AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated
as of June 4, 2009 (this "Agreement"), is made by and
between RMR Asia Real Estate Fund, a Massachusetts business
trust and registered closed end management investment company,
File No. 811-22007 (the "Target Fund"), and New RMR Asia
Pacific Real Estate Fund, a Delaware statutory trust and
registered closed end management investment company, File
No. 811-22260 (the "Acquiring Fund" and together with
the "Target Fund", the "Funds" and each individually, a "Fund").
WHEREAS, the Acquiring Fund has proposed to enter
into the Reorganization (as defined below) with the Target
Fund;
WHEREAS, the Boards of Trustees of the Funds have
determined that participation in the Reorganization is in
the best interests of each respective Fund;
WHEREAS, the parties intend that the transaction
contemplated by this Agreement qualify as a "reorganization"
within the meaning of Section 368(a) of the Code
(as defined below); and
WHEREAS, the Acquiring Fund is also proposing to
enter into a reorganization with RMR Asia Pacific Real
Estate Fund, a registered closed end management investment
company, File No. 811-21856 (the "Sister Fund"), pursuant
to a separate agreement and plan of reorganization;
NOW, THEREFORE, in order to consummate the Reorganization
and in consideration of the respective representations, warranties,
covenants and agreements hereinafter set forth, and intending to
be legally bound, each Fund hereby agrees as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have
the following meanings:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934,
as amended.
(c) "1940 Act" means the Investment Company Act of 1940,
as amended.
(d) "Acquiring Fund" shall have the meaning assigned to
such term in the preamble.
(e) "Acquiring Fund Closing Financial Statements" shall
have the meaning assigned to such term in Section 2(d).
(f) "Acquiring Fund Common Shares" shall have the meaning
assigned to such term in Section 2(k).
(g) "Agreement" shall have the meaning assigned to such
term in the preamble.
(h) "Closing Date" shall have the meaning assigned to
such term in Section 8(a).
(i) "Code" means the Internal Revenue Code of 1986, as
amended.
(j) "Commission" means the Securities and Exchange
Commission.
(k) "Fund" or "Funds" shall have the meaning assigned to
such terms in the preamble.
(l) "GAAP" means United States generally accepted
accounting principles and practices as in effect from time to
time and applied consistently throughout the periods involved.
(m) "Indemnified Party" shall have the meaning assigned
to such term in Section 13(a).
(n) "Indemnitor" shall have the meaning assigned to such
term in Section 13(a).
(o) "Loss" or "Losses" shall have the meanings assigned
to such terms in Section 13(a).
(p) "NYSE Amex" means NYSE Amex LLC.
(q) "Proxy Statement/Prospectus" shall have the meaning
assigned to such term in Section 2(j).
(r) "Registration Statement" shall have the meaning assigned
to such term in Section 2(j).
(s) "Reorganization" shall have the meaning assigned to
such term in Section 4(a).
(t) "RIC" means a regulated investment company under
Section 851 of the Code.
(u) "Shareholder Meeting" shall have the meaning assigned
to such term in Section 2(j).
(v) "Sister Fund" shall have the meaning assigned to such
term in the recitals.
(w) "Skadden" means Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
(x) "Target Fund" shall have the meaning assigned to such
term in the preamble.
(y) "Target Fund Closing Financial Statements" shall have
the meaning assigned to such term in Section 3(e).
(z) "Target Fund Common Shares" shall have the meaning
assigned to such term in Section 3(m).
(aa) "Target Fund Investments" means (i) the investments
of the Target Fund shown on the schedule of its investments as of
the Valuation Date furnished to the Acquiring Fund and (ii) all
other assets owned by the Target Fund or liabilities incurred as
of the Valuation Date.
(bb) "Valuation Date" shall be 4:00 p.m., Eastern Time, on
June 16, 2009, or such earlier or later day and time as may be
mutually agreed upon in writing by the parties hereto.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND.
The Acquiring Fund represents and warrants to, and agrees
with, the Target Fund that:
(a) The Acquiring Fund is a trust, with transferable shares,
duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and has the power and
authority to own all of its assets and to carry out this Agreement.
The Acquiring Fund has all necessary federal, state and local
authorizations to carry on its business as it is now being conducted
or proposed to be conducted and to carry out this Agreement.
(b) The Acquiring Fund is duly registered under the 1940 Act
as a non-diversified, closed end management investment company and
such registration has not been revoked or rescinded and is in full
force and effect.
(c) The Acquiring Fund has full power and authority to enter
into and perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement has been duly authorized
by all necessary action of its Board of Trustees, and this Agreement
constitutes a valid and binding contract enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto.
(d) An unaudited statement of assets, liabilities and capital
of the Acquiring Fund and an unaudited schedule of investments of the
Acquiring Fund, in each case, with values determined as provided in
Section 5 of this Agreement, each as of the Valuation Date (together,
the "Acquiring Fund Closing Financial Statements"), will be furnished
to the Target Fund, at or prior to the Closing Date, for the purpose
of determining the number of Acquiring Fund Common Shares to be issued
to the Target Fund pursuant to Section 5 hereof; the Acquiring Fund
Closing Financial Statements will fairly present the financial position
of the Acquiring Fund as of the Valuation Date in conformity with GAAP.
(e) There are no material legal, administrative or other
proceedings pending or, to the knowledge of the Acquiring Fund, threatened
against it which assert liability on the part of the Acquiring Fund or
which materially affect its financial condition or its ability to
consummate the Reorganization. The Acquiring Fund is not charged with
nor, to the best of its knowledge, does any person presently intend to
charge it with, or to recommend that it be charged with, any violation
of any provisions of any federal, state or local law or regulation or
administrative ruling to which it is bound.
(f) There are no material contracts outstanding to which the
Acquiring Fund is a party that have not been disclosed in the Registration
Statement or that have not otherwise been disclosed to the Target Fund.
(g) The execution, delivery and performance of this Agreement by
the Acquiring Fund do not, and the consummation of the transactions
contemplated hereby will not, constitute or result in a breach or
violation of, or a default under, (i) the governing documents of the
Acquiring Fund, (ii) any contract or other commitment or obligation
binding upon the Acquiring Fund, after giving effect to any agreement
of the Funds to amend such contract or other commitment or obligation
to cure any potential violation as a condition precedent to the
Reorganization or (iii) any order or decree binding upon the Acquiring
Fund.
(h) The Acquiring Fund has no known liabilities of a material
amount, contingent or otherwise, other than those shown on the
Acquiring Fund Closing Financial Statements, those incurred in
the ordinary course of its business as an investment company,
and those incurred in connection with the Reorganization. As
of the Valuation Date, the Acquiring Fund will advise the
Target Fund in writing of all known liabilities, contingent
or otherwise, whether or not incurred in the ordinary course
of business, existing or accrued as of such time, not
otherwise disclosed in the Acquiring Fund Closing Financial
Statements.
(i) No consent, approval, authorization or order of
any court or government authority is required for the
consummation by the Acquiring Fund of the Reorganization,
except such as may be required under the 1933 Act, the 1934
Act and the 1940 Act or state securities laws (which term as
used herein shall include the laws of the District of
Columbia and Puerto Rico).
(j) The registration statement filed by the Acquiring
Fund on Form N-14, which includes the proxy statement of
the Target Fund with respect to the transactions contemplated
herein (the "Proxy Statement/Prospectus"), and any documents
included or incorporated by reference therein and any
supplement or amendment thereto (collectively, as so amended
or supplemented, the "Registration Statement"), on the
effective date of the Registration Statement, at the time of
the special meeting of the shareholders of the Target Fund
called to vote on this Agreement and the Reorganization
(the "Shareholder Meeting") and at the Closing Date (i)
complied or will comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act
and the rules and regulations thereunder and (ii) did not or
will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
and the Proxy Statement/Prospectus included therein did not
or will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that no
representation or warranty is made by the Acquiring Fund with
respect to statements made or incorporated by reference in the
Registration Statement or Proxy Statement/Prospectus based on
information supplied by the Target Fund or the Sister Fund for
inclusion or incorporation by reference therein, or based on
information which is not included or incorporated by reference
in such documents but which should have been disclosed pursuant
to Section 3(l).
(k) The Acquiring Fund is authorized to issue an
unlimited number of common shares of beneficial interest, par
value $.001 per share (the "Acquiring Fund Common Shares").
(l) The Acquiring Fund Common Shares to be issued to the
Target Fund pursuant to this Agreement will have been duly
authorized and, when issued and transferred pursuant to this
Agreement, will be legally and validly issued and will be fully
paid, nonassessable and will have full voting rights, and no
shareholder of the Acquiring Fund will have any preemptive right
of subscription or purchase in respect thereof.
(m) The Acquiring Fund, subject to the Registration
Statement having been declared effective and the filing of the
Proxy Statement/Prospectus under Rule 497, has taken all required
action under the 1933 Act, the 1934 Act and the 1940 Act and the
rules and regulations thereunder to make the public offering
and consummate the sale of the Acquiring Fund Common Shares as
contemplated by this Agreement.
(n) At or prior to the Closing Date, the Acquiring Fund
will have obtained any and all regulatory, trustee and shareholder
approvals necessary to issue the Acquiring Fund Common Shares
to the Target Fund.
(o) The Acquiring Fund has filed, or intends to file, or
has obtained extensions to file, all federal, state and local
tax returns which are required to be filed by it, and has paid
or has obtained extensions to pay, all federal, state and local
taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year
in which the Closing Date occurs. All tax liabilities of the
Acquiring Fund have been adequately provided for on its books,
and no tax deficiency or liability of the Acquiring Fund has been
asserted and no question with respect thereto has been raised by
the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid, up to and
including the taxable year in which the Closing Date occurs.
(p) The Acquiring Fund has (i) elected to qualify and has
qualified as a RIC as of and since its inception, (ii) been a RIC
at all times since the end of its first taxable year when it so
qualified, (iii) qualifies and will continue to qualify as a RIC
and (iv) satisfied the distribution requirements imposed by
the Code for each of its taxable years.
(q) The Acquiring Fund has no plan or intention to sell
or otherwise dispose of the Target Fund Investments, except
for dispositions made in the ordinary course of business.
3. REPRESENTATIONS AND WARRANTIES OF THE TARGET FUND.
The Target Fund represents and warrants to, and agrees
with, the Acquiring Fund that:
(a) The Target Fund is a trust, with transferable
shares, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, and
has the power and authority to own all of its assets and to
carry out this Agreement. The Target Fund has all necessary
federal, state and local authorizations to carry on its business
as it is now being conducted and to carry out this Agreement.
(b) The Target Fund is duly registered under the 1940
Act as a non-diversified, closed end management investment
company, and such registration has not been revoked or rescinded
and is in full force and effect.
(c) The Target Fund has full power and authority to
enter into and perform its obligations under this Agreement,
subject, in the case of consummation of the Reorganization,
to the approval and adoption of this Agreement and the
Reorganization by the shareholders of the Target Fund as
described in Section Error! Reference source not found. hereof.
The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action of its Board of
Trustees and this Agreement constitutes a valid and binding
contract enforceable in accordance with its terms, subject to
the effects of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect
thereto.
(d) The Target Fund has furnished the Acquiring Fund
with the Target Fund's Annual Report to Shareholders for the
year ended December 31, 2008, and the audited financial
statements appearing therein fairly present the financial
position of the Target Fund as of the respective dates indicated,
in conformity with GAAP.
(e) An unaudited statement of assets, liabilities and
capital of the Target Fund and an unaudited schedule of
investments of the Target Fund (which shall include dates of
acquisition and tax costs), in each case, with values
determined as provided in Section 5 of this Agreement, each
as of the Valuation Date (together, the "Target Fund Closing
Financial Statements"), will be furnished to the Acquiring
Fund at or prior to the Closing Date for the purpose of determining
the number of Acquiring Fund Common Shares to be issued to
the Target Fund pursuant to Section 5 hereof; the Target Fund
Closing Financial Statements will fairly present the financial
position of the Target Fund as of the Valuation Date in
conformity with GAAP.
(f) Other than as disclosed in the Registration Statement,
there are no material legal, administrative or other proceedings
pending or, to the knowledge of the Target Fund, threatened
against it which assert liability on the part of the Target
Fund or which materially affect its financial condition or
its ability to consummate the Reorganization. The Target Fund
is not charged with nor, to the best of its knowledge, does
any person presently intend to charge it with, or to recommend
that it be charged with, any violation of any provisions of
any federal, state or local law or regulation or administrative
ruling to which it is bound.
(g) There are no material contracts outstanding to
which the Target Fund is a party that have not been disclosed
in the Registration Statement or that have not otherwise been
disclosed to the Acquiring Fund.
(h) The execution, delivery and performance of this
Agreement by the Target Fund do not, and the consummation of
the transaction contemplated hereby will not, constitute or
result in a breach or violation of, or a default under, (i) the
governing documents of the Target Fund, (ii) any contract or
other commitment or obligation binding upon the Target Fund or
(iii) any order or decree binding upon the Target Fund.
(i) Other than as disclosed in the Registration Statement,
the Target Fund has no known liabilities of a material amount,
contingent or otherwise, other than those shown on the Target
Fund Closing Financial Statements, those incurred in the
ordinary course of its business as an investment company and
those incurred in connection with the Reorganization. As of
the Valuation Date, the Target Fund will advise the Acquiring
Fund in writing of all known liabilities, contingent or otherwise,
whether or not incurred in the ordinary course of business,
existing or accrued as of such time, not otherwise disclosed
in the Target Fund Closing Financial Statements.
(j) No consent, approval, authorization or order of
any court or governmental authority is required for the
consummation by the Target Fund of the Reorganization, except
such as may be required under the 1933 Act, the 1934 Act and
the 1940 Act or state securities laws (which term as used
herein shall include the laws of the District of Columbia
and Puerto Rico).
(k) At both the Valuation Date and the Closing Date,
the Target Fund will have full right, power and authority to
sell, assign, transfer and deliver the Target Fund Investments.
At the Closing Date, subject only to the obligation to
deliver the Target Fund Investments as contemplated by this
Agreement, the Target Fund will have good and marketable title
to all of the Target Fund Investments, and the Acquiring Fund
will acquire all of the Target Fund Investments free and
clear of any encumbrances, liens or security interests and
without any restrictions upon the transfer thereof (except
those imposed by the federal or state securities laws and
those imperfections of title or encumbrances as do not
materially detract from the value or use of the Target Fund
Investments or materially affect title thereto).
(l) The Registration Statement, on the effective
date of the Registration Statement, at the time of the
Shareholder Meeting and on the Closing Date (i) complied
or will comply in all material respects with the provisions
of the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder and (ii) did not or will not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
and the Proxy Statement/Prospectus included therein did
not or will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however,
that no representation or warranty is made by the Target
Fund with respect to statements made or incorporated by
reference in the Registration Statement or Proxy
Statement/Prospectus based on information supplied by the
Acquiring Fund or the Sister Fund for inclusion or
incorporation by reference therein, or based on information
which is not included or incorporated by reference in such
documents but which should have been disclosed pursuant to
Section 2(j).
(m) The Target Fund is authorized to issue an unlimited
number of common shares of beneficial interest, par
value $.001 per share (the "Target Fund Common Shares"),
4,755,000 shares of which are outstanding on the date hereof.
Each outstanding Target Fund Common Share is duly authorized,
validly issued, fully paid, nonassessable, and has full voting
rights, subject, in the case of the nonassessability of such
shares, to certain decisions of the Supreme Judicial Court of
The Commonwealth of Massachusetts holding that shareholders
of a Massachusetts business trust may, in certain circumstances,
be assessed or held personally liable as partners for the
obligations of a Massachusetts business trust. Other than
the outstanding Target Fund Common Shares, there are no
outstanding (i) shares of capital stock or other voting
securities of the Target Fund, (ii) stock appreciation rights,
phantom stock units, restricted stock grants or contingent
stock grants which grant awards of any of the foregoing,
(iii) bonds, debentures, notes or other indebtedness of the
Target Fund having the right to vote (or convertible into,
or exchangeable for, securities having the right to vote)
on any matters on which shareholders of the Target Fund may
vote, (iv) securities of the Target Fund convertible into
or exchangeable for shares of capital stock or voting
securities of the Target Fund, (v) options or other rights
to acquire from the Target Fund, or obligations of the Target
Fund to issue any, capital stock, voting securities or
securities convertible into or exchangeable for capital stock
or voting securities of the Target Fund or (vi) equity
equivalent interests in the ownership or earnings of the
Target Fund.
(n) All of the issued and outstanding Target Fund
Common Shares were offered for sale and sold in conformity
with all applicable federal and state securities laws.
(o) The Target Fund has filed, or intends to file,
or has obtained extensions to file, all federal, state and
local tax returns which are required to be filed by it, and
has paid or has obtained extensions to pay, all federal,
state and local taxes shown on said returns to be due and
owing and all assessments received by it, up to and including
the taxable year in which the Closing Date occurs. All tax
liabilities of the Target Fund have been adequately provided
for on its books, and no tax deficiency or liability of the
Target Fund has been asserted and no question with respect
thereto has been raised by the Internal Revenue Service or
by any state or local tax authority for taxes in excess of
those already paid, up to and including the taxable year
in which the Closing Date occurs.
(p) The Target Fund (i) has elected to qualify and
has qualified as a RIC as of and since its inception, (ii)
has been a RIC at all times since the end of its first taxable
year when it so qualified, (iii) qualifies and will continue
to qualify as a RIC for its taxable year ending upon its
liquidation and dissolution and (iv) has satisfied the
distribution requirements imposed by the Code for each of
its taxable years.
(q) The books and records of the Target Fund made
available to the Acquiring Fund and/or its counsel are
substantially true and correct and contain no material
misstatements or omissions with respect to the operations
of the Target Fund.
(r) The Target Fund will not sell or otherwise
dispose of any of the Acquiring Fund Common Shares to
be received in the Reorganization, except for the
distribution to the shareholders of the Target Fund,
as provided in this Agreement.
4. THE REORGANIZATION.
(a) Subject to the receipt of the requisite
approvals of the shareholders of the Target Fund, and to
the other terms and conditions contained herein, the Target
Fund agrees to convey, transfer and deliver to the
Acquiring Fund and the Acquiring Fund agrees to acquire
from the Target Fund, on the Closing Date, all of the
Target Fund Investments (including interest accrued as of
the Valuation Date on debt instruments), and assume all of
the liabilities of the Target Fund, in exchange for that
number and type of Acquiring Fund Common Shares determined
as provided in Section 5 of this Agreement (the "Reorganization").
On the Closing Date, the Target Fund Common Shares shall be
cancelled on the books of the Target Fund, will be null and
void, and shall represent only the right to receive, subject
to the terms and conditions of this Agreement, Acquiring Fund
Common Shares, and, if not paid prior to the Reorganization,
any dividends payable with respect to such Target Fund Common
Shares pursuant to Section 4(c) herein. Pursuant to this
Agreement, as soon as practicable after the Closing Date,
the Target Fund will distribute (or cause to be distributed)
all Acquiring Fund Common Shares it has received pursuant
to the terms of this Agreement to its shareholders pro rata
in exchange for their Target Fund Common Shares. Such
distributions shall be accomplished by the opening of
shareholder accounts on the share ledger records of the
Acquiring Fund in the names of and in the amounts due to
the holders of Target Fund Common Shares based on their
respective holdings in the Target Fund as of the Valuation
Date.
(b) If it is mutually determined by the parties hereto
that the portfolios of the Target Fund and the Acquiring Fund,
when aggregated, would contain investments exceeding certain
percentage limitations set forth in the Acquiring Fund's
investment policies and restrictions, the Target Fund, if
requested by the Acquiring Fund, will dispose of a sufficient
amount of such investments as may be necessary to avoid
violating such limitations as of the Closing Date.
Notwithstanding the foregoing, (i) nothing herein will
require the Target Fund to dispose of any portfolio securities
or other investments, if, in the reasonable judgment of the
Target Fund's Board of Trustees or investment advisor, such
disposition would create more than an insignificant risk that
the Reorganization would not be treated as a "reorganization"
described in Section 368(a) of the Code for federal income
tax purposes or would otherwise not be in the best interests
of the Target Fund and (ii) nothing will permit the Target
Fund to dispose of any portfolio securities or other investments
if, in the reasonable judgment of the Acquiring Fund's Board
of Trustees or investment advisor, such disposition would create
more than an insignificant risk that the Reorganization would not
be treated as a "reorganization" described in Section 368(a)
of the Code for federal income tax purposes or would otherwise
not be in the best interests of the Acquiring Fund.
(c) Prior to the Closing Date, the Target Fund shall
declare and pay on or immediately before the Closing Date a
dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its
shareholders all of its net investment company taxable income
to and including the Closing Date, if any (computed without
regard to any deduction for dividends paid), and all of its
net capital gain, if any, realized to and including the
Closing Date.
(d) The Target Fund will promptly pay or cause to be
paid to the Acquiring Fund any interest the Target Fund
receives on or after the Closing Date with respect to any of
the Target Fund Investments transferred to the Acquiring
Fund hereunder.
(e) Recourse for liabilities assumed from the Target
Fund by the Acquiring Fund in the Reorganization will be
limited to the net assets acquired by the Acquiring Fund.
The known liabilities of the Target Fund, as of the
Valuation Date, shall be confirmed to the Acquiring Fund
pursuant to Section 3(i) of this Agreement.
(f) The Target Fund will cause its existence to be
terminated following the Closing Date by (i) terminating its
registration under the 1940 Act, (ii) delisting from NYSE
Amex, (iii) terminating its organization and voluntarily
dissolving and liquidating in accordance with Massachusetts
law and (iv) withdrawing its authority to do business in
any state where it is required to do so.
5. ISSUANCE AND VALUATION OF ACQUIRING FUND COMMON SHARES
IN THE REORGANIZATION.
(a) On the Closing Date, Acquiring Fund Common Shares
shall be issued by the Acquiring Fund to the Target Fund in
exchange for such assets of the Target Fund as follows: on
the Closing Date, the Acquiring Fund will issue to the Target
Fund a number of Acquiring Fund Common Shares, the aggregate
net asset value of which will equal the aggregate net asset
value of the Target Fund Common Shares, determined as set
forth in this Section 5.
(b) The net asset value of each of the Funds shall
be determined in accordance with the regular procedures of
the Acquiring Fund, and no formula will be used to adjust
the net asset value so determined of any Fund to take into
account differences in realized and unrealized gains and
losses. The value of the Target Fund Investments to be
transferred to the Acquiring Fund shall be determined pursuant
to the regular procedures of the Acquiring Fund. Values in
all cases shall be determined as of the Valuation Date.
(c) The net asset value per share of the Target Fund
Common Shares shall be determined in accordance with this
Section 5 on the Valuation Date, and the net asset value per
share of the Acquiring Fund Common Shares shall be determined
in accordance with this Section 5 immediately after giving
effect to the Reorganization. For purposes of determining
the net asset value of a Target Fund Common Share and an
Acquiring Fund Common Share, the value of the securities
held by the applicable Fund plus any cash or other assets
(including interest accrued but not yet received) minus all
liabilities (including accrued and incurred expenses as
allocated pursuant to Section 6 hereof) outstanding at such
time.
(d) The Acquiring Fund shall issue to the Target Fund
separate certificates or evidence of book entry for the
Acquiring Fund Common Shares, each registered in the names
provided by the Target Fund or in the name of the Target Fund.
The Target Fund shall then distribute the Acquiring Fund
Common Shares to the holders of Target Fund Common Shares by
delivering the Acquiring Fund Common Shares to Xxxxx Fargo
Bank, N.A., as the transfer agent and registrar for the
Acquiring Fund Common Shares, for distribution to the holders
of Target Fund Common Shares on the basis of such holder's
proportionate interest in the aggregate net asset value of the
Target Fund Common Shares. All issued and outstanding Target
Fund Common Shares will be cancelled on the books of the Target
Fund and will be null and void as of the Closing Date.
6. PAYMENT OF EXPENSES.
(a) Each of the Acquiring Fund and the Target Fund will
pay its own expenses incurred in connection with the
Reorganization, whether or not consummated. With respect
to expenses incurred in connection with the Reorganization
and the reorganization of the Sister Fund with the Acquiring
Fund that are attributable to the Target Fund and the Sister
Fund, such expenses shall be allocated in proportion to the
net asset values attributable to the common shares of the
Target Fund and the Sister Fund. Neither the Funds, the Sister
Fund, nor RMR Advisors, Inc., the Funds' and the Sister Fund's
investment adviser, will pay any expenses of the shareholders
arising out of or in connection with the Reorganization.
(b) Notwithstanding anything herein to the contrary,
if for any reason the Reorganization is not consummated, except
for the payment of expenses as provided in this Section 6,
no party shall be liable to any other party for any damages
resulting therefrom, including, without limitation, consequential
damages.
7. COVENANTS OF THE FUNDS.
(a) The Target Fund covenants to operate its business
as presently conducted between the date hereof and the Closing
Date. The Acquiring Fund covenants not to commence business
operations (except to the extent contemplated herein or necessary
or appropriate to consummate the purposes and intent of this
Agreement and the separate agreement and plan of reorganization
that it has entered into with the Sister Fund) prior to the
completion of the Reorganization on the Closing Date.
(b) The Acquiring Fund will file the Registration
Statement with the Commission and will use its reasonable best
efforts to cause the Registration Statement to become effective
as promptly as practicable. Each Fund agrees to cooperate
fully with the other, and each will furnish to the other the
information relating to itself to be set forth in the
Registration Statement as required by the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations
thereunder and any applicable state securities laws.
(c) The Acquiring Fund shall use its reasonable best
efforts to cause the Acquiring Fund Common Shares to be
issued in the Reorganization to be approved for listing on
NYSE Amex prior to the Closing Date.
(d) The Target Fund shall mail to its shareholders of
record entitled to vote at the Shareholder Meeting, in
sufficient time to comply with requirements as to notice
thereof, the Proxy Statement/Prospectus.
(e) The Target Fund shall duly take all lawful action
to call, give notice of, convene and hold the Shareholder
Meeting on a date determined in accordance with the mutual
agreement of the Funds for the purpose of obtaining the
requisite shareholder vote with respect to this Agreement and
the Reorganization and shall take all lawful action to solicit
the approval and adoption of this Agreement and the
Reorganization by its shareholders.
(f) Each of the Funds agrees that, by the Closing Date,
all of its federal and other tax returns and reports required
to be filed on or before such date shall have been filed and
all taxes shown on said returns to be due and owing either
shall have been paid or adequate liability reserves shall have
been provided for the payment of such taxes.
The intention of the parties is that the transaction
contemplated by this Agreement will qualify as a "reorganization"
within the meaning of Section 368(a) of the Code. Neither Fund
shall take any action or cause any action to be taken
(including, without limitation, the filing of any tax return)
that is inconsistent with such treatment or results in the
failure of the transaction to qualify as a reorganization within
the meaning of Section 368(a) of the Code. At or prior to the
Closing Date, each Fund will take such action, or cause such
action to be taken, as is reasonably necessary to enable
Skadden, as special U.S. federal income tax counsel to the
Acquiring Fund, to render the tax opinion required herein
(including, without limitation, each party's execution of
representations reasonably requested by and addressed to Skadden).
In connection with this covenant, the Funds agree to
cooperate with each other in filing any tax return, amended
return or claim for refund, determining a liability for taxes
or a right to a refund of taxes or participating in or
conducting any audit or other proceeding in respect of taxes.
The Acquiring Fund agrees to retain for a period of 10 years
following the Closing Date all returns, schedules and work
papers and all material records or other documents relating
to tax matters of the Target Fund for the taxable period
first ending after the Closing Date and for all prior taxable
periods.
After the Closing Date, the Target Fund shall prepare,
or cause its agents to prepare, any federal, state or local tax
returns required to be filed by such Fund with respect to its
final taxable year ending with its complete liquidation and
dissolution and for any prior periods or taxable years and
further shall cause such tax returns to be duly filed with
the appropriate taxing authorities.
(g) The Target Fund agrees that following the
consummation of the Reorganization, it will terminate its
organization and dissolve and liquidate in accordance with
Massachusetts law and any other applicable law, it will not
make any distributions of any Acquiring Fund Common Shares
other than to its shareholders as provided herein and without
first paying or adequately providing for the payment of all
of its respective liabilities not assumed by the Acquiring Fund,
if any, and on and after the Closing Date it shall not conduct
any business except in connection with its termination or as
otherwise expressly provided herein.
(h) The Target Fund undertakes that if the Reorganization
is consummated, it will file an application pursuant to
Section 8(f) of the 1940 Act for an order declaring that
the Target Fund has ceased to be a registered investment
company.
(i) Following the consummation of the Reorganization,
the Acquiring Fund will conduct its business as a non-diversified,
closed end management investment company registered under the
1940 Act.
8. CLOSING DATE.
(a) Delivery of the Target Fund Investments and the
Acquiring Fund Common Shares to be issued as provided in this
Agreement, shall be made at such place and time as the Funds
shall mutually agree on the Valuation Date, the date and time
upon which such delivery is to take place being referred to
herein as the "Closing Date." To the extent that any Target
Fund Investments, for any reason, are not transferable on the
Closing Date, the Target Fund shall cause such Target Fund
Investments to be transferred to the Acquiring Fund's account
with its custodian at the earliest practicable date thereafter.
(b) The Target Fund will deliver to the Acquiring Fund
on the Closing Date confirmation or other adequate evidence as
to the tax basis of the Target Fund Investments delivered to
the Acquiring Fund hereunder.
(c) As soon as practicable after the close of business
on the Closing Date, the Target Fund shall deliver to the
Acquiring Fund a list of the names and addresses of all of the
shareholders of record of the Target Fund on the Closing Date
and the number of Target Fund Common Shares owned by each such
shareholder, certified to the best of its knowledge and belief
by the transfer agent for the Target Fund Common Shares or by
its President.
9. CONDITIONS TO EACH FUND'S OBLIGATION TO EFFECT THE
REORGANIZATION.
The respective obligations of each Fund to consummate
the Reorganization shall be subject to the satisfaction of
each of the following conditions:
(a) That this Agreement shall have been adopted, and
the Reorganization shall have been approved, by the
affirmative vote of the holders of a "majority of the
outstanding" (as defined in the 1940 Act) Target Fund
Common Shares.
(b) That the Board of Trustees of the Acquiring Fund
shall have approved the issuance of additional Acquiring Fund
Common Shares in an amount determined in accordance with
Section 5 of this Agreement and such shares shall have been
approved for listing on NYSE Amex.
(c) That there shall not be any material litigation
pending with respect to the matters contemplated by this Agreement.
(d) That the Registration Statement shall have become
effective under the 1933 Act, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge
of the Acquiring Fund, be contemplated by the Commission.
(e) That the shareholders of the Sister Fund shall
have approved the reorganization of the Sister Fund with the
Acquiring Fund and that such reorganization shall have been
consummated.
10. CONDITIONS TO THE TARGET FUND'S OBLIGATION TO EFFECT THE
REORGANIZATION.
The obligations of the Target Fund to consummate the
Reorganization shall be subject to the satisfaction of each
of the following additional conditions:
(a) That the Acquiring Fund shall have delivered to
the Target Fund a copy of the resolution duly adopted by its
Board of Trustees approving this Agreement, certified by its
Secretary.
(b) That the Acquiring Fund shall have delivered to
the Target Fund a copy of the resolution duly adopted by
its Board of Trustees approving the issuance of additional
Acquiring Fund Common Shares pursuant to this Agreement,
certified by its Secretary.
(c) That the Acquiring Fund shall have furnished to
the Target Fund the Acquiring Fund Closing Financial
Statements, certified on the Acquiring Fund's behalf by its
President (or any Vice President) or its Treasurer.
(d) That the Acquiring Fund shall have furnished to
the Target Fund a certificate signed by the Acquiring Fund's
President (or any Vice President) or its Treasurer, dated as
of the Closing Date, certifying that, as of the Valuation
Date and as of the Closing Date, all representations and
warranties of the Acquiring Fund made in this Agreement
that are not qualified by materiality are true and correct
in all material respects or, if qualified by materiality,
are true and correct in all respects, in each case, with
the same effect as if made at and as of such dates, and that
the Acquiring Fund has complied with all of the agreements
and satisfied all of the conditions on its part to be performed
or satisfied at or prior to such dates.
(e) That the Target Fund shall have obtained an opinion
from Skadden, special U.S. federal income tax counsel for
the Acquiring Fund, dated as of the Closing Date, addressed
to the Target Fund, that the consummation of the transactions
set forth in this Agreement complies with the requirements of
a reorganization as described in Section 368(a) of the Code.
11. CONDITIONS TO THE ACQUIRING FUND'S OBLIGATION TO EFFECT
THE REORGANIZATION.
The obligations of the Acquiring Fund hereunder shall
be subject to the following additional conditions:
(a) That the Target Fund shall have delivered to the
Acquiring Fund a copy of the resolution duly adopted by its
Board of Trustees approving this Agreement, and a certificate
setting forth the vote of the holders of Target Fund Common
Shares obtained at the Shareholder Meeting, each certified by
its Secretary.
(b) That the Target Fund shall have furnished
to the Acquiring Fund the Target Fund Closing Financial
Statements, certified on the Target Fund's behalf by its
President (or any Vice President) or its Treasurer, and a
certificate signed by such Fund's President (or any Vice President)
or its Treasurer, dated as of the Closing Date, certifying
that as of the Valuation Date and as of the Closing Date
there has been no material adverse change in the financial
position of the Target Fund since the date of such Fund's
most recent Annual Report, other than changes in the Target
Fund Investments since that date or changes in the market
value of the Target Fund Investments.
(c) That the Target Fund shall have furnished to the
Acquiring Fund a certificate signed by such Fund's President
(or any Vice President) or its Treasurer, dated the Closing
Date, certifying that as of the Valuation Date and as of the
Closing Date all representations and warranties of the Target
Fund made in this Agreement that are not qualified by
materiality are true and correct in all material respects
or, if qualified by materiality, are true and correct in all
respects, in each case, with the same effect as if made at
and as of such dates, and that the Target Fund has complied
with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied at or prior to such
dates.
(d) That the Acquiring Fund shall have obtained an
opinion from Skadden, as special U.S. federal income tax
counsel for the Acquiring Fund, dated as of the Closing Date,
addressed to the Acquiring Fund, that the consummation of the
transactions set forth in this Agreement complies with the
requirements of a reorganization as described in Section
368(a) of the Code.
12. TERMINATION, POSTPONEMENT AND WAIVERS.
(a) Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated
and the Reorganization abandoned at any time (whether before
or after adoption thereof by the shareholders of the Target
Fund) prior to the Closing Date, or the Closing Date may be
postponed, (i) by mutual written consent of the Boards of
Trustees of the Funds, (ii) by the Board of Trustees of the
Target Fund if any condition of the Target Fund's obligations
set forth in Section 10 of this Agreement has not been fulfilled
or waived by such board; or (iii) by the Board of Trustees of
the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 11 of this Agreement has not
been fulfilled or waived by such board.
(b) If the transactions contemplated by this Agreement
have not been consummated by December 31, 2009, this Agreement
automatically shall terminate on that date, unless a later date
is mutually agreed to in writing by the Boards of Trustees of
the Funds.
(c) In the event this Agreement is terminated pursuant
to the provisions hereof, the same shall become void and have
no further effect, and there shall not be any liability on the
part of any Fund or its respective directors, trustees,
officers, agents or shareholders in respect of this Agreement,
except that the provisions of Section 6, this Section 12,
Section 13 and Section 14 shall survive such termination.
(d) At any time prior to the Closing Date, any of the
terms or conditions of this Agreement may be waived by the
Board of Trustees of any Fund (whichever is entitled to the
benefit thereof), if, in the judgment of such board after
consultation with its counsel, such waiver will not have a
material adverse effect on the benefits to the shareholders
of such Fund intended under this Agreement.
(e) The respective representations and warranties
contained in Sections 2 and 3 of this Agreement shall expire
with, and be terminated by, the consummation of the
Reorganization, and neither Fund nor any of its respective
officers, trustees, agents or shareholders shall have any
liability with respect to such representations or warranties
after the Closing Date. This provision shall not protect any
officer, trustee, agent or shareholder of either Fund against
any liability to the entity for which that officer, trustee,
agent or shareholder so acts or to its shareholders, to which
that officer, trustee, agent or shareholder otherwise would be
subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties in the
conduct of such office.
(f) If any order or orders of the Commission with
respect to this Agreement shall be issued prior to the Closing
Date that impose any terms or conditions that are determined
by action of the boards of trustees of the Funds to be
acceptable, such terms and conditions shall be binding as if
a part of this Agreement without further vote or approval of
the shareholders of the Target Fund, unless such terms and
conditions shall result in a change in the method of computing
the number of Acquiring Fund Common Shares to be issued to the
Target Fund, in which event, unless such terms and conditions
shall have been included in the proxy solicitation materials
furnished to the shareholders of the Target Fund prior to the
Shareholder Meeting, this Agreement shall not be consummated
and shall terminate unless the Target Fund promptly shall
call a special meeting of shareholders at which such conditions
so imposed shall be submitted for approval.
13. INDEMNIFICATION.
(a) Each party (an "Indemnitor") shall indemnify and
hold the other and its officers, trustees, agents and persons
controlled by or controlling any of them (each an
"Indemnified Party") harmless from and against any and all
losses, damages, liabilities, claims, demands, judgments,
settlements, deficiencies, taxes, assessments, charges,
costs and expenses of any nature whatsoever (including
reasonable attorneys' fees) including amounts paid in
satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by such
Indemnified Party in connection with the defense or disposition
of any claim, action, suit or other proceeding, whether
civil or criminal, before any court or administrative or
investigative body in which such Indemnified Party may be or
may have been involved as a party or otherwise or with which
such Indemnified Party may be or may have been threatened
(each, a "Loss" and collectively, "Losses") arising out of or
related to any claim of a breach of any covenant made herein
by the Indemnitor, provided, however, that no Indemnified Party
shall be indemnified hereunder against any Losses arising
directly from such Indemnified Party's (i) willful misfeasance,
(ii) bad faith, (iii) gross negligence or (iv) reckless
disregard of the duties involved in the conduct of such
Indemnified Party's position.
(b) The Indemnified Party shall use its reasonable best
efforts to minimize any liabilities, damages, deficiencies,
claims, judgments, assessments, costs and expenses in respect
of which indemnity may be sought hereunder. The Indemnified
Party shall give written notice to Indemnitor within the earlier
of 10 days of receipt of written notice to Indemnified Party
or 30 days from discovery by Indemnified Party of any matters
which may give rise to a claim for indemnification or
reimbursement under this Agreement. The failure to give
such notice shall not affect the right of Indemnified Party
to indemnity hereunder unless such failure has materially
and adversely affected the rights of the Indemnitor. At any
time after 10 days from the giving of such notice, Indemnified
Party may, at its option, resist, settle or otherwise
compromise, or pay such claim unless it shall have received
notice from Indemnitor that Indemnitor intends, at Indemnitor's
sole cost and expense, to assume the defense of any such matter,
in which case Indemnified Party shall have the right, at no
cost or expense to Indemnitor, to participate in such defense.
If Indemnitor does not assume the defense of such matter, and
in any event until Indemnitor states in writing that it will
assume the defense, Indemnitor shall pay all costs of
Indemnified Party arising out of the defense until the
defense is assumed; provided, however, that Indemnified Party
shall consult with Indemnitor and obtain Indemnitor's prior
written consent to any payment or settlement of any such claim.
Indemnitor shall keep Indemnified Party fully apprised at all
times as to the status of the defense. If Indemnitor does not
assume the defense, Indemnified Party shall keep Indemnitor
apprised at all times as to the status of the defense. Following
indemnification as provided for hereunder, Indemnitor shall be
subrogated to all rights of Indemnified Party with respect to
all third parties, firms or corporations relating to the matter
for which indemnification has been made.
14. OTHER MATTERS.
(a) All covenants, agreements, representations and
warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have
been material and relied upon by each of the parties,
notwithstanding any investigation made by them or on their
behalf.
(b) All notices hereunder shall be sufficiently given
for all purposes hereunder if in writing and delivered
personally or sent by registered mail or certified mail,
postage prepaid. Notice to the Target Fund shall be addressed
to the Target Fund c/o RMR Funds, 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: General Counsel, or at such
other address as the Target Fund may designate by written
notice to the Acquiring Fund. Notice to the Acquiring Fund
shall be addressed to the Acquiring Fund x/x XXX Xxxxx, 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: General
Counsel, or at such other address and to the attention of such
other person as the Acquiring Fund may designate by written
notice to the Target Fund. Any notice shall be deemed to have
been served or given as of the date such notice is delivered
personally or mailed as provided herein.
(c) This Agreement supersedes all previous
correspondence and oral communications between the Funds
regarding the Reorganization, constitutes the only understanding
with respect to the Reorganization, may not be changed except
in a writing executed by each Fund and shall be governed by
and construed in accordance with the laws of the State of
Delaware (without giving effect to choice of law principles
thereof).
(d) This Agreement may be amended or modified by the
parties hereto prior to the Closing Date, by action taken
or authorized by their respective boards of trustees, at
any time before or after adoption of this Agreement and
approval of the Reorganization by the Target Fund's shareholders,
but, after any such adoption and approval, no amendment or
modification shall be made which by law requires further
approval by such shareholders without such further approval.
This Agreement may not be amended or modified except by an
instrument in writing signed on behalf of each of the parties
hereto.
(e) This Agreement is not intended to confer upon any
person other than the parties hereto (or their respective
successors and assigns) any rights, remedies, obligations or
liabilities hereunder. If any provision of this Agreement
shall be held or made invalid by a statute, rule, regulation,
decision of a tribunal or otherwise, the remainder of this
Agreement shall not be affected thereby and, to such extent,
the provisions of this Agreement shall be deemed severable,
provided that, this Agreement shall be deemed modified to give
effect to the fullest extent permitted under applicable law
to the intentions of the parties as reflected by this Agreement
prior to the invalidity of such provision.
(f) It is expressly agreed that the obligations of the
Funds hereunder shall not be binding upon any of their
respective trustees, shareholders, nominees, officers, agents,
or employees personally, but shall bind only the trust property
of the respective Fund as provided in such Fund's Agreement
and Declaration of Trust. The execution and delivery of this
Agreement has been authorized by the Board of Trustees of each
Fund and signed by authorized officers of each Fund, acting as
such, and neither such authorization by such trustees, nor
such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the
trust property of each Fund as provided in such Funds' Agreement
and Declaration of Trust.
(g) This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered,
shall be deemed to be an original but all such counterparts
together shall constitute but one instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have hereunto caused
this Agreement to be executed and delivered by their duly
authorized officers as of the day and year first written above.
RMR ASIA REAL ESTATE FUND
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Trustee, President and Principal Executive Officer
NEW RMR ASIA PACIFIC REAL ESTATE FUND
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Trustee, President and Principal Executive Officer
19
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