EXHIBIT (4)
THE MUNDER FUNDS, INC.
THE MUNDER FRAMLINGTON FUNDS TRUST
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of this 11th
day of February, 2003, by and between The Munder Framlington Funds Trust, a
Massachusetts business trust ("Munder Framlington"), with its principal place of
business at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, on behalf of the
Munder Healthcare Fund ("Acquiring Fund"), a separate series of Munder
Framlington, and The Munder Funds, Inc., a Maryland corporation ("Company"),
with its principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, on behalf of the Munder Bio(Tech)/2/ Fund ("Acquired Fund"), a separate
series of the Company.
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended ("Code"). The reorganization and
liquidation will consist of the transfer of all of the assets of the Acquired
Fund to the Acquiring Fund in exchange solely for Class A, Class B, Class C,
Class K and Class Y shares of beneficial interest ($0.001 par value per share)
of the Acquiring Fund ("Acquiring Fund Shares"), the assumption by the Acquiring
Fund of all liabilities of the Acquired Fund, and the distribution of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in complete
liquidation of the Acquired Fund, as provided herein ("Reorganization"), all
upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are each a series of an
open-end, registered investment company of the management type and the Acquired
Fund owns securities that generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of Munder Framlington have determined, with respect to the
Acquiring Fund, that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund
by the Acquiring Fund is in the best interests of the Acquiring Fund and its
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Directors of the Company have determined, with respect to the
Acquired Fund, that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund
by the Acquiring Fund is in the best interests of the Acquired Fund and its
shareholders and that the interests of the existing shareholders of the Acquired
Fund would not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND
LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the requisite approval of the Acquired Fund
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all of the Acquired Fund's assets, as set forth in paragraph
1.2, to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor:
(i) to deliver to the Acquired Fund the number of full and fractional Class A,
Class B, Class C, Class K and Class Y Acquiring Fund Shares, determined by
dividing the value of the Acquired Fund's net assets with respect to each
corresponding class (Class A, Class B, Class II, Class K and Class Y,
respectively), computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquiring Fund Share of the
corresponding class, computed in the manner and as of the time and date set
forth in paragraph 2.2; and (ii) to assume all liabilities of the Acquired Fund,
as set forth in paragraph 1.3. Such transactions shall take place on the date of
the closing provided for in paragraph 3.1 ("Closing Date").
1.2. The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and dividends or
interests receivable that are owned by the Acquired Fund and any deferred or
prepaid expenses shown as an asset on the books of the Acquired Fund on the
Valuation Date (collectively, "Assets").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Valuation Date. The Acquiring Fund
shall assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date as defined in
paragraph 2.1 (collectively, "Liabilities"). On or as soon as practicable prior
to the Closing Date, the Acquired Fund will declare and pay to its shareholders
of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in no event less than 98%) of its investment
company taxable income (computed without regard to any deduction for dividends
paid) and realized net capital gain, if any, for the current taxable year
through the Closing Date.
1.4. Immediately after the transfer of assets provided for in
paragraph 1.1, the Acquired Fund will (a) distribute to the Acquired Fund's
shareholders of record with respect to each class of its shares as of the
Closing as defined in paragraph 3.1 ("Acquired Fund Shareholders"), on a pro
rata basis within that class, the Acquiring Fund Shares of the corresponding
class received by the Acquired Fund pursuant to paragraph 1.1 and (b) completely
liquidate. Such distribution and liquidation will be accomplished, with respect
to each class of the Acquired Fund's shares, by the transfer of the Acquiring
Fund Shares then credited to the account of the Acquired Fund on the books of
the Acquiring Fund to open accounts on the share records of the Acquiring Fund
in the names of the Acquired Fund Shareholders. The aggregate net asset value of
Class A, Class B, Class C, Class K and Class Y Acquiring Fund Shares to be so
credited to Class A, Class B, Class II, Class K and Class Y Acquired Fund
Shareholders, respectively, shall, with respect to each class, be equal to the
aggregate net asset value of the shares of common stock ($0.01 par value per
share) of the Acquired Fund ("Acquired Fund
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Shares") of the corresponding class owned by Acquired Fund Shareholders on the
Closing Date. All issued and outstanding Acquired Fund Shares will
simultaneously be canceled on the books of the Acquired Fund, although shares
certificates representing interests in Class A, Class B, Class II, Class K and
Class Y Acquired Fund Shares will represent a number of the corresponding class
of Acquiring Fund Shares after the Closing Date, as determined in accordance
with Section 2.3. The Acquiring Fund shall not issue certificates representing
the Class A, Class B, Class C, Class K and Class Y Acquiring Fund Shares in
connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's Transfer Agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Fund, including,
but not limited to, the responsibility for filing regulatory reports, tax
returns, or other documents with the Securities and Exchange Commission
("Commission"), any state securities commission, and any Federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund.
2. VALUATION
2.1. The value of the Assets shall be the value of such Assets as of
the close of business of the New York Stock Exchange and after the declaration
of any dividends on the Closing Date (such time and date being hereinafter
called the "Valuation Date"), computed using the valuation procedures set forth
in the then-current prospectus and statement of additional information with
respect to the Acquired Fund, and valuation procedures established by the
Company's Board of Directors.
2.2. The net asset value of a Class A, Class B, Class C, Class K and
Class Y Acquiring Fund Share shall be the net asset value per share computed
with respect to that class as of the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus and
statement of additional information, and valuation procedures established by
Munder Framlington's Board of Trustees.
2.3. The number of the Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's Assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class II, Class K and Class Y of the Acquired Fund, as the case may be,
determined using the same valuation procedures referred to in paragraph 2.1, by
the net asset value of an Acquiring Fund Share, determined in accordance with
paragraph 2.2.
2.4. All computations of value shall be made by State Street Bank and
Trust Company, in its capacity as sub-administrator for the Acquired Fund and
the Acquiring Fund and shall be subject to confirmation by each Fund's
administrator and independent accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be April 25, 2003, or such other date as
the parties may agree. All acts taking place at the closing of the transactions
provided for in this Agreement
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("Closing") shall be deemed to take place simultaneously as of the close of
business on the Closing Date unless otherwise agreed to by the parties. The
close of business on the Closing Date shall be as of 4:00 p.m., Eastern Time.
The Closing shall be held at the offices of Munder Framlington or at such other
place as the parties may agree.
3.2. The Company shall direct State Street Bank and Trust Company, as
custodian for the Acquired Fund ("Custodian"), to deliver to Munder Framlington,
at the Closing, a certificate of an authorized officer stating that (i) the
Assets have been delivered in proper form to the Acquiring Fund within two
business days prior to or on the Closing Date, and (ii) all necessary taxes in
connection with the delivery of the Assets, including all applicable Federal and
state stock transfer stamps, if any, have been paid or provision for payment has
been made. The Acquired Fund's portfolio securities represented by a certificate
or other written instrument shall be presented by the Custodian to those persons
at the Custodian who have primary responsibility for the safekeeping of the
assets of the Acquiring Fund, as the Custodian also serves as the custodian for
the Acquiring Fund. Such presentation shall be made for examination no later
than five business days preceding the Closing Date, and such certificates and
other written instruments shall be transferred and delivered by the Acquired
Fund as of the Closing Date for the account of the Acquiring Fund duly endorsed
in proper form for transfer in such condition as to constitute good delivery
thereof. The Custodian shall deliver to those persons at the Custodian who have
primary responsibility for the safekeeping of the assets of the Acquiring Fund
as of the Closing Date by book entry, in accordance with the customary practices
of the Custodian and of each securities depository, as defined in Rule 17f-4
under the Investment Company Act of 1940, as amended ("1940 Act"), in which the
Acquired Fund's Assets are deposited, the Acquired Fund's Assets deposited with
such depositories. The cash to be transferred by the Acquired Fund shall be
delivered by wire transfer of Federal funds on the Closing Date.
3.3. The Company shall direct PFPC, Inc., in its capacity as transfer
agent for the Acquired Fund ("Transfer Agent"), to deliver to Munder Framlington
at the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership of outstanding Class A, Class B, Class II, Class K and
Class Y shares owned by each such shareholder immediately prior to the Closing.
The Acquiring Fund shall deliver to the Secretary of the Acquired Fund a
confirmation evidencing that (a) the appropriate number of Acquiring Fund Shares
have been credited to the Acquired Fund's account on the books of the Acquiring
Fund pursuant to paragraph 1.1 prior to the actions contemplated by paragraph
1.3 and (b) the appropriate number of Acquiring Fund Shares have been credited
to the accounts of the Acquired Fund Shareholders on the books of the Acquiring
Fund pursuant to paragraph 1.4. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund (each, an "Exchange") shall be closed to
trading or trading thereupon shall be restricted, or (b) trading or the
reporting of trading on such Exchange or elsewhere shall be disrupted so that,
in the judgment of the Board of Directors of the Company and the Board of
Trustees of Munder Framlington, accurate appraisal of the value of the net
assets of the Acquired Fund or the Acquiring Fund, respectively, is
impracticable, the Closing Date shall be postponed until the first
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business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been fully disclosed to the Acquiring Fund prior
to the date of this Agreement in a written instrument executed by an officer of
the Company, the Company, on behalf of the Acquired Fund, represents and
warrants to Munder Framlington as follows:
(a) The Acquired Fund is duly organized as a series of the
Company, which is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, with power under the Company's
Articles of Incorporation, as amended from time to time ("Charter"), to own all
of its Assets and to carry on its business as it is now being conducted;
(b) The Company is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act, and the
registration of the Class A, Class B, Class II, Class K and Class Y Acquired
Fund Shares under the Securities Act of 1933, as amended ("1933 Act"), is in
full force and effect;
(c) No consent, approval, authorization, or order of any
court or governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated herein, except such as may be required
under the 1933 Act, the Securities Exchange Act of 1934, as amended ("1934
Act"), the 1940 Act and state securities laws;
(d) The current prospectus and statement of additional
information of the Acquired Fund and each prospectus and statement of additional
information of the Acquired Fund used at all times prior to the date of this
Agreement conforms or conformed at the time of its use in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder; and does not or did not at the
time of its use include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) On the Valuation Date, the Company, on behalf of the
Acquired Fund, will have good and marketable title to the Assets and full right,
power, and authority to sell, assign, transfer and deliver such Assets hereunder
free of any liens or other encumbrances, and upon delivery and payment for such
Assets, Munder Framlington, on behalf of the Acquiring Fund, will acquire good
and marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act;
(f) The Acquired Fund is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Company's Charter or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Company, on behalf of the Acquired Fund, is a party or by which it is bound, or
(ii) the acceleration of any obligation, or the imposition of any penalty, under
any
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agreement, indenture, instrument, contract, lease, judgment or decree to which
the Company, on behalf of the Acquired Fund, is a party or by which it is bound;
(g) All material contracts or other commitments of the
Acquired Fund (other than this Agreement and certain investment contracts
including options, futures, and forward contracts) will terminate without
liability to the Acquired Fund on or prior to the Closing Date;
(h) No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against the Company, with respect to the
Acquired Fund or any of its properties or assets, that, if adversely determined,
would materially and adversely affect its financial condition or the conduct of
its business. The Company, on behalf of the Acquired Fund, knows of no facts
which might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at June 30, 2002 have been audited by Ernst & Young LLP,
independent accountants, and are in accordance with accounting principles
generally accepted in the United States of America ("GAAP") consistently
applied, and such statements (copies of which have been furnished to the
Acquiring Fund) present fairly, in all material respects, the financial
condition of the Acquired Fund as of such date in accordance with GAAP, and
there are no known contingent liabilities of the Acquired Fund required to be
reflected on a balance sheet (including the notes thereto) in accordance with
GAAP as of such date not disclosed therein;
(j) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at December 31, 2002 (unaudited) are, or will be when sent to
Acquired Fund Shareholders in the regular course, in accordance with GAAP
consistently applied, and such statements (copies of which have been, or will
be, furnished to the Acquiring Fund) present or will present fairly, in all
material respects, the financial condition of the Acquired Fund as of such date
in accordance with GAAP, including all known contingent liabilities of the
Acquired Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date;
(k) Since June 30, 2002, there has not been any material
adverse change in the Acquired Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred. For the purposes of this
subparagraph (k), a decline in net asset value per share of Acquired Fund Shares
due to declines in market values of securities held by the Acquired Fund, the
discharge of Acquired Fund liabilities, or the redemption of Acquired Fund
Shares by shareholders of the Acquired Fund shall not constitute a material
adverse change;
(l) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquired Fund
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all
6
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 Acquired
Fund's knowledge, no such return is currently under audit and no assessment has
been asserted with respect to such returns;
(m) For each taxable year of its operation (including the
taxable year ending on the Closing Date), the Acquired Fund has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to and has computed
(or will compute) its Federal income tax under Section 852 of the Code, and will
have distributed all of its investment company taxable income and net capital
gain (as defined in the Code) that has accrued through the Closing Date, and
before the Closing Date will have declared dividends sufficient to distribute
all of its investment company taxable income and net capital gain for the period
ending on the Closing Date;
(n) All issued and outstanding Acquired Fund Shares are, and
on the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Company and have been offered and sold in every state,
territory and the District of Columbia in compliance in all material respects
with applicable registration requirements of the 1933 Act and other securities
laws. All of the issued and outstanding Acquired Fund Shares will, at the time
of Closing, be held by the persons and in the amounts set forth in the records
of the Transfer Agent, on behalf of the Acquired Fund, as provided in paragraph
3.3. The Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the Acquired Fund Shares, nor is
there outstanding any security convertible into any of the Acquired Fund Shares;
(o) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action, if any, on the part
of the Directors of the Company, on behalf of the Acquired Fund, and, subject to
the approval of the shareholders of the Acquired Fund, this Agreement
constitutes a valid and binding obligation of the Company, on behalf of the
Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(p) The information to be furnished by the Acquired Fund for
use in registration statements, proxy materials and other documents filed or to
be filed with any Federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
Federal securities and other laws and regulations thereunder applicable thereto;
and
(q) The combined proxy statement and prospectus ("Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Acquired Fund, will, on the
effective date of the Registration Statement and on the Closing Date (i) not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading, provided, however, that the representations and warranties of this
subparagraph (q) shall not apply to statements in or
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omissions from the Proxy Statement and the Registration Statement made in
reliance upon and in conformity with information that was furnished by the
Acquiring Fund for use therein, and (ii) comply in all material respects with
the provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the rules and
regulations thereunder.
4.2. Except as has been fully disclosed to the Acquired Fund prior to
the date of this Agreement in a written instrument executed by an officer of
Munder Framlington, Munder Framlington, on behalf of the Acquiring Fund,
represents and warrants to the Company as follows:
(a) The Acquiring Fund is duly organized as a series of
Munder Framlington, which is a business trust duly organized, validly existing,
and in good standing under the laws of the Commonwealth of Massachusetts, with
power under Munder Framlington's Declaration of Trust to own all of its
properties and assets and to carry on its business as it is now being conducted;
(b) Munder Framlington is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act and the
registration of the Class A, Class B, Class C, Class K and Class Y Acquiring
Fund Shares under the 1933 Act, is in full force and effect;
(c) No consent, approval, authorization, or order of any
court or governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated herein, except such as may be
required under the 1933 Act, the 1934 Act, the 1940 Act and state securities
laws;
(d) The current prospectus and statement of additional
information of the Acquiring Fund and each prospectus and statement of
additional information of the Acquiring Fund used at all times prior to the date
of this Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the Commission thereunder and does not or did not at
the time of its use include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) On the Closing Date, Munder Framlington, on behalf of
the Acquiring Fund, will have good and marketable title to the Acquiring Fund's
assets, free of any liens or other encumbrances, except those liens or
encumbrances as to which the Acquired Fund has received notice and necessary
documentation at or prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of Munder Framlington's Declaration of Trust or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which Munder Framlington, on behalf of the Acquiring Fund, is a party or by
which it is bound, or (ii) the acceleration of any obligation, or the imposition
of any penalty, under any agreement, indenture, instrument, contract, lease,
judgment
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or decree to which Munder Framlington, on behalf of the Acquiring Fund, is a
party or by which it is bound;
(g) No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or, to its knowledge, threatened against Munder Framlington, with respect to the
Acquiring Fund or any of the Acquiring Fund's properties or assets, that, if
adversely determined, would materially and adversely affect the Acquiring Fund's
financial condition or the conduct of its business. Munder Framlington, on
behalf of the Acquiring Fund, knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects the Acquiring Fund's business or its
ability to consummate the transactions herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Acquiring Fund at June 30, 2002 have been audited by Ernst & Young LLP,
independent accountants, and are in accordance with GAAP consistently applied,
and such statements (copies of which have been furnished to the Acquired Fund)
present fairly, in all material respects, the financial condition of the
Acquiring Fund as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Acquiring Fund required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Fund at December 31, 2002 (unaudited) are, or will be when sent to
Acquiring Fund Shareholders in the regular course, in accordance with GAAP
consistently applied, and such statements (copies of which have been, or will
be, furnished to the Acquired Fund) present or will present fairly, in all
material respects, the financial condition of the Acquiring Fund as of such date
in accordance with GAAP, including all known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date;
(j) Since June 30, 2002, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For purposes of this subparagraph (j), a
decline in net asset value per share of the Acquiring Fund Shares due to
declines in market values of securities held by the Acquiring Fund, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
Shares by shareholders of the Acquiring Fund, shall not constitute a material
adverse change;
(k) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquiring Fund
required by law to have been filed by such date (including any extensions) 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
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thereof, and to the best of the Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(l) For each taxable year of its operation (including the
taxable year that includes the Closing Date), the Acquiring Fund has met (or
will meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been eligible to (or will be eligible to) and
has computed (or will compute) its Federal income tax under Section 852 of the
Code, and has distributed all of its investment company taxable income and net
capital gain (as defined in the Code) for periods ending prior to the Closing
Date;
(m) All issued and outstanding Acquiring Fund Shares are,
and on the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by Munder Framlington and have been offered and sold in
every state, territory and the District of Columbia in compliance in all
material respects with applicable registration requirements of the 1933 Act and
other securities laws. The Acquiring Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Acquiring Fund Shares,
nor is there outstanding any security convertible into any Acquiring Fund
Shares;
(n) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action, if any, on the part
of the Trustees of Munder Framlington, on behalf of the Acquiring Fund, and this
Agreement constitutes a valid and binding obligation of Munder Framlington, on
behalf of the Acquiring Fund, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(o) The Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will on the Closing Date have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable by the Acquiring Fund; and
(p) The information to be furnished by the Acquiring Fund
for use in the registration statements, proxy materials and other documents that
may be necessary in connection with the transactions contemplated hereby shall
be accurate and complete in all material respects and shall comply in all
material respects with Federal securities and other laws and regulations
applicable thereto; and
(q) The Proxy Statement to be included in the Registration
Statement (and any amendment or supplement thereto), insofar as it relates to
the Acquiring Fund and the Acquiring Fund Shares, will, from the effective date
of the Registration Statement through the date of the meeting of shareholders of
the Acquired Fund contemplated therein and on the Closing Date (i) not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading, provided, however, that the representations and warranties of this
subparagraph (q) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquired Fund for use therein, and
(ii)
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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.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing Date, it
being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2. The Company will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3. The Acquired Fund covenants that the Class A, Class B, Class C,
Class K and Class Y Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.4. The Acquired Fund will assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund Shares.
5.5. Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all action, and do
or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6. The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of the Proxy Statement
(referred to in paragraph 4.1(q)) to be included in a Registration Statement on
Form N-14 ("Registration Statement"), in compliance with the 1933 Act, the 1934
Act and the 1940 Act, in connection with the meeting of the shareholders of the
Acquired Fund to consider approval of this Agreement and the transactions
contemplated herein.
5.7. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.8. The Company, on behalf of the Acquired Fund, covenants that it
will, from time to time, as and when reasonably requested by the Acquiring Fund,
execute and deliver or cause to be executed and delivered all such assignments
and other instruments, and will take or cause to be taken such further action as
Munder Framlington, on behalf of the Acquiring Fund, may reasonably deem
necessary or desirable in order to vest in and confirm (a) the Company's, on
behalf of the Acquired Fund's, title to and possession of the Acquiring Fund
Shares to be delivered hereunder and (b) Munder Framlington's, on behalf of the
Acquiring Fund's, title to and possession of all the Assets and to otherwise to
carry out the intent and purpose of this Agreement.
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5.9. The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state blue sky or securities laws as may be necessary in order to continue
its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Company, on behalf of the Acquired Fund, to
consummate the transactions provided for herein shall be subject, at the
Company's election, to the performance by Munder Framlington, on behalf of the
Acquiring Fund, of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of Munder Framlington, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
6.2. Munder Framlington, on behalf of the Acquiring Fund, shall have
delivered to the Acquired Fund a certificate executed in the name of the
Acquiring Fund by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to the Company and dated as of the
Closing Date, to the effect that the representations and warranties of Munder
Framlington, on behalf of the Acquiring Fund, made in this Agreement are true
and correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as the
Company shall reasonably request;
6.3. Munder Framlington, on behalf of the Acquiring Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by Munder Framlington, on
behalf of the Acquiring Fund, on or before the Closing Date; and
6.4. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of Munder Framlington, on behalf of the Acquiring Fund,
to complete the transactions provided for herein shall be subject, at Munder
Framlington's election, to the performance by the Company, on behalf of the
Acquired Fund, of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the Company, on behalf of
the Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date
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hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date;
7.2. The Company shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's Assets and Liabilities, as of the Closing Date,
certified by the Treasurer of the Company;
7.3. The Company, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Fund a certificate executed in the name of the
Acquired Fund by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to Munder Framlington and dated as
of the Closing Date, to the effect that the representations and warranties of
the Company, on behalf of the Acquired Fund, made in this Agreement are true and
correct at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and as to such other matters as
Munder Framlington shall reasonably request;
7.4. The Company, on behalf of the Acquired Fund, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Company, on behalf of
the Acquired Fund, on or before the Closing Date;
7.5. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Class A, Class B, Class C, Class K and Class Y
Acquiring Fund Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1; and
7.6. The Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and (ii) any undistributed investment
company taxable income and net realized capital gains from any period to the
extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Company, on behalf of the Acquired
Fund, or Munder Framlington, on behalf of the Acquiring Fund, the other party to
this Agreement shall be entitled, at its option, to refuse to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the Company's
Charter and By-Laws, applicable Maryland law and the 1940 Act, and certified
copies of the resolutions evidencing such approval shall have been delivered to
the Acquiring Fund. Notwithstanding anything herein to the contrary, neither the
Company nor Munder Framlington may waive the conditions set forth in this
paragraph 8.1;
13
8.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to the Company's or Munder Framlington's knowledge, threatened
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Company or Munder Framlington to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4. The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5. The parties shall have received the opinion of counsel to the
Company addressed to the Company substantially to the effect that, based upon
certain facts, assumptions, and representations, the transaction contemplated by
this Agreement shall constitute a tax-free reorganization for Federal income tax
purposes. The delivery of such opinion is conditioned upon receipt by counsel to
the Company of representations it shall request of the Company and Munder
Framlington. Notwithstanding anything herein to the contrary, neither the
Company nor Munder Framlington may waive the condition set forth in this
paragraph 8.5.
9. INDEMNIFICATION
9.1. Munder Framlington, out of the Acquiring Fund's assets and
property, agrees to indemnify and hold harmless the Acquired Fund from and
against any and all losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquired Fund may become subject, insofar as such
loss, claim, damage, liability or expense (or actions with respect thereto)
arises out of or is based on any breach by the Acquiring Fund of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
9.2. The Company, out of the Acquired Fund's assets and property,
agrees to indemnify and hold harmless the Acquiring Fund from and against any
and all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquiring Fund may become subject, insofar as such
loss, claim, damage, liability or expense (or actions with respect thereto)
arises out of or is based on any breach by the Acquired Fund of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
10. BROKERAGE FEES AND EXPENSES
10.1. Munder Framlington, on behalf of the Acquiring Fund, and the
Company, on behalf of the Acquired Fund, represent and warrant to each other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
14
10.2. The expenses relating to the proposed Reorganization will be
borne solely by Munder Capital Management and its affiliates. No such expenses
shall be borne by the Acquired Fund or the Acquiring Fund, except for brokerage
fees and expenses incurred in connection with the Reorganization. The costs of
the Reorganization shall include, but not be limited to, costs associated with
obtaining any necessary order of exemption from the 1940 Act, if any,
preparation of the Registration Statement, printing and distributing the Proxy
Statement, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1. The Company and Munder Framlington agree that neither party has
made any representation, warranty or covenant, on behalf of either the Acquired
Fund or the Acquiring Fund, not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
11.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of the
Acquired Fund and Acquiring Fund in Sections 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by resolution of the Company's Board of Directors or
Munder Framlington's Board of Trustees, at any time prior to the Closing Date,
if circumstances should develop that, in the opinion of that Board, make
proceeding with the Agreement inadvisable.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the
Company and Munder Framlington; provided, however, that following the meeting of
the shareholders of the Acquired Fund called by the Company pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Class A, Class B, Class C,
Class K and Class Y Acquiring Fund Shares to be issued to the Class A, Class B,
Class II, Class K and Class Y Acquired Fund Shareholders, respectively, under
this Agreement to the detriment of such shareholders without their further
approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, electronic delivery (i.e., e-mail) personal service or prepaid or
certified mail addressed to the Company and Munder Framlington,
15
000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, attn: Xxxxxxx X. Xxxxxxxxxxx, in each
case with a copy to Dechert LLP, 0000 X Xxxxxx, X.X., Xxxxxxxxxx, XX 00000,
attn: Xxxx X. Xxxxxx.
15. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1. The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts without regard to its
principles of conflicts of laws.
15.3. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President.
THE MUNDER FUNDS, INC., on behalf of its
MUNDER BIO(TECH)/2/ FUND
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxxxxx
Vice President & Secretary
THE MUNDER FRAMLINGTON FUNDS TRUST, on
behalf of its MUNDER HEALTHCARE FUND
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Vice President
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