Exhibit 4 under Form N-14
AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND TERMINATION
("Agreement") is made as of June 10, 2004, among XXXXXX XXXXXX SELECT
FUND, INC., a Maryland corporation ("Corporation"), on behalf of each
segregated portfolio of assets ("series") thereof listed under the heading
"Acquired Funds" on Schedule A to this Agreement ("Schedule A") (each an
"Acquired Fund"), REGIONS XXXXXX XXXXXX SELECT FUNDS, a Massachusetts
business trust ("Trust"), on behalf of each series thereof listed under
the heading "Acquiring Funds" on Schedule A (each an "Acquiring Fund"),
and, solely for purposes of paragraph 7.2 hereof, XXXXXX ASSET MANAGEMENT,
INC. (The Acquired Funds and the Acquiring Funds are sometimes referred
to herein individually as a "Fund" and collectively as the "Funds," and
Corporation and Trust are sometimes referred to herein individually as an
"Investment Company" and collectively as the "Investment Companies.")
The Investment Companies wish to effect two separate reorganizations
described in section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended ("Code"), and intend this Agreement to be, and adopt it as, a
"plan of reorganization" within the meaning of the regulations under the
Code ("Regulations"). Each reorganization will consist of (1) the
transfer of the assets of an Acquired Fund to the Acquiring Fund listed on
Schedule A opposite its name (each, a "corresponding Acquiring Fund") in
exchange solely for that Acquiring Fund's assumption of that Acquired
Fund's liabilities and the issuance to that Acquired Fund of shares of
beneficial interest in that Acquiring Fund, (2) the distribution of those
shares to that Acquired Fund's shareholders in liquidation of that
Acquired Fund, and (3) the termination of that Acquired Fund, all on the
terms and conditions hereinafter set forth in this Agreement. (All such
transactions involving each Acquired Fund and its corresponding Acquiring
Fund are referred to herein as a "Reorganization.") The consummation of
one Reorganization shall not be contingent on the consummation of the
other Reorganization. (For convenience, the balance of this Agreement
will refer only to a single Reorganization, one Acquired Fund, and one
Acquiring Fund, but the terms and conditions hereof shall apply separately
to each Reorganization and the Funds participating therein.)
All agreements, representations, actions, obligations, and covenants
described herein made or to be taken or undertaken by the Funds are made
and shall be taken or undertaken by Corporation on Acquired Fund's behalf
and by Trust on Acquiring Fund's behalf.
Acquired Fund's shares are divided into three classes, designated
Class A, Class C, and Class I shares ("Class A Acquired Fund Shares,"
"Class C Acquired Fund Shares," and "Class I Acquired Fund Shares,"
respectively, and collectively, "Acquired Fund Shares"). Acquiring Fund's
shares also are divided into three classes, designated Class A, Class C,
and Class I shares ("Class A Acquiring Fund Shares," "Class C Acquiring
Fund Shares," and "Class I Acquiring Fund Shares," respectively, and
collectively, "Acquiring Fund Shares"). The Funds' identically designated
classes of shares are substantially similar to each other.
In consideration of the mutual promises contained herein, the
parties agree as follows:
1. PLAN OF REORGANIZATION AND TERMINATION
1.1. Acquired Fund agrees to assign, sell, convey, transfer, and
deliver all of its assets described in paragraph 1.2 ("Assets") to
Acquiring Fund. Acquiring Fund agrees in exchange therefor --
(a) to issue and deliver to Acquired Fund the number of full
and fractional (rounded to the third decimal place) (1) Class A
Acquiring Fund Shares determined by dividing Acquired Fund's net
value (computed as set forth in paragraph 2.1) ("Acquired Fund
Value") attributable to the Class A Acquired Fund Shares by the net
asset value ("NAV") of a Class A Acquiring Fund Share (computed as
set forth in paragraph 2.2), (2) Class C Acquiring Fund Shares
determined by dividing the Acquired Fund Value attributable to the
Class C Acquired Fund Shares by the NAV of a Class C Acquiring Fund
Share (as so computed), and (3) Class I Acquiring Fund Shares
determined by dividing the Acquired Fund Value attributable to the
Class I Acquired Fund Shares by the NAV of a Class I Acquiring Fund
Share (as so computed); and
(b) to assume all of Acquired Fund's liabilities described in
paragraph 1.3 ("Liabilities").
Such transactions shall take place at the Closing (as defined in paragraph
3.1).
1.2. The Assets shall include all cash, cash equivalents,
securities, receivables (including interest and dividends receivable),
claims and rights of action, rights to register shares under applicable
securities laws, books and records, deferred and prepaid expenses shown as
assets on Acquired Fund's books, and other property Acquired Fund owns at
the Effective Time (as defined in paragraph 3.1).
1.3. The Liabilities shall include all of Acquired Fund's
liabilities, debts, obligations, and duties of whatever kind or nature,
whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at
the Effective Time, and whether or not specifically referred to in this
Agreement. Notwithstanding the foregoing, Acquired Fund agrees to use its
best efforts to discharge all its known Liabilities before the Effective
Time.
1.4. At or immediately before the Effective Time, Acquired Fund
shall declare and pay to its shareholders a dividend and/or other
distribution in an amount large enough so that it will have distributed
substantially all (and in any event not less than 90%) of its investment
company taxable income (as defined in section 852(b)(2) of the Code,
computed without regard to any deduction for dividends paid) and
substantially all of its realized net capital gain (as defined in section
1222(11)), if any, for the current taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Acquired Fund shall distribute the Acquiring Fund Shares it
receives pursuant to paragraph 1.1 to its shareholders of record,
determined as of the Effective Time (each a "Shareholder" and collectively
"Shareholders"), in constructive exchange for their Acquired Fund Shares.
Such distribution shall be accomplished by Trust's transfer agent's
opening accounts on Acquiring Fund's share transfer books in the
Shareholders' names and transferring such Acquiring Fund Shares thereto.
Each Shareholder's account shall be credited with the respective pro rata
number of full and fractional (rounded to the third decimal place)
Acquiring Fund Shares due that Shareholder, by class (i.e., the account
for each Shareholder that holds Class A Acquired Fund Shares shall be
credited with the respective pro rata number of Class A Acquiring Shares
due that Shareholder, the account for each Shareholder that holds Class C
Acquired Fund Shares shall be credited with the respective pro rata number
of Class C Acquiring Fund Shares due that Shareholder, and the account for
each Shareholder that holds Class I Acquired Fund Shares shall be credited
with the respective pro rata number of Class I Acquiring Shares due that
Shareholder). All outstanding Acquired Fund Shares, including any
represented by certificates, shall simultaneously be canceled on Acquired
Fund's share transfer books. Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares issued in connection with the
Reorganization.
1.6. As soon as reasonably practicable after distribution of the
Acquiring Fund Shares pursuant to paragraph 1.5, but in all events within
six months after the Effective Time, Acquired Fund shall be terminated as
a series of Corporation and any further actions shall be taken in
connection therewith as required by applicable law.
1.7. Any reporting responsibility of Acquired Fund to a public
authority is and shall remain its responsibility up to and including the
date on which it is terminated.
1.8. Any transfer taxes payable on issuance of Acquiring Fund
Shares in a name other than that of the registered holder on Acquired
Fund's share transfer books of the Acquired Fund Shares constructively
exchanged therefor shall be paid by the person to whom such Acquiring Fund
Shares are to be issued, as a condition of such transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(a), Acquired Fund's net value
shall be (a) the value of the Assets computed as of the close of regular
trading on the New York Stock Exchange ("NYSE") on the date of the Closing
("Valuation Time"), using the valuation procedures set forth in its
then-current prospectus and statement of additional information ("SAI"),
less (b) the amount of the Liabilities as of the Valuation Time.
2.2. For purposes of paragraph 1.1(a), the NAV per share of each
class of the Acquiring Fund Shares shall be computed as of the Valuation
Time, using the valuation procedures set forth in Acquiring Fund's
then-current prospectus and SAI.
2.3. All computations pursuant to paragraphs 2.1 and 2.2 shall be
made by or under the direction of Xxxxxx Xxxxxx & Company, Inc.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to
consummate it ("Closing"), shall occur at the Investment Companies'
principal office on or about the date set forth on Schedule A or at such
other place and/or on such other date as to which they may agree. All
acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of business on the date thereof or at such
other time as to which the Investment Companies may agree ("Effective
Time"). If, immediately before the Valuation Time, (a) the NYSE is closed
to trading or trading thereon is restricted or (b) trading or the
reporting of trading on the NYSE or elsewhere is disrupted, so that
accurate appraisal of Acquired Fund's net value and/or the NAV of an
Acquiring Fund Share of any class is impracticable, the Effective Time
shall be postponed until the first business day after the day when such
trading has been fully resumed and such reporting has been restored.
3.2. Corporation's fund accounting and pricing agent shall deliver
at the Closing a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot)
concerning the Assets, including all portfolio securities, transferred by
Acquired Fund to Acquiring Fund, as reflected on Acquiring Fund's books
immediately after the Closing, does or will conform to such information on
Acquired Fund's books immediately before the Closing. Corporation's
custodian shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets it holds will be transferred to
Acquiring Fund at the Effective Time and (b) all necessary taxes in
conjunction 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.
3.3. Corporation shall deliver to Trust at the Closing a list of
the names and addresses of the Shareholders and the number of outstanding
Acquired Fund Shares owned by each Shareholder, all as of the Effective
Time, certified by Corporation's Secretary or Assistant Secretary.
Trust's transfer agent shall deliver at the Closing a certificate as to
the opening of accounts in the Shareholders' names on Acquiring Fund's
share transfer books. Trust shall issue and deliver a confirmation to
Corporation evidencing the Acquiring Fund Shares to be credited to
Acquired Fund at the Effective Time or provide evidence satisfactory to
Corporation that such Acquiring Fund Shares have been credited to Acquired
Fund's account on Acquiring Fund's share transfer books. At the Closing,
each Investment Company shall deliver to the other bills of sale, checks,
assignments, stock certificates, receipts, or other documents the other
Investment Company or its counsel reasonably requests.
3.4. Each Investment Company shall deliver to the other at the
Closing a certificate executed in its name by its President or a Vice
President in form and substance satisfactory to the recipient and dated
the Effective Time, to the effect that the representations and warranties
it made in this Agreement are true and correct at the Effective Time
except as they may be affected by the transactions contemplated by this
Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Corporation represents and warrants as follows:
4.1.1. Corporation is a corporation that is duly
incorporated, validly existing, and in good standing under the laws
of the State of Maryland; and its Articles of Incorporation, as
amended ("Charter"), are on file with that state's Department of
Assessments and Taxation;
4.1.2. Corporation is duly registered as an open-end
management investment company under the Investment Company Act of
1940, as amended ("1940 Act"), and such registration is in full
force and effect;
4.1.3. Acquired Fund is a duly established and designated
series of Corporation;
4.1.4. At the Closing, Acquired Fund will have good and
marketable title to the Assets and full right, power, and authority
to sell, assign, transfer, and deliver the Assets free of any liens
or other encumbrances (except securities that are subject to
"securities loans" as referred to in section 851(b)(2) of the Code);
and on delivery and payment for the Assets, Acquiring Fund will
acquire good and marketable title thereto;
4.1.5. Acquired Fund's current prospectus and SAI conform
in all material respects to the applicable requirements of the
Securities Act of 1933, as amended ("1933 Act"), and the 1940 Act
and the rules and regulations thereunder and do not include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
4.1.6. Acquired Fund is not in violation of, and the
execution and delivery of this Agreement and consummation of the
transactions contemplated hereby will not conflict with or violate,
Maryland law or any provision of the Charter or Corporation's
By-Laws or of any agreement, instrument, lease, or other undertaking
to which Corporation (with respect to Acquired Fund) is a party or
by which it is bound or result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which Corporation (with respect to Acquired
Fund) is a party or by which it is bound, except as otherwise
disclosed in writing to and accepted by Trust;
4.1.7. Except as otherwise disclosed in writing to and
accepted by Trust, all material contracts and other commitments of
or applicable to Acquired Fund (other than this Agreement and
investment contracts, including options, futures, and forward
contracts) will be terminated, or provision for discharge of any
liabilities of Acquired Fund thereunder will be made, at or before
the Effective Time, without either Fund's incurring any liability or
penalty with respect thereto and without diminishing or releasing
any rights Acquired Fund may have had with respect to actions taken
or omitted or to be taken by any other party thereto before the
Closing;
4.1.8. Except as otherwise disclosed in writing to and
accepted by Trust, (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is
presently pending or (to Corporation's knowledge) threatened against
Corporation (with respect to Acquired Fund) or any of its properties
or assets attributable or allocable to Acquired Fund that, if
adversely determined, would materially and adversely affect Acquired
Fund's financial condition or the conduct of its business and
(b) Corporation knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and
is not a party to or subject to the provisions of any order, decree,
or judgment of any court or governmental body that materially or
adversely affects its business or its ability to consummate the
transactions contemplated hereby;
4.1.9. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Corporation's board of directors,
which has made the determinations required by Rule 17a-8(a) under
the 1940 Act; and this Agreement constitutes a valid and legally
binding obligation of Corporation (with respect to Acquired Fund),
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization,
receivership, moratorium, and other laws affecting the rights and
remedies of creditors generally and general principles of equity;
4.1.10. No governmental consents, approvals, authorizations,
or filings are required under the 1933 Act, the Securities Exchange
Act of 1934, as amended, or the 1940 Act (collectively, "Federal
Securities Laws") for Corporation's execution or performance of this
Agreement, except for (a) the filing with the Securities and
Exchange Commission ("SEC") of a registration statement by Trust on
Form N-14 relating to the Acquiring Fund Shares issuable hereunder,
and any supplement or amendment thereto ("Registration Statement"),
including therein a prospectus and proxy statement
("Prospectus/Statement"), and (b) such consents, approvals,
authorizations, and filings as have been made or received or as may
be required subsequent to the Effective Time;
4.1.11. On the effective date of the Registration
Statement and at the Effective Time, the Prospectus/Statement will
(a) comply in all material respects with the applicable provisions
of the Federal Securities Laws and the regulations thereunder and
(b) 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 misleading; provided that the
foregoing shall not apply to statements in or omissions from the
Prospectus/Statement made in reliance on and in conformity with
information furnished by Trust for use therein;
4.1.12. Acquired Fund incurred the Liabilities in the
ordinary course of its business; and there are no Liabilities other
than Liabilities disclosed or provided for in Corporation's
financial statements referred to in paragraph 4.1.18 and Liabilities
incurred by Acquired Fund in the ordinary course of its business
subsequent to June 30, 2003, or otherwise disclosed to Trust, none
of which has been materially adverse to the business, assets, or
results of Acquired Fund's operations;
4.1.13. Acquired Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a regulated
investment company under Subchapter M of the Code ("RIC") for each
past taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current
taxable year; Acquired Fund will invest its assets at all times
through the Effective Time in a manner that ensures compliance with
the foregoing; and Acquired Fund has no earnings and profits
accumulated in any taxable year in which the provisions of
Subchapter M did not apply to it;
4.1.14. Acquired Fund is not under the jurisdiction of a
court in a "title 11 or similar case" (as defined in section
368(a)(3)(A) of the Code);
4.1.15. Not more than 25% of the value of Acquired Fund's
total assets (excluding cash, cash items, and U.S. government
securities) is invested in the stock and securities of any one
issuer, and not more than 50% of the value of such assets is
invested in the stock and securities of five or fewer issuers;
4.1.16. During the five-year period ending at the Effective
Time, (a) neither Acquired Fund nor any person "related" (as defined
in section 1.368-1(e)(3) of the Regulations) to it will have
acquired Acquired Fund Shares, either directly or through any
transaction, agreement, or arrangement with any other person, with
consideration other than Acquiring Fund Shares or Acquired Fund
Shares, except for shares redeemed in the ordinary course of
Acquired Fund's business as a series of an open-end investment
company as required by section 22(e) of the 1940 Act, and (b) no
distributions will have been made with respect to Acquired Fund
Shares, other than normal, regular dividend distributions made
pursuant to Acquired Fund's historic dividend-paying practice and
other distributions that qualify for the deduction for dividends
paid (within the meaning of section 561 of the Code) referred to in
sections 852(a)(1) and 4982(c)(1)(A) of the Code;
4.1.17. Acquired Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years
through and including the taxable year ended June 30, 2003, have
been timely filed and all taxes payable pursuant to those returns
have been timely paid; and
4.1.18. Corporation's audited financial statements for the
year ended June 30, 2003, and unaudited financial statements for the
six months ended December 31, 2003, delivered to Trust, fairly
represent Acquired Fund's financial position as of each such date
and the results of its operations and changes in its net assets for
the periods then ended.
4.2. Trust represents and warrants as follows:
4.2.1. Trust is a trust operating under a written
declaration of trust, the beneficial interest in which is divided
into transferable shares ("Business Trust"), that is duly created,
validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts; and its Amended and Restated
Declaration of Trust ("Declaration") is on file with the Secretary
of the Commonwealth of Massachusetts;
4.2.2. Trust is duly registered as an open-end management
investment company under the 1940 Act, and such registration is in
full force and effect;
4.2.3. Acquiring Fund is a duly established and
designated series of
Trust;
4.2.4. No consideration other than Acquiring Fund Shares
(and Acquiring Fund's assumption of the Liabilities) will be issued
in exchange for the Assets in the Reorganization;
4.2.5. The Acquiring Fund Shares to be issued and
delivered to Acquired Fund hereunder will, at the Effective Time,
have been duly authorized and, when issued and delivered as provided
herein (including the receipt of consideration in exchange therefor
exceeding their par value), will be duly and validly issued and
outstanding shares of Acquiring Fund, fully paid and non-assessable
by Trust;
4.2.6. Acquiring Fund's current prospectus and SAI
conform in all material respects to the applicable requirements of
the 1933 Act and the 1940 Act and the rules and regulations
thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
4.2.7. Acquiring Fund is not in violation of, and the
execution and delivery of this Agreement and consummation of the
transactions contemplated hereby will not conflict with or violate,
Massachusetts law or any provision of the Declaration or Trust's
By-Laws or of any agreement, instrument, lease, or other undertaking
to which Trust (with respect to Acquiring Fund) is a party or by
which it is bound or result in the acceleration of any obligation,
or the imposition of any penalty, under any agreement, judgment, or
decree to which Trust (with respect to Acquiring Fund) is a party or
by which it is bound, except as otherwise disclosed in writing to
and accepted by Corporation;
4.2.8. Except as otherwise disclosed in writing to and
accepted by Corporation, (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is presently pending or (to Trust's knowledge) threatened
against Trust (with respect to Acquiring Fund) or any of its
properties or assets attributable or allocable to Acquiring Fund
that, if adversely determined, would materially and adversely affect
Acquiring Fund's financial condition or the conduct of its business
and (b) Trust knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and
is not a party to or subject to the provisions of any order, decree,
or judgment of any court or governmental body that materially or
adversely affects its business or its ability to consummate the
transactions contemplated hereby;
4.2.9. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Trust's board of trustees (together
with Corporation's board of directors, "Boards"), which has made the
determinations required by Rule 17a-8(a) under the 1940 Act; and
this Agreement constitutes a valid and legally binding obligation of
Trust (with respect to Acquiring Fund), enforceable in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
fraudulent transfer, reorganization, receivership, moratorium, and
other laws affecting the rights and remedies of creditors generally
and general principles of equity;
4.2.10. No governmental consents, approvals, authorizations,
or filings are required under the Federal Securities Laws for
Trust's execution or performance of this Agreement, except for
(a) the filing with the SEC of the Registration Statement and a
post-effective amendment to Trust's registration statement on Form
N1-A and (b) such consents, approvals, authorizations, and filings
as have been made or received or as may be required subsequent to
the Effective Time;
4.2.11. On the effective date of the Registration Statement
and at the Effective Time, the Prospectus/Statement will (a) comply
in all material respects with the applicable provisions of the
Federal Securities Laws and the regulations thereunder and (b) 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 misleading; provided that the foregoing
shall not apply to statements in or omissions from the
Prospectus/Statement made in reliance on and in conformity with
information furnished by Corporation for use therein;
4.2.12. Acquiring Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a RIC for each
past taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current
taxable year; it intends to continue to meet all such requirements
for the next taxable year; and it has no earnings and profits
accumulated in any taxable year in which the provisions of
Subchapter M of the Code did not apply to it;
4.2.13. Following the Reorganization, Acquiring Fund (a) will
continue Acquired Fund's "historic business" (within the meaning of
section 1.368-1(d)(2) of the Regulations) and (b) will use a
significant portion of Acquired Fund's "historic business assets"
(within the meaning of section 1.368-1(d)(3) of the Regulations) in
a business; moreover, Acquiring Fund (c) has no plan or intention to
sell or otherwise dispose of any of the Assets, except for
dispositions made in the ordinary course of that business and
dispositions necessary to maintain its status as a RIC, and
(d) expects to retain substantially all the Assets in the same form
as it receives them in the Reorganization, unless and until
subsequent investment circumstances suggest the desirability of
change or it becomes necessary to make dispositions thereof to
maintain such status;
4.2.14. There is no plan or intention for Acquiring Fund to
be dissolved or merged into another business or statutory trust or a
corporation or any "fund" thereof (as defined in section 851(g)(2)
of the Code) following the Reorganization;
4.2.15. Immediately after the Reorganization, (a) not more
than 25% of the value of Acquiring Fund's total assets (excluding
cash, cash items, and U.S. government securities) will be invested
in the stock and securities of any one issuer and (b) not more than
50% of the value of such assets will be invested in the stock and
securities of five or fewer issuers;
4.2.16. Acquiring Fund does not directly or indirectly
own, nor at the Effective Time will it directly or indirectly own,
nor has it directly or indirectly owned at any time during the past
five years, any Acquired Fund Shares;
4.2.17. Acquiring Fund has no plan or intention to issue
additional Acquiring Fund Shares following the Reorganization except
for shares issued in the ordinary course of its business as a series
of an open-end investment company; nor does Acquiring Fund, or any
person "related" (within the meaning of section 1.368-1(e)(3) of the
Regulations) to it, have any plan or intention to acquire -- during
the five-year period beginning at the Effective Time, either
directly or through any transaction, agreement, or arrangement with
any other person -- with consideration other than Acquiring Fund
Shares, any Acquiring Fund Shares issued to the Shareholders
pursuant to the Reorganization, except for redemptions in the
ordinary course of such business as required by section 22(e) of the
1940 Act;
4.2.18. During the five-year period ending at the Effective
Time, neither Acquiring Fund nor any person "related" (as defined in
section 1.368-1(e)(3) of the Regulations) to it will have acquired
Acquired Fund Shares with consideration other than Acquiring Fund
Shares;
4.2.19. Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years
through and including the taxable year ended November 30, 2002, have
been timely filed and all taxes payable pursuant to such returns
have been timely paid;
4.2.20. Trust's audited financial statements for the
year ended November 30, 2003, delivered to Corporation, fairly
represent Acquiring Fund's financial position as of such date and
the results of its operations and changes in its net assets for the
period then ended; and
4.2.21. If the Reorganization is consummated, Acquiring Fund
will treat each Shareholder that receives Acquiring Fund Shares in
connection with the Reorganization as having made a minimum initial
purchase of such shares for the purpose of making additional
investments therein, regardless of the value of the shares so
received.
4.3. Each Investment Company represents and warrants as follows:
4.3.1. The fair market value of the Acquiring Fund Shares
each Shareholder receives will be approximately equal to the fair
market value of its Acquired Fund Shares it constructively
surrenders in exchange therefor;
4.3.2. Its management (a) is unaware of any plan or
intention of Shareholders to redeem, sell, or otherwise dispose of
(1) any portion of their Acquired Fund Shares before the
Reorganization to any person "related" (within the meaning of
section 1.368-1(e)(3) of the Regulations) to either Fund or (2) any
portion of the Acquiring Fund Shares they receive in the
Reorganization to any person "related" (within such meaning) to
Acquiring Fund, (b) does not anticipate dispositions of those
Acquiring Fund Shares at the time of or soon after the
Reorganization to exceed the usual rate and frequency of
dispositions of shares of Acquired Fund as a series of an open-end
investment company, (c) expects that the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the
time of the Reorganization will be de minimis, and (d) does not
anticipate that there will be extraordinary redemptions of Acquiring
Fund Shares immediately following the Reorganization;
4.3.3. The Shareholders will pay their own expenses, if
any, incurred in connection with the Reorganization;
4.3.4. The fair market value of the Assets on a going
concern basis will equal or exceed the Liabilities to be assumed by
Acquiring Fund and those to which the Assets are subject;
4.3.5. There is no intercompany indebtedness between the
Funds that was issued or acquired, or will be settled, at a discount;
4.3.6. Pursuant to the Reorganization, Acquired Fund will
transfer to Acquiring Fund, and Acquiring Fund will acquire, at
least 90% of the fair market value of the net assets, and at least
70% of the fair market value of the gross assets, Acquired Fund held
immediately before the Reorganization. For the purposes of this
representation, any amounts Acquired Fund uses to pay its
Reorganization expenses and to make redemptions and distributions
immediately before the Reorganization (except (a) redemptions in the
ordinary course of its business required by section 22(e) of the
1940 Act and (b) regular, normal dividend distributions made to
conform to its policy of distributing all or substantially all of
its income and gains to avoid the obligation to pay federal income
tax and/or the excise tax under section 4982 of the Code) will be
included as assets it held immediately before the Reorganization;
4.3.7. None of the compensation received by any
Shareholder who is an employee of or service provider to Acquired
Fund will be separate consideration for, or allocable to, any of the
Acquired Fund Shares such Shareholder held; none of the Acquiring
Fund Shares any such Shareholder receives will be separate
consideration for, or allocable to, any employment agreement,
investment advisory agreement, or other service agreement; and the
compensation paid to any such Shareholder will be for services
actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services;
4.3.8. Immediately after the Reorganization, the
Shareholders will not own shares constituting "control" (as defined
in section 304(c) of the Code) of Acquiring Fund;
4.3.9. Neither Fund will be reimbursed for any expenses
incurred by it or on its behalf in connection with the
Reorganization unless those expenses are solely and directly related
to the Reorganization (determined in accordance with the guidelines
set forth in Rev. Rul. 73-54, 1973-1 C.B. 187) ("Reorganization
Expenses"); and
4.3.10. The aggregate value of the acquisitions, redemptions,
and distributions limited by paragraphs 4.1.16, 4.2.17, and 4.2.18
will not exceed 50% of the value (without giving effect to such
acquisitions, redemptions, and distributions) of the proprietary
interest in Acquired Fund at the Effective Time.
5. COVENANTS
5.1. Each Investment Company covenants to operate its respective
Fund's business in the ordinary course between the date hereof and the
Closing, it being understood that:
(a) such ordinary course will include declaring and paying
customary dividends and other distributions and such changes in
operations as are contemplated by each Fund's normal business
activities and
(b) each Fund will retain exclusive control of the
composition of its portfolio until the Closing; provided that
Acquired Fund shall not dispose of more than an insignificant
portion of its historic business assets (as defined above) during
such period without Acquiring Fund's prior consent, and the
Investment Companies shall coordinate the Funds' respective
portfolios so that the transfer of the Assets to Acquiring Fund will
not cause it to fail to be in compliance with all of its investment
policies and restrictions immediately after the Closing.
5.2. Corporation covenants that the Acquiring Fund Shares to be
delivered hereunder are not being acquired for the purpose of making any
distribution thereof, other than in accordance with the terms hereof.
5.3. Corporation covenants that it will assist Trust in obtaining
information Trust reasonably requests concerning the beneficial ownership
of Acquired Fund Shares.
5.4. Corporation covenants that its books and records (including
all books and records required to be maintained under the 1940 Act and the
rules and regulations thereunder) regarding Acquired Fund will be turned
over to Trust at the Closing.
5.5. Each Investment Company covenants to cooperate in preparing
the Prospectus/Statement in compliance with applicable federal securities
laws.
5.6. Each Investment Company covenants that it will, from time to
time, as and when requested by the other Investment Company, execute and
deliver or cause to be executed and delivered all assignments and other
instruments, and will take or cause to be taken all further action, the
other Investment Company may deem necessary or desirable in order to vest
in, and confirm to, (a) Trust, on Acquiring Fund's behalf, title to and
possession of all the Assets, and (b) Corporation, on Acquired Fund's
behalf, title to and possession of the Acquiring Fund Shares to be
delivered hereunder, and otherwise to carry out the intent and purpose
hereof.
5.7. Trust covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and
such state securities laws it may deem appropriate in order to continue
Acquiring Fund's operations after the Effective Time.
5.8. Subject to this Agreement, each Investment Company covenants
to take or cause to be taken all actions, and to do or cause to be done
all things, reasonably necessary, proper, or advisable to consummate and
effectuate the transactions contemplated hereby.
6. CONDITIONS PRECEDENT
Each Investment Company's obligations hereunder shall be subject to
(a) performance by the other Investment Company of all its obligations to
be performed hereunder at or before the Effective Time, (b) all
representations and warranties of the other Investment Company contained
herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions
contemplated hereby, as of the Effective Time, with the same force and
effect as if made at and as of the Effective Time, and (c) the following
further conditions that, at or before the Effective Time:
6.1. This Agreement and the transactions contemplated hereby shall
have been duly adopted and approved by both Boards.
6.2. All necessary filings shall have been made with the SEC and
state securities authorities, and no order or directive shall have been
received that any other or further action is required to permit the
parties to carry out the transactions contemplated hereby. The
Registration Statement shall have become effective under the 1933 Act, no
stop orders suspending the effectiveness thereof shall have been issued,
and the SEC shall not have issued an unfavorable report with respect to
the Reorganization under section 25(b) of the 1940 Act nor instituted any
proceedings seeking to enjoin consummation of the transactions
contemplated hereby under section 25(c) of the 1940 Act. All consents,
orders, and permits of federal, state, and local regulatory authorities
(including the SEC and state securities authorities) either Investment
Company deems necessary to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained, except
where failure to obtain same would not involve a risk of a material
adverse effect on the assets or properties of either Fund, provided that
either Investment Company may for itself waive any of such conditions.
6.3. At the Effective Time, no action, suit, or other proceeding
shall be pending before any court or governmental agency in which it is
sought to restrain or prohibit, or to obtain damages or other relief in
connection with, the transactions contemplated hereby.
6.4. Corporation shall have received an opinion of Xxxxxxxxxxx &
Xxxxxxxx LLP ("K&L") substantially to the effect that:
6.4.1. Acquiring Fund is a duly established series of
Trust, a Business Trust that is duly created and validly existing
under the laws of the Commonwealth of Massachusetts with power under
the Declaration to own all its properties and assets and, to K&L's
knowledge, to carry on its business as presently conducted;
6.4.2. This Agreement (a) has been duly authorized,
executed, and delivered by Trust on Acquiring Fund's behalf and
(b) assuming due authorization, execution, and delivery of this
Agreement by Corporation on Acquired Fund's behalf, is a valid and
legally binding obligation of Trust with respect to Acquiring Fund,
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, fraudulent transfer, reorganization,
receivership, moratorium, and other laws affecting the rights and
remedies of creditors generally and general principles of equity;
6.4.3. The Acquiring Fund Shares to be issued and
distributed to the Shareholders under this Agreement, assuming their
due delivery as contemplated by this Agreement and the receipt of
consideration in exchange therefor exceeding their par value, will
be duly authorized and validly issued and outstanding and fully paid
and non-assessable by Trust;
6.4.4. The execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby
will not, materially violate any provision of the Declaration or
Trust's By-Laws or of any agreement (known to K&L, without any
independent inquiry or investigation) to which Trust (with respect
to Acquiring Fund) is a party or by which it is bound or (to K&L's
knowledge, without any independent inquiry or investigation) result
in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, judgment, or decree to which Trust
(with respect to Acquiring Fund) is a party or by which it is bound,
except as set forth in such opinion or as otherwise disclosed in
writing to and accepted by Corporation;
6.4.5. To K&L's knowledge (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Trust on Acquiring Fund's behalf of the transactions
contemplated herein, except such as have been obtained under the
Federal Securities Laws and such as may be required under state
securities laws;
6.4.6. Trust is registered with the SEC as an investment
company, and to K&L's knowledge no order has been issued or
proceeding instituted to suspend such registration; and
6.4.7. To K&L's knowledge (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Trust (with respect to Acquiring
Fund) or any of its properties or assets attributable or allocable
to Acquiring Fund and (b) Trust (with respect to Acquiring Fund) is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and
adversely affects Acquiring Fund's business, except as set forth in
such opinion or as otherwise disclosed in writing to and accepted by
Corporation.
In rendering such opinion, K&L may (1) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and copies
thereof without independent verification thereof, (2) limit such opinion
to applicable federal and state law, and (3) define the word "knowledge"
and related terms to mean the knowledge of attorneys then with K&L who
have devoted substantive attention to matters directly related to this
Agreement and the Reorganization.
6.5. Trust shall have received an opinion of K&L substantially to
the effect that:
6.5.1. Corporation is duly incorporated, validly
existing, and in good standing under the laws of the State of
Maryland with power under the Charter to own all its properties and
assets and, to K&L's knowledge, to carry on its business as
presently conducted;
6.5.2. This Agreement (a) has been duly authorized,
executed, and delivered by Corporation on Acquired Fund's behalf and
(b) assuming due authorization, execution, and delivery of this
Agreement by Trust on Acquiring Fund's behalf, is a valid and
legally binding obligation of Corporation with respect to Acquired
Fund, enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity;
6.5.3. The execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby
will not, materially violate any provision of the Charter or
Corporation's By-Laws or of any agreement (known to K&L, without any
independent inquiry or investigation) to which Corporation (with
respect to Acquired Fund) is a party or by which it is bound or (to
K&L's knowledge, without any independent inquiry or investigation)
result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, judgment, or decree to which
Corporation (with respect to Acquired Fund) is a party or by which
it is bound, except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by Trust;
6.5.4. To K&L's knowledge (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Corporation on Acquired Fund's behalf of the
transactions contemplated herein, except such as have been obtained
under the Federal Securities Laws and such as may be required under
state securities laws;
6.5.5. Corporation is registered with the SEC as an
investment company, and to K&L's knowledge no order has been issued
or proceeding instituted to suspend such registration; and
6.5.6. To K&L's knowledge (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Corporation (with respect to
Acquired Fund) or any of its properties or assets attributable or
allocable to Acquired Fund and (b) Corporation (with respect to
Acquired Fund) is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects Acquired Fund's business, except as
set forth in such opinion or as otherwise disclosed in writing to
and accepted by Trust.
In rendering such opinion, K&L may (1) rely, as to matters governed by the
laws of the State of Maryland, on an opinion of competent Maryland
counsel, (2) make assumptions regarding the authenticity, genuineness,
and/or conformity of documents and copies thereof without independent
verification thereof, (3) limit such opinion to applicable federal and
state law, and (4) define the word "knowledge" and related terms to mean
the knowledge of attorneys then with K&L who have devoted substantive
attention to matters directly related to this Agreement and the
Reorganization.
6.6. Each Investment Company shall have received an opinion of K&L,
addressed to and in form and substance reasonably satisfactory to it, as
to the federal income tax consequences mentioned below ("Tax Opinion").
In rendering the Tax Opinion, K&L may rely as to factual matters,
exclusively and without independent verification, on the representations
and warranties made in this Agreement, which K&L may treat as
representations and warranties made to it, and in separate letters
addressed to K&L and the certificates delivered pursuant to paragraph
3.4. The Tax Opinion shall be substantially to the effect that, based on
the facts and assumptions stated therein and conditioned on consummation
of the Reorganization in accordance with this Agreement, for federal
income tax purposes:
6.6.1. Acquiring Fund's acquisition of the Assets in
exchange solely for Acquiring Fund Shares and Acquiring Fund's
assumption of the Liabilities, followed by Acquired Fund's
distribution of those shares pro rata to the Shareholders
constructively in exchange for their Acquired Fund Shares, will
qualify as a "reorganization" (as defined in section 368(a)(1)(C) of
the Code), and each Fund will be "a party to a reorganization"
within the meaning of section 368(b) of the Code;
6.6.2. Acquired Fund will recognize no gain or loss on
the transfer of the Assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares and Acquiring Fund's assumption of the
Liabilities or on the subsequent distribution of those shares to the
Shareholders in constructive exchange for their Acquired Fund Shares;
6.6.3. Acquiring Fund will recognize no gain or loss on
its receipt of the Assets in exchange solely for Acquiring Fund
Shares and its assumption of the Liabilities;
6.6.4. Acquiring Fund's basis in each Asset will be the
same as Acquired Fund's basis therein immediately before the
Reorganization, and Acquiring Fund's holding period for each Asset
will include Acquired Fund's holding period therefor;
6.6.5. A Shareholder will recognize no gain or loss on
the constructive exchange of all its Acquired Fund Shares solely for
Acquiring Fund Shares pursuant to the Reorganization; and
6.6.6. A Shareholder's aggregate basis in the Acquiring
Fund Shares it receives in the Reorganization will be the same as
the aggregate basis in its Acquired Fund Shares it constructively
surrenders in exchange for those Acquiring Fund Shares, and its
holding period for those Acquiring Fund Shares will include, in each
instance, its holding period for those Acquired Fund Shares,
provided the Shareholder holds them as capital assets at the
Effective Time.
Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may state
that no opinion is expressed as to the effect of the Reorganization on the
Funds or any Shareholder with respect to any Asset as to which any
unrealized gain or loss is required to be recognized for federal income
tax purposes at the end of a taxable year (or on the termination or
transfer thereof) under a xxxx-to-market system of accounting.
At any time before the Closing, either Investment Company may waive
any of the foregoing conditions (except that set forth in paragraph 6.1)
if, in the judgment of its Board, such waiver will not have a material
adverse effect on its Fund's shareholders' interests.
7. BROKERAGE FEES AND EXPENSES
7.1. Each Investment Company represents and warrants to the other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
7.2. Xxxxxx Asset Management, Inc. or its affiliates will bear the
total Reorganization Expenses.
8. ENTIRE AGREEMENT; NO SURVIVAL
Neither Investment Company has made any representation, warranty, or
covenant not set forth herein, and this Agreement constitutes the entire
agreement among the parties. The representations, warranties, and
covenants contained herein or in any document delivered pursuant hereto or
in connection herewith shall not survive the Closing.
9. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or before the
Effective Time:
9.1. By either Investment Company (a) in the event of the other
Investment Company 's material breach of any representation, warranty, or
covenant contained herein to be performed at or prior to the Effective
Time, (b) if a condition to its obligations has not been met and it
reasonably appears that such condition will not or cannot be met, or
(c) if the Closing has not occurred on or before July 30, 2004, or such
other date as the Investment Companies may agree; or
9.2. By the Investment Companies' mutual agreement.
In the event of termination under paragraphs 9.1(c) or 9.2, neither
Investment Company (nor its directors/trustees, officers or shareholders)
shall have any liability to the other Investment Company.
10. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time
in any manner mutually agreed on in writing by the Investment Companies;
provided that no such amendment, modification, or supplement shall have a
material adverse effect on the Shareholders' interests.
11. MISCELLANEOUS
11.1. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland, without giving
effect to principles of conflict of laws; provided that, in the case of
any conflict between such laws and the federal securities laws, the latter
shall govern.
11.2. Nothing expressed or implied herein is intended or shall be
construed to confer on or give any person, firm, trust, or corporation
other than the parties and their respective successors and assigns any
rights or remedies under or by reason of this Agreement.
11.3 The parties acknowledge that Trust is a Business Trust.
Notice is hereby given that this instrument is executed on behalf of
Trust's trustees solely in their capacities as trustees, and not
individually, and that Trust's obligations under this instrument are not
binding on or enforceable against any of its trustees, officers, or
shareholders or any series of Trust other than Acquiring Fund but are only
binding on and enforceable against Acquiring Fund's property. Corporation
agrees that, in asserting any rights or claims under this Agreement, it
shall look only to Acquiring Fund's property in settlement of such rights
or claims and not to such trustees, officers, or shareholders.
11.4. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall
become effective when one or more counterparts have been executed by each
Investment Company and delivered to the other Investment Company. The
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be
executed and delivered by its duly authorized officers as of the day and
year first written above.
XXXXXX XXXXXX SELECT FUND, INC., on
behalf of its series Regions Xxxxxx
Xxxxxx Select Capital Growth Fund and
Regions Xxxxxx Xxxxxx Select Financial
Fund
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President
REGIONS XXXXXX XXXXXX SELECT FUNDS, on
behalf of its series Regions Xxxxxx
Xxxxxx Select Mid Cap Growth Fund and
Regions Xxxxxx Xxxxxx Select Value Fund
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Solely for purposes of paragraph 7.2
hereof, XXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Investment Officer
SCHEDULE A
ACQUIRED FUNDS ACQUIRING FUNDS CLOSING DATE
(each a series of (each a series of Trust) (on or about)
Corporation)
Regions Xxxxxx Xxxxxx Regions Xxxxxx Xxxxxx June 16, 2004
Select Financial Fund Select Value Fund
Regions Xxxxxx Xxxxxx Regions Xxxxxx Xxxxxx June 23, 2004
Select Capital Growth Select Mid Cap Growth Fund
Fund
