof;
(c) this Agreement has been duly authorized, executed, and delivered
by the Saratoga Fund and represents a valid and binding contract of the
Saratoga Fund, enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and to the exercise of
judicial discretion in accordance with general principles of trust, whether
in a proceeding at law or in trust;
(d) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated by this Agreement will not,
violate the Declaration of Trust or By-Laws of Saratoga Trust or any
material agreement known to such counsel to which the Saratoga Fund is a
party or by which it is bound;
(e) to the knowledge of such counsel, no consent, approval,
authorization, or order of any court or governmental authority is required
for the consummation by the Saratoga Fund of the transactions contemplated
by this Agreement, except such as have been obtained under the 1933 Act,
the 1934 Act, the 1940 Act, the rules and regulations under those statutes,
and such as may be required by state securities laws, rules and
regulations; and
(f) Saratoga Trust is registered as an investment company under the
1940 Act and the Saratoga Fund is a separate series thereof and such
registration with the SEC as an investment company under the 1940 Act is in
full force and effect.
Such opinion: (a) shall state that while such counsel have not
verified, and are not passing upon and do not assume responsibility for,
the accuracy, completeness, or fairness of any portion of the Form N-14
Registration Statement or any amendment thereof or supplement thereto, they
have generally reviewed and discussed certain information included therein
with respect to the Saratoga Fund with certain of its officers and that in
the course of such review and discussion no facts came to the attention of
such
-13-
counsel which caused them to believe that, on the respective effective or
clearance dates of the Form N-14 Registration Statement and any amendment
thereof or supplement thereto and only insofar as they relate to
information with respect to the Saratoga Fund, the Form N-14 Registration
Statement or any amendment thereof or supplement thereto contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; (b) shall state that such counsel does not express any
opinion or belief as to the financial statements, other financial data,
statistical data, or information relating to the Saratoga Fund contained or
incorporated by reference in the Form N-14 Registration Statement or any
exhibits or attachments to the text thereof; (c) may rely on the opinion of
other counsel to the extent set forth in such opinion, provided such other
counsel is reasonably acceptable to the Orbitex Fund; and (d) shall state
that such opinion is solely for the benefit of the Orbitex Fund and its
Board of Directors and officers.
7.7 The Orbitex Fund shall have received an opinion of counsel regarding
the transaction addressed to the Orbitex Fund in a form reasonably satisfactory
to it and dated as of the Closing Date, with respect to the matters specified in
Section 8.9 hereof.
7.8 The Form N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending the effectiveness shall have been
instituted, or to the knowledge of Saratoga Trust, contemplated by the SEC.
7.9 No action, suit, or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein.
7.10 The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceedings seeking to enjoin
consummation of the transactions contemplated by this Agreement under Section
25(c) of the 1940 Act.
7.11 The Orbitex Fund shall have received from the Saratoga Fund all such
documents, including but not limited to, checks, share certificates, if any, and
receipts, which the Orbitex Fund or its counsel may reasonably request.
7.12 The Saratoga Fund shall have furnished the Orbitex Fund on the Closing
Date with a certificate or certificates of any of its Vice President and/or
Treasurer or Assistant Treasurer dated as of said date to the effect that: (a)
the Saratoga Fund has no plan or intention to reacquire any of the Saratoga Fund
Shares to be issued in the Reorganization, except in the ordinary course of
business; (b) the Saratoga Fund has no plan or intention to sell or otherwise
dispose of more than 66% of the assets of the Orbitex Fund in the
Reorganization, except for dispositions made in the ordinary course of business
or transfers described in Section 368(a)(2)(C) of the Code; and (c) following
the Closing, the Saratoga Fund will continue the historic business of the
Orbitex Fund or use a significant portion of the Orbitex Fund's assets in a
business.
7.13 The transfer agent for the Saratoga Fund, shall issue and deliver to
any of the Vice Presidents of Orbitex Fund, a confirmation statement evidencing
the Saratoga Fund Shares to be
-14-
credited at the Closing Date or provide evidence satisfactory to the Orbitex
Fund that the Saratoga Fund Shares have been credited to the accounts of each of
the Orbitex Fund Shareholders on the books of the Saratoga Fund.
7.14 At the Closing Date, the registration of Saratoga Trust with the SEC
as an investment company under the 1940 Act and the Saratoga Fund as a series
thereof will be in full force and effect.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SARATOGA FUND
The obligations of the Saratoga Fund hereunder shall be subject to the
following conditions precedent; provided, however, that the Saratoga Fund may,
at its option, waive compliance with any conditions precedent:
8.1 This Agreement and the transactions contemplated by this Agreement
shall have been approved by the Board of Directors of the Orbitex Fund and the
Orbitex Fund Shareholders in the manner required by Orbitex Fund's Articles of
Incorporation and By-Laws and applicable law.
8.2 The Orbitex Fund shall have furnished the Saratoga Fund with the
Statement of Assets and Liabilities of the Orbitex Fund, with values determined
as provided in Section 2 of this Agreement, with their respective dates of
acquisition and tax costs, all as of the Closing Date, certified on the Orbitex
Fund's behalf by its Treasurer or Assistant Treasurer. The Statement of Assets
and Liabilities shall list all of the securities owned by the Orbitex Fund as of
the Closing Date and a final statement of assets and liabilities of the Orbitex
Fund prepared in accordance with GAAP consistently applied.
8.3 As of the Closing Date, there shall have been no material adverse
change in the financial position, assets, or liabilities of the Orbitex Fund
since the dates of the financial statements referred to in Section 4.6 of this
Agreement. For purposes of this Section 8.3, a decline in the value of the
Orbitex Fund Net Assets due to the effect of normal market conditions on liquid
securities shall not constitute a material adverse change.
8.4 All representations and warranties of the Orbitex Fund made in this
Agreement, except as they may be affected by the transactions contemplated by
this Agreement, shall be true and correct in all material respects as if made at
and as of the Closing Date.
8.5 The Orbitex Fund shall have performed and complied in all material
respects with their obligations, agreements, and covenants required by this
Agreement to be performed or complied with by each of them prior to or at the
Closing Date.
8.6 The Orbitex Fund shall have furnished the Saratoga Fund at the Closing
Date with a certificate or certificates of any of its officers, dated as of the
Closing Date, to the effect that the conditions precedent set forth in Sections
8.1, 8.3, 8.4, 8.5, 8.12, 8.14 and 8.16 hereof have been fulfilled.
-15-
8.7 The Orbitex Fund shall have duly executed and delivered to the Saratoga
Fund (a) bills of sale, assignments, certificates and other instruments of
transfer ("Transfer Documents") as the Saratoga Fund may deem necessary or
desirable to transfer all of the Orbitex Fund's right, title, and interest in
and to the Orbitex Fund Net Assets, and (b) all such other documents, including
but not limited to, checks, share certificates, if any, and receipts, which the
Saratoga Fund may reasonably request. Such assets of the Orbitex Fund shall be
accompanied by all necessary state stock transfer stamps or cash for the
appropriate purchase price therefor.
8.8 The Saratoga Fund shall have received a legal opinion or opinions from
counsel, in form reasonably satisfactory to the Saratoga Fund and dated as of
the Closing Date, to the effect that:
(a) The Orbitex Fund is a duly organized closed-end, management
investment company;
(b) The Orbitex Fund is a corporation that is duly organized, validly
existing, and in "good standing" under the laws of the State of Maryland;
(c) the shares of the Orbitex Fund are issued and outstanding at the
Closing Date, are duly authorized, validly issued, fully paid and
non-assessable by the Orbitex Fund;
(d) this Agreement has been duly authorized, executed, and delivered
by the Orbitex Fund and represents valid and binding contracts of the
Orbitex Fund, enforceable in accordance with their terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and to the exercise of
judicial discretion in accordance with general principles of trust, whether
in a proceeding at law or in trust; provided, however, that no opinion need
be expressed with respect to provisions of this Agreement relating to
indemnification;
(e) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated by this Agreement will not,
violate the Articles of Incorporation or By-laws of Orbitex Fund or any
material agreement known to such counsel to which the Orbitex Fund is a
party or by which it is bound;
(f) to the knowledge of such counsel, no consent, approval,
authorization, or order of any court or governmental authority is required
for the consummation by the Orbitex Fund of the transactions contemplated
by this Agreement, except such as have been obtained under the 1933 Act,
the 1934 Act, the 1940 Act, the rules and regulations under those statutes,
and such as may be required under state securities laws, rules, and
regulations.
Such opinion: (a) shall state that while such counsel have not verified,
and are not passing upon and do not assume responsibility for, the
accuracy, completeness, or fairness of any portion of the Form N-14
Registration Statement or any amendment thereof or supplement thereto, they
have generally reviewed and discussed certain information
-16-
included therein with respect to the Orbitex Fund with certain of its
officers and that in the course of such review and discussion no facts came
to the attention of such counsel which caused them to believe that, on the
respective effective or clearance dates of the Form N-14 Registration
Statement, and any amendment thereof or supplement thereto and only insofar
as they relate to information with respect to the Orbitex Fund, the Form
N-14 Registration Statement or any amendment thereof or supplement thereto
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; (b) shall state that such counsel does
not express any opinion or belief as to the financial statements, other
financial data, statistical data, or any information relating to the
Orbitex Fund contained or incorporated by reference in the Form N-14
Registration Statement; (c) may rely upon the opinion of other counsel to
the extent set forth in the opinion, provided such other counsel is
reasonably acceptable to the Saratoga Fund; and (d) shall state that such
opinion is solely for the benefit of the Saratoga Fund and its Board of
Trustees and officers.
8.9 The Saratoga Fund shall have received a legal opinion or opinions of
counsel, addressed to the Saratoga Fund and in a form reasonably satisfactory to
it, and dated as of the Closing Date, substantially to the effect that, based
upon certain facts, assumptions and representations, the transactions
contemplated by this Agreement with respect to the Orbitex Fund and the Saratoga
Fund constitute a tax-free reorganization for federal income tax purposes. The
delivery of such opinion or opinions is conditioned upon receipt by counsel of
all necessary representations that it shall request of the Orbitex Fund and
Saratoga Fund.
8.10 The property and assets to be transferred to the Saratoga Fund under
this Agreement shall include no assets which the Saratoga Fund may not properly
acquire.
8.11 The Form 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 Saratoga Trust, contemplated by the SEC.
8.12 No action, suit, or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein.
8.13 The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
consummation of the transactions contemplated by this Agreement under Section
25(c) of the 1940 Act.
8.14 On or before the Closing Date, the Orbitex Fund shall have declared a
dividend or dividends, which, together with all previous dividends, shall have
the effect of distributing to their shareholders all of their net investment
company income, if any, for each taxable period or year ending prior to the
Closing Date and for the periods from the end of each such taxable period or
year to and including the Closing Date (computed without regard to any deduction
for dividends paid), and all of its net capital gain, if any, realized in each
taxable period or year ending prior to the Closing Date and in the periods from
the end of each such taxable period or year to and including the Closing Date.
-17-
8.15 Orbitex Data Services, Inc., in its capacity as transfer agent for the
Orbitex Fund, shall have furnished to the Saratoga Fund immediately prior to the
Closing Date a list of the names and addresses of the Orbitex Fund Shareholders
and the number and percentage ownership of outstanding Orbitex Fund Shares owned
by each such shareholder as of the close of regular trading on the NYSE on the
Closing Date, certified on behalf of the Orbitex Fund by any of its officers.
8.16 At the Closing Date, the registration of the Orbitex Fund with the SEC
as an investment company under the 1940 Act shall be in full force and effect.
9. FEES AND EXPENSES
9.1 Each Fund represents and warrants to the other that there is no person
or entity entitled to receive any finder's fees or other similar fees or
commission payments in connection with the transactions provided for herein.
9.2 Each Fund shall be liable solely for its own expenses incurred in
connection with entering into and carrying out the transactions contemplated by
this Agreement, whether or not the transactions contemplated hereby are
consummated. Any such expenses that are so borne by each Fund shall be solely
and directly related to the Reorganization within the meaning of Revenue Ruling
73-54, 1973-1 C.B. 187.
10. ENTIRE AGREEMENT, SURVIVAL OF WARRANTIES
10.1 The Orbitex Fund and the Saratoga Fund agree that neither party has
made any representation, warranty, or covenant not set forth herein or referred
to in Sections 4 and 5 of this Agreement, and that this Agreement constitutes
the entire agreement between the Funds and supersedes any and all prior
agreements, arrangements, and undertakings relating to the matters provided for
herein.
11. TERMINATION
11.1 This Agreement may be terminated by mutual agreement of the Parties
hereto. In addition, either Party may at its option terminate this Agreement at
or prior to the Closing Date because of:
(a) a material breach by the other Party of any representation,
warranty, or agreement contained herein to be performed at or prior to the
Closing Date; or
(b) a condition precedent to the obligations of either party which the
Boards determine has not been met and which reasonably appears will not or
cannot be met;
(c) a determination by the Board of Directors of the Orbitex Fund that
the Reorganization, will not be in the best interest of the Orbitex Fund,
or its shareholders.
(d) a determination by the Board of Trustees of the Saratoga Fund that
the Reorganization, will not be in the best interest of the Saratoga Fund,
or its shareholders.
-18-
11.2 In the event of any such termination, there shall be no liability for
damages on the part of either Party, or the Orbitex Fund's Board of Directors or
officers, but each shall bear its expenses incidental to the preparation and
carrying out of this Agreement.
12. MISCELLANEOUS
12.1 Each party acknowledges and agrees that: (a) all obligations of the
Saratoga Fund under this Agreement are binding only with respect to the Saratoga
Fund; (b) any liability of the Saratoga Fund under this Agreement or in
connection with the transactions contemplated herein shall be discharged only
out of the assets of the Saratoga Fund; and (c) no other series of the Saratoga
Trust shall be liable with respect to this Agreement or in connection with the
transactions contemplated herein.
Each party acknowledges and agrees that: (a) all obligations of the Orbitex
Fund under this Agreement are binding only with respect to the Orbitex Fund; and
(b) any liability of the Orbitex Fund under this Agreement or in connection with
the transactions contemplated herein shall be discharged only out of the assets
of the Orbitex Fund.
This Agreement may be amended, modified, or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Funds;
provided, however, that following the Special Joint Meeting of Shareholders
called by the Board of Directors of the Orbitex Fund pursuant to Section 6.2
hereof, no such amendment may have the effect of changing the provisions for
determining the number of Saratoga Fund Shares to be issued to Orbitex Fund
Shareholders under this Agreement to the detriment of such shareholders without
their further approval, provided that nothing contained in this Section 13 shall
be construed to prohibit the parties from amending this Agreement to change the
Closing Date or any other provision of this Agreement (to the fullest extent
permitted by law).
Any notice, report, statement, or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed to be
properly given when delivered personally or by telecopier to the party entitled
to receive the notice or when sent by certified or registered mail, postage
prepaid, or delivered to a recognized overnight courier service, in each case
properly addressed to the party entitled to receive such notice or
communication, or such other address as may hereafter be furnished in writing by
notice similarly given by one party to the other.
The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of any
such provision, nor in any way to affect the validity of this Agreement or any
part hereof as the right of any party thereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach.
12.2 The article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
-19-
12.4 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
12.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
12.6 It is expressly understood and agreed that the obligations of the
Orbitex Fund and the Saratoga Fund under this Agreement, including but not
limited to any liability as a result of the breach of any of their respective
representations and warranties, are not binding on their respective Boards,
shareholders, nominees, officers, agents, or employees individually, but bind
only the respective assets of the Saratoga Fund and the Orbitex Fund.
-20-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by a duly authorized officer on this _________ day of __________
2002.
ORBITEX LIFE SCIENCES HEALTH & BIOTECHNOLOGY FUND, INC.
BY___________________________________________
SARATOGA ADVANTAGE TRUST
(On behalf of the Saratoga Health & Biotechnology Portfolio)
BY____________________________________________
-21-
