1
EXHIBIT 4
FORM OF
MERGER AGREEMENT AND PLAN OF REORGANIZATION
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
AMONG
THE GROWTH FUND OF SPAIN, INC.,
XXXXXXX SPAIN AND PORTUGAL FUND, INC.
AND
XXXXXXX XXXXXX INVESTMENTS, INC. (WITH RESPECT TO SECTION 9)
DATED AS OF APRIL 14, 1998
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS............................................................................ 1
2. BASIC TRANSACTION...................................................................... 1
2.1 The Merger................................................................... 1
2.2 Actions at Closing........................................................... 2
2.3 Effect of Merger............................................................. 2
3. REPRESENTATIONS AND WARRANTIES OF THE GROWTH FUND OF SPAIN............................. 2
3.1 Organization................................................................. 2
3.2 Registrations and Qualifications............................................. 2
3.3 Regulatory Consents and Approvals............................................ 3
3.4 Noncontravention............................................................. 3
3.5 Financial Statements......................................................... 3
3.6 Annual Report................................................................ 4
3.7 Qualification, Corporate Power, Authorization of Transaction................. 4
3.8 Legal Compliance............................................................. 4
3.9 Material Contracts........................................................... 4
3.10 Undisclosed Liabilities..................................................... 4
3.11 Tax Filings................................................................. 5
3.12 Qualifications under Subchapter M........................................... 5
3.13 Form N-14 and Exemptive Application......................................... 5
3.14 Capitalization.............................................................. 6
3.15 Books and Records........................................................... 6
4. REPRESENTATIONS AND WARRANTIES OF THE SPAIN AND PORTUGAL FUND.......................... 6
4.1 Organization................................................................. 6
4.2 Registrations and Qualifications............................................. 7
4.3 Regulatory Consents and Approvals............................................ 7
4.4 Noncontravention............................................................. 7
4.5 Financial Statements......................................................... 7
4.6 Annual Report................................................................ 8
4.7 Qualification, Corporate Power, Authorization of Transaction................. 8
4.8 Legal Compliance............................................................. 8
4.9 Material Contracts........................................................... 8
4.10 Undisclosed Liabilities..................................................... 8
4.11 Tax Filings................................................................. 9
4.12 Qualification under Subchapter M............................................ 9
4.13 Form N-14 and Exemptive Application......................................... 9
4.14 Capitalization.............................................................. 10
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4.15 Issuance of Stock........................................................... 10
4.16 Books and Records........................................................... 10
5. CONVERSION TO SPAIN AND PORTUGAL FUND COMMON STOCK..................................... 11
5.1 Conversion................................................................... 11
5.2 Computation of Net Asset Value............................................... 11
5.3 Issuance of Spain and Portugal Fund Common Stock............................. 11
5.4 Surrender of Growth Fund of Spain Stock Certificates......................... 11
6. COVENANTS OF THE PARTIES............................................................... 12
6.1 Stockholders' Meetings....................................................... 12
6.2 Operations in the Normal Course.............................................. 12
6.3 Articles of Merger........................................................... 13
6.4 Regulatory Filings........................................................... 13
6.5 Preservation of Assets....................................................... 13
6.6 Tax Matters.................................................................. 13
6.7 Stockholder List............................................................. 14
6.8 Delisting, Termination of Registration as an Investment Company............... 14
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SPAIN AND PORTUGAL FUND......................... 14
7.1 Approval of Merger........................................................... 14
7.2 Certificates and Statements by the Growth Fund of Spain...................... 15
7.3 Absence of Litigation........................................................ 15
7.4 Legal Opinions............................................................... 16
7.5 Auditor's Consent and Certification.......................................... 18
7.6 Liabilities.................................................................. 18
7.7 Effectiveness of N-14 Registration Statement................................. 18
7.8 Approval of Exemptive Application, Regulatory Filings........................ 18
7.9 Administrative Rulings, Proceedings.......................................... 19
7.10 Satisfaction of the Spain and Portugal Fund................................. 19
7.11 Dividends................................................................... 19
7.12 Custodian's Certificate...................................................... 19
7.13 Books and Records............................................................ 19
7.14 Compliance with Blue Sky Laws................................................ 19
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE GROWTH FUND OF SPAIN.................... 20
8.1 Approval of Merger........................................................... 20
8.2 Certificates and Statements by the Spain and Portugal Fund................... 20
8.3 Absence of Litigation........................................................ 21
8.4 Legal Opinions............................................................... 21
8.5 Auditor's Consent and Certification.......................................... 23
8.6 Effectiveness of N-14 Registration Statement................................. 24
8.7 Approval of Exemptive Application; Regulatory Filings........................ 24
8.8 Satisfaction of the Growth Fund of Spain..................................... 24
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8.9 Dividends.................................................................... 24
8.10 Nomination of Directors of Growth Fund of Spain............................. 25
8.11 Amendment of the Spain and Portugal Fund's Investment Advisory, Management
and Administration Contract.............................................. 25
9. PAYMENT OF EXPENSES.................................................................... 26
9.1 Allocation................................................................... 26
9.2 Qualification of Investment Adviser.......................................... 26
10. COOPERATION FOLLOWING EFFECTIVE DATE.................................................. 26
11. INDEMNIFICATION....................................................................... 26
11.1 The Growth Fund of Spain.................................................... 26
11.2 The Spain and Portugal Fund................................................. 27
12. TERMINATION, POSTPONEMENT AND WAIVERS................................................. 27
12.1 Termination................................................................. 27
12.2 Waiver...................................................................... 27
12.3 Expiration of Representations and Warranties................................ 28
13. MISCELLANEOUS......................................................................... 28
13.1 Transfer Restriction........................................................ 28
13.2 Material Provisions......................................................... 29
13.3 Notices..................................................................... 29
13.4 Amendments.................................................................. 30
13.5 Headings.................................................................... 30
13.6 Counterparts................................................................ 30
13.7 Enforceability.............................................................. 30
13.8 Successor and Designs....................................................... 31
13.9 Governing Law............................................................... 31
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 14th day of April, 1998, by and among The Growth Fund of Spain, Inc.
(the "Target Fund" or the "Growth Fund of Spain"), a Maryland corporation and
registered investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), Xxxxxxx Spain and Portugal Fund, Inc. (the "Acquiring
Fund" or the "Spain and Portugal Fund"), a Maryland corporation and a registered
investment company under the 1940 Act, and Xxxxxxx Xxxxxx Investments, Inc.,
investment adviser to the Parties (for purposes of Section 9 of the Agreement
only) (the "Investment Adviser"). The Spain and Portugal Fund and the Growth
Fund of Spain are collectively referred to herein as the "Parties."
This agreement contemplates a tax-free merger transaction which
qualifies for federal income tax purposes as a reorganization within the meaning
of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the Parties hereto agree as follows:
1. DEFINITIONS
Certain capitalized terms used in this Agreement are
specifically defined herein.
2. BASIC TRANSACTION
2.1 The Merger. On and subject to the terms and conditions of this
Agreement, the Target Fund will merge with and into the Acquiring Fund (the
"Merger") at the Effective Date (as defined in Section 2.3 below) in accordance
with the Maryland General Corporation Law ("MGCL"). The Spain and Portugal Fund
shall be the surviving investment company. The Growth Fund of Spain shall cease
to exist as a separate investment company and each share of the Growth Fund of
Spain will be converted into an equivalent dollar amount (to the nearest one
ten-thousandth of one cent) of full shares of Common Stock of the Spain and
Portugal Fund, with a par value of $0.01 per share, plus cash in lieu of any
fractional shares, computed based on the net asset value per share of each of
the Parties at 4:00 p.m. Eastern Time on the Business Day prior to the Effective
Date (the "Valuation Time"); the Effective Date and the Business Day prior to it
must each be a day on which the New York Stock Exchange is open for trading (a
"Business Day"), all upon and subject to the terms hereinafter set forth.
From and after the Effective Date, the Acquiring Company shall possess
all of the properties, assets, rights, privileges, powers and shall be subject
to all of the restrictions, liabilities, obligations, disabilities and duties of
the Growth Fund of Spain, all as provided under Maryland law.
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2.2 Actions at Closing. At the closing of the transactions contemplated
by this Agreement (the "Closing") on the date thereof (the "Closing Date"), (i)
the Growth Fund of Spain will deliver to the Spain and Portugal Fund the various
certificates and documents referred to in Article 7 below, (ii) the Spain and
Portugal Fund will deliver to the Growth Fund of Spain the various certificates
and documents referred to in Article 8 below, and (iii) the Growth Fund of Spain
and the Spain and Portugal Fund will file jointly with the State Department of
Assessments and Taxation of Maryland (the "Department") the Articles of Merger
in the form attached hereto as Exhibit A (the "Articles of Merger") and make all
other filings or recordings required by Maryland law in connection with the
Merger.
2.3 Effect of Merger. Subject to the requisite approvals of the
stockholders of the Parties, and to the other terms and conditions described
herein, the Merger shall become effective at such time as the Articles of Merger
are accepted for record by the Department or at such later time as is specified
in the Articles of Merger (the "Effective Date") and the separate corporate
existence of the Growth Fund of Spain shall cease. As promptly as practicable
after the Merger, the Growth Fund of Spain shall delist its shares from the New
York Stock Exchange ("NYSE") and its registration under the 1940 Act shall be
terminated. Any reporting responsibility of the Growth Fund of Spain is and
shall remain the responsibility of the Growth Fund of Spain up to and including
the Effective Date.
3. REPRESENTATIONS AND WARRANTIES OF THE GROWTH FUND OF SPAIN
The Growth Fund of Spain represents and warrants to the Spain and
Portugal Fund that the statements contained in this Article 3 are correct and
complete in all material respects as of the execution of this Agreement on the
date hereof.
The Growth Fund of Spain represents and warrants to, and agrees with
the Spain and Portugal Fund that:
3.1 Organization.
The Growth Fund of Spain is a corporation duly organized, validly
existing under the laws of the State of Maryland and is in good standing with
the Department, and has the power to own all of its assets and to carry on its
business as it is now being conducted and to carry out this Agreement.
3.2 Registrations and Qualifications.
The Growth Fund of Spain is duly registered under the 1940 Act as a
diversified, closed-end management investment company (File No. 811-05304), and
such registration has not been revoked or rescinded and is in full force and
effect. The Growth Fund of Spain has elected and qualified for the special tax
treatment afforded regulated investment companies ("RICs") under Sections
851-855 of the Code at all times since its inception. The Growth Fund of Spain
is
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qualified as a foreign association in every jurisdiction where required,
except to the extent that failure to so qualify would not have a material
adverse effect on the Growth Fund of Spain.
3.3 Regulatory Consents and Approvals.
No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Growth Fund of
Spain of the transactions contemplated herein, except such as have been obtained
or applied for under the Securities Act of 1933, as amended (the "1933 Act"),
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940
Act and such as may be required by state securities laws.
3.4 Noncontravention.
The Growth Fund of Spain is not, and the execution, delivery and
performance of this Agreement by the Growth Fund of Spain will not result, in
violation of the laws of the State of Maryland or of the Articles of
Incorporation or the By-laws of the Growth Fund of Spain, or of any material
agreement, indenture, instrument, contract, lease or other undertaking to which
the Growth Fund of Spain is a party or by which it is bound, and the execution,
delivery and performance of this Agreement by the Growth Fund of Spain will not
result in the acceleration of any obligation, or the imposition of any penalty,
under any agreement, indenture, instrument, contract, lease, judgment or decree
to which the Growth Fund of Spain is a party or by which it is bound.
3.5 Financial Statements.
The Spain and Portugal Fund has been furnished with a statement of
assets, liabilities and capital and a schedule of investments of the Growth Fund
of Spain, each as of November 30, 1997, said financial statements having been
examined by Ernst & Young LLP, independent public auditors. These financial
statements are in accordance with generally accepted accounting principles
applied on a consistent basis ("GAAP") and present fairly, in all material
respects, the financial position of the Growth Fund of Spain as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Growth Fund of Spain required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date not disclosed therein.
The Spain and Portugal Fund has been furnished with an unaudited
statement of assets, liabilities and capital and a schedule of investments of
the Growth Fund of Spain, each as of March 31, 1998. This financial statement is
in accordance with GAAP and presents fairly, in all material respects, the
financial position of the Growth Fund of Spain as of such date in accordance
with GAAP, and there are no known contingent liabilities of the Growth Fund of
Spain required to be reflected on a balance sheet (including the notes thereto)
in accordance with GAAP as of such date not disclosed therein.
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3.6 Annual Report.
The Spain and Portugal Fund has been furnished with the Growth Fund of
Spain's Annual Report to Stockholders for the year ended November 30, 1997.
3.7 Qualification, Corporate Power, Authorization of Transaction.
The Growth Fund of Spain 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 Directors, and, subject to stockholder approval, 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.
3.8 Legal Compliance.
No material litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending (in which service
of process has been received) or to its knowledge threatened against the Growth
Fund of Spain or any properties or assets held by it. The Growth Fund of Spain
knows of no facts which might form the basis for the institution of such
proceedings which would materially and adversely affect its business and is not
a party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated.
3.9 Material Contracts.
There are no material contracts outstanding to which the Growth Fund of
Spain is a party that have not been disclosed in the N-14 Registration Statement
or will not be otherwise disclosed to the Spain and Portugal Fund prior to the
Effective Date.
3.10 Undisclosed Liabilities.
Since November 30, 1997, there has not been any material adverse change
in the Growth Fund of Spain's financial condition, assets, liabilities or
business and the Growth Fund of Spain has no known liabilities of a material
amount, contingent or otherwise, other than those shown on the Growth Fund of
Spain's statements of assets, liabilities and capital referred to above, those
incurred in the ordinary course of its business as an investment company since
December 18, 1989, and those incurred in connection with the Merger. Prior to
the Effective Date, the Growth Fund of Spain will advise the Spain and Portugal
Fund in writing of all known liabilities, contingent or otherwise, whether or
not incurred in the ordinary course of business, existing or accrued. For
purposes of this subsection 3.10, a decline in net asset value per share of the
Growth Fund of Spain due to declines in market values of securities in the
Growth Fund of
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Spain's portfolio or the discharge of Growth Fund of Spain liabilities will not
constitute a material adverse change.
3.11 Tax Filings.
All federal and other tax returns and information reports of the Growth
Fund of Spain required by law to have been filed shall have been filed and are
or will be correct in all material respects, and all federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof, and,
to the best of the Growth Fund of Spain's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to such returns.
All tax liabilities of the Growth Fund of Spain have been adequately provided
for on its books, and no tax deficiency or liability of the Growth Fund of Spain
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
Effective Date occurs.
3.12 Qualification under Subchapter M.
For each taxable year of its operation (including the taxable year
ending on the Effective Date), the Growth Fund of Spain has met the requirements
of Subchapter M of the Code for qualification as a regulated investment company
and has elected to be treated as such, has been eligible to and has computed its
federal income tax under Section 852 of the Code, and will have distributed
substantially all of its investment company taxable income and net realized
capital gain (as defined in the Code) that has accrued through the Effective
Date.
3.13 Form N-14 and Exemptive Application.
The exemptive application to be filed with the Securities and Exchange
Commission (the "SEC") by the Parties regarding the Merger (the "Exemptive
Application") and the registration statement to be filed by the Spain and
Portugal Fund on Form N-14 relating to the Spain and Portugal Fund Common Stock
to be issued pursuant to this Agreement, and any supplement or amendment thereto
or to the documents therein (as amended, the "N-14 Registration Statement"), on
the effective date of the N-14 Registration Statement, at the time of the
stockholders' meetings referred to in Article 6 of this Agreement and at the
Effective Date, insofar as it relates to the Growth Fund of Spain (i) shall have
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 not misleading; and the 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 the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall only apply to
statements in or omissions from the N-14 Registration Statement made in reliance
upon and in conformity
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with information furnished by the Growth Fund of Spain for use in the N-14
Registration Statement.
3.14 Capitalization.
(a) All issued and outstanding shares of the Growth Fund of Spain (i)
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act and state securities laws, (ii) are, and on the Effective Date will
be, duly and validly issued and outstanding, fully paid and non-assessable, and
(iii) will be held at the time of the Closing by the persons and in the amounts
set forth in the records of the Transfer Agent as provided in Section 6.7. The
Growth Fund of Spain does not have outstanding any options, warrants, or other
rights to subscribe for or purchase any of the Growth Fund of Spain shares, nor
is there outstanding any security convertible into any of the Growth Fund of
Spain shares.
(b) The Growth Fund of Spain is authorized to issue 50,000,000 shares
of stock, par value $0.01 per share, all of which shares are classified as
Common Stock and each outstanding share of which is fully paid, non-assessable
and has full voting rights. All of the issued and outstanding Shares of the
Growth Fund of Spain were offered for sale and sold in conformity with all
applicable Federal and State Securities laws.
3.15 Books and Records.
The books and records of the Growth Fund of Spain made available to the
Spain and Portugal Fund are substantially true and correct and contain no
material misstatements or omissions with respect to the operations of the Growth
Fund of Spain.
4. REPRESENTATIONS AND WARRANTIES OF THE SPAIN AND PORTUGAL FUND
The Spain and Portugal Fund represents and warrants to the Growth Fund
of Spain that the statements contained in this Article 4 are correct and
complete in all material respects as of the execution of this Agreement on the
date hereof.
The Spain and Portugal Fund represents and warrants to, and agrees with
the Growth Fund of Spain that:
4.1 Organization.
The Spain and Portugal Fund is a corporation duly organized, validly
existing under the laws of the State of Maryland and is in good standing with
the Department, and has the power to own all of its assets and to carry on its
business as it is now being conducted and to carry out this Agreement.
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4.2 Registrations and Qualifications.
The Spain and Portugal Fund is duly registered under the 1940 Act as a
non-diversified, closed-end management investment company (File No. 811-06022)
and such registration has not been revoked or rescinded and is in full force and
effect. The Spain and Portugal Fund has elected and qualified for the special
tax treatment afforded RICs under Sections 851-855 of the Code at all times
since its inception. The Spain and Portugal Fund is qualified as a foreign
association in every jurisdiction where required, except to the extent that
failure to so qualify would not have a material adverse effect on the Spain and
Portugal Fund.
4.3 Regulatory Consents and Approvals.
No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Spain and
Portugal Fund of the transactions contemplated herein, except as such have been
obtained or applied for under the 1933 Act, the 1934 Act and the 1940 Act and
such as may be required by state securities laws.
4.4 Noncontravention.
The Spain and Portugal Fund is not, and the execution, delivery and
performance of this Agreement by the Spain and Portugal Fund will not result, in
violation of the laws of the State of Maryland or of the Articles of
Incorporation or the By-laws of the Spain and Portugal Fund, or of any material
agreement, indenture, instrument, contract, lease or other undertaking to which
the Spain and Portugal Fund is a party or by which it is bound, and the
execution, delivery and performance of this Agreement by the Spain and Portugal
Fund will not result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Spain and Portugal Fund is a party or by which
it is bound.
4.5 Financial Statements.
The Growth Fund of Spain has been furnished with a statement of assets,
liabilities and capital and a schedule of investments of the Spain and Portugal
Fund, each as of September 30, 1997, said financial statements having been
examined by Price Waterhouse LLP, independent public auditors. These financial
statements are in accordance with GAAP and present fairly, in all material
respects, the financial position of the Spain and Portugal Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Spain and Portugal Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date not disclosed
therein.
The Growth Fund of Spain has been furnished with an unaudited statement
of assets, liabilities and capital and a schedule of investments of the Spain
and Portugal Fund, each as of March 31, 1998. This financial statement is in
accordance with GAAP and presents fairly, in all material respects the financial
position of the Spain and Portugal Fund as of such date in
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accordance with GAAP, and there are no known contingent liabilities of the Spain
and Portugal Fund required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date not disclosed therein.
4.6 Annual Report.
The Growth Fund of Spain has been furnished with the Spain and Portugal
Fund's Annual Report to Stockholders for the year ended September 30, 1997.
4.7 Qualification, Corporate Power, Authorization of Transaction.
The Spain and Portugal 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 Directors, and, subject to stockholder approval, 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.
4.8 Legal Compliance.
No material litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or to its
knowledge threatened against the Spain and Portugal Fund or any properties or
assets held by it. The Spain and Portugal Fund knows of no facts which might
form the basis for the institution of such proceedings which would materially
and adversely affect its business and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
4.9 Material Contracts.
There are no material contracts outstanding to which the Spain and
Portugal Fund is a party that have not been disclosed in the N-14 Registration
Statement or will not be otherwise disclosed to the Growth Fund of Spain prior
to the Effective Date.
4.10 Undisclosed Liabilities.
Since September 30, 1997, there has not been any material adverse
change in the Spain and Portugal Fund's financial condition, assets,
liabilities, or business and the Spain and Portugal Fund has no known
liabilities of a material amount, contingent or otherwise, other than those
shown on the Spain and Portugal Fund's statements of assets, liabilities and
capital referred to above, those incurred in the ordinary course of its business
as an investment company since August 25, 1987 and those incurred in connection
with the Merger. Prior to the Effective Date, the Spain and Portugal Fund will
advise the Growth Fund of Spain in writing of all known
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liabilities, contingent or otherwise, whether or not incurred in the ordinary
course of business, existing or accrued. For purposes of this Section 4.10, a
decline in net asset value per share of the Spain and Portugal Fund due to
declines in market values of securities in the Spain and Portugal Fund's
portfolio or the discharge of the Spain and Portugal Fund liabilities will not
constitute a material adverse change.
4.11 Tax Filings.
All federal and other tax returns and information reports of the Spain
and Portugal Fund required by law to have been filed shall have been filed and
are or will be correct in all material respects, and all federal and other taxes
shown as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof, and,
to the best of the Spain and Portugal Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to such
returns. All tax liabilities of the Spain and Portugal Fund have been adequately
provided for on its books, and no tax deficiency or liability of the Spain and
Portugal 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 Effective Date occurs.
4.12 Qualification under Subchapter M.
For each taxable year of its operation, the Spain and Portugal Fund has
met the requirements of Subchapter M of the Code for qualification as a
regulated investment company and has elected to be treated as such, has been
eligible to and has computed its federal income tax under Section 852 of the
Code, and will have distributed substantially all of its investment company
taxable income and net realized capital gain (as defined in the Code) that has
accrued through the Effective Date.
4.13 Form N-14 and Exemptive Application.
The Exemptive Application, and the N-14 Registration Statement, on the
effective date of the N-14 Registration Statement, at the time of the
stockholders' meetings referred to in Section 6 of this Agreement and at the
Effective Date, insofar as it relates to the Spain and Portugal Fund (i) shall
have 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 not misleading; and the 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 the light
of the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall not
apply to statements in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by the Growth Fund of
Spain for use in the N-14 Registration Statement.
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4.14 Capitalization.
(a) All issued and outstanding shares of the Spain and Portugal Fund
(i) have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act and state securities laws, (ii) are, and on the Effective Date will
be, duly and validly issued and outstanding, fully paid and non-assessable, and
(iii) will be held at the time of the Closing by the persons and in the amounts
set forth in the records of the Transfer Agent. The Spain and Portugal Fund does
not have outstanding any options, warrants, or other rights to subscribe for or
purchase any of the Spain and Portugal Fund shares, nor is there outstanding any
security convertible into any of the Spain and Portugal Fund shares.
(b) The Spain and Portugal Fund is authorized to issue 200,000,000
shares of stock, par value $0.01 per share, all of which shares are classified
as Common Stock and each outstanding share of which is fully paid,
non-assessable and has full voting rights. All of the issued and outstanding
shares of Common Stock of the Spain and Portugal Fund were offered for sale and
sold in conformity with all applicable Federal and state securities laws and the
shares to be issued pursuant to this Agreement will be in compliance with all
applicable federal and state securities laws.
4.15 Issuance of Stock.
(a) At or prior to the Effective Date, the Spain and Portugal Fund
Common Stock to be issued pursuant to this Agreement will be duly qualified for
offering to the public in all states of the United States in which the sale of
shares of Spain and Portugal Fund Common Stock presently are qualified, and
there are a sufficient number of such shares registered under the 1933 Act and
with each pertinent state securities commission to permit the issuance
contemplated by this Agreement.
(b) At or prior to the Effective Date, the Spain and Portugal Fund will
have obtained any and all regulatory, director and stockholder approvals
necessary to issue the Spain and Portugal Fund Common Stock.
4.16 Books and Records.
The books and records of the Spain and Portugal Fund made available to
the Growth Fund of Spain are substantially true and correct and contain no
material misstatements or omissions with respect to the operations of the Spain
and Portugal Fund.
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5. CONVERSION TO SPAIN AND PORTUGAL FUND COMMON STOCK
5.1 Conversion.
Subject to the requisite approval of the stockholders of the Parties,
and the other terms and conditions contained herein, at the Effective Date, each
share of Common Stock of the Growth Fund of Spain will be converted into an
equivalent dollar amount (to the nearest one ten-thousandth of one cent) of full
shares of Spain and Portugal Fund Common Stock, plus cash in lieu of fractional
shares, computed based on the net asset value per share of each of the Parties
at the Valuation Time.
5.2 Computation of Net Asset Value.
The net asset value per share of the Parties shall be determined as of
the Valuation Time, and no formula will be used to adjust the net asset value so
determined of either of the Parties to take into account differences in realized
and unrealized gains and losses. The value of the assets of the Growth Fund of
Spain to be transferred to the Spain and Portugal Fund shall be determined by
the Spain and Portugal Fund pursuant to the principles and procedures
consistently utilized by the Spain and Portugal Fund in valuing its own assets
and determining its own liabilities for purposes of the Merger. Such valuation
and determination shall be made by the Spain and Portugal Fund in cooperation
with the Growth Fund of Spain and shall be confirmed in writing by the Spain and
Portugal Fund to the Growth Fund of Spain. The net asset value per share of
Spain and Portugal Fund Common Stock shall be determined in accordance with such
procedures, and the Spain and Portugal Fund shall certify the computations
involved.
5.3 Issuance of Spain and Portugal Fund Common Stock.
(a) The Spain and Portugal Fund shall issue to the stockholders of the
Growth Fund of Spain separate certificates or share deposit receipts for the
Spain and Portugal Fund Common Stock by delivering the certificates or share
deposit receipts evidencing ownership of the Spain and Portugal Fund Common
Stock to State Street Bank and Trust Company, as the transfer agent and
registrar for Spain and Portugal Fund Common Stock.
(b) The Spain and Portugal Fund may elect to issue separate
certificates of share deposit receipts for the Spain and Portugal Fund that have
been designated as a separate series of shares of Spain and Portugal Fund and
that would trade pursuant to a separate listing on the New York Stock Exchange
but would otherwise have identical voting and other rights and privileges.
5.4 Surrender of Growth Fund of Spain Stock Certificates.
With respect to any Growth Fund of Spain stockholder holding
certificates representing shares of the Common Stock of the Growth Fund of Spain
as of the Effective Date, and subject to the Spain and Portugal Fund being
informed thereof in writing by the Growth Fund of Spain, the Spain and Portugal
Fund will not permit such stockholder to receive new certificates evidencing
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ownership of the Spain and Portugal Fund Common Stock, until such stockholder
has surrendered his or her outstanding certificates evidencing ownership of the
common Stock of the Growth Fund of Spain or, in the event of lost certificates,
posted adequate bond. The Growth Fund of Spain will request its stockholders to
surrender their outstanding certificates representing certificates of the Common
Stock of the Growth Fund of Spain or post adequate bond therefor. Dividends
payable to holders of record of shares of the Spain and Portugal Fund as of any
date after the Effective Date and prior to the exchange of certificates by any
stockholder of the Growth Fund of Spain shall be paid to such stockholder,
without interest; however, such dividends shall not be paid unless and until
such stockholder surrenders his or her stock certificates of the Growth Fund of
Spain for exchange. No fractional shares of the Spain and Portugal Fund will be
issued to Growth Fund of Spain stockholders. In lieu thereof, the Spain and
Portugal Fund's transfer agent, State Street Bank and Trust Company, will
aggregate all fractional shares of the Spain and Portugal Fund and sell the
resulting full shares on the New York Stock Exchange at the current market price
for shares of the Spain and Portugal Fund for the account of all holders of
fractional interests, and each such holder will receive such holder's pro rata
share of the proceeds of such sale, without interest, upon surrender of such
holder's Growth Fund of Spain Common Stock certificates.
6. COVENANTS OF THE PARTIES
6.1 Stockholders' Meetings.
(a) Each of the Parties shall hold a meeting of its respective
stockholders for the purpose of considering the Merger as described herein,
which meeting has been called by each Party for July 23, 1998, and any
amendments thereof.
(b) Each of the Parties agrees to mail to each of its respective
stockholders of record entitled to vote at the meeting of stockholders at which
action is to be considered regarding the Merger, in sufficient time to comply
with requirements as to notice thereof, a combined Proxy Statement and
Prospectus which complies in all material respects with the applicable
provisions of Section 14(a) of the 1934 Act and Section 20(a) of the 1940 Act,
and the rules and regulations, respectively, thereunder.
6.2 Operations in the Normal Course.
Each Party covenants to operate its business in the ordinary course
between the date hereof and the Effective Date, it being understood that such
ordinary course of business will include (i) the declaration and payment of
customary dividends and other distributions and (ii) in the case of the Growth
Fund of Spain, preparing for its liquidation, dissolution and deregistration,
except that the distribution of dividends pursuant to Sections 7.11 and 8.9 of
this Agreement shall not be deemed to constitute a breach of the provisions of
this Section 6.2.
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6.3 Articles of Merger.
The Parties agree that, as soon as practicable after satisfaction of
all conditions to the Merger, they will jointly file executed Articles of Merger
with the Department and make all other filings or recordings required by
Maryland law in connection with the Merger.
6.4 Regulatory Filings.
(a) The Growth Fund of Spain undertakes that, if the Merger is
consummated, it will file, or cause its agents to file, an application pursuant
to Section 8(f) of the 1940 Act for an order declaring that the Growth Fund of
Spain has ceased to a registered investment company.
(b) The Spain and Portugal Fund will file the N-14 Registration
Statement with the SEC and will use its best efforts to ensure that the N-14
Registration Statement becomes effective as promptly as practicable. The Growth
Fund of Spain agrees to cooperate fully with the Spain and Portugal Fund, and
will furnish to the Spain and Portugal Fund the information relating to itself
to be set forth in the N-14 Registration Statement as required by the 1933 Act,
the 1934 Act, the 1940 Act, and the rules and regulations thereunder and the
state securities or blue sky laws.
(c) The Parties each agree to proceed as promptly as possible to cause
to be made the necessary filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxxxxx") if applicable, with respect to the
transactions contemplated by this Agreement and to ensure that the related
waiting period expires or is otherwise terminated at the earliest possible time.
6.5 Preservation of Assets.
The Spain and Portugal Fund agrees that it has no plan or intention to
sell or otherwise dispose of the assets of the Growth Fund of Spain to be
acquired in the Merger, except for dispositions made in the ordinary course of
business.
6.6 Tax Matters.
Each of the Parties agrees that by the Effective 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 as due on said returns either
have been paid or adequate liability reserves have been provided for the payment
of such taxes. In connection with this covenant, the Parties 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 Spain and Portugal Fund agrees to retain for a period of ten (10)
years following the Effective Date all returns, schedules and work papers and
all material records or other documents relating to tax matters of the Growth
Fund of Spain for its final taxable year and for all prior taxable periods. Any
information obtained under this subsection shall be kept
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confidential except as otherwise may be necessary in connection with the filing
of returns or claims for refund or in conducting an audit or other proceeding.
After the Effective Date, the Spain and Portugal Fund shall prepare, or cause
its agents to prepare, any Federal, state or local tax returns, including any
Forms 1099, required to be filed by the Growth Fund of Spain with respect to its
final taxable years ending with the Effective Date and for any prior periods or
taxable years for which the due date for such return has not passed as of the
Effective Date and further shall cause such tax returns and Forms 1099 to be
duly filed with the appropriate taxing authorities. Notwithstanding the
aforementioned provisions of this subsection, any expenses incurred by the Spain
and Portugal Fund (other than for payment of taxes) in excess of any accrual for
such expenses by the Growth Fund of Spain in connection with the preparation and
filing of said tax returns and Forms 1099 after the Effective Date shall be
borne by the Spain and Portugal Fund.
6.7 Stockholder List.
Prior to the Effective Date, the Growth Fund of Spain shall have made
arrangements with its transfer agent to deliver to the Spain and Portugal Fund,
a list of the names and addresses of all of the stockholders of record of the
Growth Fund of Spain on the Effective Date and the number of shares of Common
Stock of the Growth Fund of Spain owned by each such stockholder, certified by
the Growth Fund of Spain's transfer agent or President to the best of their
knowledge and belief.
6.8 Delisting, Termination of Registration as an Investment
Company.
The Growth Fund of Spain agrees that the (i) delisting of the shares of
the Growth Fund of Spain with the NYSE and (ii) termination of its registration
as a regulated investment company will be effected in accordance with applicable
law as soon as practicable following the Effective Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SPAIN AND PORTUGAL FUND
The obligations of the Spain and Portugal Fund hereunder shall be
subject to the following conditions:
7.1 Approval of Merger.
This Agreement shall have been adopted, and an amendment to the Spain
and Portugal Fund's Articles of Incorporation permitting the Merger to be
approved by the affirmative vote of the holders of more than 50% of the shares
of Common Stock of the Spain and Portugal Fund issued and outstanding and
entitled to vote thereon shall have been approved, by the affirmative vote of
the holders of more than 50% of the shares of Common Stock of the Spain and
Portugal Fund issued and outstanding and entitled to vote thereon, and the
Growth Fund of Spain shall
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have delivered to the Spain and Portugal Fund a copy of the resolution approving
this Agreement adopted by its Board of Directors and stockholders, certified by
its secretary.
7.2 Certificates and Statements by the Growth Fund of Spain.
(a) The Growth Fund of Spain shall have furnished a statement of
assets, liabilities and capital, together with a schedule of investments with
their respective dates of acquisition and tax costs, certified on its behalf by
its President (or any Vice President) and its Treasurer, and a certificate
executed by both such officers, dated the Effective Date, certifying that there
has been no material adverse change in its financial position since March 31,
1998, other than changes in its portfolio securities since that date or changes
in the market value of its portfolio securities.
(b) The Growth Fund of Spain shall have furnished to the Spain and
Portugal Fund a certificate signed by its President (or any Vice President),
dated the Effective Date, certifying that as of the Effective Date all
representations and warranties made in this Agreement are true and correct in
all material respects as if made at and as of such date and each 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.
(c) The Growth Fund of Spain shall have delivered to the Spain and
Portugal Fund a letter from Ernst & Young LLP, dated the Effective Date, stating
that such firm has performed a limited review of the Federal, state and local
income tax returns for the period ended November 30, 1997, and that based on
such limited review, nothing came to their attention which caused them to
believe that such returns did not properly reflect, in all material respects,
the Federal, state and local income taxes of the Growth Fund of Spain for the
period covered thereby; and that for the period from November 30, 1997 to and
including the Effective Date and for any taxable year ending upon its
dissolution, such firm has performed a limited review to ascertain the amount of
such applicable Federal, state and local taxes, and has determined that either
such amount has been paid or reserves established for payment of such taxes,
this review to be based on unaudited financial data; and that based on such
limited review, nothing has come to their attention which caused them to believe
that the taxes paid or reserves set aside for payment of such taxes were not
adequate in all material respects for the satisfaction of Federal, state and
local taxes for the period from November 30, 1997, to and including the
Effective Date and for any taxable year ending upon its dissolution or that the
Growth Fund of Spain would not continue to qualify as a RIC for Federal income
tax purposes.
7.3 Absence of Litigation.
There shall be no material litigation pending with respect to the
matters contemplated by this Agreement.
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7.4 Legal Opinions.
(a) The Spain and Portugal Fund shall have received an opinion of
Vedder, Price, Xxxxxxx & Kammholz, as counsel to the Growth Fund of Spain, in
form and substance satisfactory to the Spain and Portugal Fund and dated the
Effective Date, to the effect that (i) the Growth Fund of Spain is a corporation
duly organized, validly existing under the laws of the State of Maryland and is
in good standing with the Department; (ii) the Agreement has been duly
authorized, executed and delivered by the Growth Fund of Spain, and, assuming
that the N-14 Registration Statement complies with the 1933 Act, 1934 Act and
the 1940 Act constitutes a valid and legally binding obligation of the Growth
Fund of Spain, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws pertaining to the enforcement of creditors' rights generally and by
equitable principles; (iii) to the best of such counsel's knowledge, no consent,
approval, authorization or order of any United States federal or Maryland state
court or governmental authority is required for the consummation by the Growth
Fund of Spain of the Merger, except such as may be required under the 1933 Act,
the 1934 Act, the 1940 Act, the published rules and regulations of the SEC
thereunder and under Maryland law and such as may be required by state
securities or blue sky laws; (iv) the descriptions in the N-14 Registration
Statement with respect to the Growth Fund of Spain, including but not limited to
the description of statutes, legal and governmental proceedings and contracts
and other documents with respect to the Growth Fund of Spain, are accurate and
fairly present the information required to be shown; (v) such counsel does not
know of any statutes, legal or governmental proceedings or contracts or other
documents with respect to the Growth Fund of Spain related to the Merger of a
character required to be described in the N-14 Registration Statement which are
not described therein or, if required to be filed, filed as required; (vi) the
execution and delivery of this Agreement does not, and the consummation of the
Merger will not, violate any material provision of the Articles of
Incorporation, as amended, the by-laws, as amended, or any agreement (known to
such counsel) to which the Growth Fund of Spain is a party or by which the
Growth Fund of Spain is bound, except insofar as the parties have agreed to
amend such provision as a condition precedent to the Merger; (vii) the Growth
Fund of Spain is not, to the knowledge of such counsel, required to qualify to
do business as a foreign corporation in any jurisdiction where it is not
currently so qualified or where the failure to so qualify would have a material
adverse effect on the Spain and Portugal Fund, the Growth Fund of Spain, or
either of their stockholders; (viii) to the best of such counsel's knowledge, no
material suit, action or legal or administrative proceeding is pending or
threatened against the Growth Fund of Spain; and (ix) all corporate actions
required to be taken by the Growth Fund of Spain to authorize this Agreement and
to effect the Merger have been duly authorized by all necessary corporate
actions on behalf of the Growth Fund of Spain. Such opinion shall also state
that (x) while such counsel cannot make any representation as to the accuracy or
completeness of statements of fact in the N-14 Registration Statement or any
amendment or supplement thereto with respect to the Growth Fund of Spain,
nothing has come to their attention that would lead them to believe that, on the
respective effective dates of the N-14 Registration Statement and any amendment
or supplement thereto with respect to the Growth Fund of Spain, (1) the N-14
Registration Statement or any amendment or supplement thereto contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading with respect to the Growth Fund of Spain, and (2) the prospectus
included in the N-14 Registration Statement contained any untrue statement
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of a material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading with respect to the Growth Fund of Spain; and (xi) such
counsel need not express any opinion or belief as to the financial statements,
other financial data, statistical data or information relating to the Growth
Fund of Spain contained or incorporated by reference in the N-14 Registration
Statement. In giving the opinion set forth above, Vedder, Price, Xxxxxxx &
Kammholz may state that it is relying on certificates of officers of the Growth
Fund of Spain with regard to matters of fact and certain certificates and
written statements of governmental officials with respect to the good standing
of the Growth Fund of Spain and on the opinion of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP as to matters of Maryland law.
(b) The Spain and Portugal Fund shall have received an opinion from
Dechert Price & Xxxxxx, as counsel to the Spain and Portugal Fund, dated the
Effective Date, to the effect that for Federal income tax purposes (i) the
Merger as provided in this Agreement will constitute a reorganization within the
meaning of Section 368(a)(1)(A) of the Code and that the Spain and Portugal Fund
and the Growth Fund of Spain will each be deemed a "party" to a reorganization
within the meaning of Section 368(b) of the Code; (ii) in accordance with
Section 361(a) of the Code, no gain or loss will be recognized to the Growth
Fund of Spain as a result of the Merger or the distribution of Spain and
Portugal Fund Common Stock to Growth Fund of Spain stockholders under Section
361(c)(1) of the Code, except to the extent such stockholders are paid cash in
lieu of fractional shares of Spain and Portugal Fund in the Merger; (iii) under
Section 1032 of the Code, no gain or loss will be recognized to the Spain and
Portugal Fund as a result of the Merger; (iv) in accordance with Section
354(a)(1) of the Code, no gain or loss will be recognized to the stockholders of
the Growth Fund of Spain on the conversion of their shares into Spain and
Portugal Fund Common Stock; (v) in accordance with Section 362(b) of the Code,
the tax basis of the Growth Fund of Spain assets in the hands of the Spain and
Portugal Fund will be the same as the tax basis of such assets in the hands of
the Growth Fund of Spain prior to the consummation of the Merger; (vi) in
accordance with Section 358 of the Code, immediately after the Merger, the tax
basis of the Spain and Portugal Fund Common Stock received by the stockholders
of the Growth Fund of Spain in the Merger will be equal, in the aggregate, to
the tax basis of the shares of the Growth Fund of Spain converted pursuant to
the Merger; (vii) in accordance with Section 1223 of the Code, a stockholder's
holding period for the Spain and Portugal Fund Common Stock will be determined
by including the period for which he or she held the Common Stock of the Growth
Fund of Spain converted pursuant to the Merger, provided that such Growth Fund
of Spain shares were held as a capital asset; (viii) in accordance with Section
1223 of the Code, the Spain and Portugal Fund's holding period with respect to
the Growth Fund of Spain assets transferred will include the period for which
such assets were held by the Growth Fund of Spain; and (ix) the payment of cash
to the Growth Fund of Spain stockholders in lieu of fractional shares of the
Spain and Portugal Fund will be treated as though the fractional shares were
distributed as part of the Merger and then redeemed by the Spain and Portugal
Fund with
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the result that the Growth Fund of Spain stockholder will generally
have capital gains or losses to the extent the cash distribution differs from
such stockholder's basis allocable to the fractional shares.
7.5 Auditor's Consent and Certification.
The Spain and Portugal Fund shall have received from Ernst & Young LLP
a letter dated as of the effective date of the N-14 Registration Statement and a
similar letter dated within five days prior to the Effective Date, in form and
substance satisfactory to the Spain and Portugal Fund, to the effect that (i)
they are independent public auditors with respect to the Growth Fund of Spain
within the meaning of the 1933 Act and the applicable published rules and
regulations thereunder; and (ii) in their opinion, the financial statements and
supplementary information of the Growth Fund of Spain included or incorporated
by reference in the N-14 Registration Statement and reported on by them comply
as to form in all material respects with the applicable accounting requirements
of the 1933 Act and the published rules and regulations thereunder.
7.6 Liabilities.
The assets or liabilities of the Growth Fund of Spain to be transferred
to the Spain and Portugal Fund shall not include any assets or liabilities which
the Spain and Portugal Fund, by reason of limitations in its Registration
Statement or Articles of Incorporation, may not properly acquire or assume. The
Spain and Portugal Fund does not anticipate that there will be any such assets
or liabilities but the Spain and Portugal Fund will notify the Growth Fund of
Spain if any do exist and will reimburse the Growth Fund of Spain for any
reasonable transaction costs incurred by the Growth Fund of Spain for the
liquidation of such assets and liabilities.
7.7 Effectiveness of N-14 Registration Statement.
The N-14 Registration Statement shall have become effective under the
1933 Act and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Spain and Portugal Fund, contemplated by
the SEC.
7.8 Approval of Exemptive Application; Regulatory Filings.
(a) The Exemptive Application shall have been approved and that the
Spain and Portugal Fund shall have received from the SEC such orders or
interpretations as Dechert Price & Xxxxxx, as counsel to the Spain and Portugal
Fund, deems reasonably necessary or desirable under the 1933 Act and the 1940
Act in connection with the Merger, provided, that such counsel shall have
requested such orders as promptly as practicable, and all such orders shall be
in full force and effect.
(b) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated.
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7.9 Administrative Rulings, Proceedings.
The SEC shall not have issued an unfavorable advisory report under
Section 25(b) of the 1940 Act, nor instituted or threatened to institute any
proceeding seeking to enjoin consummation of the Merger under Section 25(c) of
the 1940 Act, no other legal, administrative or other proceeding shall be
instituted or threatened which would materially affect the financial condition
of the Growth Fund of Spain or would prohibit the Merger.
7.10 Satisfaction of the Spain and Portugal Fund.
All proceedings taken by the Growth Fund of Spain and its counsel in
connection with the Merger and all documents incidental thereto shall be
satisfactory in form and substance to the Spain and Portugal Fund.
7.11 Dividends.
Prior to the Effective Date, the Growth Fund of Spain shall have
declared and paid a dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its stockholders
substantially all of its net investment company taxable income that has accrued
through the Effective Date, if any (computed without regard to any deduction of
dividends paid), and substantially all of its net capital gain, if any, realized
through the Effective Date.
7.12 Custodian's Certificate.
The Growth Fund of Spain's custodian shall have delivered to the Spain
and Portugal Fund a certificate identifying all of the assets of the Growth Fund
of Spain held or maintained by such custodian as of the Valuation Time.
7.13 Books and Records.
The Growth Fund of Spain's transfer agent shall have provided to the
Spain and Portugal Fund (i) the originals or true copies of all of the records
of the Growth Fund of Spain in the possession of such transfer agent as of the
Exchange Date, (ii) a certificate setting forth the number of shares of the
Growth Fund of Spain outstanding as of the Valuation Time, and (iii) the name
and address of each holder of record of any shares and the number of shares held
of record by each such shareholder.
7.14 Compliance with Blue Sky Laws.
All of the issued and outstanding shares of the Growth Fund of Spain
shall have been offered for sale and sold in conformity with all applicable
state securities or blue sky laws (including any applicable exemptions
therefrom) and, to the extent that any audit of the records of the Growth Fund
of Spain or its transfer agent by the Spain and Portugal Fund or its agents
shall
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have revealed otherwise, either (i) the Growth Fund of Spain shall have taken
all actions that in the opinion of the Spain and Portugal Fund or its counsel
are necessary to remedy any prior failure on the part of the Growth Fund of
Spain to have offered for sale and sold such shares in conformity with such laws
or (ii) the Growth Fund of Spain shall have furnished (or caused to be
furnished) surety, or deposited (or caused to be deposited) assets in escrow,
for the benefit of the Spain and Portugal Fund, to indemnify the Spain and
Portugal Fund against any expense, loss, claim, damage or liability whatsoever
that may be asserted to threatened by reason of such failure on the part of the
Spain and Portugal Fund to have offered and sold such shares in conformity with
such laws.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE GROWTH FUND OF
SPAIN
The obligations of the Growth Fund of Spain hereunder shall be subject
to the following conditions:
8.1 Approval of Merger.
This Agreement shall have been adopted, and an amendment to the Growth
Fund of Spain's Articles of Incorporation permitting the Merger to be approved
by the affirmative vote of the holders of 66 2/3% of the shares of Common Stock
of the Growth Fund of Spain issued and outstanding and entitled to vote thereon
shall have been approved, by the affirmative vote of the holders of 66 2/3%
percent of the shares of Common Stock of the Growth Fund of Spain issued and
outstanding and entitled to vote thereon; and that the Spain and Portugal Fund
shall have delivered to the Growth Fund of Spain a copy of the resolution
approving this Agreement adopted by its Board of Directors and stockholders,
certified by its secretary.
8.2 Certificates and Statements by the Spain and Portugal Fund.
(a) The Spain and Portugal Fund shall have furnished a statement of
assets, liabilities and capital, together with a schedule of investments with
their respective dates of acquisition and tax costs, certified on its behalf by
its President (or any Vice President) and its Treasurer, and a certificate
executed by both such officers, dated the Effective Date, certifying that there
has been no material adverse change in its financial position since March 31,
1998, other than changes in its portfolio securities since that date or changes
in the market value of its portfolio securities.
(b) The Spain and Portugal Fund shall have furnished to the Growth Fund
of Spain a certificate signed by its President (or any Vice President), dated
the Effective Date, certifying that as of the Effective Date all representations
and warranties made in this Agreement are true and correct in all material
respects as if made at and as of such date and each 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.
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(c) The Spain and Portugal Fund shall have delivered to the Growth Fund
of Spain a letter from Price Waterhouse LLP, dated the Effective Date, stating
that such firm has performed a limited review of the Federal, state and local
income tax returns for the period ended September 30, 1997, and that based on
such limited review, nothing came to their attention which caused them to
believe that such returns did not properly reflect, in all material respects,
the Federal, state and local income taxes of the Spain and Portugal Fund for the
period covered thereby; and that for the period from September 30, 1997 to and
including the Effective Date, such firm has performed a limited review to
ascertain the amount of such applicable Federal, state and local taxes, and has
determined that either such amount has been paid or reserves established for
payment of such taxes, this review to be based on unaudited financial data; and
that based on such limited review, nothing has come to their attention which
caused them to believe that the taxes paid or reserves set aside for payment of
such taxes were not adequate in all material respects for the satisfaction of
Federal, state and local taxes for the period from September 30, 1997, to and
including the Effective Date or that the Spain and Portugal Fund would not
continue to qualify as a regulated investment company for Federal income tax
purposes.
8.3 Absence of Litigation.
There shall be no material litigation pending with respect to the
matters contemplated by this Agreement.
8.4 Legal Opinions.
(a) The Growth Fund of Spain shall have received an opinion of Dechert
Price & Xxxxxx, as counsel to the Spain and Portugal Fund, in form and substance
satisfactory to the Growth Fund of Spain and dated the Effective Date, to the
effect that (i) the Spain and Portugal Fund is a corporation duly organized,
validly existing under the laws of the State of Maryland and is in good standing
with the Department; (ii) the Agreement has been duly authorized, executed and
delivered by the Spain and Portugal Fund, and, assuming that the N-14
Registration Statement complies with the 1933 Act, 1934 Act and the 1940 Act,
constitutes a valid and legally binding obligation of the Spain and Portugal
Fund, enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
pertaining to the enforcement of creditors' rights generally and by equitable
principles; (iii) to the best of such counsel's knowledge, no consent, approval,
authorization or order of any United States federal or Maryland state court or
governmental authority is required for the consummation by the Spain and
Portugal Fund of the Merger, except such may be required under the 1933 Act, the
1934 Act, the 1940 Act and the published rules and regulations of the SEC
thereunder and under Maryland law and such as may be required under state
securities or blue sky laws; (iv) the N-14 Registration Statement has become
effective under the 1933 Act, no stop order suspending the effectiveness of the
N-14 Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the 1933 Act, and,
with respect to the Spain and Portugal Fund, the N-14 Registration Statement,
and each amendment or supplement thereto, as of their respective effective
dates, appear on their face to be
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appropriately responsive in all material respects to the requirements of the
1933 Act, the 1934 Act and the 1940 Act and the published rules and regulations
of the SEC thereunder; (v) the descriptions in the N-14 Registration Statement
with respect to the Spain and Portugal Fund, including, but not limited to, the
description of statutes, legal and governmental proceedings and contracts and
other documents with respect to the Spain and Portugal Fund, and other documents
with respect to the Spain and Portugal Fund are accurate and fairly present the
information required to be shown; (vi) such counsel does not know of any
statutes, legal or governmental proceedings or contracts with respect to the
Spain and Portugal Fund or other documents related to the Merger of a character
required to be described in the N-14 Registration Statement which are not
described therein or, if required to be filed, filed as required; (vii) the
execution and delivery of this Agreement does not, and the consummation of the
Merger will not, violate any material provision of the Articles of
Incorporation, as amended, the by-laws, as amended, or any agreement (known to
such counsel) to which the Spain and Portugal Fund is a party or by which the
Spain and Portugal Fund is bound, except insofar as the parties have agreed to
amend such provision as a condition precedent to the Merger; (viii) the Spain
and Portugal Fund is not, to the knowledge of such counsel, required to qualify
to do business as a foreign corporation in any jurisdiction where it is not
currently so qualified or where the failure to so qualify would have a material
adverse effect on the Spain and Portugal Fund, the Growth Fund of Spain, or
either of their stockholders; (ix) to the best of such counsel's knowledge, no
material suit, action or legal or administrative proceeding is pending or
threatened against the Spain and Portugal Fund; and (x) all corporate actions
required to be taken by the Spain and Portugal Fund to authorize this Agreement
and to effect the Merger have been duly authorized by all necessary corporate
actions on behalf of the Spain and Portugal Fund. Such opinion shall also state
that (x) while such counsel cannot make any representation as to the accuracy or
completeness of statements of fact in the N-14 Registration Statement or any
amendment or supplement thereto with respect to the Spain and Portugal Fund,
nothing has come to their attention that would lead them to believe that, on the
respective effective dates of the N-14 Registration Statement and any amendment
or supplement thereto, (1) the N-14 Registration Statement or any amendment or
supplement thereto contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading with respect to the Spain and Portugal
Fund; and (2) the prospectus included in the N-14 Registration Statement
contained any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading with respect to the
Spain and Portugal Fund; and (y) such counsel need not express any opinion or
belief as to the financial statements, other financial data, statistical data or
information relating to the Spain and Portugal Fund contained or incorporated by
reference in the N-14 Registration Statement. In giving the opinion set forth
above, Dechert Price & Xxxxxx may state that it is relying on certificates of
officers of the Spain and Portugal Fund with regard to matters of fact and
certain certificates and written statements of governmental officials with
respect to the good standing of the Spain and Portugal Fund and on the opinion
of Xxxxxxx, Baetjer & Xxxxxx, LLP as to matters of Maryland law.
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(b) The Growth Fund of Spain shall have received an opinion from
Vedder, Price, Xxxxxxx & Kammholz and dated the Effective Date, to the effect
that for Federal income tax purposes (i) the Merger as provided in this
Agreement will constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code and that the Spain and Portugal Fund and the Growth
Fund of Spain will each be deemed a "party" to a reorganization within the
meaning of Section 368(b) of the Code; (ii) in accordance with Section 361(a) of
the Code, no gain or loss will be recognized to the Growth Fund of Spain as a
result of the Merger or on the distribution of Spain and Portugal Fund Common
Stock to Growth Fund of Spain stockholders under Section 361(c)(1) of the Code,
except to the extent such stockholders are paid cash in lieu of fractional
shares of Spain and Portugal Fund in the Merger; (iii) under Section 1032 of the
Code, no gain or loss will be recognized to the Spain and Portugal Fund as a
result of the Merger; (iv) in accordance with Section 354(a)(1) of the Code, no
gain or loss will be recognized to the stockholders of the Growth Fund of Spain
on the conversion of their shares into Spain and Portugal Fund Common Stock; (v)
in accordance with Section 362(b) of the Code, the tax basis of the Growth Fund
of Spain assets in the hands of the Spain and Portugal Fund will be the same as
the tax basis of such assets in the hands of the Growth Fund of Spain prior to
the consummation of the Merger; (vi) in accordance with Section 358 of the Code,
immediately after the Merger, the tax basis of the Spain and Portugal Fund
Common Stock received by the stockholders of the Growth Fund of Spain in the
Merger will be equal, in the aggregate, to the tax basis of the shares of the
Growth Fund of Spain converted pursuant to the Merger; (vii) in accordance with
Section 1223 of the Code, a stockholder's holding period for the Spain and
Portugal Fund Common Stock will be determined by including the period for which
he or she held the Common Stock of the Growth Fund of Spain converted pursuant
to the Merger, provided, that such Growth Fund of Spain shares were held as a
capital asset; (viii) in accordance with Section 1223 of the Code, Spain and
Portugal Fund's holding period with respect to the Growth Fund of Spain assets
transferred will include the period for which such assets were held by the
Growth Fund of Spain; and (ix) the payment of cash to the Growth Fund of Spain
stockholders in lieu of fractional shares of the Spain and Portugal Fund will be
treated as though the fractional shares were distributed as part of the Merger
and then redeemed by the Spain and Portugal Fund with the result that the
Growth Fund of Spain stockholder will generally have capital gains or losses to
the extent the cash distribution differs from such stockholder's basis
allocable to the fractional shares.
8.5 Auditor's Consent and Certification.
The Growth Fund of Spain shall have received from Price Waterhouse LLP
a letter dated as of the effective date of the N-14 Registration Statement and a
similar letter dated within five days prior to the Effective Date, in form and
substance satisfactory to the Growth Fund of Spain, to the effect that (i) they
are independent public auditors with respect to the Spain and Portugal Fund
within the meaning of the 1933 Act and the applicable published rules and
regulations thereunder; and (ii) in their opinion, the financial statements and
supplementary information of the Spain and Portugal Fund incorporated by
reference in the N-14 Registration Statement and
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reported on by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published rules and
regulations thereunder.
8.6 Effectiveness of N-14 Registration Statement.
The N-14 Registration Statement shall have become effective under the
1933 Act and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Growth Fund of Spain, contemplated by the
SEC.
8.7 Approval of Exemptive Application; Regulatory Filings.
(a) The Exemptive Application shall have been approved and the Growth
Fund of Spain shall have received from the SEC such orders or interpretations as
Vedder, Price, Xxxxxxx & Kammholz, as counsel to the Growth Fund of Spain, deems
reasonably necessary or desirable under the 1933 Act and the 1940 Act in
connection with the Merger, provided, that such counsel or counsel to the Spain
and Portugal Fund shall have requested such orders as promptly as practicable,
and all such orders shall be in full force and effect. Any applicable waiting
period under the HSR Act relating to the transactions contemplated hereby shall
have expired or been terminated.
(b) The SEC shall not have issued an unfavorable advisory report under
Section 25(b) of the 1940 Act, nor instituted or threatened to institute any
proceeding seeking to enjoin consummation of the Merger under Section 25(c) of
the 1940 Act, no other legal, administrative or other proceeding shall be
instituted or threatened which would materially affect the financial condition
of the Growth Fund of Spain or would prohibit the Merger.
(c) The Spain and Portugal Fund shall have received from any relevant
state securities administrator such order or orders as are reasonably necessary
or desirable under the 1933 Act, the 1934 Act, the 1940 Act, and any applicable
state securities or blue sky laws in connection with the transactions
contemplated hereby, and that all such orders shall be in full force and effect.
8.8 Satisfaction of the Growth Fund of Spain.
That all proceedings taken by the Spain and Portugal Fund and its
counsel in connection with the Merger and all documents incidental thereto shall
be satisfactory in form and substance to the Growth Fund of Spain.
8.9 Dividends.
Prior to the Effective Date, the Spain and Portugal Fund shall have
declared and paid a dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its stockholders
substantially all of its net investment company taxable income that has accrued
through the Effective Date, if any (computed without regard to any deduction of
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dividends paid), and substantially all of its net capital gain, if any, realized
through the Effective Date.
8.10 Nomination of Directors of Growth Fund of Spain
The Committee of Independent Directors of the Spain and Portugal Fund
shall have recommended, and the Board of Directors of the Spain and Portugal
Fund shall have approved, the nomination of the current Directors of the Growth
Fund of Spain for election to the Board of Directors of the Spain and Portugal
Fund at the Annual Meeting of Stockholders of the Spain and Portugal Fund
currently scheduled to be held July 23, 1998, and at any adjournments thereof,
provided that the Agreement shall have been adopted by the requisite vote of the
stockholders of the Spain and Portugal Fund and of the Growth Fund of Spain. The
current Directors of the Growth Fund of Spain elected to the Board of Directors
of the Spain and Portugal Fund shall take their seats on the Board of Directors
at the meeting of the Board of Directors of the Spain and Portugal Fund first
held after the Effective Date of the Merger. The nominees and their classes
shall be the following: Class I Directors (term to expire in 1999): Xxxxxx X.
Xxxxxxxxxx, Moritz A. Sell and Xxxx X. Xxxxxxxx; Class II Directors (term to
expire in 2000): Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxxx and Xxxx X. Xxxxxxxx; Class
III Directors (term to expire in 2001): Xxxxxxxxx X. Xxxxxx and Xxxx X. Xxxxxxx
(collectively, the "Nominees"). Provided further that in order to limit ongoing
expenses of the Spain and Portugal Fund and to enhance the efficiency of Board
operations, such Nominees have advised the Spain and Portugal Fund that it is
their current intention to serve on the Board of Directors of the Spain and
Portugal Fund only until such time as the proposed in-kind redemption offer to
stockholders of the Spain and Portugal Fund following the Merger is completed,
unless there is a pro-rata reduction in the amount of shares accepted pursuant
to such redemption offer, in which event the Nominees may continue to serve on
the Board of Directors to consider the appropriateness of further action. If any
Nominee is elected to the Board of Directors of the Spain and Portugal Fund, the
Committee of Independent Directors shall appoint each such Nominee who is not an
interested person of the Spain and Portugal Fund or Xxxxxxx Xxxxxx Investments,
Inc. to serve on the Committee of Independent Directors.
8.11 Amendment of the Spain and Portugal Fund's Investment
Advisory, Management and Administration Contract
The Spain and Portugal Fund's Investment Advisory, Management and
Administration Contract with Xxxxxxx Xxxxxx shall have been amended to provide
that the fee payable from the Spain and Portugal Fund to Xxxxxxx Xxxxxx
thereunder shall be equal to an annual rate of 1.00% per annum of the value of
the Fund's average weekly net assets with respect to the first $400 million of
net assets, declining to 0.95% per annum of the value of the Fund's average
weekly net assets thereafter, and to provide that Xxxxxxx Xxxxxx will pay for
the travel expenses related to the attendance at Board and committee meetings of
all Directors, officers and executive employees of the Spain and Portugal Fund
who are affiliates of Xxxxxxx Xxxxxx.
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9. PAYMENT OF EXPENSES
9.1 Allocation.
All expenses incurred in connection with the Merger since January 1,
1998 shall be allocated equally among Xxxxxxx Xxxxxx Investments, Inc., the
Spain and Portugal Fund, and the Growth Fund of Spain. Such expenses shall
include, but not be limited to, all costs related to the preparation and
distribution of the N-14 Registration Statement, the Exemptive Application, the
HSR Filing for the Parties, proxy solicitation expenses, SEC registration fees,
and NYSE listing fees. Neither of the Parties owes any broker's or finder's fees
in connection with the transactions provided for herein.
9.2 Qualification of Investment Adviser.
For purposes of this section, the Investment Adviser represents and
warrants to the Parties that it has full power and authority to enter into and
perform its obligations under this Section 9. The execution, delivery and
performance by it of this provision has been duly authorized by all necessary
action.
10. COOPERATION FOLLOWING EFFECTIVE DATE
In case at any time after the Effective Date any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party may reasonably request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification as described below). The Growth Fund of Spain
acknowledges and agrees that from and after the Effective Date, the Spain and
Portugal Fund shall be entitled to possession of all documents, books, records,
agreements and financial data of any sort pertaining to the Growth Fund of
Spain.
11. INDEMNIFICATION
11.1 The Growth Fund of Spain.
The Spain and Portugal Fund agrees to indemnify and hold harmless the
Growth Fund of Spain and each of the Growth Fund of Spain's directors and
officers from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which jointly and severally, the
Growth Fund of Spain or any of its directors or officers may become subject,
insofar as any such loss, claim, damage, liability or expense (or actions with
respect thereto) arises out of or is based on any breach by the Spain and
Portugal Fund of any of its representations, warranties, covenants or agreements
set forth in this Agreement.
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11.2 The Spain and Portugal Fund.
The Growth Fund of Spain agrees to indemnify and hold harmless the
Spain and Portugal Fund and each of the Spain and Portugal Fund's directors and
officers from and against any and all losses, claims, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally, the Spain and
Portugal Fund or any of its directors or officers may become subject, insofar as
any such loss, claim, damage, liability or expense (or actions with respect
thereto) arises out of or is based on any breach by the Growth Fund of Spain of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
12. TERMINATION, POSTPONEMENT AND WAIVERS
12.1 Termination.
(a) Notwithstanding anything to the contrary in this Agreement, this
Agreement may be terminated and the Merger abandoned at any time (whether before
or after adoption by the stockholders of each of the Parties) prior to the
Effective Date, or the Effective Date may be postponed, (i) by mutual agreement
of the Parties' Board of Directors; (ii) by the Board of Directors of the Spain
and Portugal Fund if any of obligations of the Growth Fund of Spain set forth in
this Agreement has not been fulfilled or waived by such Board or if the Growth
Fund of Spain has made a material and intentional misrepresentation herein or in
connection herewith; or (iii) by the Board of Directors of the Growth Fund of
Spain if any obligations of the Spain and Portugal Fund set forth in this
Agreement has not been fulfilled or waived by such Board or if the Spain and
Portugal Fund has made a material and intentional misrepresentation herein or in
connection herewith.
(b) If the transaction contemplated by this Agreement shall not have
been consummated by December 31, 1998, this Agreement automatically shall
terminate on that date, unless a later date is mutually agreed to by the Boards
of Directors of the Parties.
(c) In the event of termination of this Agreement pursuant to the
provisions hereof, the Agreement shall become void and have no further effect,
and there shall not be any liability hereunder on the part of either of the
Parties or their respective directors or officers, except for any such material
breach or intentional misrepresentation, as to each of which all remedies at law
or in equity of the party adversely affected shall survive.
12.2 Waiver.
At any time prior to the Effective Date, any of the terms or conditions
of this Agreement may be waived by the Board of Directors of either the Growth
Fund of Spain or the Spain and Portugal Fund (whichever is entitled to the
benefit thereof), if, in the judgment of such Board after consultation with its
counsel, such action or waiver will not have a material adverse effect on
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the benefits intended in this Agreement to the stockholders of their respective
fund, on behalf of which such action is taken.
12.3 Expiration of Representations and Warranties.
(a) The respective representations and warranties contained in Articles
3 and 4 of this Agreement shall expire with, and be terminated by, the
consummation of the Merger, and neither of the Parties nor any of their
officers, directors, agents or stockholders shall have any liability with
respect to such representations or warranties after the Effective Date. This
provision shall not protect any officer, director, agent or stockholder of the
Parties against any liability to the entity for which that officer, director,
agent or stockholder so acts or to its stockholders to which that officer,
director, agent or stockholder would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties in
the conduct of such office.
(b) If any order or orders of the SEC with respect to this Agreement
shall be issued prior to the Effective Date and shall impose any terms or
conditions which are determined by action of the Boards of Directors of the
Parties to be acceptable, such terms and conditions shall be binding as if a
part of this Agreement without further vote or approval of the stockholders of
the Parties, unless such terms and conditions shall result in a change in the
method of computing the number of shares of Spain and Portugal Fund Common Stock
to be issued pursuant to this Agreement, in which event, unless such terms and
conditions shall have been included in the proxy solicitation materials
furnished to the stockholders of the Parties prior to the meetings at which the
Merger shall have been approved, this Agreement shall not be consummated and
shall terminate unless the Parties call special meetings of stockholders at
which such conditions so imposed shall be submitted for approval.
13. MISCELLANEOUS
13.1 Transfer Restriction.
Pursuant to Rule 145 under the 1933 Act, and in connection with the
issuance of any shares to any person who at the time of the Merger is, to its
knowledge, an affiliate of a party to the Merger pursuant to Rule 145(c), Spain
and Portugal Fund will cause to be affixed upon the certificate(s) issued to
such person (if any) a legend as follows:
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT TO THE XXXXXXX SPAIN AND PORTUGAL FUND, INC. (OR ITS STATUTORY
SUCCESSOR) OR ITS PRINCIPAL UNDERWRITER UNLESS (I) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF
1933 OR (II) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
FUND, SUCH REGISTRATION IS NOT REQUIRED.
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and, further, that stop transfer instructions will be issued to the Spain and
Portugal Fund's transfer agent with respect to such shares. The Growth Fund of
Spain will provide the Spain and Portugal Fund on the Effective Date with the
name of any Growth Fund of Spain stockholder who is to the respective knowledge
of the Growth Fund of Spain an affiliate of it on such date.
13.2 Material Provisions.
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.
13.3 Notices.
All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Growth Fund of Spain:
Xxxxxx X. Xxxxxxx, Esq.
Vice President, Treasurer and Secretary
The Growth Fund of Spain, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
With a Copy to:
Xxxxx X. Xxxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Spain and Portugal Fund:
Xxxxx X. Xxxxxxxx, Esq.
Vice President and Assistant Secretary
Xxxxxxx Spain and Portugal Fund
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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With a Copy to:
Xxxxxx X. Xxxx, Esq.
Dechert Price & Xxxxxx
0000 Xxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
13.4 Amendments.
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Growth Fund of Spain and the Spain and Portugal Fund; provided, however, that
following the meeting of the Growth Fund of Spain and Spain and Portugal Fund
stockholders to approve the Merger, no such amendment may have the effect of
changing the provisions for determining the number of the Spain and Portugal
Fund shares to be issued to the Growth Fund of Spain stockholders under this
Agreement to the detriment of such stockholders without their further approval.
13.5 Headings.
The Article headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
13.6 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.7 Enforceability.
Any term or provisions of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.
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13.8 Successors and Assigns.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and the stockholders of the
Parties and their respective successors and assigns, any rights or remedies
under or by reason of this Agreement.
13.9 Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Maryland, without regard to its
principles of conflicts of law.
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IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed by its President or Vice President and its seal to be
affixed thereto and attested by its Secretary or Assistant Secretary.
XXXXXXX SPAIN AND PORTUGAL FUND, INC.
By:___________________________________[SEAL]
Name:____________________________________
Attest: Title:___________________________________
THE GROWTH FUND OF SPAIN, INC.
By:____________________________________[SEAL]
Name:____________________________________
Attest: Title:____________________________________
XXXXXXX XXXXXX INVESTMENTS, INC.
(with respect to Section 9)
By:____________________________________[SEAL]
Name:____________________________________
Attest: Title:____________________________________
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