AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as
of March 13, 2002, by and between Xxx Xxxxxx Life Investment Trust, a
registered investment company, SEC File No. 811-4424 (the "Trust"), on behalf
of its series, the Strategic Stock Portfolio (the "Acquired Portfolio") and
Xxx Xxxxxx Life Investment Trust, on behalf of its series, the Growth and
Income Portfolio (the "Acquiring Portfolio").
W I T N E S S E T H:
WHEREAS, the Board of Trustees of the Acquiring Portfolio (the
"Acquiring Portfolio Board") and the Board of Directors of the Acquired
Portfolio (the "Acquired Portfolio Board") have determined that entering into
this Agreement for the Acquiring Portfolio to acquire the assets and
liabilities of the Acquired Portfolio is in the best interests of the
shareholders of each respective Portfolio; and
WHEREAS, the parties intend that this transaction qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. PLAN OF TRANSACTION.
A. TRANSFER OF ASSETS. Upon satisfaction of the conditions
precedent set forth in Sections 7 and 8 hereof, the Acquired Portfolio will
convey, transfer and deliver to the Acquiring Portfolio at the Closing,
provided for in Section 2 hereof, all of the existing assets of the Acquired
Portfolio (including accrued interest to the Closing Date) to the Acquiring
Portfolio as more fully set forth on Schedule 1 hereto, and as amended from
time to time prior to the Closing Date (as defined below), free and clear of
all liens, encumbrances and claims whatsoever (the assets so transferred
collectively being referred to as the "Assets").
B. CONSIDERATION. In consideration thereof, the Acquiring Portfolio
agrees that on the Closing Date the Acquiring Portfolio will (i) deliver to
the Acquired Portfolio, full and fractional Class I and Class II Shares of
beneficial interest, par value $0.01 per share, of the Acquiring Portfolio
having aggregate net asset values in an amount equal to the aggregate dollar
value of the Assets net of any liabilities of the Acquired Portfolio
described in Section 3E hereof (the "Liabilities") determined pursuant to
Section 3A of this Agreement (collectively, the "Acquiring Portfolio Shares")
and (ii) assume all of the Acquired Portfolio's Liabilities. The calculation
of full and fractional Class I and Class II Shares of the Acquiring Portfolio
to be exchanged shall be carried out to no less than two (2) decimal places.
All Acquiring Portfolio Shares delivered to the Acquired Portfolio in
exchange for such Assets shall be delivered at net asset value without sales
load, commission or other transactional fee being imposed.
2. CLOSING OF THE TRANSACTION.
CLOSING DATE. The closing shall occur within fifteen (15) business
days after the later of receipt of all necessary regulatory approvals and the
final adjournment of the meeting of shareholders of the Acquired Portfolio at
which this Agreement will be considered and approved or such later date as
soon as practicable thereafter, as the parties may mutually agree (the
"Closing Date"). On the Closing Date, the Acquiring Portfolio shall deliver
to the Acquired Portfolio the Acquiring Portfolio Shares in the amount
determined pursuant to Section 1B hereof and the Acquired Portfolio
thereafter shall, in order to effect the distribution of such shares to the
Acquired Portfolio shareholders, instruct the Acquiring Portfolio to register
the pro rata interest in the Acquiring Portfolio Shares (in full and
fractional shares) of each of the holders of record of shares of the Acquired
Portfolio in accordance with their holdings of Class I and Class II shares
and shall provide as part of such instruction a complete and updated list of
such holders (including addresses and taxpayer identification numbers), and
the Acquiring Portfolio agrees promptly to comply with said instruction. The
Acquiring Portfolio shall have no obligation to inquire as to the validity,
propriety or correctness of such instruction, but shall assume that such
instruction is valid, proper and correct.
3. PROCEDURE FOR REORGANIZATION.
A. VALUATION. The value of the Assets and Liabilities of the
Acquired Portfolio to be transferred and assumed, respectively, by the
Acquiring Portfolio shall be computed as of the Closing Date, in the manner
set forth in the most recent Prospectus and Statement of Additional
Information of the Acquiring Portfolio (collectively, the "Acquiring
Portfolio Prospectus"), copies of which have been delivered to the Acquired
Portfolio.
B. DELIVERY OF FUND ASSETS. The Assets shall be delivered to State
Street Bank and Trust Company or other custodian as designated by the
Acquiring Portfolio (collectively the "Custodian") for the benefit of the
Acquiring Portfolio, duly endorsed in proper form for transfer in such
condition as to constitute a good delivery thereof, free and clear of all
liens, encumbrances and claims whatsoever, in accordance with the custom of
brokers, and shall be accompanied by all necessary state stock transfer
stamps, the cost of which shall be borne by Xxx Xxxxxx Asset Management Inc.
("Asset Management").
C. FAILURE TO DELIVER SECURITIES. If the Acquired Portfolio is
unable to make delivery pursuant to Section 3B hereof to the Custodian of any
of the Acquired Portfolio's securities for the reason that any of such
securities purchased by the Acquiring Portfolio have not yet been delivered
to it by the Acquired Portfolio's broker or brokers, then, in lieu of such
delivery, the Acquired Portfolio shall deliver to the Custodian, with respect
to said securities, executed copies of an agreement of assignment and due
bills executed on behalf of said broker or brokers, together with such other
documents as may be required by the Acquiring Portfolio or Custodian,
including brokers' confirmation slips.
D. SHAREHOLDER ACCOUNTS. The Acquiring Portfolio, in order to
assist the Acquired Portfolio in the distribution of the Acquiring Portfolio
Shares to the Acquired Portfolio shareholders after delivery of the Acquiring
Portfolio Shares to the Acquired Portfolio, will establish pursuant to the
request of the Acquired Portfolio an open account with the Acquiring
Portfolio for each shareholder of the Acquired Portfolio and, upon request by
the Acquired Portfolio, shall transfer to such accounts, the exact number of
full and fractional Class I and Class II Shares of the Acquiring Portfolio
then held by the Acquired Portfolio specified in the instruction provided
pursuant to Section 2 hereof. The Acquiring Portfolio is not required to
issue certificates representing Acquiring Portfolio Shares unless requested
to do so by a shareholder. Upon liquidation or dissolution of the Acquired
Portfolio, certificates representing shares of beneficial interest of the
Acquired Portfolio shall become null and void.
E. LIABILITIES. The Liabilities shall include all of Acquired
Portfolio's liabilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at
the Closing Date, and whether or not specifically referred to in this
Agreement.
F. EXPENSES. In the event that the transactions contemplated herein
are consummated, Asset Management is paying all the expenses associated with
the Reorganization. In addition, as part of the Reorganization, the Acquired
Portfolio will write off any remaining unamortized organizational expenses,
which shall be reimbursed by Asset Management. In the event that the
transactions contemplated herein are not consummated for any reason, then all
reasonable outside expenses incurred to the date of termination of this
Agreement shall be borne by Asset Management.
G. DISSOLUTION. As soon as practicable after the Closing Date but
in no event later than one year after the Closing Date, the Acquired
Portfolio shall voluntarily dissolve and completely liquidate by taking, in
accordance with Delaware law and Federal securities laws, all steps as shall
be necessary and proper to effect a complete liquidation and dissolution of
the Acquired Portfolio. Immediately after the Closing Date, the share
transfer books relating to the Acquired Portfolio shall be closed and no
transfer of shares shall thereafter be made on such books.
4. ACQUIRED PORTFOLIO'S REPRESENTATIONS AND WARRANTIES.
The Acquired Portfolio hereby represents and warrants to the Acquiring
Portfolio, which representations and warranties are true and correct on the
date hereof, and agrees with the Acquiring Portfolio that:
A. ORGANIZATION. The Acquired Portfolio is duly formed and in good
standing under the laws of the state of its organization and is duly
authorized to transact business in the state of its organization. The
Acquired Portfolio is qualified to do business in all jurisdictions in which
they are required to be so qualified, except jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
Acquired Portfolio. The Acquired Portfolio has all material federal, state
and local authorizations necessary to own all of the properties and assets
and to carry on its business as now being conducted, except authorizations
which the failure to so obtain would not have a material adverse effect on
the Acquired Portfolio.
B. REGISTRATION. The Acquired Portfolio is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company and such registration has not been revoked or
rescinded. The Acquired Portfolio is in compliance in all material respects
with the 1940 Act and the rules and regulations thereunder with respect to
its activities. All of the outstanding shares of beneficial interest of the
Acquired Portfolio have been duly authorized and are validly issued, fully
paid and nonassessable and not subject to pre-emptive or dissenters' rights.
C. AUDITED FINANCIAL STATEMENTS. The statement of assets and
liabilities and the portfolio of investments and the related statements of
operations and changes in net assets of the Acquired Portfolio audited as of
and for the year ended December 31, 2001, true and complete copies of which
have been heretofore furnished to the Acquiring Portfolio, fairly represent
the financial condition and the results of operations of the Acquired
Portfolio as of and for their respective dates and periods in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved.
D. FINANCIAL STATEMENTS. The Acquired Portfolio shall furnish to
the Acquiring Portfolio within five (5) business days after the Closing Date,
an unaudited statement of assets and liabilities and the portfolio of
investments and the related statements of operations and changes in net
assets as of and for the interim period ending on the Closing Date; such
financial statements will represent fairly the financial position and
portfolio of investments and the results of the Acquired Portfolio's
operations as of, and for the period ending on, the dates of such statements
in conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved and the results of its
operations and changes in financial position for the period then ended; and
such financial statements shall be certified by the Treasurer of the Acquired
Portfolio as complying with the requirements hereof.
E. CONTINGENT LIABILITIES. There are, and as of the Closing Date
will be, no contingent Liabilities of the Acquired Portfolio not disclosed in
the financial statements delivered pursuant to Sections 4C and 4D which would
materially affect the Acquired Portfolio's financial condition, and there are
no legal, administrative, or other proceedings pending or, to its knowledge,
threatened against the Acquired Portfolio which would, if adversely
determined, materially affect the Acquired Portfolio's financial condition.
All Liabilities were incurred by the Acquired Portfolio in the ordinary
course of its business.
F. MATERIAL AGREEMENTS. The Acquired Portfolio is in compliance
with all material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and except as
referred to in the Acquired Portfolio's Prospectus, there are no material
agreements outstanding relating to the Acquired Portfolio to which the
Acquired Portfolio is a party.
G. STATEMENT OF EARNINGS. As promptly as practicable, but in any
case no later than 30 calendar days after the Closing Date, the Acquired
Portfolio shall furnish the Acquiring Portfolio with a statement of the
earnings and profits of the Acquired Portfolio within the meaning of the Code
as of the Closing Date.
H. TAX RETURNS. At the date hereof and on the Closing Date, all
Federal and other material tax returns and reports of the Acquired Portfolio
required by law to have been filed by such dates shall have been filed, and
all Federal and other taxes shown thereon shall have been paid so far as due,
or provision shall have been made for the payment thereof, and to the best of
the Acquired Portfolio's knowledge no such return is currently under audit
and no assessment has been asserted with respect to any such return.
I. CORPORATE AUTHORITY. The Acquired Portfolio has the necessary
power to enter into this Agreement and to consummate the transactions
contemplated herein. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by the Acquired Portfolio Board, and except for
obtaining approval of the holders of the shares of the Acquired Portfolio, no
other corporate acts or proceedings by the Acquired Portfolio are necessary
to authorize this Agreement and the transactions contemplated herein. This
Agreement has been duly executed and delivered by the Acquired Portfolio and
constitutes the legal, valid and binding obligation of the Acquired Portfolio
enforceable in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar law affecting creditors' rights generally, or by
general principals of equity (regardless of whether enforcement is sought in
a proceeding at equity or law).
J. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery
and performance of this Agreement by the Acquired Portfolio does not and will
not (i) violate any provision of the Acquired Portfolio's organizational
documents, (ii) violate any statute, law, judgment, writ, decree, order,
regulation or rule of any court or governmental authority applicable to the
Acquired Portfolio, (iii) result in a violation or breach of, or constitute a
default under any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument or obligation to which the Acquired Portfolio
is subject, or (iv) result in the creation or imposition or any lien, charge
or encumbrance upon any property or assets of the Acquired Portfolio. Except
as set forth in Schedule 2 to this Agreement, (i) no consent, approval,
authorization, order or filing with or notice to any court or governmental
authority or agency is required for the consummation by the Acquired
Portfolio of the transactions contemplated by this Agreement and (ii) no
consent of or notice to any third party or entity is required for the
consummation by the Acquired Portfolio of the transactions contemplated by
this Agreement.
K. ABSENCE OF CHANGES. From the date of this Agreement through the
Closing Date, there shall not have been:
any change in the business, results of operations, assets, or
financial condition or the manner of conducting the business of the Acquired
Portfolio, other than changes in the ordinary course of its business, or any
pending or threatened litigation, which has had or may have a material
adverse effect on such business, results of operations, assets or financial
condition;
issued any option to purchase or other right to acquire shares of
the Acquired Portfolio granted by the Acquired Portfolio to any person other
than subscriptions to purchase shares at net asset value in accordance with
terms in the Prospectus for the Acquired Portfolio;
any entering into, amendment or termination of any contract or
agreement by the Acquired Portfolio, except as otherwise contemplated by this
Agreement;
any indebtedness incurred, other than in the ordinary course of
business, by the Acquired Portfolio for borrowed money or any commitment to
borrow money entered into by the Acquired Portfolio;
any amendment of the Acquired Portfolio's organizational
documents; or
any grant or imposition of any lien, claim, charge or encumbrance
(other than encumbrances arising in the ordinary course of business with
respect to covered options) upon any asset of the Acquired Portfolio other
than a lien for taxes not yet due and payable.
L. TITLE. On the Closing Date, the Acquired Portfolio will have good
and marketable title to the Assets, free and clear of all liens, mortgages,
pledges, encumbrances, charges, claims and equities whatsoever, other than a
lien for taxes not yet due and payable, and full right, power and authority
to sell, assign, transfer and deliver such Assets; upon delivery of such
Assets, the Acquiring Portfolio will receive good and marketable title to
such Assets, free and clear of all liens, mortgages, pledges, encumbrances,
charges, claims and equities other than a lien for taxes not yet due and
payable.
M. PROXY STATEMENT/PROSPECTUS. The Registration Statement and the
Proxy Statement/Prospectus contained therein as of the effective date of the
Registration Statement, and at all times subsequent thereto up to and
including the Closing Date, as amended or as supplemented if it shall have
been amended or supplemented, conform and will conform as it relates to the
Acquired Portfolio, in all material respects, to the applicable requirements
of the applicable Federal and state securities laws and the rules and
regulations of the SEC thereunder, and do not and will not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representations or warranties in this Section 4M apply to statements or
omissions made in reliance upon and in conformity with written information
concerning the Acquiring Portfolio furnished to the Acquired Portfolio by the
Acquiring Portfolio.
N. TAX QUALIFICATION. The Acquired Portfolio has qualified as a
regulated investment company within the meaning of Section 851 of the Code
for each of its taxable years; and has satisfied the distribution
requirements imposed by Section 852 of the Code for each of its taxable
years.
O. FAIR MARKET VALUE. The fair market value on a going concern
basis of the Assets will equal or exceed the Liabilities to be assumed by the
Acquiring Portfolio and those to which the Assets are subject.
P. ACQUIRED PORTFOLIO LIABILITIES. Except as otherwise provided for
herein, the Acquired Portfolio shall use reasonable efforts, consistent with
its ordinary operating procedures, to repay in full any indebtedness for
borrowed money and have discharged or reserved against all of the Acquired
Portfolio's known debts, liabilities and obligations including expenses,
costs and charges whether absolute or contingent, accrued or unaccrued.
5. THE ACQUIRING PORTFOLIO'S REPRESENTATIONS AND WARRANTIES.
The Acquiring Portfolio hereby represents and warrants to the Acquired
Portfolio, which representations and warranties are true and correct on the
date hereof, and agrees with the Acquired Portfolio that:
A. ORGANIZATION. The Acquiring Portfolio is duly formed and in good
standing under the laws of the state of its organization and is duly
authorized to transact business in the state of its organization. The
Acquiring Portfolio is qualified to do business in all jurisdictions in which
it is required to be so qualified, except jurisdictions in which the failure
to so qualify would not have a material adverse effect on the Acquiring
Portfolio. The Acquiring Portfolio has all material federal, state and local
authorizations necessary to own all of the properties and assets and to carry
on its business and the business thereof as now being conducted, except
authorizations which the failure to so obtain would not have a material
adverse effect on the Acquiring Portfolio.
B. REGISTRATION. The Acquiring Portfolio is registered under the
1940 Act as an open-end, management investment company and such registration
has not been revoked or rescinded. The Acquiring Portfolio is in compliance
in all material respects with the 1940 Act and the rules and regulations
thereunder. All of the outstanding shares of beneficial interest, par value
$0.01 per share, of the Acquiring Portfolio have been duly authorized and are
validly issued, fully paid and non-assessable and not subject to pre-emptive
or dissenters' rights.
C. AUDITED FINANCIAL STATEMENTS. The statement of assets and
liabilities and the portfolio of investments and the related statements of
operations and changes in net assets of the Acquiring Portfolio audited as of
and for the year ended December 31, 2001, true and complete copies of which
have been heretofore furnished to the Acquired Portfolio, fairly represent
the financial condition and the results of operations of the Acquiring
Portfolio as of and for their respective dates and periods in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved.
D. FINANCIAL STATEMENTS. The Acquiring Portfolio shall furnish to
the Acquired Portfolio within five (5) business days after the Closing Date,
an unaudited statement of assets and liabilities and the portfolio of
investments and the related statements of operations and changes in net
assets as of and for the interim period ending on the Closing Date; such
financial statements will represent fairly the financial position and
portfolio of investments and the results of its operations as of, and for the
period ending on, the dates of such statements in conformity with generally
accepted accounting principles applied on a consistent basis during the
period involved and the results of its operations and changes in financial
position for the periods then ended; and such financial statements shall be
certified by the Treasurer of the Acquiring Portfolio as complying with the
requirements hereof.
E. CONTINGENT LIABILITIES. There are no contingent liabilities of
the Acquiring Portfolio not disclosed in the financial statements delivered
pursuant to Sections 5C and 5D which would materially affect the Acquiring
Portfolio's financial condition, and there are no legal, administrative, or
other proceedings pending or, to its knowledge, threatened against the
Acquiring Portfolio which would, if adversely determined, materially affect
the Acquiring Portfolio's financial condition.
F. MATERIAL AGREEMENTS. The Acquiring Portfolio is in compliance
with all material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and except as
referred to in the Acquiring Portfolio Prospectus and Statement of Additional
Information there are no material agreements outstanding to which the
Acquiring Portfolio is a party.
G. TAX RETURNS. At the date hereof and on the Closing Date, all
Federal and other material tax returns and reports of the Acquiring Portfolio
required by law to have been filed by such dates shall have been filed, and
all Federal and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of the
Acquiring Portfolio's knowledge no such return is currently under audit and
no assessment has been asserted with respect to any such return.
H. CORPORATE AUTHORITY. The Acquiring Portfolio has the necessary
power to enter into this Agreement and to consummate the transactions
contemplated herein. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by the Acquiring Portfolio Board, no other corporate
acts or proceedings by the Acquiring Portfolio are necessary to authorize
this Agreement and the transactions contemplated herein. This Agreement has
been duly executed and delivered by the Acquiring Portfolio and constitutes a
valid and binding obligation of the Acquiring Portfolio enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar law affecting creditors' rights generally, or by general principals
of equity (regardless of whether enforcement is sought in a proceeding at
equity or law).
I. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery
and performance of this Agreement by the Acquiring Portfolio does not and
will not (i) result in a material violation of any provision of the Acquiring
Portfolio's organizational documents, (ii) violate any statute, law,
judgment, writ, decree, order, regulation or rule of any court or
governmental authority applicable to the Acquiring Portfolio or (iii) result
in a material violation or breach of, or constitute a default under, any
material contract, indenture, mortgage, loan agreement, note, lease or other
instrument or obligation to which the Acquiring Portfolio is subject, or (iv)
result in the creation or imposition or any lien, charge or encumbrance upon
any property or assets of the Acquiring Portfolio. Except as set forth in
Schedule 3 to this Agreement, (i) no consent, approval, authorization, order
or filing with notice to any court or governmental authority or agency is
required for the consummation by the Acquiring Portfolio of the transactions
contemplated by this Agreement and (ii) no consent of or notice to any third
party or entity is required for the consummation by the Acquiring Portfolio
of the transactions contemplated by this Agreement.
J. ABSENCE OF PROCEEDINGS. There are no legal, administrative or
other proceedings pending or, to its knowledge, threatened against the
Acquiring Portfolio which would materially affect its financial condition.
K. SHARES OF THE ACQUIRING PORTFOLIO: REGISTRATION. The Acquiring
Portfolio Shares to be issued pursuant to Section 1 hereof will be duly
registered under the Securities Act and all applicable state securities laws.
L. SHARES OF THE ACQUIRING PORTFOLIO: AUTHORIZATION. The shares of
beneficial interest of the Acquiring Portfolio to be issued pursuant to
Section 1 hereof have been duly authorized and, when issued in accordance
with this Agreement, will be validly issued and fully paid and non-assessable
by the Acquiring Portfolio and conform in all material respects to the
description thereof contained in the Acquiring Portfolio's Prospectus
furnished to the Acquired Portfolio.
M. ABSENCE OF CHANGES. From the date hereof through the Closing
Date, there shall not have been any change in the business, results of
operations, assets or financial condition or the manner of conducting the
business of the Acquiring Portfolio, other than changes in the ordinary
course of its business, which has had a material adverse effect on such
business, results of operations, assets or financial condition.
N. REGISTRATION STATEMENT. The Registration Statement and the
Prospectus/Proxy Statement contained therein as of the effective date of the
Registration Statement, and at all times subsequent thereto up to and
including the Closing Date, as amended or as supplemented if they shall have
been amended or supplemented, conforms and will conform, as it relates to the
Acquiring Portfolio, in all material respects, to the applicable requirements
of the applicable Federal securities laws and the rules and regulations of
the SEC thereunder, and do not and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representations or warranties in this Section 5 apply to statements or
omissions made in reliance upon and in conformity with written information
concerning the Acquired Portfolio furnished to the Acquiring Portfolio by the
Acquired Portfolio.
O. TAX QUALIFICATION. The Acquiring Portfolio has qualified as a
regulated investment company within the meaning of Section 851 of the Code
for each of its taxable years; and has satisfied the distribution
requirements imposed by Section 852 of the Code for each of its taxable
years.
6. COVENANTS.
During the period from the date of this Agreement and continuing until
the Closing Date the Acquired Portfolio and Acquiring Portfolio each agrees
that (except as expressly contemplated or permitted by this Agreement):
A. OTHER ACTIONS. The Acquired Portfolio and Acquiring Portfolio
shall operate only in the ordinary course of business consistent with prior
practice. No party shall take any action that would, or reasonably would be
expected to, result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect.
B. GOVERNMENT FILINGS; CONSENTS. The Acquired Portfolio and
Acquiring Portfolio shall file all reports required to be filed by the
Acquired Portfolio and Acquiring Portfolio with the SEC between the date of
this Agreement and the Closing Date and shall deliver to the other party
copies of all such reports promptly after the same are filed. Except where
prohibited by applicable statutes and regulations, each party shall promptly
provide the other (or its counsel) with copies of all other filings made by
such party with any state, local or federal government agency or entity in
connection with this Agreement or the transactions contemplated hereby. Each
of the Acquired Portfolio and the Acquiring Portfolio shall use all
reasonable efforts to obtain all consents, approvals and authorizations
required in connection with the consummation of the transactions contemplated
by this Agreement and to make all necessary filings with the appropriate
Secretary of State.
C. PREPARATION OF THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/ PROSPECTUS.
In connection with the Registration Statement and the Proxy
Statement/Prospectus, each party hereto will cooperate with the other and
furnish to the other the information relating to the Acquired Portfolio or
Acquiring Portfolio, as the case may be, required by the Securities Act or
the Exchange Act and the rules and regulations thereunder, as the case may
be, to be set forth in the Registration Statement or the Proxy
Statement/Prospectus, as the case may be. The Acquired Portfolio shall
promptly prepare for filing with the SEC the Proxy Statement/Prospectus and
the Acquiring Portfolio shall promptly prepare and file with the SEC the
Registration Statement, in which the Proxy Statement/Prospectus will be
included as a prospectus. In connection with the Registration Statement,
insofar as it relates to the Acquired Portfolio and its affiliated persons,
the Acquiring Portfolio shall only include such information as is approved by
the Acquired Portfolio for use in the Registration Statement. The Acquiring
Portfolio shall not amend or supplement any such information regarding the
Acquired Portfolio and such affiliates without the prior written consent of
the Acquired Portfolio which consent shall not unreasonably withheld or
delayed. The Acquiring Portfolio shall promptly notify and provide the
Acquired Portfolio with copies of all amendments or supplements filed with
respect to the Registration Statement. The Acquiring Portfolio shall use all
reasonable efforts to have the Registration Statement declared effective
under the Securities Act as promptly as practicable after such filing. The
Acquiring Portfolio shall also take any action (other than qualifying to do
business in any jurisdiction in which it is now not so qualified) required to
be taken under any applicable state securities laws in connection with the
issuance of the Acquiring Portfolio's shares of beneficial interest in the
transactions contemplated by this Agreement, and the Acquired Portfolio shall
furnish all information concerning the Acquired Portfolio and the holders of
the Acquired Portfolio's shares of beneficial interest as may be reasonably
requested in connection with any such action.
D. ACCESS TO INFORMATION. During the period prior to the Closing
Date, the Acquired Portfolio shall make available to the Acquiring Portfolio
a copy of each report, schedule, registration statement and other document
(the "Documents") filed or received by it during such period pursuant to the
requirements of Federal or state securities laws or Federal or state banking
laws (other than Documents which such party is not permitted to disclose
under applicable law). During the period prior to the Closing Date, the
Acquiring Portfolio shall make available to the Acquired Portfolio each
Document pertaining to the transactions contemplated hereby filed or received
by it during such period pursuant to Federal or state securities laws or
Federal or state banking laws (other than Documents which such party is not
permitted to disclose under applicable law).
E. SHAREHOLDERS MEETING. The Acquired Portfolio shall call a
meeting of the Acquired Portfolio shareholders to be held as promptly as
practicable for the purpose of voting upon the approval of this Agreement and
the transactions contemplated herein, and shall furnish a copy of the Proxy
Statement/Prospectus and form of proxy to each shareholder of the Acquired
Portfolio as of the record date for such meeting of shareholders. The Board
shall recommend to the Acquired Portfolio shareholders approval of this
Agreement and the transactions contemplated herein, subject to fiduciary
obligations under applicable law.
F. COORDINATION OF PORTFOLIOS. The Acquired Portfolio and Acquiring
Portfolio covenant and agree to coordinate the respective portfolios of the
Acquired Portfolio and Acquiring Portfolio from the date of the Agreement up
to and including the Closing Date in order that at Closing, when the Assets
are added to the Acquiring Portfolio's portfolio, the resulting portfolio
will meet the Acquiring Portfolio's investment objective, policies and
restrictions, as set forth in the Acquiring Portfolio's Prospectus, a copy of
which has been delivered to the Acquired Portfolio.
G. DISTRIBUTION OF THE SHARES. At Closing the Acquired Portfolio
covenants that it shall cause to be distributed the Acquiring Portfolio
Shares in the proper pro rata amount for the benefit of Acquired Portfolio's
shareholders and such that the Acquired Portfolio shall not continue to hold
amounts of said shares so as to cause a violation of Section 12(d)(1) of the
1940 Act. The Acquired Portfolio covenants further that, pursuant to Section
3G, it shall liquidate and dissolve as promptly as practicable after the
Closing Date. The Acquired Portfolio covenants to use all reasonable efforts
to cooperate with the Acquiring Portfolio and the Acquiring Portfolio's
transfer agent in the distribution of said shares.
H. BROKERS OR FINDERS. Except as disclosed in writing to the other
party prior to the date hereof, each of the Acquired Portfolio and the
Acquiring Portfolio represents that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, and each party
shall hold the other harmless from and against any and all claims,
liabilities or obligations with respect to any such fees, commissions or
expenses asserted by any person to be due or payable in connection with any
of the transactions contemplated by this Agreement on the basis of any act or
statement alleged to have been made by such first party or its affiliate.
I. ADDITIONAL AGREEMENT. In case at any time after the Closing Date
any further action is necessary or desirable in order to carry out the
purposes of this Agreement the proper officers and trustees of each party to
this Agreement shall take all such necessary action.
J. PUBLIC ANNOUNCEMENTS. For a period of time from the date of this
Agreement to the Closing Date, the Acquired Portfolio and the Acquiring
Portfolio will consult with each other before issuing any press releases or
otherwise making any public statements with respect to this Agreement or the
transactions contemplated herein and shall not issue any press release or
make any public statement prior to such consultation, except as may be
required by law or the rules of any national securities exchange on which
such party's securities are traded.
K. TAX STATUS OF REORGANIZATION. The intention of the parties is
that the transaction will qualify as a reorganization within the meaning of
Section 368(a) of the Code. Neither the Acquiring Portfolio nor the Acquired
Portfolio 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 meaning of Section 368(a) of the Code. At or prior to
the Closing Date, the Acquiring Portfolio and the Acquired Portfolio will
take such action, or cause such action to be taken, as is reasonably
necessary to enable Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel
to the Acquired Portfolio, to render the tax opinion required herein.
L. DECLARATION OF DIVIDEND. At or immediately prior to the Closing
Date, the Acquired Portfolio shall declare and pay to its stockholders a
dividend or other distribution in an amount large enough so that it will have
distributed substantially all (and in any event not less than 98%) of its
investment company taxable income (computed without regard to any deduction
for dividends paid) and realized net capital gain, if any, for the current
taxable year through the Closing Date.
7. CONDITIONS TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO.
The obligations of the Acquired Portfolio hereunder with respect to the
consummation of the Reorganization are subject to the satisfaction, or waiver
by the Acquired Portfolio, of the following conditions:
A. SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated herein shall have been approved by the affirmative vote of the
holders of a majority of the outstanding shares of beneficial interest the
Acquired Portfolio.
B. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Acquiring Portfolio contained herein
shall be true in all material respects as of the Closing Date, and as of the
Closing Date there shall have been no material adverse change in the
financial condition, results of operations, business properties or assets of
the Acquiring Portfolio, and the Acquired Portfolio shall have received a
certificate of an officer of the Acquiring Portfolio satisfactory in form and
substance to the Acquired Portfolio so stating. The Acquiring Portfolio
shall have performed and complied in all material respects with all
agreements, obligations and covenants required by this Agreement to be so
performed or complied with by it on or prior to the Closing Date.
C. REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
shall have become effective and no stop orders under the Securities Act
pertaining thereto shall have been issued.
D. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been obtained.
E. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint or
prohibition (an "Injunction") preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, nor shall any proceeding
by any state, local or federal government agency or entity asking any of the
foregoing be pending. There shall not have been any action taken or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement, which makes
the consummation of the transactions contemplated by this Agreement illegal
or which has a material adverse effect on business operations of the
Acquiring Portfolio.
F. TAX OPINION. The Acquired Portfolio shall have obtained an
opinion from Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for the
Acquired Portfolio, dated as of the Closing Date, addressed to the Acquired
Portfolio, that the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as described in
Section 368(a) of the Code.
G. OPINION OF COUNSEL. The Acquired Portfolio shall have received
the opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for
the Acquiring Portfolio, dated as of the Closing Date, addressed to the
Acquired Portfolio substantially in the form and to the effect that: (i) the
Trust is duly formed and validly existing under the laws of its State of
organization; (ii) the Acquiring Portfolio is duly designated as a series of
the Trust; (iii) the Acquiring Portfolio is registered as an open-end,
management investment company under the 1940 Act; (iv) this Agreement and the
reorganization provided for herein and the execution of this Agreement have
been duly authorized and approved by all requisite action of the Trust on
behalf of the Acquiring Portfolio and this Agreement has been duly executed
and delivered by the Trust on behalf of the Acquiring Portfolio and (assuming
the Agreement is a valid and binding obligation of the other parties thereto)
is a valid and binding obligation of the Trust on behalf of the Acquiring
Portfolio; (v) neither the execution or delivery by the Trust on behalf of
the Acquiring Portfolio of this Agreement nor the consummation by the
Acquiring Portfolio of the transactions contemplated thereby violate any
provision of any statute or any published regulation or any judgment or order
disclosed to counsel by the Trust or the Acquiring Portfolio as being
applicable to the Trust or the Acquiring Portfolio; (vi) the Acquiring
Portfolio's Shares have been duly authorized and upon issuance thereof in
accordance with this Agreement will be validly issued and fully paid; and
(vii) to their knowledge and subject to the qualifications set forth below,
the execution and delivery by the Trust on behalf of Acquiring Portfolio of
the Agreement and the consummation of the transactions therein contemplated
do not require, under the laws of the State of organization or any state in
which the Acquiring Portfolio is qualified to do business or the federal laws
of the United States, the consent, approval, authorization, registration,
qualification or order of, or filing with, any court or governmental agency
or body (except such as have been obtained). Counsel need express no
opinion, however, as to any such consent, approval, authorization,
registration, qualification, order or filing (a) which may be required as a
result of the involvement of other parties to the Agreement in the
transactions contemplated by the Agreement because of their legal or
regulatory status or because of any other facts specifically pertaining to
them; (b) the absence of which does not deprive the Acquired Portfolio of any
material benefit under the Agreement; or (c) which can be readily obtained
without significant delay or expense to the Acquired Portfolio, without loss
to the Acquired Portfolio of any material benefit under the Agreement and
without any material adverse effect on the Acquired Portfolio during the
period such consent, approval, authorization, registration, qualification or
order was obtained. The foregoing opinion relates only to consents,
approvals, authorizations, registrations, qualifications, orders or filings
under (a) laws which are specifically referred to in this opinion, (b) laws
of the State of organization or any state in which the Acquiring Portfolio is
qualified to do business and the federal laws of the United States which, in
counsel's experience, are normally applicable to transactions of the type
provided for in the Agreement and (c) court orders and judgments disclosed to
counsel by the Trust or the Acquiring Portfolio in connection with the
opinion. In addition, although counsel need not have specifically considered
the possible applicability to the Acquiring Portfolio of any other laws,
orders or judgments, nothing has come to their attention in connection with
their representation of the Acquiring Portfolio in this transaction that has
caused them to conclude that any other consent, approval, authorization,
registration, qualification, order or filing is required.
H. OFFICER CERTIFICATES. The Acquired Portfolio shall have received
a certificate of an authorized officer of the Acquiring Portfolio, dated as
of the Closing Date, certifying that the representations and warranties set
forth in Section 5 are true and correct on the Closing Date, together with
certified copies of the resolutions adopted by the Acquiring Portfolio Board
shall be furnished to the Acquired Portfolio.
8. CONDITIONS TO OBLIGATIONS OF ACQUIRING PORTFOLIO.
The obligations of the Acquiring Portfolio hereunder with respect to
the consummation of the Reorganization are subject to the satisfaction, or
written waiver by the Acquiring Portfolio of the following conditions:
A. SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated herein shall have been approved by the affirmative vote of the
holders of a majority of the outstanding shares of common stock of the
Acquired Portfolio.
B. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Acquired Portfolio contained herein
shall be true in all material respects as of the Closing Date, and as of the
Closing Date there shall have been no material adverse change in the
financial condition, results of operations, business, properties or assets of
the Acquired Portfolio, and the Acquiring Portfolio shall have received a
certificate of an authorized officer of the Acquired Portfolio satisfactory
in form and substance to the Acquiring Portfolio so stating. The Acquired
Portfolio shall have performed and complied in all material respects with all
agreements, obligations and covenants required by this Agreement to be so
performed or complied with by them on or prior to the Closing Date.
C. REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
shall have become effective and no stop orders under the Securities Act
pertaining thereto shall have been issued.
D. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been obtained.
E. NO INJUNCTIONS OR RESTRAINTS: ILLEGALITY. No injunction
preventing the consummation of the transactions contemplated by this
Agreement shall be in effect, nor shall any proceeding by any state, local or
federal government agency or entity seeking any of the foregoing be pending.
There shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the transactions
contemplated by this Agreement, which makes the consummation of the
transactions contemplated by this Agreement illegal.
F. TAX OPINION. The Acquiring Portfolio shall have obtained an
opinion from Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for the
Acquired Portfolio, dated as of the Closing Date, addressed to the Acquiring
Portfolio, that the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as described in
Section 368(a) of the Code.
G. OPINION OF COUNSEL. The Acquiring Portfolio shall have received
the opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for
the Trust on behalf of the Acquired Portfolio, dated as of the Closing Date,
addressed to the Acquiring Portfolio, substantially in the form and to the
effect that: (i) the Acquired Portfolio is duly formed and validly existing
under the laws of its state of organization; (ii) the Acquired Portfolio is
duly designated as a series of the Trust; (iii) the Acquired Portfolio is
registered as an open-end, management investment company under the 1940 Act;
(iv) this Agreement and the reorganization provided for herein and the
execution of this Agreement have been duly authorized by all requisite action
of the Trust on behalf of the Acquired Portfolio and this Agreement has been
duly executed and delivered by the Trust on behalf of the Acquired Portfolio
and (assuming the Agreement is a valid and binding obligation of the other
parties thereto) is a valid and binding obligation of the Trust on behalf of
the Acquired Portfolio; (v) neither the execution or delivery by the Acquired
Portfolio of this Agreement nor the consummation by the Acquired Portfolio of
the transactions contemplated thereby violate any provision of any statute,
or any published regulation or any judgment or order disclosed to them by the
Trust or the Acquired Portfolio as being applicable to the Trust or the
Acquired Portfolio; and (vi) to their knowledge and subject to the
qualifications set forth below, the execution and delivery by the Trust on
behalf of the Acquired Portfolio of the Agreement and the consummation of the
transactions therein contemplated do not require, under the laws of the State
of organization or any state in which the Acquired Portfolio is qualified to
do business, or the federal laws of the United States, the consent, approval,
authorization, registration, qualification or order of, or filing with, any
court or governmental agency or body (except such as have been obtained under
the Securities Act, the 1940 Act or the rules and regulations thereunder.)
Counsel need express no opinion, however, as to any such consent, approval,
authorization, registration, qualification, order or filing; (a) which may be
required as a result of the involvement of other parties to the Agreement in
the transactions contemplated by the Agreement because of their legal or
regulatory status or because of any other facts specifically pertaining to
them; (b) the absence of which does not deprive the Acquiring Portfolio of
any material benefit under such agreements; or (c) which can be readily
obtained without significant delay or expense to the Acquiring Portfolio,
without loss to the Acquiring Portfolio of any material benefit under the
Agreement and without any material adverse effect on them during the period
such consent, approval, authorization, registration, qualification or order
was obtained. The foregoing opinion relates only to consents, approvals,
authorizations, registrations, qualifications, orders or filings under (a)
laws which are specifically referred to in the opinion, (b) laws of the State
of organization or any State in which the Acquired Portfolio is qualified to
do business and the federal laws of the United States which, in our
experience, are normally applicable to transactions of the type provided for
in the Agreement and (c) court orders and judgments disclosed to them by the
Trust or the Acquired Portfolio in connection with the opinion. In addition,
although counsel need not have specifically considered the possible
applicability to the Acquired Portfolio of any other laws, orders or
judgments, nothing has come to their attention in connection with their
representation of the Acquired Portfolio in this transaction that has caused
them to conclude that any other consent, approval, authorization,
registration, qualification, order or filing is required.
H. THE ASSETS. The Assets, as set forth in Schedule 1, as amended,
shall consist solely of securities which are in conformity with the Acquiring
Portfolio's investment objectives, policies and restrictions as set forth in
the Acquiring Portfolio's Prospectus, a copy of which has been delivered to
the Acquired Portfolio.
I. SHAREHOLDER LIST. The Acquired Portfolio shall have delivered to
the Acquiring Portfolio an updated list of all shareholders of the Acquired
Portfolio, as reported by the Acquired Portfolio's transfer agent, as of one
(1) business day prior to the Closing Date with each shareholder's respective
holdings in the Acquired Portfolio, taxpayer identification numbers, Form W9
and last known address.
J. OFFICER CERTIFICATES. The Acquiring Portfolio shall have
received a certificate of an authorized officer of the Acquired Portfolio,
dated as of the Closing Date, certifying that the representations and
warranties set forth in Section 4 are true and correct on the Closing Date,
together with certified copies of the resolutions adopted by the Acquired
Portfolio Board and shareholders.
9. AMENDMENT, WAIVER AND TERMINATION.
A. The parties hereto may, by agreement in writing authorized by the
respective Boards, amend this Agreement at any time before or after approval
thereof by the shareholders of the Acquired Portfolio; provided, however,
that after receipt of Acquired Portfolio shareholder approval, no amendment
shall be made by the parties hereto which substantially changes the terms of
Sections 1, 2 and 3 hereof without obtaining Acquired Portfolio's shareholder
approval thereof.
B. At any time prior to the Closing Date, either of the parties may
by written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions made for its benefit
contained herein. No delay on the part of either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
C. This Agreement may be terminated, and the transactions
contemplated herein may be abandoned at any time prior to the Closing Date:
by the mutual consents of the respective Boards of the Acquired
Portfolio and the Acquiring Portfolio;
by the Acquired Portfolio, if the Acquiring Portfolio breaches in
any material respect any of its representations, warranties, covenants or
agreements contained in this Agreement;
by the Acquiring Portfolio, if the Acquired Portfolio breaches in
any material respect any of its representations, warranties, covenants or
agreements contained in this Agreement;
by either the Acquired Portfolio or Acquiring Portfolio, if the
Closing has not occurred on or prior to December 31, 2002 (provided that the
rights to terminate this Agreement pursuant to this subsection (C)(4) shall
not be available to any party whose failure to fulfill any of its obligations
under this Agreement has been the cause of or resulted in the failure of the
Closing to occur on or before such date);
by the Acquiring Portfolio in the event that: (a) all the
conditions precedent to the Acquired Portfolio's obligation to close, as set
forth in Section 7 of this Agreement, have been fully satisfied (or can be
fully satisfied at the Closing); (b) the Acquiring Portfolio gives the
Acquired Portfolio written assurance of its intent to close irrespective of
the satisfaction or nonsatisfaction of all conditions precedent to the
Acquiring Portfolio's obligation to close, as set forth in Section 8 of this
Agreement; and (c) the Acquired Portfolio then fails or refuses to close
within the earlier of five (5) business days or December 31, 2002; or
by the Acquired Portfolio in the event that: (a) all the
conditions precedent to the Acquiring Portfolio's obligation to close, as set
forth in Section 8 of this Agreement, have been fully satisfied (or can be
fully satisfied at the Closing); (b) the Acquired Portfolio gives the
Acquiring Portfolio written assurance of its intent to close irrespective of
the satisfaction or nonsatisfaction of all the conditions precedent to the
Acquired Portfolio's obligation to close, as set forth in Section 7 of this
Agreement; and (c) the Acquiring Portfolio then fails or refuses to close
within the earlier of five (5) business days or December 31, 2002.
10. REMEDIES.
A. In the event of termination of this Agreement by either or both
of the Acquired Portfolio and Acquiring Portfolio pursuant to Section 9C,
written notice thereof shall forthwith be given by the terminating party to
the other party hereto, and this Agreement shall therefore terminate and
become void and have no effect, and the transactions contemplated herein and
thereby shall be abandoned, without further action by the parties hereto.
11. SURVIVAL OF WARRANTIES AND INDEMNIFICATION.
A. SURVIVAL. The representations and warranties included or
provided for herein, or in the schedules or other instruments delivered or to
be delivered pursuant hereto, shall survive the Closing Date for a three year
period except that any representation or warranty with respect to taxes shall
survive for the expiration of the statutory period of limitations for
assessments of tax deficiencies as the same may be extended from time to time
by the taxpayer. The covenants and agreements included or provided for
herein shall survive and be continuing obligations in accordance with their
terms. The period for which a representation, warranty, covenant or agreement
survives shall be referred to hereinafter as the "Survival Period."
Notwithstanding anything set forth in the immediately preceding sentence, the
Acquiring Portfolio's and the Acquired Portfolio's right to seek indemnity
pursuant to this Agreement shall survive for a period of ninety (90) days
beyond the expiration of the Survival Period of the representation, warranty,
covenant or agreement upon which indemnity is sought. In no event shall the
Acquiring Portfolio or the Acquired Portfolio be obligated to indemnify the
other if indemnity is not sought within ninety (90) days of the expiration of
the applicable Survival Period.
B. INDEMNIFICATION. 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 (collectively, the
"Losses") arising out of or related to any claim of a breach of any
representation, warranty or covenant made herein by the Indemnitor, provided,
however, that no Indemnified Party shall be indemnified hereunder against any
Losses arising directly from such 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.
C. INDEMNIFICATION PROCEDURE. The Indemnified Party shall use its
best efforts to minimize any liabilities, damages, deficiencies, claims,
judgments, assessments, costs and expenses in respect of which indemnity may
be sought hereunder. The Indemnified Party shall give written notice to
Indemnitor within the earlier of ten (10) days of receipt of written notice
to Indemnified Party or thirty (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;
provided that in any event such notice shall have been given prior to the
expiration of the Survival Period. At any time after ten (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.
12. SURVIVAL.
The provisions set forth in Sections 10, 11 and 16 hereof shall survive
the termination of this Agreement for any cause whatsoever.
13. NOTICES.
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 Acquired Portfolio shall
be addressed to the Acquired Portfolio c/o Xxx Xxxxxx Asset Management Inc.,
0 Xxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxxxx Terrace, Illinois 60181-5555,
Attention: General Counsel, or at such other address as the Acquired
Portfolio may designate by written notice to the Acquiring Portfolio. Notice
to the Acquiring Portfolio shall be addressed to the Acquiring Portfolio c/o
Xxx Xxxxxx Asset Management Inc., 0 Xxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000, Attention: General Counsel, or at such other address
and to the attention of such other person as the Acquiring Portfolio may
designate by written notice to the Acquired Portfolio. Any notice shall be
deemed to have been served or given as of the date such notice is delivered
personally or mailed.
14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns. This Agreement shall not be
assigned by any party without the prior written consent of the other party
hereto.
15. BOOKS AND RECORDS.
The Acquired Portfolio and the Acquiring Portfolio agree that copies of
the books and records of the Acquired Portfolio relating to the Assets
including, but not limited to all files, records, written materials; e.g.,
closing transcripts, surveillance files and credit reports shall be delivered
by the Acquired Portfolio to the Acquiring Portfolio at the Closing Date. In
addition to, and without limiting the foregoing, the Acquired Portfolio and
the Acquiring Portfolio agree to take such action as may be necessary in
order that the Acquiring Portfolio shall have reasonable access to such other
books and records as may be reasonably requested, all for three complete
fiscal and tax years after the Closing Date; namely, general ledger, journal
entries, voucher registers; distribution journal; payroll register, monthly
balance owing report; income tax returns; tax depreciation schedules; and
investment tax credit basis schedules.
16. GENERAL.
This Agreement supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement of the
terms of the Agreement between the parties and may not be amended, modified
or changed or terminated orally. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
executed by the Acquired Portfolio and Acquiring Portfolio and delivered to
each of the parties hereto. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement is for the sole benefit of
the parties thereto, and nothing in this Agreement, expressed or implied, is
intended to confer upon any other person any rights or remedies under or by
reason of this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois without regard to
principles of conflicts or choice of law.
17. LIMITATION OF LIABILITY.
Consistent with the Acquiring Portfolio's Declaration of Trust, notice
is hereby given and the parties hereto acknowledge and agree that this
instrument is executed by the Trustees of the Acquiring Portfolio on behalf
of the Acquiring Portfolio as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees or
shareholders of the Acquiring Portfolio individually but binding only upon
the assets and property of the Acquired Portfolio or the Acquiring Portfolio
as the case may be.
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.
Xxx Xxxxxx Life Investment Trust on
behalf of the Strategic Stock
Portfolio
___________________________________
_
Name:
Title:
Xxx Xxxxxx Life Investment Trust on
behalf of the Growth and Income
Portfolio
___________________________________
_
Name:
Title:
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