FORM N-SAR Exhibits 77Q1(g) MAINSTAY FUNDS TRUST For Period Ended 12/31/09 MAINSTAY FUNDS TRUST AGREEMENT AND PLAN OF REORGANIZATION
FORM
N-SAR
Exhibits
77Q1(g)
811-22321
For
Period Ended 12/31/09
Epoch
Global Equity Shareholder Yield Fund acquired by MainStay Epoch Global Equity
Yield Fund
This
Agreement and Plan of Reorganization (“AGREEMENT”) is made as of November 13,
2009, by and between The World Funds, Inc., a Maryland corporation (“WORLD
FUNDS”), on behalf of its investment portfolio, the Epoch Global Equity
Shareholder Yield Fund (the “ACQUIRED FUND”), and MainStay Funds
Trust, a Delaware statutory trust (“MAINSTAY FUNDS”), on behalf of its
investment portfolio, the MainStay Epoch Global Equity Yield Fund (the
“ACQUIRING FUND” and, together with the Acquired Fund, the “FUNDS”). New York
Life Investment Management LLC, a limited liability company organized under the
laws of the State of New York (“NEW YORK LIFE INVESTMENTS”), joins this
Agreement solely for purposes of paragraphs 4.3, 5.10, 6.1 and 8.2, and Epoch
Investment Partners, Inc., a corporation organized under the laws of the State
of Delaware (“EPOCH”), joins this Agreement solely for purposes of paragraphs
4.4 and 8.2.
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 will consist of the transfer of all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for
Class A shares and Class I shares of beneficial interest of the Acquiring Fund
(the “ACQUIRING FUND SHARES”), the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund specified in paragraph 1.3, and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement (the
“REORGANIZATION”).
The Board
of Directors of World Funds has determined, with respect to the Acquired Fund,
that (1) participation in the Reorganization is in the best interests of the
Acquired Fund and its shareholders, and (2) the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of the
Reorganization. The Board of Trustees of MainStay Funds has determined, with
respect to the Acquiring Fund, that (1) participation in the Reorganization is
in the best interests of the Acquiring Fund and its shareholders, and (2) the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of the Reorganization.
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE
I
THE
REORGANIZATION AND FUND TRANSACTIONS
1.1. The
Reorganization. Subject to the requisite approval of the Acquired Fund’s
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, at the Effective
Time (as defined in paragraph 2.5), World Funds shall assign, deliver and
otherwise transfer the Assets (as defined in paragraph 1.2) of the Acquired
Fund, to MainStay Funds on behalf of the Acquiring Fund, and MainStay Funds
shall assume the Liabilities (as defined in paragraph 1.3) of the Acquired Fund
on behalf of the Acquiring Fund. In consideration of the foregoing,
at the Effective Time, MainStay Funds shall, on behalf of the Acquiring Fund,
deliver to World Funds on behalf of the Acquired Fund, full and fractional
Acquiring Fund Shares (to the third decimal place). Holders of Class
P shares and Institutional Class shares of the Acquired Fund will receive Class
A shares and Class I shares, respectively, of the Acquiring Fund. The
number of Acquiring Fund Shares to be delivered shall be determined as set forth
in paragraph 2.3.
1.2. Assets of
the Acquired Fund. The assets of the Acquired Fund to be acquired by
the Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, cash equivalents, securities, receivables (including
securities, interests and dividends receivable), commodities and futures
interests, rights to register shares under applicable securities laws, any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
at the Effective Time, books and records, and any other property owned by the
Acquired Fund at the Effective Time (collectively, the “ASSETS”).
1.3. Liabilities
of the Acquired Fund. The Acquired Fund will use commercially reasonable efforts
to discharge all of its known liabilities and obligations prior to the Effective
Time. The Acquiring Fund will assume all of the Acquired Fund’s
liabilities and obligations of any kind whatsoever, whether known or unknown,
absolute, accrued, contingent or otherwise, in existence on the Closing Date
(collectively, the “LIABILITIES”).
1.4. Distribution
of Acquiring Fund Shares. At the Effective Time (or as soon thereafter as is
reasonably practicable), World Funds, on behalf of the Acquired Fund, will
distribute the Acquiring Fund Shares received from MainStay Funds pursuant to
paragraph 1.1, pro rata to the record holders of the shares of the Acquired Fund
determined as of the Effective Time (the “ACQUIRED FUND SHAREHOLDERS”) in
complete liquidation of the Acquired Fund. Such distribution and
liquidation will be accomplished by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund Shareholders. The aggregate net asset value of the
Acquiring Fund Shares to be so credited to Acquired Fund Shareholders shall be
equal to the aggregate net asset value of the then outstanding shares of
beneficial interest of the Acquired Fund (the “ACQUIRED FUND SHARES”) owned by
Acquired Fund Shareholders at the Effective Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be redeemed and
canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
1.5. Recorded
Ownership of Acquiring Fund Shares. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund’s Transfer Agent (as defined in
paragraph 3.3).
1.6. Filing
Responsibilities of Acquired Fund. Any reporting responsibility of
the Acquired Fund, including, but not limited to, the responsibility for filing
regulatory reports, tax returns, or other documents with the Securities and
Exchange Commission (“COMMISSION”), any state securities commission, and any
Federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Acquired
Fund.
ARTICLE
II
VALUATION
2.1. Net Asset
Value of the Acquired Fund. The net asset value of the Acquired Fund
Shares shall be the net asset value computed as of the Effective Time, after the
declaration and payment of any dividends and/or other distributions on that
date, using the valuation procedures described in the then-current prospectuses
and statement of additional information of the Acquiring Fund.
2.2. Net Asset
Value of the Acquiring Fund. The net asset value of the Acquiring
Fund Shares shall be the same as the net asset value of the Acquired Fund Shares
as computed in paragraph 2.1.
2.3. Calculation
of Number of Acquiring Fund Shares. The number of Class A shares and Class I
shares of the Acquiring Fund to be issued (including fractional shares to the
third decimal place, if any) in connection with the Reorganization shall be
equal to the number of Class P shares and Institutional Class shares,
respectively, owned by Acquired Fund Shareholders at the Effective
Time.
2.4. Joint
Direction of Calculation. All computations of value with respect to both the
Acquired Fund and the Acquiring Fund shall be made by State Street Bank and
Trust Company (“STATE STREET”), in its capacity as accounting agent for the
MainStay Funds. Such computations shall be evaluated by New York Life
Investments, in its capacity as administrator for the Funds, in consultation
with Epoch, the investment adviser to the Acquired Fund. Such
computations shall be subject to confirmation by the Acquired Fund’s and
Acquiring Fund’s respective transfer agents and independent
accountants.
2.5. Effective
Time. The Effective Time shall be the time at which the Funds
calculate their net asset values as set forth in their respective prospectuses
(normally the close of regular trading on the New York Stock Exchange (“NYSE”))
on the Closing Date (as defined in paragraph 3.1) (the “EFFECTIVE
TIME”).
ARTICLE
III
CLOSING
3.1. Closing.
The Reorganization, together with related acts necessary to consummate the same
(“CLOSING”), shall occur at the principal office of New York Life Investments on
or about November 13, 2009, or at such other place and/or on such other date as
to which the parties may agree (the “CLOSING DATE”). All acts taking
place at the Closing shall be deemed to take place simultaneously as of the
Effective Time.
3.2. Transfer
and Delivery of Assets. World Funds shall direct Brown Brothers Xxxxxxxx &
Co. (“BROWN BROTHERS”), as custodian for the Acquired Fund, to deliver, at the
Closing, a certificate of an authorized officer stating that (i) the Assets were
delivered in proper form to the Acquiring Fund at the Effective Time, and (ii)
all necessary taxes in connection 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. The Acquired Fund’s portfolio
securities represented by a certificate or other written instrument shall be
presented by Brown Brothers to State Street, as custodian for the Acquiring
Fund. Such presentation shall be made for examination no later than
five (5) business days preceding the Effective Time, and shall be transferred
and delivered by the Acquired Fund as of the Effective Time for the account of
the Acquiring Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. Brown Brothers shall deliver
to State Street as of the Effective Time by book entry, in accordance with the
customary practices of State Street and of each securities depository, as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the
“1940 ACT”), in which the Acquired Fund’s Assets are deposited, the Acquired
Fund’s Assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer of Federal
funds at the Effective Time.
3.3. Share
Records. World Funds shall direct Commonwealth Fund Services, Inc., in its
capacity as transfer agent for the Acquired Fund (the “TRANSFER AGENT”), to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding Acquired Fund Shares owned by
each such Acquired Fund Shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver to the Secretary
of the Acquired Fund prior to the Effective Time a confirmation evidencing that
the appropriate number of Acquiring Fund Shares will be credited to the Acquired
Fund at the Effective Time, or provide other evidence satisfactory to the
Acquired Fund as of the Effective Time that such Acquiring Fund Shares have been
credited to the Acquired Fund’s accounts on the books of the Acquiring
Fund.
3.4. Postponement
of Effective Time. In the event that at the Effective Time the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund (each, an “EXCHANGE”) shall be closed to trading or trading
thereupon 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 the
Board of Directors of World Funds or the Board of Trustees of MainStay Funds,
accurate appraisal of the value of the net assets of the Acquired Fund or the
Acquiring Fund, respectively, is impracticable, the Effective Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
4.1. Representations
and Warranties of World Funds. Except as has been fully disclosed to the
Acquiring Fund in a written instrument executed by an officer of World Funds,
World Funds, on behalf of the Acquired Fund, represents and warrants to MainStay
Funds, on behalf of the Acquiring Fund, as follows:
(a) The
Acquired Fund is a duly established series of World Funds, which is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, with power under World Funds’ Articles of
Incorporation and By-Laws, each as amended from time to time, to own all of its
properties and assets and to carry on its business as it is presently
conducted.
(b) World
Funds is registered with the Commission as an open-end management investment
company under the 1940 Act, and the registration of the Acquired Fund Shares
under the Securities Act of 1933, as amended (the “1933 ACT”), is in full force
and effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by World Funds on behalf of the
Acquired Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the “1934 ACT”), and the 1940 Act, and such as may be required under state
securities laws.
(d) The
current prospectuses, statement of additional information, shareholder reports,
marketing and other related materials of the Acquired Fund and each prospectus
and statement of additional information of the Acquired Fund used at all times
prior to the date of this Agreement conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder and does not
or did not at the time of its use 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 materially misleading.
(e) At the
Effective Time, World Funds, on behalf of the Acquired Fund, will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, MainStay Funds, on
behalf of the Acquiring Fund, will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act.
(f) World
Funds is not engaged currently, and the execution, delivery and performance of
this Agreement will not result, in (i) a violation of Maryland Law or a material
violation of its Articles of Incorporation and By-Laws, or of any agreement,
indenture, instrument, contract, lease or other undertaking to which World
Funds, on behalf of the Acquired Fund, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or decree to
which World Funds, on behalf of the Acquired Fund, is a party or by which it is
bound.
(g) All
material contracts or other commitments of the Acquired Fund (other than this
Agreement and certain investment contracts, including options, futures, forward
contracts and other similar instruments) will terminate without liability or
obligation to the Acquired Fund on or prior to the Effective Time.
(h) Except as
otherwise disclosed to and accepted by MainStay Funds, on behalf of the
Acquiring Fund, in writing, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against the Acquired Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its
business. World Funds, on behalf of the Acquired Fund, knows of no
facts which might form the basis for the institution of such proceedings 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 and adversely affects its
business or its ability to consummate the transactions herein
contemplated.
(i) The
Statement of Assets and Liabilities, Statements of Operations and Changes in Net
Assets, and Schedule of Investments of the Acquired Fund at December 31, 2008
have been audited by Xxxx, Xxxxxx & Xxxxx LLP, independent registered public
accounting firm, and are in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) consistently applied, and such
statements (copies of which have been furnished to the Acquiring Fund) present
fairly, in all material respects, the financial condition of the Acquired Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein.
(j) Since
December 31, 2008, there has not been any material adverse change in the
Acquired Fund’s financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund in writing. For the purposes of this subparagraph (j),
a decline in net asset value per share of Acquired Fund Shares due to declines
in market values of securities held by the Acquired Fund, the discharge of the
Acquired Fund’s liabilities, or the redemption of the Acquired Fund’s shares by
shareholders of the Acquired Fund shall not constitute a material adverse
change.
(k) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquired Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquired Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(l) For each
taxable year of its operation (including the taxable year ending at the
Effective Time), the Acquired Fund has met (or will meet) the requirements of
Subchapter M of Chapter 1 of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code.
(m) All of
the issued and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Fund, nor is there outstanding any security convertible into any of the
Acquired Fund’s shares.
(n) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Directors of World Funds, on behalf of the Acquired Fund, and,
subject to the approval of the shareholders of the Acquired Fund, this Agreement
will constitute a valid and binding obligation of World Funds on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
(o) The
information to be furnished by the Acquired Fund for use in registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including the Financial Industry
Regulatory Authority (“FINRA”)), which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and complete in all material
respects and shall comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
(p) The Proxy
Statement (as defined in paragraph 5.6), insofar as it relates to the Acquired
Fund, will, through the date of the meeting of the Acquired Fund Shareholders
contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquiring Fund for use therein.
4.2. Representations
and Warranties of MainStay Funds. Except as has been fully disclosed to the
Acquired Fund in a written instrument executed by an officer of MainStay Funds,
MainStay Funds, on behalf of the Acquiring Fund, represents and warrants to
World Funds, on behalf of the Acquired Fund, as follows:
(a) The
Acquiring Fund is a duly established series of MainStay Funds Trust, which is a
statutory trust duly organized, validly existing, and in good standing under the
laws of the State of Delaware with power under its Declaration of Trust and
By-Laws, each as amended from time to time, to own all of its properties and
assets and to carry on its business as it is presently conducted.
(b) At the
Effective Time, MainStay Funds will be registered with the Commission as an
open-end management investment company under the 1940 Act, and the registration
of the Acquiring Fund Shares under the 1933 Act will be in full force and
effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by MainStay Funds on behalf of the
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.
(d) The
preliminary prospectus and statement of additional information of the Acquiring
Fund filed with the Commission on July 30, 2009 as part of the MainStay Funds’
registration statement on Form N-1A, which will become effective prior to the
Closing Date, conforms and, as of its effective date, will conform in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder, and does not
and, as of its effective date, will not include any untrue statement of material
fact or omit to state any material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading.
(e) At the
Effective Time, MainStay Funds, on behalf of the Acquiring Fund, will have good
and marketable title to the Acquiring Fund’s assets, free of any liens or other
encumbrances.
(f) The
Acquiring Fund is not engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a violation of Delaware
law or a material violation of MainStay Funds’ Declaration of Trust and By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which MainStay Funds, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which MainStay Funds, on behalf of the Acquiring Fund, is
a party or by which it is bound.
(g) Except as
otherwise disclosed to and accepted by World Funds, on behalf of the Acquired
Fund, in writing, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
Acquiring Fund’s knowledge, threatened against MainStay Funds, on behalf of the
Acquiring Fund, or any of the Acquiring Fund’s properties or assets that, if
adversely determined, would materially and adversely affect the Acquiring Fund’s
financial condition or the conduct of its business. MainStay Funds, on behalf of
the Acquiring Fund, knows of no facts which might form the basis for the
institution of such proceedings 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 and adversely affects the Acquiring Fund’s business or its
ability to consummate the transactions herein contemplated.
(h) The
Acquiring Fund was formed for the purpose of effecting the Reorganization and,
prior to the Closing, will have not commenced operations or carried on any
business activity, will have had no assets or liabilities and will have no
issued or outstanding shares other than as described in paragraph 6.1(b) of this
Agreement.
(i) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquiring Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(j) The
Acquiring Fund intends to meet the requirements of Subchapter M of the Code for
qualification and treatment of such Surviving Fund as a regulated investment
company in the future and, from the date of this Agreement until the Closing
Date, shall not take any action inconsistent with such efforts to qualify and be
treated as a regulated investment company under the Code in the
future.
(k) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Trustees of MainStay Funds, on behalf of the Acquiring Fund, and
this Agreement will constitute a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors’ rights and to general equity principles.
(l) The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will at the Effective Time have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares,
will be fully paid and non-assessable by MainStay Funds, and will have been
issued in every jurisdiction in compliance in all material respects with
applicable registration requirements and applicable securities
laws. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquiring Fund, nor is there outstanding any security convertible into any of
the Acquiring Fund’s shares.
(m) The
information to be furnished by the Acquiring Fund for use in the registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including FINRA) that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
(n) The Proxy
Statement, insofar as it relates to the Acquiring Fund and the Acquiring Fund
Shares, will, through the date of the meeting of shareholders of the Acquired
Fund contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(n) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein.
4.3. Representation
and Warranty of New York Life Investments. New York Life Investments represents
and warrants to World Funds, on behalf of the Acquired Fund, and MainStay Funds,
on behalf of the Acquiring Fund, that the execution, delivery and performance of
this Agreement will have been duly authorized prior to the Effective Time by all
necessary action, if any, on the part of New York Life Investments, and this
Agreement will constitute a valid and binding obligation of New York Life
Investments, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
4.4. Representation
and Warranty of Epoch. Epoch represents and warrants to World Funds,
on behalf of the Acquired Fund, and MainStay Funds, on behalf of the Acquiring
Fund, that the execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action, if
any, on the part of Epoch, and this Agreement will constitute a valid and
binding obligation of Epoch, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights and to general equity
principles.
ARTICLE
V
COVENANTS
AND AGREEMENTS
5.1. Conduct
of Business. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course consistent with past practice between the date
hereof and the Effective Time, it being understood that such ordinary course of
business will include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable.
5.2. Meeting
of Shareholders. World Funds will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
5.3. No
Distribution of Acquiring Fund Shares. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
5.4. Information.
The Acquired Fund will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Acquired Fund Shares.
5.5. Other
Necessary Action. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
5.6. Proxy
Statement. The Acquired Fund will provide the Acquiring Fund with information
regarding the Acquired Fund, and the Acquiring Fund will provide the Acquired
Fund with information regarding the Acquiring Fund, reasonably necessary for the
preparation of a proxy statement on Schedule 14A (the “PROXY STATEMENT”), in
compliance with the 1934 Act and the 1940 Act, in connection with the meeting of
the shareholders of the Acquired Fund to consider approval of this Agreement and
the transactions contemplated herein.
5.7. Liquidating
Distribution. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its respective
shareholders consisting of the Acquiring Fund Shares received at the
Closing.
5.8. Best
Efforts. The Acquiring Fund and the Acquired Fund shall each use their
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent set forth in Article VI to effect the transactions contemplated by
this Agreement as promptly as practicable.
5.9. Other
Instruments. World Funds, on behalf of the Acquired Fund, and MainStay Funds, on
behalf of the Acquiring Fund, each covenants that it will, from time to time, as
and when reasonably requested by the other party, 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 party may
reasonably deem necessary or desirable in order to vest in and confirm (a) World
Funds’, on behalf of the Acquired Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and (b) MainStay Funds’, on behalf of the
Acquiring Fund, title to and possession of all the Assets and otherwise to carry
out the intent and purpose of this Agreement.
5.10. Expense
Limitation. From the Closing Date to the second anniversary of the
Closing Date, New York Life Investments agrees to reimburse expenses of Class A
and Class I shares of the Acquiring Fund so that the total ordinary operating
expenses for Class A and Class I shares of the Acquiring Fund do not exceed the
total annual operating expenses of the Class P shares and Institutional shares
of the Acquired Fund (adjusted to reflect any expense limitation agreements then
in effect), respectively, as of the Closing Date. New York Life
Investments may recoup the amount of any expense reimbursements from the
Acquiring Fund if such action does not cause the Acquiring Fund to exceed
existing expense limitations and the recoupment is made within the year in which
New York Life Investments incurred the expense. For purposes of this
paragraph 5.10, The term “total ordinary operating expenses” excludes taxes,
interest, litigation, extraordinary expenses, brokerage and other transaction
expenses relating to the purchase or sale of portfolio investments, and the fees
and expenses of any other funds in which the Acquiring Fund
invests.
5.11. Regulatory
Approvals. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Effective Time.
ARTICLE
VI
CONDITIONS
PRECEDENT
6.1. Conditions
Precedent to Obligations of Acquired Fund. The obligations of World Funds, on
behalf of the Acquired Fund, to consummate the transactions provided for herein
shall be subject, at World Funds’ election, to the following
conditions:
(a) All
representations and warranties of MainStay Funds, on behalf of the Acquiring
Fund, contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective Time, with the
same force and effect as if made on and as of the Effective Time.
(b) Prior to
the Closing Date, (i) the Trustees of the MainStay Funds, on behalf of the
Acquiring Fund, shall have authorized the issuance of and the Acquiring Fund
shall have issued one share to New York Life Investments in consideration of the
payment of $10.00, (ii) New York Life Investments shall have, among other
things, approved as the sole initial shareholder (x) the Investment Advisory
Agreement between MainStay Funds, on behalf of the Acquiring Fund, and New York
Life Investments, (y) the Investment Sub-Advisory Agreement between New York
Life Investments and Epoch and (z) the Acquiring Fund’s adoption of a “manager
of managers” structure, pursuant to which the Acquiring Fund’s investment
adviser is authorized to enter into and amend contracts with investment
sub-advisers without the prior approval of the Acquiring Fund’s shareholders, in
the manner contemplated by the order of the Securities and Exchange Commission
(“SEC”) granting the Acquiring Fund and its investment adviser exemptive relief
from Section 15(a) of the 1940 Act and Rule 18f-2 thereunder (SEC Rel.
40-27656), and (iii) immediately prior to or contemporaneously with the
consummation of the transactions described in this Agreement, the share of the
Acquiring Fund acquired by New York Life Investments has been or is redeemed for
$10.00. Notwithstanding the foregoing, the Acquiring Fund may issue
shares to New York Life Investments or another entity for cash contributions
made in connection with any required initial capital requirements imposed by
Section 14(a) of the 1940 Act.
(c) MainStay
Funds, on behalf of the Acquiring Fund, shall have delivered to the Acquired
Fund a certificate executed in the name of the Acquiring Fund by its President
or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to World Funds, and dated as of the Effective Time, to the effect
that the representations and warranties of MainStay Funds, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as World Funds shall reasonably
request.
(d) MainStay
Funds, on behalf of the Acquiring Fund, shall have performed all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by MainStay Funds, on behalf of the Acquiring
Fund, on or before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The World
Funds shall have received on the Closing Date the opinion of Dechert LLP,
counsel to the MainStay Funds, dated as of the Closing Date, covering the
following points:
(1) The
MainStay Funds is a statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the trust power to own
all of the Acquiring Fund’s properties and assets and to carry on its business,
including that of the Acquiring Fund, as a registered investment
company;
(2) The
Agreement has been duly authorized by MainStay Funds, on behalf of the Acquiring
Fund and, assuming due authorization, execution and delivery of the Agreement by
World Funds, is a valid and binding obligation of MainStay Funds on behalf of
the Acquiring Fund enforceable against the MainStay Funds in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors’ rights generally
and to general equity principles;
(3) The
Acquiring Fund shares to be issued to the Acquired Fund Shareholders as provided
by this Agreement are duly authorized, upon such delivery will be validly issued
and outstanding, and will be fully paid and non-assessable by MainStay Funds and
no shareholder of an Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof;
(4) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of
MainStay Funds’ Declaration of Trust or By-Laws or any provision of any
agreement (known to such counsel) to which MainStay Funds is a party or by which
it is bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty under any agreement, judgment or
decree to which the MainStay Funds is a party or by which it is
bound;
(5) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Delaware is
required to be obtained by MainStay Funds in order to consummate 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;
(6) MainStay
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquiring Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and
(7) To the
knowledge of such counsel, and except as otherwise disclosed to the World Funds
pursuant to paragraph 4.2(g) of this Agreement, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to MainStay Funds or the Acquiring Fund and
neither MainStay Funds nor the Acquiring Fund is 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 its business.
6.2. Conditions
Precedent to Obligations of Acquiring Fund. The obligations of MainStay Funds,
on behalf of the Acquiring Fund, to complete the transactions provided for
herein shall be subject, at MainStay Funds’ election, to the following
conditions:
(a) All
representations and warranties of World Funds, on behalf of the Acquired Fund,
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same force
and effect as if made on and as of the Effective Time.
(b) World
Funds shall have delivered to the Acquiring Fund a statement of the Acquired
Fund’s Assets and Liabilities, as of the Effective Time, that is prepared in
accordance with GAAP and certified by the Treasurer of World Funds.
(c) World
Funds, on behalf of the Acquired Fund, shall have delivered to the Acquiring
Fund a certificate executed in the name of the Acquired Fund by its President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquiring Fund and dated as of the Effective Time, to the
effect that the representations and warranties of World Funds, on behalf of the
Acquired Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as MainStay Funds shall
reasonably request.
(d) World
Funds, on behalf of the Acquired Fund, shall have performed all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by World Funds, on behalf of the Acquired Fund, on or
before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The
MainStay Funds shall have received on the Closing Date the opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the World Funds, covering the following
points:
(1) The World
Funds is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland and has the power to own all of Acquired
Fund’s properties and assets, and to carry on its business, including that of
the Acquired Fund, as a registered investment company;
(2) The
Agreement has been duly authorized by the World Funds, on behalf of the Acquired
Fund, and, assuming due authorization, execution and delivery of the Agreement
by the MainStay Funds, is a valid and binding obligation of the World Funds, on
behalf of the Acquired Fund, enforceable against the World Funds in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and to general equity principles;
(3) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of the
World Funds’ Articles of Incorporation or By-Laws or any provision of any
agreement (known to such counsel) to which the World Funds is a party or by
which it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the World Funds is a party or by which it
is bound;
(4) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Maryland is
required to be obtained by the World Funds in order to consummate 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;
(5) The World
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquired Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(6) To the
knowledge of such counsel, and except as otherwise disclosed to the MainStay
Funds pursuant to paragraph 4.1(h) of this Agreement, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the World Funds or
the Acquired Fund and neither the World Funds nor the Acquired Fund is 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 its
business.
6.3. Other
Conditions Precedent. If any of the conditions set forth in this paragraph 6.3
have not been satisfied on or before the Effective Time, World Funds, on behalf
of the Acquired Fund, or MainStay Funds, on behalf of the Acquiring Fund, shall,
at its option, not be required to consummate the transactions contemplated by
this Agreement.
(a) The
Agreement and the transactions contemplated herein shall have been approved by
the requisite vote of the holders of the outstanding shares of the Acquired Fund
in accordance with the provisions of World Funds’ Articles of Incorporation and
By-Laws, applicable Maryland law and the 1940 Act and the regulations
thereunder, and certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything herein
to the contrary, World Funds and MainStay Funds, on behalf of either the
Acquired Fund or the Acquiring Fund, respectively, may not waive the conditions
set forth in this paragraph 6.3(a).
(b) At the
Effective Time, no action, suit or other proceeding shall be pending or, to the
knowledge of World Funds or MainStay Funds, threatened 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.
(c) All
consents of other parties and all other consents, orders and permits of Federal,
state and local regulatory authorities deemed necessary by World Funds and
MainStay Funds to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund or the
Acquired Fund, provided that either party hereto may for itself waive any of
such conditions.
(d) World
Funds and MainStay Funds shall have received an opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP, in a form acceptable to Dechert LLP, as to federal income tax
matters substantially to the effect that, based on the facts, representations,
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
(1) The
Reorganization will constitute a tax-free reorganization within the meaning of
Section 368(a) of the Code, and the Acquired Fund and the Acquiring Fund will
each be a party to a reorganization within the meaning of Section 368(b) of the
Code.
(2) No gain
or loss will be recognized by the Acquired Fund upon the transfer of all of its
assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the Acquired Fund’s liabilities or
upon the distribution of the Acquiring Fund Shares to the Acquired Fund’s
shareholders in exchange for their shares of the Acquired Fund.
(3) No gain
or loss will be recognized by the Acquiring Fund upon the receipt by it of all
of the assets of the Acquired Fund in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
(4) The
adjusted tax basis of the assets of the Acquired Fund received by the Acquiring
Fund will be the same as the adjusted tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization.
(5) The
holding period of the assets of the Acquired Fund received by the Acquiring Fund
will include the holding period of those assets in the hands of the Acquired
Fund immediately prior to the Reorganization.
(6) No gain
or loss will be recognized by the shareholders of the Acquired Fund upon the
exchange of their Acquired Fund Shares for the Acquiring Fund Shares (including
fractional shares to which they may be entitled) and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund.
(7) The
aggregate adjusted tax basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) pursuant to the Reorganization will be the same as the aggregate
adjusted tax basis of the Acquired Fund Shares held by the Acquired Fund’s
shareholders immediately prior to the Reorganization.
(8) The
holding period of the Acquiring Fund Shares received by the shareholders of the
Acquired Fund (including fractional shares to which they may be entitled) will
include the holding period of the Acquired Fund Shares surrendered in exchange
therefore, provided that the Acquired Fund Shares were held as a capital asset
on the Closing Date.
No
opinion will be expressed as to the effect of the Reorganization on (i) the
Acquired Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting and (ii) any Acquired Fund
or Acquiring Fund shareholder that is required to recognize unrealized gains and
losses for federal income tax purposes under a mark-to-market system of
accounting.
Such
opinion shall be based on customary assumptions, limitations and such
representations as Xxxxxx, Xxxxx & Xxxxxxx LLP may reasonably request, and
the Acquired Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Such opinion may contain such
assumptions and limitations as shall be in the opinion of such counsel
appropriate to render the opinions expressed therein. Notwithstanding
anything herein to the contrary, neither party may waive the condition set forth
in this paragraph 6.3(d).
(e) Brown
Brothers shall have delivered such certificates or other documents as set forth
in paragraph 3.2.
(f) The
Transfer Agent shall have delivered to MainStay Funds a certificate of its
authorized officer as set forth in paragraph 3.3.
(g) The
Acquiring Fund shall have issued and delivered to the Secretary of the Acquired
Fund the confirmation as set forth in paragraph 3.3.
(h) Each
party shall have delivered to the other such bills of sale, checks, assignments,
receipts or other documents as reasonably requested by such other party or its
counsel.
ARTICLE
VII
INDEMNIFICATION
7.1. Indemnification
by MainStay Funds. MainStay Funds, solely out of the Acquiring Fund’s assets and
property, agrees to indemnify and hold harmless World Funds, the Acquired Fund,
and their directors, officers, employees and agents (the “WORLD INDEMNIFIED
PARTIES”) from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which the World Indemnified Parties
may become subject, insofar as such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on any breach by the
Acquiring Fund of any of its representations, warranties, covenants or
agreements set forth in this Agreement, provided that this indemnification shall
not apply to the extent such loss, claim, damage, liability or expense (or
actions with respect thereto) shall be due to any negligent, intentional or
fraudulent act, omission or error of the Acquired Fund, or its respective
directors, officers or agents.
7.2. Indemnification
by World Funds. World Funds, solely out of the Acquired Fund’s assets and
property, agrees to indemnify and hold harmless MainStay Funds, the Acquiring
Fund, and their trustees, officers, employees and agents (the “MAINSTAY
INDEMNIFIED PARTIES”) from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the payment of
reasonable legal fees and reasonable costs of investigation) to which the
MainStay Indemnified Parties may become subject, insofar as such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement, provided that
this indemnification shall not apply to the extent such loss, claim, damage,
liability or expense (or actions with respect thereto) shall be due to any
negligent, intentional or fraudulent act, omission or error of the Acquiring
Fund, or its respective trustees, officers or agents.
7.3. Liability
of World Funds. MainStay Funds understands and agrees that the obligations of
World Funds on behalf of the Acquired Fund under this Agreement shall not be
binding upon any Director, shareholder, nominee, officer, agent or employee of
World Funds on behalf of World Funds personally, but bind only World Funds on
behalf of the Acquired Fund and the Acquired Fund’s property. Moreover, no
series of World Funds other than the Acquired Fund shall be responsible for the
obligations of World Funds hereunder, and all persons shall look only to the
assets of the Acquired Fund to satisfy the obligations of the Acquired Fund
hereunder. MainStay Funds represents that it has notice of the provisions of the
Articles of Incorporation of the World Funds disclaiming such shareholder and
trustee liability for acts or obligations of the Acquired Fund.
7.4. Liability
of MainStay Funds. World Funds understands and agrees that the obligations of
MainStay Funds on behalf of the Acquiring Fund under this Agreement shall not be
binding upon any trustee, shareholder, nominee, officer, agent or employee of
MainStay Funds on behalf of MainStay Funds personally, but bind only MainStay
Funds on behalf of the Acquiring Fund and the Acquiring Fund’s property.
Moreover, no series of MainStay Funds other than the Acquiring Fund shall be
responsible for the obligations of MainStay Funds hereunder, and all persons
shall look only to the assets of the Acquiring Fund to satisfy the obligations
of the Acquiring Fund hereunder. World Funds represents that it has notice of
the provisions of the Declaration of Trust of MainStay Funds disclaiming such
shareholder and trustee liability for acts or obligations of the Acquiring
Fund.
ARTICLE
VIII
BROKERAGE
FEES AND EXPENSES
8.1. No Broker
or Finder Fees. The Acquiring Fund and the Acquired Fund, represent and warrant
to each other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
8.2. Expenses
of Reorganization. The expenses relating to the proposed Reorganization, whether
or not consummated, will be borne by New York Life Investments and Epoch
Investment Partners, Inc. The costs of the Reorganization shall include, but not
be limited to: costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparing and filing the registration statement of the
Acquiring Funds, preparing, printing and distributing the Proxy Statement and
prospectus supplements relating to the Reorganization, and winding down the
operations and terminating the existence of the Acquired Funds; legal fees,
including those incurred in connection with the preparation of legal opinions,
and accounting fees with respect to the Reorganization and the Proxy Statement;
expenses of soliciting proxies from Acquired Fund Shareholders and holding
shareholder meetings; and all necessary taxes in connection with the delivery of
the Assets, including all applicable federal and state stock transfer stamps.
Notwithstanding any of the foregoing, expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
another person of such expenses would result in the disqualification of such
party as a “regulated investment company” within the meaning of Section 851 of
the Code.
ARTICLE
IX
AMENDMENTS
AND TERMINATION
9.1. Amendments.
This Agreement may be amended, modified or supplemented in such manner as may be
deemed necessary or advisable by the authorized officers of World Funds or
MainStay Funds, on behalf of either the Acquired Fund or the Acquiring Fund,
respectively; provided, however, that following the approval of this Agreement
by the shareholders of the Acquired Fund pursuant to paragraph 6.3(a) of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
9.2. Termination.
This Agreement may be terminated and the transactions contemplated hereby may be
abandoned by resolution of the Board of Directors of World Funds or the Board of
Trustees of MainStay Funds, on behalf of the Acquired Fund or the Acquiring
Fund, respectively, at any time prior to the Effective Time, if circumstances
should develop that, in the opinion of such Board of Directors or Board of
Trustees, as the case may be, make proceeding with the Agreement
inadvisable.
ARTICLE
X
NOTICES
Any
notice, report, statement or demand required or permitted by any provisions of
this Agreement shall be in writing and shall be given by facsimile, electronic
delivery (i.e., e-mail) personal service or prepaid or certified mail addressed
as follows:
|
If
to World Funds:
|
|
The
World Funds, Inc.
|
|
0000
Xxxxx Xxxxx Xxxxxxx – Xxxxx 000
|
|
Richmond,
Virginia 23235
|
|
Attention:
Xxxx Xxxxx, III
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx@xxxxxx.xxx
|
|
With
copies (which shall not constitute notice) to:
|
|
Xxxxxx,
Xxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
|
|
Attention:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxx@xxxxxxxxxxx.xxx
|
|
If
to MainStay Funds:
|
|
The
MainStay Funds
|
|
00
Xxxxxxx Xxxxxx
|
|
New
York, New York 10010
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
|
With
a copy (which shall not constitute notice) to:
|
|
Dechert
LLP
|
|
0000
X Xxxxxx, X.X.
|
|
Washington,
D.C. 20006
|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx.xxxxxx@xxxxxxx.xxx
|
|
If
to New York Life Investments:
|
|
New
York Life Investment Management LLC
|
|
000
Xxxxxxxxxx Xxxxxx
|
|
Parsippany,
New Jersey 07054
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
ARTICLE
XI
MISCELLANEOUS
11.1. Entire
Agreement. MainStay Funds and World Funds agree that they have not made any
representation, warranty or covenant, on behalf of either the Acquiring Fund or
the Acquired Fund, respectively, not set forth herein, and that this Agreement
constitutes the entire agreement between the parties.
11.2. Survival.
The representations, warranties and covenants contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith, and the
obligations with respect to indemnification of the Acquired Fund and Acquiring
Fund contained in paragraphs 7.1 and 7.2, shall survive the
Closing.
11.3. Headings.
The Article and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
11.4. Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to its principles of conflicts of
laws.
11.5. Assignment.
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.
11.6. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all taken together shall constitute one
agreement.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the 13th day of November, 2009.
|
ON
BEHALF OF THE ACQUIRING FUND
|
THE
WORLD FUNDS, INC.
ON
BEHALF OF THE ACQUIRED FUND
|
|
By: /s/
Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: President
|
By: /s/
Xxxx Xxxxx XXX
Name: Xxxx
Xxxxx XXX
Title: President
|
|
Solely
for purposes of paragraphs 4.3, 5.10, 6.1 and 8.2:
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
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Solely
for purposes of paragraphs 4.4 and 8.2:
EPOCH
INVESTMENT PARTNERS, INC.
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By: /s/
Xxxxx X. Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Executive
Vice President
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By: /s/
T.T. Taussig
Name: T.
T. Xxxxxxx
Title: President
and COO
|
Epoch
International Cap Fund acquired by MainStay Epoch International Small Cap
Fund
This
Agreement and Plan of Reorganization (“AGREEMENT”) is made as of November 13,
2009, by and between The World Funds, Inc., a Maryland corporation (“WORLD
FUNDS”), on behalf of its investment portfolio, the Epoch International Small
Cap Fund (the “ACQUIRED FUND”), and MainStay Funds Trust, a Delaware
statutory trust (“MAINSTAY FUNDS”), on behalf of its investment portfolio, the
MainStay Epoch International Small Cap Fund (the “ACQUIRING FUND” and, together
with the Acquired Fund, the “FUNDS”). New York Life Investment Management LLC, a
limited liability company organized under the laws of the State of New York
(“NEW YORK LIFE INVESTMENTS”), joins this Agreement solely for purposes of
paragraphs 4.3, 5.10, 6.1 and 8.2, and Epoch Investment Partners, Inc., a
corporation organized under the laws of the State of Delaware (“EPOCH”), joins
this Agreement solely for purposes of paragraphs 4.4 and 8.2.
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 will consist of the transfer of all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for
Class A shares and Class I shares of beneficial interest of the Acquiring Fund
(the “ACQUIRING FUND SHARES”), the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund specified in paragraph 1.3, and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement (the
“REORGANIZATION”).
The Board
of Directors of World Funds has determined, with respect to the Acquired Fund,
that (1) participation in the Reorganization is in the best interests of the
Acquired Fund and its shareholders, and (2) the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of the
Reorganization. The Board of Trustees of MainStay Funds has determined, with
respect to the Acquiring Fund, that (1) participation in the Reorganization is
in the best interests of the Acquiring Fund and its shareholders, and (2) the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of the Reorganization.
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE
XII
THE
REORGANIZATION AND FUND TRANSACTIONS
12.1. The
Reorganization. Subject to the requisite approval of the Acquired Fund’s
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, at the Effective
Time (as defined in paragraph 2.5), World Funds shall assign, deliver and
otherwise transfer the Assets (as defined in paragraph 1.2) of the Acquired
Fund, to MainStay Funds on behalf of the Acquiring Fund, and MainStay Funds
shall assume the Liabilities (as defined in paragraph 1.3) of the Acquired Fund
on behalf of the Acquiring Fund. In consideration of the foregoing,
at the Effective Time, MainStay Funds shall, on behalf of the Acquiring Fund,
deliver to World Funds on behalf of the Acquired Fund, full and fractional
Acquiring Fund Shares (to the third decimal place). Holders of Class
P shares and Institutional Class shares of the Acquired Fund will receive Class
A shares and Class I shares, respectively, of the Acquiring Fund. The
number of Acquiring Fund Shares to be delivered shall be determined as set forth
in paragraph 2.3.
12.2. Assets of
the Acquired Fund. The assets of the Acquired Fund to be acquired by
the Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, cash equivalents, securities, receivables (including
securities, interests and dividends receivable), commodities and futures
interests, rights to register shares under applicable securities laws, any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
at the Effective Time, books and records, and any other property owned by the
Acquired Fund at the Effective Time (collectively, the “ASSETS”).
12.3. Liabilities
of the Acquired Fund. The Acquired Fund will use commercially reasonable efforts
to discharge all of its known liabilities and obligations prior to the Effective
Time. The Acquiring Fund will assume all of the Acquired Fund’s
liabilities and obligations of any kind whatsoever, whether known or unknown,
absolute, accrued, contingent or otherwise, in existence on the Closing Date
(collectively, the “LIABILITIES”).
12.4. Distribution
of Acquiring Fund Shares. At the Effective Time (or as soon thereafter as is
reasonably practicable), World Funds, on behalf of the Acquired Fund, will
distribute the Acquiring Fund Shares received from MainStay Funds pursuant to
paragraph 1.1, pro rata to the record holders of the shares of the Acquired Fund
determined as of the Effective Time (the “ACQUIRED FUND SHAREHOLDERS”) in
complete liquidation of the Acquired Fund. Such distribution and
liquidation will be accomplished by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund Shareholders. The aggregate net asset value of the
Acquiring Fund Shares to be so credited to Acquired Fund Shareholders shall be
equal to the aggregate net asset value of the then outstanding shares of
beneficial interest of the Acquired Fund (the “ACQUIRED FUND SHARES”) owned by
Acquired Fund Shareholders at the Effective Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be redeemed and
canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
12.5. Recorded
Ownership of Acquiring Fund Shares. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund’s Transfer Agent (as defined in
paragraph 3.3).
12.6. Filing
Responsibilities of Acquired Fund. Any reporting responsibility of
the Acquired Fund, including, but not limited to, the responsibility for filing
regulatory reports, tax returns, or other documents with the Securities and
Exchange Commission (“COMMISSION”), any state securities commission, and any
Federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Acquired
Fund.
ARTICLE
XIII
VALUATION
13.1. Net Asset
Value of the Acquired Fund. The net asset value of the Acquired Fund
Shares shall be the net asset value computed as of the Effective Time, after the
declaration and payment of any dividends and/or other distributions on that
date, using the valuation procedures described in the then-current prospectuses
and statement of additional information of the Acquiring Fund.
13.2. Net Asset
Value of the Acquiring Fund. The net asset value of the Acquiring
Fund Shares shall be the same as the net asset value of the Acquired Fund Shares
as computed in paragraph 2.1.
13.3. Calculation
of Number of Acquiring Fund Shares. The number of Class A shares and Class I
shares of the Acquiring Fund to be issued (including fractional shares to the
third decimal place, if any) in connection with the Reorganization shall be
equal to the number of Class P shares and Institutional Class shares,
respectively, owned by Acquired Fund Shareholders at the Effective
Time.
13.4. Joint
Direction of Calculation. All computations of value with respect to both the
Acquired Fund and the Acquiring Fund shall be made by State Street Bank and
Trust Company (“STATE STREET”), in its capacity as accounting agent for the
MainStay Funds. Such computations shall be evaluated by New York Life
Investments, in its capacity as administrator for the Funds, in consultation
with Epoch, the investment adviser to the Acquired Fund. Such
computations shall be subject to confirmation by the Acquired Fund’s and
Acquiring Fund’s respective transfer agents and independent
accountants.
13.5. Effective
Time. The Effective Time shall be the time at which the Funds
calculate their net asset values as set forth in their respective prospectuses
(normally the close of regular trading on the New York Stock Exchange (“NYSE”))
on the Closing Date (as defined in paragraph 3.1) (the “EFFECTIVE
TIME”).
ARTICLE
XIV
CLOSING
14.1. Closing.
The Reorganization, together with related acts necessary to consummate the same
(“CLOSING”), shall occur at the principal office of New York Life Investments on
or about November 13, 2009, or at such other place and/or on such other date as
to which the parties may agree (the “CLOSING DATE”). All acts taking
place at the Closing shall be deemed to take place simultaneously as of the
Effective Time.
14.2. Transfer
and Delivery of Assets. World Funds shall direct Brown Brothers Xxxxxxxx &
Co. (“BROWN BROTHERS”), as custodian for the Acquired Fund, to deliver, at the
Closing, a certificate of an authorized officer stating that (i) the Assets were
delivered in proper form to the Acquiring Fund at the Effective Time, and (ii)
all necessary taxes in connection 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. The Acquired Fund’s portfolio
securities represented by a certificate or other written instrument shall be
presented by Brown Brothers to State Street, as custodian for the Acquiring
Fund. Such presentation shall be made for examination no later than
five (5) business days preceding the Effective Time, and shall be transferred
and delivered by the Acquired Fund as of the Effective Time for the account of
the Acquiring Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. Brown Brothers shall deliver
to State Street as of the Effective Time by book entry, in accordance with the
customary practices of State Street and of each securities depository, as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the
“1940 ACT”), in which the Acquired Fund’s Assets are deposited, the Acquired
Fund’s Assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer of Federal
funds at the Effective Time.
14.3. Share
Records. World Funds shall direct Commonwealth Fund Services, Inc., in its
capacity as transfer agent for the Acquired Fund (the “TRANSFER AGENT”), to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding Acquired Fund Shares owned by
each such Acquired Fund Shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver to the Secretary
of the Acquired Fund prior to the Effective Time a confirmation evidencing that
the appropriate number of Acquiring Fund Shares will be credited to the Acquired
Fund at the Effective Time, or provide other evidence satisfactory to the
Acquired Fund as of the Effective Time that such Acquiring Fund Shares have been
credited to the Acquired Fund’s accounts on the books of the Acquiring
Fund.
14.4. Postponement
of Effective Time. In the event that at the Effective Time the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund (each, an “EXCHANGE”) shall be closed to trading or trading
thereupon 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 the
Board of Directors of World Funds or the Board of Trustees of MainStay Funds,
accurate appraisal of the value of the net assets of the Acquired Fund or the
Acquiring Fund, respectively, is impracticable, the Effective Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
ARTICLE
XV
REPRESENTATIONS
AND WARRANTIES
15.1. Representations
and Warranties of World Funds. Except as has been fully disclosed to the
Acquiring Fund in a written instrument executed by an officer of World Funds,
World Funds, on behalf of the Acquired Fund, represents and warrants to MainStay
Funds, on behalf of the Acquiring Fund, as follows:
(a) The
Acquired Fund is a duly established series of World Funds, which is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, with power under World Funds’ Articles of
Incorporation and By-Laws, each as amended from time to time, to own all of its
properties and assets and to carry on its business as it is presently
conducted.
(b) World
Funds is registered with the Commission as an open-end management investment
company under the 1940 Act, and the registration of the Acquired Fund Shares
under the Securities Act of 1933, as amended (the “1933 ACT”), is in full force
and effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by World Funds on behalf of the
Acquired Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the “1934 ACT”), and the 1940 Act, and such as may be required under state
securities laws.
(d) The
current prospectuses, statement of additional information, shareholder reports,
marketing and other related materials of the Acquired Fund and each prospectus
and statement of additional information of the Acquired Fund used at all times
prior to the date of this Agreement conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder and does not
or did not at the time of its use 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 materially misleading.
(e) At the
Effective Time, World Funds, on behalf of the Acquired Fund, will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, MainStay Funds, on
behalf of the Acquiring Fund, will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act.
(f) World
Funds is not engaged currently, and the execution, delivery and performance of
this Agreement will not result, in (i) a violation of Maryland Law or a material
violation of its Articles of Incorporation and By-Laws, or of any agreement,
indenture, instrument, contract, lease or other undertaking to which World
Funds, on behalf of the Acquired Fund, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or decree to
which World Funds, on behalf of the Acquired Fund, is a party or by which it is
bound.
(g) All
material contracts or other commitments of the Acquired Fund (other than this
Agreement and certain investment contracts, including options, futures, forward
contracts and other similar instruments) will terminate without liability or
obligation to the Acquired Fund on or prior to the Effective Time.
(h) Except as
otherwise disclosed to and accepted by MainStay Funds, on behalf of the
Acquiring Fund, in writing, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against the Acquired Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its
business. World Funds, on behalf of the Acquired Fund, knows of no
facts which might form the basis for the institution of such proceedings 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 and adversely affects its
business or its ability to consummate the transactions herein
contemplated.
(i) The
Statement of Assets and Liabilities, Statements of Operations and Changes in Net
Assets, and Schedule of Investments of the Acquired Fund at December 31, 2008
have been audited by Xxxx, Xxxxxx & Xxxxx LLP, independent registered public
accounting firm, and are in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) consistently applied, and such
statements (copies of which have been furnished to the Acquiring Fund) present
fairly, in all material respects, the financial condition of the Acquired Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein.
(j) Since
December 31, 2008, there has not been any material adverse change in the
Acquired Fund’s financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund in writing. For the purposes of this subparagraph (j),
a decline in net asset value per share of Acquired Fund Shares due to declines
in market values of securities held by the Acquired Fund, the discharge of the
Acquired Fund’s liabilities, or the redemption of the Acquired Fund’s shares by
shareholders of the Acquired Fund shall not constitute a material adverse
change.
(k) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquired Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquired Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(l) For each
taxable year of its operation (including the taxable year ending at the
Effective Time), the Acquired Fund has met (or will meet) the requirements of
Subchapter M of Chapter 1 of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code.
(m) All of
the issued and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Fund, nor is there outstanding any security convertible into any of the
Acquired Fund’s shares.
(n) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Directors of World Funds, on behalf of the Acquired Fund, and,
subject to the approval of the shareholders of the Acquired Fund, this Agreement
will constitute a valid and binding obligation of World Funds on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
(o) The
information to be furnished by the Acquired Fund for use in registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including the Financial Industry
Regulatory Authority (“FINRA”)), which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and complete in all material
respects and shall comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
(p) The Proxy
Statement (as defined in paragraph 5.6), insofar as it relates to the Acquired
Fund, will, through the date of the meeting of the Acquired Fund Shareholders
contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquiring Fund for use therein.
15.2. Representations
and Warranties of MainStay Funds. Except as has been fully disclosed to the
Acquired Fund in a written instrument executed by an officer of MainStay Funds,
MainStay Funds, on behalf of the Acquiring Fund, represents and warrants to
World Funds, on behalf of the Acquired Fund, as follows:
(a) The
Acquiring Fund is a duly established series of MainStay Funds Trust, which is a
statutory trust duly organized, validly existing, and in good standing under the
laws of the State of Delaware with power under its Declaration of Trust and
By-Laws, each as amended from time to time, to own all of its properties and
assets and to carry on its business as it is presently conducted.
(b) At the
Effective Time, MainStay Funds will be registered with the Commission as an
open-end management investment company under the 1940 Act, and the registration
of the Acquiring Fund Shares under the 1933 Act will be in full force and
effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by MainStay Funds on behalf of the
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.
(d) The
preliminary prospectus and statement of additional information of the Acquiring
Fund filed with the Commission on July 30, 2009 as part of the MainStay Funds’
registration statement on Form N-1A, which will become effective prior to the
Closing Date, conforms and, as of its effective date, will conform in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder, and does not
and, as of its effective date, will not include any untrue statement of material
fact or omit to state any material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading.
(e) At the
Effective Time, MainStay Funds, on behalf of the Acquiring Fund, will have good
and marketable title to the Acquiring Fund’s assets, free of any liens or other
encumbrances.
(f) The
Acquiring Fund is not engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a violation of Delaware
law or a material violation of MainStay Funds’ Declaration of Trust and By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which MainStay Funds, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which MainStay Funds, on behalf of the Acquiring Fund, is
a party or by which it is bound.
(g) Except as
otherwise disclosed to and accepted by World Funds, on behalf of the Acquired
Fund, in writing, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
Acquiring Fund’s knowledge, threatened against MainStay Funds, on behalf of the
Acquiring Fund, or any of the Acquiring Fund’s properties or assets that, if
adversely determined, would materially and adversely affect the Acquiring Fund’s
financial condition or the conduct of its business. MainStay Funds, on behalf of
the Acquiring Fund, knows of no facts which might form the basis for the
institution of such proceedings 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 and adversely affects the Acquiring Fund’s business or its
ability to consummate the transactions herein contemplated.
(h) The
Acquiring Fund was formed for the purpose of effecting the Reorganization and,
prior to the Closing, will have not commenced operations or carried on any
business activity, will have had no assets or liabilities and will have no
issued or outstanding shares other than as described in paragraph 6.1(b) of this
Agreement.
(i) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquiring Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(j) The
Acquiring Fund intends to meet the requirements of Subchapter M of the Code for
qualification and treatment of such Surviving Fund as a regulated investment
company in the future and, from the date of this Agreement until the Closing
Date, shall not take any action inconsistent with such efforts to qualify and be
treated as a regulated investment company under the Code in the
future.
(k) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Trustees of MainStay Funds, on behalf of the Acquiring Fund, and
this Agreement will constitute a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors’ rights and to general equity principles.
(l) The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will at the Effective Time have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares,
will be fully paid and non-assessable by MainStay Funds, and will have been
issued in every jurisdiction in compliance in all material respects with
applicable registration requirements and applicable securities
laws. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquiring Fund, nor is there outstanding any security convertible into any of
the Acquiring Fund’s shares.
(m) The
information to be furnished by the Acquiring Fund for use in the registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including FINRA) that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
(n) The Proxy
Statement, insofar as it relates to the Acquiring Fund and the Acquiring Fund
Shares, will, through the date of the meeting of shareholders of the Acquired
Fund contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(n) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein.
15.3. Representation
and Warranty of New York Life Investments. New York Life Investments represents
and warrants to World Funds, on behalf of the Acquired Fund, and MainStay Funds,
on behalf of the Acquiring Fund, that the execution, delivery and performance of
this Agreement will have been duly authorized prior to the Effective Time by all
necessary action, if any, on the part of New York Life Investments, and this
Agreement will constitute a valid and binding obligation of New York Life
Investments, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
15.4. Representation
and Warranty of Epoch. Epoch represents and warrants to World Funds,
on behalf of the Acquired Fund, and MainStay Funds, on behalf of the Acquiring
Fund, that the execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action, if
any, on the part of Epoch, and this Agreement will constitute a valid and
binding obligation of Epoch, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights and to general equity
principles.
ARTICLE
XVI
COVENANTS
AND AGREEMENTS
16.1. Conduct
of Business. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course consistent with past practice between the date
hereof and the Effective Time, it being understood that such ordinary course of
business will include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable.
16.2. Meeting
of Shareholders. World Funds will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
16.3. No
Distribution of Acquiring Fund Shares. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
16.4. Information.
The Acquired Fund will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Acquired Fund Shares.
16.5. Other
Necessary Action. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
16.6. Proxy
Statement. The Acquired Fund will provide the Acquiring Fund with information
regarding the Acquired Fund, and the Acquiring Fund will provide the Acquired
Fund with information regarding the Acquiring Fund, reasonably necessary for the
preparation of a proxy statement on Schedule 14A (the “PROXY STATEMENT”), in
compliance with the 1934 Act and the 1940 Act, in connection with the meeting of
the shareholders of the Acquired Fund to consider approval of this Agreement and
the transactions contemplated herein.
16.7. Liquidating
Distribution. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its respective
shareholders consisting of the Acquiring Fund Shares received at the
Closing.
16.8. Best
Efforts. The Acquiring Fund and the Acquired Fund shall each use their
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent set forth in Article VI to effect the transactions contemplated by
this Agreement as promptly as practicable.
16.9. Other
Instruments. World Funds, on behalf of the Acquired Fund, and MainStay Funds, on
behalf of the Acquiring Fund, each covenants that it will, from time to time, as
and when reasonably requested by the other party, 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 party may
reasonably deem necessary or desirable in order to vest in and confirm (a) World
Funds’, on behalf of the Acquired Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and (b) MainStay Funds’, on behalf of the
Acquiring Fund, title to and possession of all the Assets and otherwise to carry
out the intent and purpose of this Agreement.
16.10. Expense
Limitation. From the Closing Date to the second anniversary of the
Closing Date, New York Life Investments agrees to reimburse expenses of Class A
and Class I shares of the Acquiring Fund so that the total ordinary operating
expenses for Class A and Class I shares of the Acquiring Fund do not exceed the
total annual operating expenses of the Class P shares and Institutional shares
of the Acquired Fund (adjusted to reflect any expense limitation agreements then
in effect), respectively, as of the Closing Date. New York Life
Investments may recoup the amount of any expense reimbursements from the
Acquiring Fund if such action does not cause the Acquiring Fund to exceed
existing expense limitations and the recoupment is made within the year in which
New York Life Investments incurred the expense. For purposes of this
paragraph 5.10, The term “total ordinary operating expenses” excludes taxes,
interest, litigation, extraordinary expenses, brokerage and other transaction
expenses relating to the purchase or sale of portfolio investments, and the fees
and expenses of any other funds in which the Acquiring Fund
invests.
16.11. Regulatory
Approvals. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Effective Time.
ARTICLE
XVII
CONDITIONS
PRECEDENT
17.1. Conditions
Precedent to Obligations of Acquired Fund. The obligations of World Funds, on
behalf of the Acquired Fund, to consummate the transactions provided for herein
shall be subject, at World Funds’ election, to the following
conditions:
(a) All
representations and warranties of MainStay Funds, on behalf of the Acquiring
Fund, contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective Time, with the
same force and effect as if made on and as of the Effective Time.
(b) Prior to
the Closing Date, (i) the Trustees of the MainStay Funds, on behalf of the
Acquiring Fund, shall have authorized the issuance of and the Acquiring Fund
shall have issued one share to New York Life Investments in consideration of the
payment of $10.00, (ii) New York Life Investments shall have, among other
things, approved as the sole initial shareholder (x) the Investment Advisory
Agreement between MainStay Funds, on behalf of the Acquiring Fund, and New York
Life Investments, (y) the Investment Sub-Advisory Agreement between New York
Life Investments and Epoch and (z) the Acquiring Fund’s adoption of a “manager
of managers” structure, pursuant to which the Acquiring Fund’s investment
adviser is authorized to enter into and amend contracts with investment
sub-advisers without the prior approval of the Acquiring Fund’s shareholders, in
the manner contemplated by the order of the Securities and Exchange Commission
(“SEC”) granting the Acquiring Fund and its investment adviser exemptive relief
from Section 15(a) of the 1940 Act and Rule 18f-2 thereunder (SEC Rel.
40-27656), and (iii) immediately prior to or contemporaneously with the
consummation of the transactions described in this Agreement, the share of the
Acquiring Fund acquired by New York Life Investments has been or is redeemed for
$10.00. Notwithstanding the foregoing, the Acquiring Fund may issue
shares to New York Life Investments or another entity for cash contributions
made in connection with any required initial capital requirements imposed by
Section 14(a) of the 1940 Act.
(c) MainStay
Funds, on behalf of the Acquiring Fund, shall have delivered to the Acquired
Fund a certificate executed in the name of the Acquiring Fund by its President
or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to World Funds, and dated as of the Effective Time, to the effect
that the representations and warranties of MainStay Funds, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as World Funds shall reasonably
request.
(d) MainStay
Funds, on behalf of the Acquiring Fund, shall have performed all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by MainStay Funds, on behalf of the Acquiring
Fund, on or before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The World
Funds shall have received on the Closing Date the opinion of Dechert LLP,
counsel to the MainStay Funds, dated as of the Closing Date, covering the
following points:
(1) The
MainStay Funds is a statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the trust power to own
all of the Acquiring Fund’s properties and assets and to carry on its business,
including that of the Acquiring Fund, as a registered investment
company;
(2) The
Agreement has been duly authorized by MainStay Funds, on behalf of the Acquiring
Fund and, assuming due authorization, execution and delivery of the Agreement by
World Funds, is a valid and binding obligation of MainStay Funds on behalf of
the Acquiring Fund enforceable against the MainStay Funds in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors’ rights generally
and to general equity principles;
(3) The
Acquiring Fund shares to be issued to the Acquired Fund Shareholders as provided
by this Agreement are duly authorized, upon such delivery will be validly issued
and outstanding, and will be fully paid and non-assessable by MainStay Funds and
no shareholder of an Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof;
(4) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of
MainStay Funds’ Declaration of Trust or By-Laws or any provision of any
agreement (known to such counsel) to which MainStay Funds is a party or by which
it is bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty under any agreement, judgment or
decree to which the MainStay Funds is a party or by which it is
bound;
(5) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Delaware is
required to be obtained by MainStay Funds in order to consummate 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;
(6) MainStay
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquiring Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and
(7) To the
knowledge of such counsel, and except as otherwise disclosed to the World Funds
pursuant to paragraph 4.2(g) of this Agreement, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to MainStay Funds or the Acquiring Fund and
neither MainStay Funds nor the Acquiring Fund is 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 its business.
17.2. Conditions
Precedent to Obligations of Acquiring Fund. The obligations of MainStay Funds,
on behalf of the Acquiring Fund, to complete the transactions provided for
herein shall be subject, at MainStay Funds’ election, to the following
conditions:
(a) All
representations and warranties of World Funds, on behalf of the Acquired Fund,
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same force
and effect as if made on and as of the Effective Time.
(b) World
Funds shall have delivered to the Acquiring Fund a statement of the Acquired
Fund’s Assets and Liabilities, as of the Effective Time, that is prepared in
accordance with GAAP and certified by the Treasurer of World Funds.
(c) World
Funds, on behalf of the Acquired Fund, shall have delivered to the Acquiring
Fund a certificate executed in the name of the Acquired Fund by its President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquiring Fund and dated as of the Effective Time, to the
effect that the representations and warranties of World Funds, on behalf of the
Acquired Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as MainStay Funds shall
reasonably request.
(d) World
Funds, on behalf of the Acquired Fund, shall have performed all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by World Funds, on behalf of the Acquired Fund, on or
before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The
MainStay Funds shall have received on the Closing Date the opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the World Funds, covering the following
points:
(1) The World
Funds is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland and has the power to own all of Acquired
Fund’s properties and assets, and to carry on its business, including that of
the Acquired Fund, as a registered investment company;
(2) The
Agreement has been duly authorized by the World Funds, on behalf of the Acquired
Fund, and, assuming due authorization, execution and delivery of the Agreement
by the MainStay Funds, is a valid and binding obligation of the World Funds, on
behalf of the Acquired Fund, enforceable against the World Funds in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and to general equity principles;
(3) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of the
World Funds’ Articles of Incorporation or By-Laws or any provision of any
agreement (known to such counsel) to which the World Funds is a party or by
which it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the World Funds is a party or by which it
is bound;
(4) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Maryland is
required to be obtained by the World Funds in order to consummate 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;
(5) The World
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquired Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(6) To the
knowledge of such counsel, and except as otherwise disclosed to the MainStay
Funds pursuant to paragraph 4.1(h) of this Agreement, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the World Funds or
the Acquired Fund and neither the World Funds nor the Acquired Fund is 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 its
business.
17.3. Other
Conditions Precedent. If any of the conditions set forth in this paragraph 6.3
have not been satisfied on or before the Effective Time, World Funds, on behalf
of the Acquired Fund, or MainStay Funds, on behalf of the Acquiring Fund, shall,
at its option, not be required to consummate the transactions contemplated by
this Agreement.
(a) The
Agreement and the transactions contemplated herein shall have been approved by
the requisite vote of the holders of the outstanding shares of the Acquired Fund
in accordance with the provisions of World Funds’ Articles of Incorporation and
By-Laws, applicable Maryland law and the 1940 Act and the regulations
thereunder, and certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything herein
to the contrary, World Funds and MainStay Funds, on behalf of either the
Acquired Fund or the Acquiring Fund, respectively, may not waive the conditions
set forth in this paragraph 6.3(a).
(b) At the
Effective Time, no action, suit or other proceeding shall be pending or, to the
knowledge of World Funds or MainStay Funds, threatened 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.
(c) All
consents of other parties and all other consents, orders and permits of Federal,
state and local regulatory authorities deemed necessary by World Funds and
MainStay Funds to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund or the
Acquired Fund, provided that either party hereto may for itself waive any of
such conditions.
(d) World
Funds and MainStay Funds shall have received an opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP, in a form acceptable to Dechert LLP, as to federal income tax
matters substantially to the effect that, based on the facts, representations,
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
(1) The
Reorganization will constitute a tax-free reorganization within the meaning of
Section 368(a) of the Code, and the Acquired Fund and the Acquiring Fund will
each be a party to a reorganization within the meaning of Section 368(b) of the
Code.
(2) No gain
or loss will be recognized by the Acquired Fund upon the transfer of all of its
assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the Acquired Fund’s liabilities or
upon the distribution of the Acquiring Fund Shares to the Acquired Fund’s
shareholders in exchange for their shares of the Acquired Fund.
(3) No gain
or loss will be recognized by the Acquiring Fund upon the receipt by it of all
of the assets of the Acquired Fund in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
(4) The
adjusted tax basis of the assets of the Acquired Fund received by the Acquiring
Fund will be the same as the adjusted tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization.
(5) The
holding period of the assets of the Acquired Fund received by the Acquiring Fund
will include the holding period of those assets in the hands of the Acquired
Fund immediately prior to the Reorganization.
(6) No gain
or loss will be recognized by the shareholders of the Acquired Fund upon the
exchange of their Acquired Fund Shares for the Acquiring Fund Shares (including
fractional shares to which they may be entitled) and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund.
(7) The
aggregate adjusted tax basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) pursuant to the Reorganization will be the same as the aggregate
adjusted tax basis of the Acquired Fund Shares held by the Acquired Fund’s
shareholders immediately prior to the Reorganization.
(8) The
holding period of the Acquiring Fund Shares received by the shareholders of the
Acquired Fund (including fractional shares to which they may be entitled) will
include the holding period of the Acquired Fund Shares surrendered in exchange
therefore, provided that the Acquired Fund Shares were held as a capital asset
on the Closing Date.
No
opinion will be expressed as to the effect of the Reorganization on (i) the
Acquired Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting and (ii) any Acquired Fund
or Acquiring Fund shareholder that is required to recognize unrealized gains and
losses for federal income tax purposes under a mark-to-market system of
accounting.
Such
opinion shall be based on customary assumptions, limitations and such
representations as Xxxxxx, Xxxxx & Xxxxxxx LLP may reasonably request, and
the Acquired Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Such opinion may contain such
assumptions and limitations as shall be in the opinion of such counsel
appropriate to render the opinions expressed therein. Notwithstanding
anything herein to the contrary, neither party may waive the condition set forth
in this paragraph 6.3(d).
(e) Brown
Brothers shall have delivered such certificates or other documents as set forth
in paragraph 3.2.
(f) The
Transfer Agent shall have delivered to MainStay Funds a certificate of its
authorized officer as set forth in paragraph 3.3.
(g) The
Acquiring Fund shall have issued and delivered to the Secretary of the Acquired
Fund the confirmation as set forth in paragraph 3.3.
(h) Each
party shall have delivered to the other such bills of sale, checks, assignments,
receipts or other documents as reasonably requested by such other party or its
counsel.
ARTICLE
XVIII
INDEMNIFICATION
18.1. Indemnification
by MainStay Funds. MainStay Funds, solely out of the Acquiring Fund’s assets and
property, agrees to indemnify and hold harmless World Funds, the Acquired Fund,
and their directors, officers, employees and agents (the “WORLD INDEMNIFIED
PARTIES”) from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which the World Indemnified Parties
may become subject, insofar as such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on any breach by the
Acquiring Fund of any of its representations, warranties, covenants or
agreements set forth in this Agreement, provided that this indemnification shall
not apply to the extent such loss, claim, damage, liability or expense (or
actions with respect thereto) shall be due to any negligent, intentional or
fraudulent act, omission or error of the Acquired Fund, or its respective
directors, officers or agents.
18.2. Indemnification
by World Funds. World Funds, solely out of the Acquired Fund’s assets and
property, agrees to indemnify and hold harmless MainStay Funds, the Acquiring
Fund, and their trustees, officers, employees and agents (the “MAINSTAY
INDEMNIFIED PARTIES”) from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the payment of
reasonable legal fees and reasonable costs of investigation) to which the
MainStay Indemnified Parties may become subject, insofar as such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement, provided that
this indemnification shall not apply to the extent such loss, claim, damage,
liability or expense (or actions with respect thereto) shall be due to any
negligent, intentional or fraudulent act, omission or error of the Acquiring
Fund, or its respective trustees, officers or agents.
18.3. Liability
of World Funds. MainStay Funds understands and agrees that the obligations of
World Funds on behalf of the Acquired Fund under this Agreement shall not be
binding upon any Director, shareholder, nominee, officer, agent or employee of
World Funds on behalf of World Funds personally, but bind only World Funds on
behalf of the Acquired Fund and the Acquired Fund’s property. Moreover, no
series of World Funds other than the Acquired Fund shall be responsible for the
obligations of World Funds hereunder, and all persons shall look only to the
assets of the Acquired Fund to satisfy the obligations of the Acquired Fund
hereunder. MainStay Funds represents that it has notice of the provisions of the
Articles of Incorporation of the World Funds disclaiming such shareholder and
trustee liability for acts or obligations of the Acquired Fund.
18.4. Liability
of MainStay Funds. World Funds understands and agrees that the obligations of
MainStay Funds on behalf of the Acquiring Fund under this Agreement shall not be
binding upon any trustee, shareholder, nominee, officer, agent or employee of
MainStay Funds on behalf of MainStay Funds personally, but bind only MainStay
Funds on behalf of the Acquiring Fund and the Acquiring Fund’s property.
Moreover, no series of MainStay Funds other than the Acquiring Fund shall be
responsible for the obligations of MainStay Funds hereunder, and all persons
shall look only to the assets of the Acquiring Fund to satisfy the obligations
of the Acquiring Fund hereunder. World Funds represents that it has notice of
the provisions of the Declaration of Trust of MainStay Funds disclaiming such
shareholder and trustee liability for acts or obligations of the Acquiring
Fund.
ARTICLE
XIX
BROKERAGE
FEES AND EXPENSES
19.1. No Broker
or Finder Fees. The Acquiring Fund and the Acquired Fund, represent and warrant
to each other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
19.2. Expenses
of Reorganization. The expenses relating to the proposed Reorganization, whether
or not consummated, will be borne by New York Life Investments and Epoch
Investment Partners, Inc. The costs of the Reorganization shall include, but not
be limited to: costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparing and filing the registration statement of the
Acquiring Funds, preparing, printing and distributing the Proxy Statement and
prospectus supplements relating to the Reorganization, and winding down the
operations and terminating the existence of the Acquired Funds; legal fees,
including those incurred in connection with the preparation of legal opinions,
and accounting fees with respect to the Reorganization and the Proxy Statement;
expenses of soliciting proxies from Acquired Fund Shareholders and holding
shareholder meetings; and all necessary taxes in connection with the delivery of
the Assets, including all applicable federal and state stock transfer stamps.
Notwithstanding any of the foregoing, expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
another person of such expenses would result in the disqualification of such
party as a “regulated investment company” within the meaning of Section 851 of
the Code.
ARTICLE
XX
AMENDMENTS
AND TERMINATION
20.1. Amendments.
This Agreement may be amended, modified or supplemented in such manner as may be
deemed necessary or advisable by the authorized officers of World Funds or
MainStay Funds, on behalf of either the Acquired Fund or the Acquiring Fund,
respectively; provided, however, that following the approval of this Agreement
by the shareholders of the Acquired Fund pursuant to paragraph 6.3(a) of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
20.2. Termination.
This Agreement may be terminated and the transactions contemplated hereby may be
abandoned by resolution of the Board of Directors of World Funds or the Board of
Trustees of MainStay Funds, on behalf of the Acquired Fund or the Acquiring
Fund, respectively, at any time prior to the Effective Time, if circumstances
should develop that, in the opinion of such Board of Directors or Board of
Trustees, as the case may be, make proceeding with the Agreement
inadvisable.
ARTICLE
XXI
NOTICES
Any
notice, report, statement or demand required or permitted by any provisions of
this Agreement shall be in writing and shall be given by facsimile, electronic
delivery (i.e., e-mail) personal service or prepaid or certified mail addressed
as follows:
|
If
to World Funds:
|
|
The
World Funds, Inc.
|
|
0000
Xxxxx Xxxxx Xxxxxxx – Xxxxx 000
|
|
Richmond,
Virginia 23235
|
|
Attention:
Xxxx Xxxxx, III
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx@xxxxxx.xxx
|
|
With
copies (which shall not constitute notice) to:
|
|
Xxxxxx,
Xxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
|
|
Attention:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxx@xxxxxxxxxxx.xxx
|
|
If
to MainStay Funds:
|
|
The
MainStay Funds
|
|
00
Xxxxxxx Xxxxxx
|
|
New
York, New York 10010
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
|
With
a copy (which shall not constitute notice) to:
|
|
Dechert
LLP
|
|
0000
X Xxxxxx, X.X.
|
|
Washington,
D.C. 20006
|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx.xxxxxx@xxxxxxx.xxx
|
|
If
to New York Life Investments:
|
|
New
York Life Investment Management LLC
|
|
000
Xxxxxxxxxx Xxxxxx
|
|
Parsippany,
New Jersey 07054
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
ARTICLE
XXII
MISCELLANEOUS
22.1. Entire
Agreement. MainStay Funds and World Funds agree that they have not made any
representation, warranty or covenant, on behalf of either the Acquiring Fund or
the Acquired Fund, respectively, not set forth herein, and that this Agreement
constitutes the entire agreement between the parties.
22.2. Survival.
The representations, warranties and covenants contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith, and the
obligations with respect to indemnification of the Acquired Fund and Acquiring
Fund contained in paragraphs 7.1 and 7.2, shall survive the
Closing.
22.3. Headings.
The Article and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
22.4. Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to its principles of conflicts of
laws.
22.5. Assignment.
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.
22.6. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all taken together shall constitute one
agreement.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the 13th day of November, 2009.
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ON
BEHALF OF THE ACQUIRING FUND
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THE
WORLD FUNDS, INC.
ON
BEHALF OF THE ACQUIRED FUND
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By: /s/
Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: President
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By: /s/
Xxxx Xxxxx XXX
Name: Xxxx
Xxxxx XXX
Title: President
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Solely
for purposes of paragraphs 4.3, 5.10, 6.1 and 8.2:
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
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Solely
for purposes of paragraphs 4.4 and 8.2:
EPOCH
INVESTMENT PARTNERS, INC.
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By: /s/
Xxxxx X. Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Executive
Vice President
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By: /s/
T.T. Taussig
Name: T.
T. Xxxxxxx
Title: President
and COO
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Epoch
U.S. Large Cap Equity Fund acquired by MainStay Epoch U.S. Equity
Fund
This
Agreement and Plan of Reorganization (“AGREEMENT”) is made as of November 13,
2009, by and between The World Funds, Inc., a Maryland corporation (“WORLD
FUNDS”), on behalf of its investment portfolio, the Epoch U.S. Large Cap Equity
Fund (the “ACQUIRED FUND”), and MainStay Funds Trust, a Delaware
statutory trust (“MAINSTAY FUNDS”), on behalf of its investment portfolio, the
MainStay Epoch U.S. Equity Fund (the “ACQUIRING FUND” and, together with the
Acquired Fund, the “FUNDS”). New York Life Investment Management LLC, a limited
liability company organized under the laws of the State of New York (“NEW YORK
LIFE INVESTMENTS”), joins this Agreement solely for purposes of paragraphs 4.3,
5.10, 6.1 and 8.2, and Epoch Investment Partners, Inc., a corporation organized
under the laws of the State of Delaware (“EPOCH”), joins this Agreement solely
for purposes of paragraphs 4.4 and 8.2.
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 will consist of the transfer of all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for
Class A shares and Class I shares of beneficial interest of the Acquiring Fund
(the “ACQUIRING FUND SHARES”), the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund specified in paragraph 1.3, and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement (the
“REORGANIZATION”).
The Board
of Directors of World Funds has determined, with respect to the Acquired Fund,
that (1) participation in the Reorganization is in the best interests of the
Acquired Fund and its shareholders, and (2) the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of the
Reorganization. The Board of Trustees of MainStay Funds has determined, with
respect to the Acquiring Fund, that (1) participation in the Reorganization is
in the best interests of the Acquiring Fund and its shareholders, and (2) the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of the Reorganization.
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE
XXIII
THE
REORGANIZATION AND FUND TRANSACTIONS
23.1. The
Reorganization. Subject to the requisite approval of the Acquired Fund’s
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, at the Effective
Time (as defined in paragraph 2.5), World Funds shall assign, deliver and
otherwise transfer the Assets (as defined in paragraph 1.2) of the Acquired
Fund, to MainStay Funds on behalf of the Acquiring Fund, and MainStay Funds
shall assume the Liabilities (as defined in paragraph 1.3) of the Acquired Fund
on behalf of the Acquiring Fund. In consideration of the foregoing,
at the Effective Time, MainStay Funds shall, on behalf of the Acquiring Fund,
deliver to World Funds on behalf of the Acquired Fund, full and fractional
Acquiring Fund Shares (to the third decimal place). Holders of Class
P shares and Institutional Class shares of the Acquired Fund will receive Class
A shares and Class I shares, respectively, of the Acquiring Fund. The
number of Acquiring Fund Shares to be delivered shall be determined as set forth
in paragraph 2.3.
23.2. Assets of
the Acquired Fund. The assets of the Acquired Fund to be acquired by
the Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, cash equivalents, securities, receivables (including
securities, interests and dividends receivable), commodities and futures
interests, rights to register shares under applicable securities laws, any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
at the Effective Time, books and records, and any other property owned by the
Acquired Fund at the Effective Time (collectively, the “ASSETS”).
23.3. Liabilities
of the Acquired Fund. The Acquired Fund will use commercially reasonable efforts
to discharge all of its known liabilities and obligations prior to the Effective
Time. The Acquiring Fund will assume all of the Acquired Fund’s
liabilities and obligations of any kind whatsoever, whether known or unknown,
absolute, accrued, contingent or otherwise, in existence on the Closing Date
(collectively, the “LIABILITIES”).
23.4. Distribution
of Acquiring Fund Shares. At the Effective Time (or as soon thereafter as is
reasonably practicable), World Funds, on behalf of the Acquired Fund, will
distribute the Acquiring Fund Shares received from MainStay Funds pursuant to
paragraph 1.1, pro rata to the record holders of the shares of the Acquired Fund
determined as of the Effective Time (the “ACQUIRED FUND SHAREHOLDERS”) in
complete liquidation of the Acquired Fund. Such distribution and
liquidation will be accomplished by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund Shareholders. The aggregate net asset value of the
Acquiring Fund Shares to be so credited to Acquired Fund Shareholders shall be
equal to the aggregate net asset value of the then outstanding shares of
beneficial interest of the Acquired Fund (the “ACQUIRED FUND SHARES”) owned by
Acquired Fund Shareholders at the Effective Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be redeemed and
canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
23.5. Recorded
Ownership of Acquiring Fund Shares. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund’s Transfer Agent (as defined in
paragraph 3.3).
23.6. Filing
Responsibilities of Acquired Fund. Any reporting responsibility of
the Acquired Fund, including, but not limited to, the responsibility for filing
regulatory reports, tax returns, or other documents with the Securities and
Exchange Commission (“COMMISSION”), any state securities commission, and any
Federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Acquired
Fund.
ARTICLE
XXIV
VALUATION
24.1. Net Asset
Value of the Acquired Fund. The net asset value of the Acquired Fund
Shares shall be the net asset value computed as of the Effective Time, after the
declaration and payment of any dividends and/or other distributions on that
date, using the valuation procedures described in the then-current prospectuses
and statement of additional information of the Acquiring Fund.
24.2. Net Asset
Value of the Acquiring Fund. The net asset value of the Acquiring
Fund Shares shall be the same as the net asset value of the Acquired Fund Shares
as computed in paragraph 2.1.
24.3. Calculation
of Number of Acquiring Fund Shares. The number of Class A shares and Class I
shares of the Acquiring Fund to be issued (including fractional shares to the
third decimal place, if any) in connection with the Reorganization shall be
equal to the number of Class P shares and Institutional Class shares,
respectively, owned by Acquired Fund Shareholders at the Effective
Time.
24.4. Joint
Direction of Calculation. All computations of value with respect to both the
Acquired Fund and the Acquiring Fund shall be made by State Street Bank and
Trust Company (“STATE STREET”), in its capacity as accounting agent for the
MainStay Funds. Such computations shall be evaluated by New York Life
Investments, in its capacity as administrator for the Funds, in consultation
with Epoch, the investment adviser to the Acquired Fund. Such
computations shall be subject to confirmation by the Acquired Fund’s and
Acquiring Fund’s respective transfer agents and independent
accountants.
24.5. Effective
Time. The Effective Time shall be the time at which the Funds
calculate their net asset values as set forth in their respective prospectuses
(normally the close of regular trading on the New York Stock Exchange (“NYSE”))
on the Closing Date (as defined in paragraph 3.1) (the “EFFECTIVE
TIME”).
ARTICLE
XXV
CLOSING
25.1. Closing.
The Reorganization, together with related acts necessary to consummate the same
(“CLOSING”), shall occur at the principal office of New York Life Investments on
or about November 13, 2009, or at such other place and/or on such other date as
to which the parties may agree (the “CLOSING DATE”). All acts taking
place at the Closing shall be deemed to take place simultaneously as of the
Effective Time.
25.2. Transfer
and Delivery of Assets. World Funds shall direct Brown Brothers Xxxxxxxx &
Co. (“BROWN BROTHERS”), as custodian for the Acquired Fund, to deliver, at the
Closing, a certificate of an authorized officer stating that (i) the Assets were
delivered in proper form to the Acquiring Fund at the Effective Time, and (ii)
all necessary taxes in connection 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. The Acquired Fund’s portfolio
securities represented by a certificate or other written instrument shall be
presented by Brown Brothers to State Street, as custodian for the Acquiring
Fund. Such presentation shall be made for examination no later than
five (5) business days preceding the Effective Time, and shall be transferred
and delivered by the Acquired Fund as of the Effective Time for the account of
the Acquiring Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. Brown Brothers shall deliver
to State Street as of the Effective Time by book entry, in accordance with the
customary practices of State Street and of each securities depository, as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the
“1940 ACT”), in which the Acquired Fund’s Assets are deposited, the Acquired
Fund’s Assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer of Federal
funds at the Effective Time.
25.3. Share
Records. World Funds shall direct Commonwealth Fund Services, Inc., in its
capacity as transfer agent for the Acquired Fund (the “TRANSFER AGENT”), to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding Acquired Fund Shares owned by
each such Acquired Fund Shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver to the Secretary
of the Acquired Fund prior to the Effective Time a confirmation evidencing that
the appropriate number of Acquiring Fund Shares will be credited to the Acquired
Fund at the Effective Time, or provide other evidence satisfactory to the
Acquired Fund as of the Effective Time that such Acquiring Fund Shares have been
credited to the Acquired Fund’s accounts on the books of the Acquiring
Fund.
25.4. Postponement
of Effective Time. In the event that at the Effective Time the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund (each, an “EXCHANGE”) shall be closed to trading or trading
thereupon 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 the
Board of Directors of World Funds or the Board of Trustees of MainStay Funds,
accurate appraisal of the value of the net assets of the Acquired Fund or the
Acquiring Fund, respectively, is impracticable, the Effective Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
ARTICLE
XXVI
REPRESENTATIONS
AND WARRANTIES
26.1. Representations
and Warranties of World Funds. Except as has been fully disclosed to the
Acquiring Fund in a written instrument executed by an officer of World Funds,
World Funds, on behalf of the Acquired Fund, represents and warrants to MainStay
Funds, on behalf of the Acquiring Fund, as follows:
(a) The
Acquired Fund is a duly established series of World Funds, which is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, with power under World Funds’ Articles of
Incorporation and By-Laws, each as amended from time to time, to own all of its
properties and assets and to carry on its business as it is presently
conducted.
(b) World
Funds is registered with the Commission as an open-end management investment
company under the 1940 Act, and the registration of the Acquired Fund Shares
under the Securities Act of 1933, as amended (the “1933 ACT”), is in full force
and effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by World Funds on behalf of the
Acquired Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the “1934 ACT”), and the 1940 Act, and such as may be required under state
securities laws.
(d) The
current prospectuses, statement of additional information, shareholder reports,
marketing and other related materials of the Acquired Fund and each prospectus
and statement of additional information of the Acquired Fund used at all times
prior to the date of this Agreement conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder and does not
or did not at the time of its use 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 materially misleading.
(e) At the
Effective Time, World Funds, on behalf of the Acquired Fund, will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, MainStay Funds, on
behalf of the Acquiring Fund, will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act.
(f) World
Funds is not engaged currently, and the execution, delivery and performance of
this Agreement will not result, in (i) a violation of Maryland Law or a material
violation of its Articles of Incorporation and By-Laws, or of any agreement,
indenture, instrument, contract, lease or other undertaking to which World
Funds, on behalf of the Acquired Fund, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or decree to
which World Funds, on behalf of the Acquired Fund, is a party or by which it is
bound.
(g) All
material contracts or other commitments of the Acquired Fund (other than this
Agreement and certain investment contracts, including options, futures, forward
contracts and other similar instruments) will terminate without liability or
obligation to the Acquired Fund on or prior to the Effective Time.
(h) Except as
otherwise disclosed to and accepted by MainStay Funds, on behalf of the
Acquiring Fund, in writing, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against the Acquired Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its
business. World Funds, on behalf of the Acquired Fund, knows of no
facts which might form the basis for the institution of such proceedings 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 and adversely affects its
business or its ability to consummate the transactions herein
contemplated.
(i) The
Statement of Assets and Liabilities, Statements of Operations and Changes in Net
Assets, and Schedule of Investments of the Acquired Fund at December 31, 2008
have been audited by Xxxx, Xxxxxx & Xxxxx LLP, independent registered public
accounting firm, and are in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) consistently applied, and such
statements (copies of which have been furnished to the Acquiring Fund) present
fairly, in all material respects, the financial condition of the Acquired Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein.
(j) Since
December 31, 2008, there has not been any material adverse change in the
Acquired Fund’s financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund in writing. For the purposes of this subparagraph (j),
a decline in net asset value per share of Acquired Fund Shares due to declines
in market values of securities held by the Acquired Fund, the discharge of the
Acquired Fund’s liabilities, or the redemption of the Acquired Fund’s shares by
shareholders of the Acquired Fund shall not constitute a material adverse
change.
(k) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquired Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquired Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(l) For each
taxable year of its operation (including the taxable year ending at the
Effective Time), the Acquired Fund has met (or will meet) the requirements of
Subchapter M of Chapter 1 of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code.
(m) All of
the issued and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Fund, nor is there outstanding any security convertible into any of the
Acquired Fund’s shares.
(n) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Directors of World Funds, on behalf of the Acquired Fund, and,
subject to the approval of the shareholders of the Acquired Fund, this Agreement
will constitute a valid and binding obligation of World Funds on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
(o) The
information to be furnished by the Acquired Fund for use in registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including the Financial Industry
Regulatory Authority (“FINRA”)), which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and complete in all material
respects and shall comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
(p) The Proxy
Statement (as defined in paragraph 5.6), insofar as it relates to the Acquired
Fund, will, through the date of the meeting of the Acquired Fund Shareholders
contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquiring Fund for use therein.
26.2. Representations
and Warranties of MainStay Funds. Except as has been fully disclosed to the
Acquired Fund in a written instrument executed by an officer of MainStay Funds,
MainStay Funds, on behalf of the Acquiring Fund, represents and warrants to
World Funds, on behalf of the Acquired Fund, as follows:
(a) The
Acquiring Fund is a duly established series of MainStay Funds Trust, which is a
statutory trust duly organized, validly existing, and in good standing under the
laws of the State of Delaware with power under its Declaration of Trust and
By-Laws, each as amended from time to time, to own all of its properties and
assets and to carry on its business as it is presently conducted.
(b) At the
Effective Time, MainStay Funds will be registered with the Commission as an
open-end management investment company under the 1940 Act, and the registration
of the Acquiring Fund Shares under the 1933 Act will be in full force and
effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by MainStay Funds on behalf of the
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.
(d) The
preliminary prospectus and statement of additional information of the Acquiring
Fund filed with the Commission on July 30, 2009 as part of the MainStay Funds’
registration statement on Form N-1A, which will become effective prior to the
Closing Date, conforms and, as of its effective date, will conform in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder, and does not
and, as of its effective date, will not include any untrue statement of material
fact or omit to state any material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading.
(e) At the
Effective Time, MainStay Funds, on behalf of the Acquiring Fund, will have good
and marketable title to the Acquiring Fund’s assets, free of any liens or other
encumbrances.
(f) The
Acquiring Fund is not engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a violation of Delaware
law or a material violation of MainStay Funds’ Declaration of Trust and By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which MainStay Funds, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which MainStay Funds, on behalf of the Acquiring Fund, is
a party or by which it is bound.
(g) Except as
otherwise disclosed to and accepted by World Funds, on behalf of the Acquired
Fund, in writing, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
Acquiring Fund’s knowledge, threatened against MainStay Funds, on behalf of the
Acquiring Fund, or any of the Acquiring Fund’s properties or assets that, if
adversely determined, would materially and adversely affect the Acquiring Fund’s
financial condition or the conduct of its business. MainStay Funds, on behalf of
the Acquiring Fund, knows of no facts which might form the basis for the
institution of such proceedings 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 and adversely affects the Acquiring Fund’s business or its
ability to consummate the transactions herein contemplated.
(h) The
Acquiring Fund was formed for the purpose of effecting the Reorganization and,
prior to the Closing, will have not commenced operations or carried on any
business activity, will have had no assets or liabilities and will have no
issued or outstanding shares other than as described in paragraph 6.1(b) of this
Agreement.
(i) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquiring Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(j) The
Acquiring Fund intends to meet the requirements of Subchapter M of the Code for
qualification and treatment of such Surviving Fund as a regulated investment
company in the future and, from the date of this Agreement until the Closing
Date, shall not take any action inconsistent with such efforts to qualify and be
treated as a regulated investment company under the Code in the
future.
(k) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Trustees of MainStay Funds, on behalf of the Acquiring Fund, and
this Agreement will constitute a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors’ rights and to general equity principles.
(l) The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will at the Effective Time have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares,
will be fully paid and non-assessable by MainStay Funds, and will have been
issued in every jurisdiction in compliance in all material respects with
applicable registration requirements and applicable securities
laws. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquiring Fund, nor is there outstanding any security convertible into any of
the Acquiring Fund’s shares.
(m) The
information to be furnished by the Acquiring Fund for use in the registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including FINRA) that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
(n) The Proxy
Statement, insofar as it relates to the Acquiring Fund and the Acquiring Fund
Shares, will, through the date of the meeting of shareholders of the Acquired
Fund contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(n) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein.
26.3. Representation
and Warranty of New York Life Investments. New York Life Investments represents
and warrants to World Funds, on behalf of the Acquired Fund, and MainStay Funds,
on behalf of the Acquiring Fund, that the execution, delivery and performance of
this Agreement will have been duly authorized prior to the Effective Time by all
necessary action, if any, on the part of New York Life Investments, and this
Agreement will constitute a valid and binding obligation of New York Life
Investments, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
26.4. Representation
and Warranty of Epoch. Epoch represents and warrants to World Funds,
on behalf of the Acquired Fund, and MainStay Funds, on behalf of the Acquiring
Fund, that the execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action, if
any, on the part of Epoch, and this Agreement will constitute a valid and
binding obligation of Epoch, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights and to general equity
principles.
ARTICLE
XXVII
COVENANTS
AND AGREEMENTS
27.1. Conduct
of Business. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course consistent with past practice between the date
hereof and the Effective Time, it being understood that such ordinary course of
business will include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable.
27.2. Meeting
of Shareholders. World Funds will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
27.3. No
Distribution of Acquiring Fund Shares. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
27.4. Information.
The Acquired Fund will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Acquired Fund Shares.
27.5. Other
Necessary Action. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
27.6. Proxy
Statement. The Acquired Fund will provide the Acquiring Fund with information
regarding the Acquired Fund, and the Acquiring Fund will provide the Acquired
Fund with information regarding the Acquiring Fund, reasonably necessary for the
preparation of a proxy statement on Schedule 14A (the “PROXY STATEMENT”), in
compliance with the 1934 Act and the 1940 Act, in connection with the meeting of
the shareholders of the Acquired Fund to consider approval of this Agreement and
the transactions contemplated herein.
27.7. Liquidating
Distribution. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its respective
shareholders consisting of the Acquiring Fund Shares received at the
Closing.
27.8. Best
Efforts. The Acquiring Fund and the Acquired Fund shall each use their
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent set forth in Article VI to effect the transactions contemplated by
this Agreement as promptly as practicable.
27.9. Other
Instruments. World Funds, on behalf of the Acquired Fund, and MainStay Funds, on
behalf of the Acquiring Fund, each covenants that it will, from time to time, as
and when reasonably requested by the other party, 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 party may
reasonably deem necessary or desirable in order to vest in and confirm (a) World
Funds’, on behalf of the Acquired Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and (b) MainStay Funds’, on behalf of the
Acquiring Fund, title to and possession of all the Assets and otherwise to carry
out the intent and purpose of this Agreement.
27.10. Expense
Limitation. From the Closing Date to the second anniversary of the
Closing Date, New York Life Investments agrees to reimburse expenses of Class A
and Class I shares of the Acquiring Fund so that the total ordinary operating
expenses for Class A and Class I shares of the Acquiring Fund do not exceed the
total annual operating expenses of the Class P shares and Institutional shares
of the Acquired Fund (adjusted to reflect any expense limitation agreements then
in effect), respectively, as of the Closing Date. New York Life
Investments may recoup the amount of any expense reimbursements from the
Acquiring Fund if such action does not cause the Acquiring Fund to exceed
existing expense limitations and the recoupment is made within the year in which
New York Life Investments incurred the expense. For purposes of this
paragraph 5.10, The term “total ordinary operating expenses” excludes taxes,
interest, litigation, extraordinary expenses, brokerage and other transaction
expenses relating to the purchase or sale of portfolio investments, and the fees
and expenses of any other funds in which the Acquiring Fund
invests.
27.11. Regulatory
Approvals. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Effective Time.
ARTICLE
XXVIII
CONDITIONS
PRECEDENT
28.1. Conditions
Precedent to Obligations of Acquired Fund. The obligations of World Funds, on
behalf of the Acquired Fund, to consummate the transactions provided for herein
shall be subject, at World Funds’ election, to the following
conditions:
(a) All
representations and warranties of MainStay Funds, on behalf of the Acquiring
Fund, contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective Time, with the
same force and effect as if made on and as of the Effective Time.
(b) Prior to
the Closing Date, (i) the Trustees of the MainStay Funds, on behalf of the
Acquiring Fund, shall have authorized the issuance of and the Acquiring Fund
shall have issued one share to New York Life Investments in consideration of the
payment of $10.00, (ii) New York Life Investments shall have, among other
things, approved as the sole initial shareholder (x) the Investment Advisory
Agreement between MainStay Funds, on behalf of the Acquiring Fund, and New York
Life Investments, (y) the Investment Sub-Advisory Agreement between New York
Life Investments and Epoch and (z) the Acquiring Fund’s adoption of a “manager
of managers” structure, pursuant to which the Acquiring Fund’s investment
adviser is authorized to enter into and amend contracts with investment
sub-advisers without the prior approval of the Acquiring Fund’s shareholders, in
the manner contemplated by the order of the Securities and Exchange Commission
(“SEC”) granting the Acquiring Fund and its investment adviser exemptive relief
from Section 15(a) of the 1940 Act and Rule 18f-2 thereunder (SEC Rel.
40-27656), and (iii) immediately prior to or contemporaneously with the
consummation of the transactions described in this Agreement, the share of the
Acquiring Fund acquired by New York Life Investments has been or is redeemed for
$10.00. Notwithstanding the foregoing, the Acquiring Fund may issue
shares to New York Life Investments or another entity for cash contributions
made in connection with any required initial capital requirements imposed by
Section 14(a) of the 1940 Act.
(c) MainStay
Funds, on behalf of the Acquiring Fund, shall have delivered to the Acquired
Fund a certificate executed in the name of the Acquiring Fund by its President
or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to World Funds, and dated as of the Effective Time, to the effect
that the representations and warranties of MainStay Funds, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as World Funds shall reasonably
request.
(d) MainStay
Funds, on behalf of the Acquiring Fund, shall have performed all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by MainStay Funds, on behalf of the Acquiring
Fund, on or before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The World
Funds shall have received on the Closing Date the opinion of Dechert LLP,
counsel to the MainStay Funds, dated as of the Closing Date, covering the
following points:
(1) The
MainStay Funds is a statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the trust power to own
all of the Acquiring Fund’s properties and assets and to carry on its business,
including that of the Acquiring Fund, as a registered investment
company;
(2) The
Agreement has been duly authorized by MainStay Funds, on behalf of the Acquiring
Fund and, assuming due authorization, execution and delivery of the Agreement by
World Funds, is a valid and binding obligation of MainStay Funds on behalf of
the Acquiring Fund enforceable against the MainStay Funds in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors’ rights generally
and to general equity principles;
(3) The
Acquiring Fund shares to be issued to the Acquired Fund Shareholders as provided
by this Agreement are duly authorized, upon such delivery will be validly issued
and outstanding, and will be fully paid and non-assessable by MainStay Funds and
no shareholder of an Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof;
(4) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of
MainStay Funds’ Declaration of Trust or By-Laws or any provision of any
agreement (known to such counsel) to which MainStay Funds is a party or by which
it is bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty under any agreement, judgment or
decree to which the MainStay Funds is a party or by which it is
bound;
(5) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Delaware is
required to be obtained by MainStay Funds in order to consummate 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;
(6) MainStay
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquiring Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and
(7) To the
knowledge of such counsel, and except as otherwise disclosed to the World Funds
pursuant to paragraph 4.2(g) of this Agreement, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to MainStay Funds or the Acquiring Fund and
neither MainStay Funds nor the Acquiring Fund is 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 its business.
28.2. Conditions
Precedent to Obligations of Acquiring Fund. The obligations of MainStay Funds,
on behalf of the Acquiring Fund, to complete the transactions provided for
herein shall be subject, at MainStay Funds’ election, to the following
conditions:
(a) All
representations and warranties of World Funds, on behalf of the Acquired Fund,
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same force
and effect as if made on and as of the Effective Time.
(b) World
Funds shall have delivered to the Acquiring Fund a statement of the Acquired
Fund’s Assets and Liabilities, as of the Effective Time, that is prepared in
accordance with GAAP and certified by the Treasurer of World Funds.
(c) World
Funds, on behalf of the Acquired Fund, shall have delivered to the Acquiring
Fund a certificate executed in the name of the Acquired Fund by its President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquiring Fund and dated as of the Effective Time, to the
effect that the representations and warranties of World Funds, on behalf of the
Acquired Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as MainStay Funds shall
reasonably request.
(d) World
Funds, on behalf of the Acquired Fund, shall have performed all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by World Funds, on behalf of the Acquired Fund, on or
before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The
MainStay Funds shall have received on the Closing Date the opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the World Funds, covering the following
points:
(1) The World
Funds is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland and has the power to own all of Acquired
Fund’s properties and assets, and to carry on its business, including that of
the Acquired Fund, as a registered investment company;
(2) The
Agreement has been duly authorized by the World Funds, on behalf of the Acquired
Fund, and, assuming due authorization, execution and delivery of the Agreement
by the MainStay Funds, is a valid and binding obligation of the World Funds, on
behalf of the Acquired Fund, enforceable against the World Funds in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and to general equity principles;
(3) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of the
World Funds’ Articles of Incorporation or By-Laws or any provision of any
agreement (known to such counsel) to which the World Funds is a party or by
which it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the World Funds is a party or by which it
is bound;
(4) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Maryland is
required to be obtained by the World Funds in order to consummate 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;
(5) The World
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquired Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(6) To the
knowledge of such counsel, and except as otherwise disclosed to the MainStay
Funds pursuant to paragraph 4.1(h) of this Agreement, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the World Funds or
the Acquired Fund and neither the World Funds nor the Acquired Fund is 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 its
business.
28.3. Other
Conditions Precedent. If any of the conditions set forth in this paragraph 6.3
have not been satisfied on or before the Effective Time, World Funds, on behalf
of the Acquired Fund, or MainStay Funds, on behalf of the Acquiring Fund, shall,
at its option, not be required to consummate the transactions contemplated by
this Agreement.
(a) The
Agreement and the transactions contemplated herein shall have been approved by
the requisite vote of the holders of the outstanding shares of the Acquired Fund
in accordance with the provisions of World Funds’ Articles of Incorporation and
By-Laws, applicable Maryland law and the 1940 Act and the regulations
thereunder, and certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything herein
to the contrary, World Funds and MainStay Funds, on behalf of either the
Acquired Fund or the Acquiring Fund, respectively, may not waive the conditions
set forth in this paragraph 6.3(a).
(b) At the
Effective Time, no action, suit or other proceeding shall be pending or, to the
knowledge of World Funds or MainStay Funds, threatened 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.
(c) All
consents of other parties and all other consents, orders and permits of Federal,
state and local regulatory authorities deemed necessary by World Funds and
MainStay Funds to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund or the
Acquired Fund, provided that either party hereto may for itself waive any of
such conditions.
(d) World
Funds and MainStay Funds shall have received an opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP, in a form acceptable to Dechert LLP, as to federal income tax
matters substantially to the effect that, based on the facts, representations,
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
(1) The
Reorganization will constitute a tax-free reorganization within the meaning of
Section 368(a) of the Code, and the Acquired Fund and the Acquiring Fund will
each be a party to a reorganization within the meaning of Section 368(b) of the
Code.
(2) No gain
or loss will be recognized by the Acquired Fund upon the transfer of all of its
assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the Acquired Fund’s liabilities or
upon the distribution of the Acquiring Fund Shares to the Acquired Fund’s
shareholders in exchange for their shares of the Acquired Fund.
(3) No gain
or loss will be recognized by the Acquiring Fund upon the receipt by it of all
of the assets of the Acquired Fund in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
(4) The
adjusted tax basis of the assets of the Acquired Fund received by the Acquiring
Fund will be the same as the adjusted tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization.
(5) The
holding period of the assets of the Acquired Fund received by the Acquiring Fund
will include the holding period of those assets in the hands of the Acquired
Fund immediately prior to the Reorganization.
(6) No gain
or loss will be recognized by the shareholders of the Acquired Fund upon the
exchange of their Acquired Fund Shares for the Acquiring Fund Shares (including
fractional shares to which they may be entitled) and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund.
(7) The
aggregate adjusted tax basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) pursuant to the Reorganization will be the same as the aggregate
adjusted tax basis of the Acquired Fund Shares held by the Acquired Fund’s
shareholders immediately prior to the Reorganization.
(8) The
holding period of the Acquiring Fund Shares received by the shareholders of the
Acquired Fund (including fractional shares to which they may be entitled) will
include the holding period of the Acquired Fund Shares surrendered in exchange
therefore, provided that the Acquired Fund Shares were held as a capital asset
on the Closing Date.
No
opinion will be expressed as to the effect of the Reorganization on (i) the
Acquired Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting and (ii) any Acquired Fund
or Acquiring Fund shareholder that is required to recognize unrealized gains and
losses for federal income tax purposes under a mark-to-market system of
accounting.
Such
opinion shall be based on customary assumptions, limitations and such
representations as Xxxxxx, Xxxxx & Xxxxxxx LLP may reasonably request, and
the Acquired Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Such opinion may contain such
assumptions and limitations as shall be in the opinion of such counsel
appropriate to render the opinions expressed therein. Notwithstanding
anything herein to the contrary, neither party may waive the condition set forth
in this paragraph 6.3(d).
(e) Brown
Brothers shall have delivered such certificates or other documents as set forth
in paragraph 3.2.
(f) The
Transfer Agent shall have delivered to MainStay Funds a certificate of its
authorized officer as set forth in paragraph 3.3.
(g) The
Acquiring Fund shall have issued and delivered to the Secretary of the Acquired
Fund the confirmation as set forth in paragraph 3.3.
(h) Each
party shall have delivered to the other such bills of sale, checks, assignments,
receipts or other documents as reasonably requested by such other party or its
counsel.
ARTICLE
XXIX
INDEMNIFICATION
29.1. Indemnification
by MainStay Funds. MainStay Funds, solely out of the Acquiring Fund’s assets and
property, agrees to indemnify and hold harmless World Funds, the Acquired Fund,
and their directors, officers, employees and agents (the “WORLD INDEMNIFIED
PARTIES”) from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which the World Indemnified Parties
may become subject, insofar as such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on any breach by the
Acquiring Fund of any of its representations, warranties, covenants or
agreements set forth in this Agreement, provided that this indemnification shall
not apply to the extent such loss, claim, damage, liability or expense (or
actions with respect thereto) shall be due to any negligent, intentional or
fraudulent act, omission or error of the Acquired Fund, or its respective
directors, officers or agents.
29.2. Indemnification
by World Funds. World Funds, solely out of the Acquired Fund’s assets and
property, agrees to indemnify and hold harmless MainStay Funds, the Acquiring
Fund, and their trustees, officers, employees and agents (the “MAINSTAY
INDEMNIFIED PARTIES”) from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the payment of
reasonable legal fees and reasonable costs of investigation) to which the
MainStay Indemnified Parties may become subject, insofar as such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement, provided that
this indemnification shall not apply to the extent such loss, claim, damage,
liability or expense (or actions with respect thereto) shall be due to any
negligent, intentional or fraudulent act, omission or error of the Acquiring
Fund, or its respective trustees, officers or agents.
29.3. Liability
of World Funds. MainStay Funds understands and agrees that the obligations of
World Funds on behalf of the Acquired Fund under this Agreement shall not be
binding upon any Director, shareholder, nominee, officer, agent or employee of
World Funds on behalf of World Funds personally, but bind only World Funds on
behalf of the Acquired Fund and the Acquired Fund’s property. Moreover, no
series of World Funds other than the Acquired Fund shall be responsible for the
obligations of World Funds hereunder, and all persons shall look only to the
assets of the Acquired Fund to satisfy the obligations of the Acquired Fund
hereunder. MainStay Funds represents that it has notice of the provisions of the
Articles of Incorporation of the World Funds disclaiming such shareholder and
trustee liability for acts or obligations of the Acquired Fund.
29.4. Liability
of MainStay Funds. World Funds understands and agrees that the obligations of
MainStay Funds on behalf of the Acquiring Fund under this Agreement shall not be
binding upon any trustee, shareholder, nominee, officer, agent or employee of
MainStay Funds on behalf of MainStay Funds personally, but bind only MainStay
Funds on behalf of the Acquiring Fund and the Acquiring Fund’s property.
Moreover, no series of MainStay Funds other than the Acquiring Fund shall be
responsible for the obligations of MainStay Funds hereunder, and all persons
shall look only to the assets of the Acquiring Fund to satisfy the obligations
of the Acquiring Fund hereunder. World Funds represents that it has notice of
the provisions of the Declaration of Trust of MainStay Funds disclaiming such
shareholder and trustee liability for acts or obligations of the Acquiring
Fund.
ARTICLE
XXX
BROKERAGE
FEES AND EXPENSES
30.1. No Broker
or Finder Fees. The Acquiring Fund and the Acquired Fund, represent and warrant
to each other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
30.2. Expenses
of Reorganization. The expenses relating to the proposed Reorganization, whether
or not consummated, will be borne by New York Life Investments and Epoch
Investment Partners, Inc. The costs of the Reorganization shall include, but not
be limited to: costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparing and filing the registration statement of the
Acquiring Funds, preparing, printing and distributing the Proxy Statement and
prospectus supplements relating to the Reorganization, and winding down the
operations and terminating the existence of the Acquired Funds; legal fees,
including those incurred in connection with the preparation of legal opinions,
and accounting fees with respect to the Reorganization and the Proxy Statement;
expenses of soliciting proxies from Acquired Fund Shareholders and holding
shareholder meetings; and all necessary taxes in connection with the delivery of
the Assets, including all applicable federal and state stock transfer stamps.
Notwithstanding any of the foregoing, expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
another person of such expenses would result in the disqualification of such
party as a “regulated investment company” within the meaning of Section 851 of
the Code.
ARTICLE
XXXI
AMENDMENTS
AND TERMINATION
31.1. Amendments.
This Agreement may be amended, modified or supplemented in such manner as may be
deemed necessary or advisable by the authorized officers of World Funds or
MainStay Funds, on behalf of either the Acquired Fund or the Acquiring Fund,
respectively; provided, however, that following the approval of this Agreement
by the shareholders of the Acquired Fund pursuant to paragraph 6.3(a) of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
31.2. Termination.
This Agreement may be terminated and the transactions contemplated hereby may be
abandoned by resolution of the Board of Directors of World Funds or the Board of
Trustees of MainStay Funds, on behalf of the Acquired Fund or the Acquiring
Fund, respectively, at any time prior to the Effective Time, if circumstances
should develop that, in the opinion of such Board of Directors or Board of
Trustees, as the case may be, make proceeding with the Agreement
inadvisable.
ARTICLE
XXXII
NOTICES
Any
notice, report, statement or demand required or permitted by any provisions of
this Agreement shall be in writing and shall be given by facsimile, electronic
delivery (i.e., e-mail) personal service or prepaid or certified mail addressed
as follows:
|
If
to World Funds:
|
|
The
World Funds, Inc.
|
|
0000
Xxxxx Xxxxx Xxxxxxx – Xxxxx 000
|
|
Richmond,
Virginia 23235
|
|
Attention:
Xxxx Xxxxx, III
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx@xxxxxx.xxx
|
|
With
copies (which shall not constitute notice) to:
|
|
Xxxxxx,
Xxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
|
|
Attention:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxx@xxxxxxxxxxx.xxx
|
|
If
to MainStay Funds:
|
|
The
MainStay Funds
|
|
00
Xxxxxxx Xxxxxx
|
|
New
York, New York 10010
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
|
With
a copy (which shall not constitute notice) to:
|
|
Dechert
LLP
|
|
0000
X Xxxxxx, X.X.
|
|
Washington,
D.C. 20006
|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx.xxxxxx@xxxxxxx.xxx
|
|
If
to New York Life Investments:
|
|
New
York Life Investment Management LLC
|
|
000
Xxxxxxxxxx Xxxxxx
|
|
Parsippany,
New Jersey 07054
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
ARTICLE
XXXIII
MISCELLANEOUS
33.1. Entire
Agreement. MainStay Funds and World Funds agree that they have not made any
representation, warranty or covenant, on behalf of either the Acquiring Fund or
the Acquired Fund, respectively, not set forth herein, and that this Agreement
constitutes the entire agreement between the parties.
33.2. Survival.
The representations, warranties and covenants contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith, and the
obligations with respect to indemnification of the Acquired Fund and Acquiring
Fund contained in paragraphs 7.1 and 7.2, shall survive the
Closing.
33.3. Headings.
The Article and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
33.4. Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to its principles of conflicts of
laws.
33.5. Assignment.
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.
33.6. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all taken together shall constitute one
agreement.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the 13th day of November, 2009.
|
MAINSTAY
FUNDS TRUST
ON
BEHALF OF THE ACQUIRING FUND
|
THE
WORLD FUNDS, INC.
ON
BEHALF OF THE ACQUIRED FUND
|
|
By: /s/
Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: President
|
By: /s/
Xxxx Xxxxx XXX
Name: Xxxx
Xxxxx XXX
Title: President
|
|
Solely
for purposes of paragraphs 4.3, 5.10, 6.1 and 8.2:
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
|
Solely
for purposes of paragraphs 4.4 and 8.2:
EPOCH
INVESTMENT PARTNERS, INC.
|
|
By: /s/
Xxxxx X. Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Executive
Vice President
|
By: /s/
T.T. Taussig
Name: T.
T. Xxxxxxx
Title: President
and COO
|
Epoch
U.S. All Cap Equity Fund acquired by MainStay Epoch Global Choice
Fund
This
Agreement and Plan of Reorganization (“AGREEMENT”) is made as of November 13,
2009, by and between The World Funds, Inc., a Maryland corporation (“WORLD
FUNDS”), on behalf of its investment portfolio, the Epoch U.S. All Cap Equity
Fund (the “ACQUIRED FUND”), and MainStay Funds Trust, a Delaware
statutory trust (“MAINSTAY FUNDS”), on behalf of its investment portfolio, the
MainStay Epoch Global Choice Fund (the “ACQUIRING FUND” and, together with the
Acquired Fund, the “FUNDS”). New York Life Investment Management LLC, a limited
liability company organized under the laws of the State of New York (“NEW YORK
LIFE INVESTMENTS”), joins this Agreement solely for purposes of paragraphs 4.3,
5.10, 6.1 and 8.2, and Epoch Investment Partners, Inc., a corporation organized
under the laws of the State of Delaware (“EPOCH”), joins this Agreement solely
for purposes of paragraphs 4.4 and 8.2.
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 will consist of the transfer of all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for
Class A shares and Class I shares of beneficial interest of the Acquiring Fund
(the “ACQUIRING FUND SHARES”), the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund specified in paragraph 1.3, and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement (the
“REORGANIZATION”).
The Board
of Directors of World Funds has determined, with respect to the Acquired Fund,
that (1) participation in the Reorganization is in the best interests of the
Acquired Fund and its shareholders, and (2) the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of the
Reorganization. The Board of Trustees of MainStay Funds has determined, with
respect to the Acquiring Fund, that (1) participation in the Reorganization is
in the best interests of the Acquiring Fund and its shareholders, and (2) the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of the Reorganization.
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE
XXXIV
THE
REORGANIZATION AND FUND TRANSACTIONS
34.1. The
Reorganization. Subject to the requisite approval of the Acquired Fund’s
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, at the Effective
Time (as defined in paragraph 2.5), World Funds shall assign, deliver and
otherwise transfer the Assets (as defined in paragraph 1.2) of the Acquired
Fund, to MainStay Funds on behalf of the Acquiring Fund, and MainStay Funds
shall assume the Liabilities (as defined in paragraph 1.3) of the Acquired Fund
on behalf of the Acquiring Fund. In consideration of the foregoing,
at the Effective Time, MainStay Funds shall, on behalf of the Acquiring Fund,
deliver to World Funds on behalf of the Acquired Fund, full and fractional
Acquiring Fund Shares (to the third decimal place). Holders of Class
P shares and Institutional Class shares of the Acquired Fund will receive Class
A shares and Class I shares, respectively, of the Acquiring Fund. The
number of Acquiring Fund Shares to be delivered shall be determined as set forth
in paragraph 2.3.
34.2. Assets of
the Acquired Fund. The assets of the Acquired Fund to be acquired by
the Acquiring Fund shall consist of all assets and property, including, without
limitation, all cash, cash equivalents, securities, receivables (including
securities, interests and dividends receivable), commodities and futures
interests, rights to register shares under applicable securities laws, any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
at the Effective Time, books and records, and any other property owned by the
Acquired Fund at the Effective Time (collectively, the “ASSETS”).
34.3. Liabilities
of the Acquired Fund. The Acquired Fund will use commercially reasonable efforts
to discharge all of its known liabilities and obligations prior to the Effective
Time. The Acquiring Fund will assume all of the Acquired Fund’s
liabilities and obligations of any kind whatsoever, whether known or unknown,
absolute, accrued, contingent or otherwise, in existence on the Closing Date
(collectively, the “LIABILITIES”).
34.4. Distribution
of Acquiring Fund Shares. At the Effective Time (or as soon thereafter as is
reasonably practicable), World Funds, on behalf of the Acquired Fund, will
distribute the Acquiring Fund Shares received from MainStay Funds pursuant to
paragraph 1.1, pro rata to the record holders of the shares of the Acquired Fund
determined as of the Effective Time (the “ACQUIRED FUND SHAREHOLDERS”) in
complete liquidation of the Acquired Fund. Such distribution and
liquidation will be accomplished by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund Shareholders. The aggregate net asset value of the
Acquiring Fund Shares to be so credited to Acquired Fund Shareholders shall be
equal to the aggregate net asset value of the then outstanding shares of
beneficial interest of the Acquired Fund (the “ACQUIRED FUND SHARES”) owned by
Acquired Fund Shareholders at the Effective Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be redeemed and
canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
34.5. Recorded
Ownership of Acquiring Fund Shares. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund’s Transfer Agent (as defined in
paragraph 3.3).
34.6. Filing
Responsibilities of Acquired Fund. Any reporting responsibility of
the Acquired Fund, including, but not limited to, the responsibility for filing
regulatory reports, tax returns, or other documents with the Securities and
Exchange Commission (“COMMISSION”), any state securities commission, and any
Federal, state or local tax authorities or any other relevant regulatory
authority, is and shall remain the responsibility of the Acquired
Fund.
ARTICLE
XXXV
VALUATION
35.1. Net Asset
Value of the Acquired Fund. The net asset value of the Acquired Fund
Shares shall be the net asset value computed as of the Effective Time, after the
declaration and payment of any dividends and/or other distributions on that
date, using the valuation procedures described in the then-current prospectuses
and statement of additional information of the Acquiring Fund.
35.2. Net Asset
Value of the Acquiring Fund. The net asset value of the Acquiring
Fund Shares shall be the same as the net asset value of the Acquired Fund Shares
as computed in paragraph 2.1.
35.3. Calculation
of Number of Acquiring Fund Shares. The number of Class A shares and Class I
shares of the Acquiring Fund to be issued (including fractional shares to the
third decimal place, if any) in connection with the Reorganization shall be
equal to the number of Class P shares and Institutional Class shares,
respectively, owned by Acquired Fund Shareholders at the Effective
Time.
35.4. Joint
Direction of Calculation. All computations of value with respect to both the
Acquired Fund and the Acquiring Fund shall be made by State Street Bank and
Trust Company (“STATE STREET”), in its capacity as accounting agent for the
MainStay Funds. Such computations shall be evaluated by New York Life
Investments, in its capacity as administrator for the Funds, in consultation
with Epoch, the investment adviser to the Acquired Fund. Such
computations shall be subject to confirmation by the Acquired Fund’s and
Acquiring Fund’s respective transfer agents and independent
accountants.
35.5. Effective
Time. The Effective Time shall be the time at which the Funds
calculate their net asset values as set forth in their respective prospectuses
(normally the close of regular trading on the New York Stock Exchange (“NYSE”))
on the Closing Date (as defined in paragraph 3.1) (the “EFFECTIVE
TIME”).
ARTICLE
XXXVI
CLOSING
36.1. Closing.
The Reorganization, together with related acts necessary to consummate the same
(“CLOSING”), shall occur at the principal office of New York Life Investments on
or about November 13, 2009, or at such other place and/or on such other date as
to which the parties may agree (the “CLOSING DATE”). All acts taking
place at the Closing shall be deemed to take place simultaneously as of the
Effective Time.
36.2. Transfer
and Delivery of Assets. World Funds shall direct Brown Brothers Xxxxxxxx &
Co. (“BROWN BROTHERS”), as custodian for the Acquired Fund, to deliver, at the
Closing, a certificate of an authorized officer stating that (i) the Assets were
delivered in proper form to the Acquiring Fund at the Effective Time, and (ii)
all necessary taxes in connection 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. The Acquired Fund’s portfolio
securities represented by a certificate or other written instrument shall be
presented by Brown Brothers to State Street, as custodian for the Acquiring
Fund. Such presentation shall be made for examination no later than
five (5) business days preceding the Effective Time, and shall be transferred
and delivered by the Acquired Fund as of the Effective Time for the account of
the Acquiring Fund duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. Brown Brothers shall deliver
to State Street as of the Effective Time by book entry, in accordance with the
customary practices of State Street and of each securities depository, as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the
“1940 ACT”), in which the Acquired Fund’s Assets are deposited, the Acquired
Fund’s Assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer of Federal
funds at the Effective Time.
36.3. Share
Records. World Funds shall direct Commonwealth Fund Services, Inc., in its
capacity as transfer agent for the Acquired Fund (the “TRANSFER AGENT”), to
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding Acquired Fund Shares owned by
each such Acquired Fund Shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver to the Secretary
of the Acquired Fund prior to the Effective Time a confirmation evidencing that
the appropriate number of Acquiring Fund Shares will be credited to the Acquired
Fund at the Effective Time, or provide other evidence satisfactory to the
Acquired Fund as of the Effective Time that such Acquiring Fund Shares have been
credited to the Acquired Fund’s accounts on the books of the Acquiring
Fund.
36.4. Postponement
of Effective Time. In the event that at the Effective Time the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund (each, an “EXCHANGE”) shall be closed to trading or trading
thereupon 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 the
Board of Directors of World Funds or the Board of Trustees of MainStay Funds,
accurate appraisal of the value of the net assets of the Acquired Fund or the
Acquiring Fund, respectively, is impracticable, the Effective Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored.
ARTICLE
XXXVII
REPRESENTATIONS
AND WARRANTIES
37.1. Representations
and Warranties of World Funds. Except as has been fully disclosed to the
Acquiring Fund in a written instrument executed by an officer of World Funds,
World Funds, on behalf of the Acquired Fund, represents and warrants to MainStay
Funds, on behalf of the Acquiring Fund, as follows:
(a) The
Acquired Fund is a duly established series of World Funds, which is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, with power under World Funds’ Articles of
Incorporation and By-Laws, each as amended from time to time, to own all of its
properties and assets and to carry on its business as it is presently
conducted.
(b) World
Funds is registered with the Commission as an open-end management investment
company under the 1940 Act, and the registration of the Acquired Fund Shares
under the Securities Act of 1933, as amended (the “1933 ACT”), is in full force
and effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by World Funds on behalf of the
Acquired Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the “1934 ACT”), and the 1940 Act, and such as may be required under state
securities laws.
(d) The
current prospectuses, statement of additional information, shareholder reports,
marketing and other related materials of the Acquired Fund and each prospectus
and statement of additional information of the Acquired Fund used at all times
prior to the date of this Agreement conforms or conformed at the time of its use
in all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder and does not
or did not at the time of its use 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 materially misleading.
(e) At the
Effective Time, World Funds, on behalf of the Acquired Fund, will have good and
marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, MainStay Funds, on
behalf of the Acquiring Fund, will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act.
(f) World
Funds is not engaged currently, and the execution, delivery and performance of
this Agreement will not result, in (i) a violation of Maryland Law or a material
violation of its Articles of Incorporation and By-Laws, or of any agreement,
indenture, instrument, contract, lease or other undertaking to which World
Funds, on behalf of the Acquired Fund, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or decree to
which World Funds, on behalf of the Acquired Fund, is a party or by which it is
bound.
(g) All
material contracts or other commitments of the Acquired Fund (other than this
Agreement and certain investment contracts, including options, futures, forward
contracts and other similar instruments) will terminate without liability or
obligation to the Acquired Fund on or prior to the Effective Time.
(h) Except as
otherwise disclosed to and accepted by MainStay Funds, on behalf of the
Acquiring Fund, in writing, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against the Acquired Fund or any of its
properties or assets that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of its
business. World Funds, on behalf of the Acquired Fund, knows of no
facts which might form the basis for the institution of such proceedings 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 and adversely affects its
business or its ability to consummate the transactions herein
contemplated.
(i) The
Statement of Assets and Liabilities, Statements of Operations and Changes in Net
Assets, and Schedule of Investments of the Acquired Fund at December 31, 2008
have been audited by Xxxx, Xxxxxx & Xxxxx LLP, independent registered public
accounting firm, and are in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) consistently applied, and such
statements (copies of which have been furnished to the Acquiring Fund) present
fairly, in all material respects, the financial condition of the Acquired Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein.
(j) Since
December 31, 2008, there has not been any material adverse change in the
Acquired Fund’s financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund in writing. For the purposes of this subparagraph (j),
a decline in net asset value per share of Acquired Fund Shares due to declines
in market values of securities held by the Acquired Fund, the discharge of the
Acquired Fund’s liabilities, or the redemption of the Acquired Fund’s shares by
shareholders of the Acquired Fund shall not constitute a material adverse
change.
(k) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquired Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquired Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(l) For each
taxable year of its operation (including the taxable year ending at the
Effective Time), the Acquired Fund has met (or will meet) the requirements of
Subchapter M of Chapter 1 of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of the Code.
(m) All of
the issued and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Fund, nor is there outstanding any security convertible into any of the
Acquired Fund’s shares.
(n) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Directors of World Funds, on behalf of the Acquired Fund, and,
subject to the approval of the shareholders of the Acquired Fund, this Agreement
will constitute a valid and binding obligation of World Funds on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
(o) The
information to be furnished by the Acquired Fund for use in registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including the Financial Industry
Regulatory Authority (“FINRA”)), which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and complete in all material
respects and shall comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
(p) The Proxy
Statement (as defined in paragraph 5.6), insofar as it relates to the Acquired
Fund, will, through the date of the meeting of the Acquired Fund Shareholders
contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(p) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquiring Fund for use therein.
37.2. Representations
and Warranties of MainStay Funds. Except as has been fully disclosed to the
Acquired Fund in a written instrument executed by an officer of MainStay Funds,
MainStay Funds, on behalf of the Acquiring Fund, represents and warrants to
World Funds, on behalf of the Acquired Fund, as follows:
(a) The
Acquiring Fund is a duly established series of MainStay Funds Trust, which is a
statutory trust duly organized, validly existing, and in good standing under the
laws of the State of Delaware with power under its Declaration of Trust and
By-Laws, each as amended from time to time, to own all of its properties and
assets and to carry on its business as it is presently conducted.
(b) At the
Effective Time, MainStay Funds will be registered with the Commission as an
open-end management investment company under the 1940 Act, and the registration
of the Acquiring Fund Shares under the 1933 Act will be in full force and
effect.
(c) No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by MainStay Funds on behalf of the
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.
(d) The
preliminary prospectus and statement of additional information of the Acquiring
Fund filed with the Commission on July 30, 2009 as part of the MainStay Funds’
registration statement on Form N-1A, which will become effective prior to the
Closing Date, conforms and, as of its effective date, will conform in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder, and does not
and, as of its effective date, will not include any untrue statement of material
fact or omit to state any material fact required to be stated or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading.
(e) At the
Effective Time, MainStay Funds, on behalf of the Acquiring Fund, will have good
and marketable title to the Acquiring Fund’s assets, free of any liens or other
encumbrances.
(f) The
Acquiring Fund is not engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a violation of Delaware
law or a material violation of MainStay Funds’ Declaration of Trust and By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which MainStay Funds, on behalf of the Acquiring Fund, is a party or by which
it is bound, or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which MainStay Funds, on behalf of the Acquiring Fund, is
a party or by which it is bound.
(g) Except as
otherwise disclosed to and accepted by World Funds, on behalf of the Acquired
Fund, in writing, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
Acquiring Fund’s knowledge, threatened against MainStay Funds, on behalf of the
Acquiring Fund, or any of the Acquiring Fund’s properties or assets that, if
adversely determined, would materially and adversely affect the Acquiring Fund’s
financial condition or the conduct of its business. MainStay Funds, on behalf of
the Acquiring Fund, knows of no facts which might form the basis for the
institution of such proceedings 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 and adversely affects the Acquiring Fund’s business or its
ability to consummate the transactions herein contemplated.
(h) The
Acquiring Fund was formed for the purpose of effecting the Reorganization and,
prior to the Closing, will have not commenced operations or carried on any
business activity, will have had no assets or liabilities and will have no
issued or outstanding shares other than as described in paragraph 6.1(b) of this
Agreement.
(i) At the
Effective Time, all Federal and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions, if any) shall have been filed and
are or will be correct in all material respects, and all Federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof to the
best of the knowledge of the Acquiring Fund, and no such return is currently
under audit and no assessment has been asserted with respect to such
returns.
(j) The
Acquiring Fund intends to meet the requirements of Subchapter M of the Code for
qualification and treatment of such Surviving Fund as a regulated investment
company in the future and, from the date of this Agreement until the Closing
Date, shall not take any action inconsistent with such efforts to qualify and be
treated as a regulated investment company under the Code in the
future.
(k) The
execution, delivery and performance of this Agreement will have been duly
authorized prior to the Effective Time by all necessary action, if any, on the
part of the Trustees of MainStay Funds, on behalf of the Acquiring Fund, and
this Agreement will constitute a valid and binding obligation of the Acquiring
Fund, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors’ rights and to general equity principles.
(l) The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will at the Effective Time have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares,
will be fully paid and non-assessable by MainStay Funds, and will have been
issued in every jurisdiction in compliance in all material respects with
applicable registration requirements and applicable securities
laws. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquiring Fund, nor is there outstanding any security convertible into any of
the Acquiring Fund’s shares.
(m) The
information to be furnished by the Acquiring Fund for use in the registration
statements, proxy materials and other documents filed or to be filed with any
Federal, state or local regulatory authority (including FINRA) that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
(n) The Proxy
Statement, insofar as it relates to the Acquiring Fund and the Acquiring Fund
Shares, will, through the date of the meeting of shareholders of the Acquired
Fund contemplated therein and at the Effective Time (i) 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 materially misleading,
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act, and the 1940 Act and the rules and regulations thereunder;
provided, however, that the representations and warranties of this subparagraph
(n) shall not apply to statements in or omissions from the Proxy Statement made
in reliance upon and in conformity with information that was furnished by the
Acquired Fund for use therein.
37.3. Representation
and Warranty of New York Life Investments. New York Life Investments represents
and warrants to World Funds, on behalf of the Acquired Fund, and MainStay Funds,
on behalf of the Acquiring Fund, that the execution, delivery and performance of
this Agreement will have been duly authorized prior to the Effective Time by all
necessary action, if any, on the part of New York Life Investments, and this
Agreement will constitute a valid and binding obligation of New York Life
Investments, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors’ rights and to general equity
principles.
37.4. Representation
and Warranty of Epoch. Epoch represents and warrants to World Funds,
on behalf of the Acquired Fund, and MainStay Funds, on behalf of the Acquiring
Fund, that the execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action, if
any, on the part of Epoch, and this Agreement will constitute a valid and
binding obligation of Epoch, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights and to general equity
principles.
ARTICLE
XXXVIII
COVENANTS
AND AGREEMENTS
38.1. Conduct
of Business. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course consistent with past practice between the date
hereof and the Effective Time, it being understood that such ordinary course of
business will include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable.
38.2. Meeting
of Shareholders. World Funds will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
38.3. No
Distribution of Acquiring Fund Shares. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
38.4. Information.
The Acquired Fund will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Acquired Fund Shares.
38.5. Other
Necessary Action. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
38.6. Proxy
Statement. The Acquired Fund will provide the Acquiring Fund with information
regarding the Acquired Fund, and the Acquiring Fund will provide the Acquired
Fund with information regarding the Acquiring Fund, reasonably necessary for the
preparation of a proxy statement on Schedule 14A (the “PROXY STATEMENT”), in
compliance with the 1934 Act and the 1940 Act, in connection with the meeting of
the shareholders of the Acquired Fund to consider approval of this Agreement and
the transactions contemplated herein.
38.7. Liquidating
Distribution. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its respective
shareholders consisting of the Acquiring Fund Shares received at the
Closing.
38.8. Best
Efforts. The Acquiring Fund and the Acquired Fund shall each use their
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent set forth in Article VI to effect the transactions contemplated by
this Agreement as promptly as practicable.
38.9. Other
Instruments. World Funds, on behalf of the Acquired Fund, and MainStay Funds, on
behalf of the Acquiring Fund, each covenants that it will, from time to time, as
and when reasonably requested by the other party, 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 party may
reasonably deem necessary or desirable in order to vest in and confirm (a) World
Funds’, on behalf of the Acquired Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and (b) MainStay Funds’, on behalf of the
Acquiring Fund, title to and possession of all the Assets and otherwise to carry
out the intent and purpose of this Agreement.
38.10. Expense
Limitation. From the Closing Date to the second anniversary of the
Closing Date, New York Life Investments agrees to reimburse expenses of Class A
and Class I shares of the Acquiring Fund so that the total ordinary operating
expenses for Class A and Class I shares of the Acquiring Fund do not exceed the
total annual operating expenses of the Class P shares and Institutional shares
of the Acquired Fund (adjusted to reflect any expense limitation agreements then
in effect), respectively, as of the Closing Date. New York Life
Investments may recoup the amount of any expense reimbursements from the
Acquiring Fund if such action does not cause the Acquiring Fund to exceed
existing expense limitations and the recoupment is made within the year in which
New York Life Investments incurred the expense. For purposes of this
paragraph 5.10, The term “total ordinary operating expenses” excludes taxes,
interest, litigation, extraordinary expenses, brokerage and other transaction
expenses relating to the purchase or sale of portfolio investments, and the fees
and expenses of any other funds in which the Acquiring Fund
invests.
38.11. Regulatory
Approvals. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Effective Time.
ARTICLE
XXXIX
CONDITIONS
PRECEDENT
39.1. Conditions
Precedent to Obligations of Acquired Fund. The obligations of World Funds, on
behalf of the Acquired Fund, to consummate the transactions provided for herein
shall be subject, at World Funds’ election, to the following
conditions:
(a) All
representations and warranties of MainStay Funds, on behalf of the Acquiring
Fund, contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective Time, with the
same force and effect as if made on and as of the Effective Time.
(b) Prior to
the Closing Date, (i) the Trustees of the MainStay Funds, on behalf of the
Acquiring Fund, shall have authorized the issuance of and the Acquiring Fund
shall have issued one share to New York Life Investments in consideration of the
payment of $10.00, (ii) New York Life Investments shall have, among other
things, approved as the sole initial shareholder (x) the Investment Advisory
Agreement between MainStay Funds, on behalf of the Acquiring Fund, and New York
Life Investments, (y) the Investment Sub-Advisory Agreement between New York
Life Investments and Epoch and (z) the Acquiring Fund’s adoption of a “manager
of managers” structure, pursuant to which the Acquiring Fund’s investment
adviser is authorized to enter into and amend contracts with investment
sub-advisers without the prior approval of the Acquiring Fund’s shareholders, in
the manner contemplated by the order of the Securities and Exchange Commission
(“SEC”) granting the Acquiring Fund and its investment adviser exemptive relief
from Section 15(a) of the 1940 Act and Rule 18f-2 thereunder (SEC Rel.
40-27656), and (iii) immediately prior to or contemporaneously with the
consummation of the transactions described in this Agreement, the share of the
Acquiring Fund acquired by New York Life Investments has been or is redeemed for
$10.00. Notwithstanding the foregoing, the Acquiring Fund may issue
shares to New York Life Investments or another entity for cash contributions
made in connection with any required initial capital requirements imposed by
Section 14(a) of the 1940 Act.
(c) MainStay
Funds, on behalf of the Acquiring Fund, shall have delivered to the Acquired
Fund a certificate executed in the name of the Acquiring Fund by its President
or Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to World Funds, and dated as of the Effective Time, to the effect
that the representations and warranties of MainStay Funds, on behalf of the
Acquiring Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as World Funds shall reasonably
request.
(d) MainStay
Funds, on behalf of the Acquiring Fund, shall have performed all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by MainStay Funds, on behalf of the Acquiring
Fund, on or before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The World
Funds shall have received on the Closing Date the opinion of Dechert LLP,
counsel to the MainStay Funds, dated as of the Closing Date, covering the
following points:
(1) The
MainStay Funds is a statutory trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the trust power to own
all of the Acquiring Fund’s properties and assets and to carry on its business,
including that of the Acquiring Fund, as a registered investment
company;
(2) The
Agreement has been duly authorized by MainStay Funds, on behalf of the Acquiring
Fund and, assuming due authorization, execution and delivery of the Agreement by
World Funds, is a valid and binding obligation of MainStay Funds on behalf of
the Acquiring Fund enforceable against the MainStay Funds in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors’ rights generally
and to general equity principles;
(3) The
Acquiring Fund shares to be issued to the Acquired Fund Shareholders as provided
by this Agreement are duly authorized, upon such delivery will be validly issued
and outstanding, and will be fully paid and non-assessable by MainStay Funds and
no shareholder of an Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof;
(4) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of
MainStay Funds’ Declaration of Trust or By-Laws or any provision of any
agreement (known to such counsel) to which MainStay Funds is a party or by which
it is bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty under any agreement, judgment or
decree to which the MainStay Funds is a party or by which it is
bound;
(5) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Delaware is
required to be obtained by MainStay Funds in order to consummate 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;
(6) MainStay
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquiring Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect; and
(7) To the
knowledge of such counsel, and except as otherwise disclosed to the World Funds
pursuant to paragraph 4.2(g) of this Agreement, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to MainStay Funds or the Acquiring Fund and
neither MainStay Funds nor the Acquiring Fund is 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 its business.
39.2. Conditions
Precedent to Obligations of Acquiring Fund. The obligations of MainStay Funds,
on behalf of the Acquiring Fund, to complete the transactions provided for
herein shall be subject, at MainStay Funds’ election, to the following
conditions:
(a) All
representations and warranties of World Funds, on behalf of the Acquired Fund,
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same force
and effect as if made on and as of the Effective Time.
(b) World
Funds shall have delivered to the Acquiring Fund a statement of the Acquired
Fund’s Assets and Liabilities, as of the Effective Time, that is prepared in
accordance with GAAP and certified by the Treasurer of World Funds.
(c) World
Funds, on behalf of the Acquired Fund, shall have delivered to the Acquiring
Fund a certificate executed in the name of the Acquired Fund by its President or
Vice President and its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquiring Fund and dated as of the Effective Time, to the
effect that the representations and warranties of World Funds, on behalf of the
Acquired Fund, made in this Agreement are true and correct at and as of the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement, and as to such other matters as MainStay Funds shall
reasonably request.
(d) World
Funds, on behalf of the Acquired Fund, shall have performed all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by World Funds, on behalf of the Acquired Fund, on or
before the Effective Time.
(e) The
Acquired Fund and the Acquiring Fund shall have agreed on the number of full and
fractional Acquiring Fund Shares to be issued in connection with the
Reorganization after such number has been calculated in accordance with
paragraph 2.3.
(f) The
MainStay Funds shall have received on the Closing Date the opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the World Funds, covering the following
points:
(1) The World
Funds is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland and has the power to own all of Acquired
Fund’s properties and assets, and to carry on its business, including that of
the Acquired Fund, as a registered investment company;
(2) The
Agreement has been duly authorized by the World Funds, on behalf of the Acquired
Fund, and, assuming due authorization, execution and delivery of the Agreement
by the MainStay Funds, is a valid and binding obligation of the World Funds, on
behalf of the Acquired Fund, enforceable against the World Funds in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and to general equity principles;
(3) The
execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, result in a material violation of the
World Funds’ Articles of Incorporation or By-Laws or any provision of any
agreement (known to such counsel) to which the World Funds is a party or by
which it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the World Funds is a party or by which it
is bound;
(4) To the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Maryland is
required to be obtained by the World Funds in order to consummate 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;
(5) The World
Funds is a registered investment company classified as a management company of
the open-end type with respect to each series of shares it offers, including
those of the Acquired Fund, under the 1940 Act, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(6) To the
knowledge of such counsel, and except as otherwise disclosed to the MainStay
Funds pursuant to paragraph 4.1(h) of this Agreement, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the World Funds or
the Acquired Fund and neither the World Funds nor the Acquired Fund is 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 its
business.
39.3. Other
Conditions Precedent. If any of the conditions set forth in this paragraph 6.3
have not been satisfied on or before the Effective Time, World Funds, on behalf
of the Acquired Fund, or MainStay Funds, on behalf of the Acquiring Fund, shall,
at its option, not be required to consummate the transactions contemplated by
this Agreement.
(a) The
Agreement and the transactions contemplated herein shall have been approved by
the requisite vote of the holders of the outstanding shares of the Acquired Fund
in accordance with the provisions of World Funds’ Articles of Incorporation and
By-Laws, applicable Maryland law and the 1940 Act and the regulations
thereunder, and certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything herein
to the contrary, World Funds and MainStay Funds, on behalf of either the
Acquired Fund or the Acquiring Fund, respectively, may not waive the conditions
set forth in this paragraph 6.3(a).
(b) At the
Effective Time, no action, suit or other proceeding shall be pending or, to the
knowledge of World Funds or MainStay Funds, threatened 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.
(c) All
consents of other parties and all other consents, orders and permits of Federal,
state and local regulatory authorities deemed necessary by World Funds and
MainStay Funds to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring Fund or the
Acquired Fund, provided that either party hereto may for itself waive any of
such conditions.
(d) World
Funds and MainStay Funds shall have received an opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP, in a form acceptable to Dechert LLP, as to federal income tax
matters substantially to the effect that, based on the facts, representations,
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
(1) The
Reorganization should constitute a tax-free reorganization within the meaning of
Section 368(a) of the Code, and the Acquired Fund and the Acquiring Fund will
each be a party to a reorganization within the meaning of Section 368(b) of the
Code.
(2) No gain
or loss should be recognized by the Acquired Fund upon the transfer of all of
its assets to the Acquiring Fund in exchange solely for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of the Acquired Fund’s
liabilities or upon the distribution of the Acquiring Fund Shares to the
Acquired Fund’s shareholders in exchange for their shares of the Acquired
Fund.
(3) No gain
or loss should be recognized by the Acquiring Fund upon the receipt by it of all
of the assets of the Acquired Fund in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
(4) The
adjusted tax basis of the assets of the Acquired Fund received by the Acquiring
Fund should be the same as the adjusted tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization.
(5) The
holding period of the assets of the Acquired Fund received by the Acquiring Fund
should include the holding period of those assets in the hands of the Acquired
Fund immediately prior to the Reorganization.
(6) No gain
or loss should be recognized by the shareholders of the Acquired Fund upon the
exchange of their Acquired Fund Shares for the Acquiring Fund Shares (including
fractional shares to which they may be entitled) and the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund.
(7) The
aggregate adjusted tax basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) pursuant to the Reorganization should be the same as the aggregate
adjusted tax basis of the Acquired Fund Shares held by the Acquired Fund’s
shareholders immediately prior to the Reorganization.
(8) The
holding period of the Acquiring Fund Shares received by the shareholders of the
Acquired Fund (including fractional shares to which they may be entitled) should
include the holding period of the Acquired Fund Shares surrendered in exchange
therefore, provided that the Acquired Fund Shares were held as a capital asset
on the Closing Date.
No
opinion will be expressed as to the effect of the Reorganization on (i) the
Acquired Fund or the Acquiring Fund with respect to any asset as to which any
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting and (ii) any Acquired Fund
or Acquiring Fund shareholder that is required to recognize unrealized gains and
losses for federal income tax purposes under a mark-to-market system of
accounting.
Such
opinion shall be based on customary assumptions, limitations and such
representations as Xxxxxx, Xxxxx & Xxxxxxx LLP may reasonably request, and
the Acquired Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Such opinion may contain such
assumptions and limitations as shall be in the opinion of such counsel
appropriate to render the opinions expressed therein. Notwithstanding
anything herein to the contrary, neither party may waive the condition set forth
in this paragraph 6.3(d).
(e) Brown
Brothers shall have delivered such certificates or other documents as set forth
in paragraph 3.2.
(f) The
Transfer Agent shall have delivered to MainStay Funds a certificate of its
authorized officer as set forth in paragraph 3.3.
(g) The
Acquiring Fund shall have issued and delivered to the Secretary of the Acquired
Fund the confirmation as set forth in paragraph 3.3.
(h) Each
party shall have delivered to the other such bills of sale, checks, assignments,
receipts or other documents as reasonably requested by such other party or its
counsel.
ARTICLE
XL
INDEMNIFICATION
40.1. Indemnification
by MainStay Funds. MainStay Funds, solely out of the Acquiring Fund’s assets and
property, agrees to indemnify and hold harmless World Funds, the Acquired Fund,
and their directors, officers, employees and agents (the “WORLD INDEMNIFIED
PARTIES”) from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which the World Indemnified Parties
may become subject, insofar as such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on any breach by the
Acquiring Fund of any of its representations, warranties, covenants or
agreements set forth in this Agreement, provided that this indemnification shall
not apply to the extent such loss, claim, damage, liability or expense (or
actions with respect thereto) shall be due to any negligent, intentional or
fraudulent act, omission or error of the Acquired Fund, or its respective
directors, officers or agents.
40.2. Indemnification
by World Funds. World Funds, solely out of the Acquired Fund’s assets and
property, agrees to indemnify and hold harmless MainStay Funds, the Acquiring
Fund, and their trustees, officers, employees and agents (the “MAINSTAY
INDEMNIFIED PARTIES”) from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the payment of
reasonable legal fees and reasonable costs of investigation) to which the
MainStay Indemnified Parties may become subject, insofar as such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement, provided that
this indemnification shall not apply to the extent such loss, claim, damage,
liability or expense (or actions with respect thereto) shall be due to any
negligent, intentional or fraudulent act, omission or error of the Acquiring
Fund, or its respective trustees, officers or agents.
40.3. Liability
of World Funds. MainStay Funds understands and agrees that the obligations of
World Funds on behalf of the Acquired Fund under this Agreement shall not be
binding upon any Director, shareholder, nominee, officer, agent or employee of
World Funds on behalf of World Funds personally, but bind only World Funds on
behalf of the Acquired Fund and the Acquired Fund’s property. Moreover, no
series of World Funds other than the Acquired Fund shall be responsible for the
obligations of World Funds hereunder, and all persons shall look only to the
assets of the Acquired Fund to satisfy the obligations of the Acquired Fund
hereunder. MainStay Funds represents that it has notice of the provisions of the
Articles of Incorporation of the World Funds disclaiming such shareholder and
trustee liability for acts or obligations of the Acquired Fund.
40.4. Liability
of MainStay Funds. World Funds understands and agrees that the obligations of
MainStay Funds on behalf of the Acquiring Fund under this Agreement shall not be
binding upon any trustee, shareholder, nominee, officer, agent or employee of
MainStay Funds on behalf of MainStay Funds personally, but bind only MainStay
Funds on behalf of the Acquiring Fund and the Acquiring Fund’s property.
Moreover, no series of MainStay Funds other than the Acquiring Fund shall be
responsible for the obligations of MainStay Funds hereunder, and all persons
shall look only to the assets of the Acquiring Fund to satisfy the obligations
of the Acquiring Fund hereunder. World Funds represents that it has notice of
the provisions of the Declaration of Trust of MainStay Funds disclaiming such
shareholder and trustee liability for acts or obligations of the Acquiring
Fund.
ARTICLE
XLI
BROKERAGE
FEES AND EXPENSES
41.1. No Broker
or Finder Fees. The Acquiring Fund and the Acquired Fund, represent and warrant
to each other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
41.2. Expenses
of Reorganization. The expenses relating to the proposed Reorganization, whether
or not consummated, will be borne by New York Life Investments and Epoch
Investment Partners, Inc. The costs of the Reorganization shall include, but not
be limited to: costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparing and filing the registration statement of the
Acquiring Funds, preparing, printing and distributing the Proxy Statement and
prospectus supplements relating to the Reorganization, and winding down the
operations and terminating the existence of the Acquired Funds; legal fees,
including those incurred in connection with the preparation of legal opinions,
and accounting fees with respect to the Reorganization and the Proxy Statement;
expenses of soliciting proxies from Acquired Fund Shareholders and holding
shareholder meetings; and all necessary taxes in connection with the delivery of
the Assets, including all applicable federal and state stock transfer stamps.
Notwithstanding any of the foregoing, expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
another person of such expenses would result in the disqualification of such
party as a “regulated investment company” within the meaning of Section 851 of
the Code.
ARTICLE
XLII
AMENDMENTS
AND TERMINATION
42.1. Amendments.
This Agreement may be amended, modified or supplemented in such manner as may be
deemed necessary or advisable by the authorized officers of World Funds or
MainStay Funds, on behalf of either the Acquired Fund or the Acquiring Fund,
respectively; provided, however, that following the approval of this Agreement
by the shareholders of the Acquired Fund pursuant to paragraph 6.3(a) of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
42.2. Termination.
This Agreement may be terminated and the transactions contemplated hereby may be
abandoned by resolution of the Board of Directors of World Funds or the Board of
Trustees of MainStay Funds, on behalf of the Acquired Fund or the Acquiring
Fund, respectively, at any time prior to the Effective Time, if circumstances
should develop that, in the opinion of such Board of Directors or Board of
Trustees, as the case may be, make proceeding with the Agreement
inadvisable.
ARTICLE
XLIII
NOTICES
Any
notice, report, statement or demand required or permitted by any provisions of
this Agreement shall be in writing and shall be given by facsimile, electronic
delivery (i.e., e-mail) personal service or prepaid or certified mail addressed
as follows:
|
If
to World Funds:
|
|
The
World Funds, Inc.
|
|
0000
Xxxxx Xxxxx Xxxxxxx – Xxxxx 000
|
|
Richmond,
Virginia 23235
|
|
Attention:
Xxxx Xxxxx, III
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx@xxxxxx.xxx
|
|
With
copies (which shall not constitute notice) to:
|
|
Xxxxxx,
Xxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxxxxxxxx Xxxxxx, X.X.
|
|
Attention:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxx@xxxxxxxxxxx.xxx
|
|
If
to MainStay Funds:
|
|
The
MainStay Funds
|
|
00
Xxxxxxx Xxxxxx
|
|
New
York, New York 10010
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
|
With
a copy (which shall not constitute notice) to:
|
|
Dechert
LLP
|
|
0000
X Xxxxxx, X.X.
|
|
Washington,
D.C. 20006
|
|
Attn:
Xxxxxx X. Xxxxxx, Esq.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxx.xxxxxx@xxxxxxx.xxx
|
|
If
to New York Life Investments:
|
|
New
York Life Investment Management LLC
|
|
000
Xxxxxxxxxx Xxxxxx
|
|
Parsippany,
New Jersey 07054
|
|
Attention:
Xxxxxxxxxx X. X. Xxxxxxxx, Xxx.
|
|
Telephone
No.: (000) 000-0000
|
|
Facsimile
No.: (000) 000-0000
|
|
Email:
xxxxxxxxxx_xxxxxxxx@xxxxx.xxx
|
ARTICLE
XLIV
MISCELLANEOUS
44.1. Entire
Agreement. MainStay Funds and World Funds agree that they have not made any
representation, warranty or covenant, on behalf of either the Acquiring Fund or
the Acquired Fund, respectively, not set forth herein, and that this Agreement
constitutes the entire agreement between the parties.
44.2. Survival.
The representations, warranties and covenants contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith, and the
obligations with respect to indemnification of the Acquired Fund and Acquiring
Fund contained in paragraphs 7.1 and 7.2, shall survive the
Closing.
44.3. Headings.
The Article and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
44.4. Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to its principles of conflicts of
laws.
44.5. Assignment.
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.
44.6. Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all taken together shall constitute one
agreement.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the 13th day of November, 2009.
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MAINSTAY
FUNDS TRUST
ON
BEHALF OF THE ACQUIRING FUND
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THE
WORLD FUNDS, INC.
ON
BEHALF OF THE ACQUIRED FUND
|
|
By: /s/
Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: President
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By: /s/
Xxxx Xxxxx XXX
Name: Xxxx
Xxxxx XXX
Title: President
|
|
Solely
for purposes of paragraphs 4.3, 5.10, 6.1 and 8.2:
NEW
YORK LIFE INVESTMENT MANAGEMENT LLC
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Solely
for purposes of paragraphs 4.4 and 8.2:
EPOCH
INVESTMENT PARTNERS, INC.
|
|
By: /s/
Xxxxx X. Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Executive
Vice President
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By: /s/
T.T. Taussig
Name: T.
T. Xxxxxxx
Title: President
and COO
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