AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of April 30, 2002 (the
"Agreement"), between THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS, an
unincorporated Massachusetts business trust (the "Dreyfus Trust"), on behalf of
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND, a segregated portfolio of assets
("series") thereof (the "Acquired Fund"), and MPAM FUNDS TRUST, an
unincorporated Massachusetts business trust (the "MPAM Trust"), on behalf of
MPAM NATIONAL INTERMEDIATE MUNICIPAL BOND FUND, a series thereof (the "Acquiring
Fund"). (The Acquired Fund and the Acquiring Fund are sometimes referred to
herein individually as a "Fund" and collectively as the "Funds.") All
agreements, representations, actions and obligations described herein made or to
be taken or undertaken by either Fund are made and shall be taken or undertaken
by the Dreyfus Trust on behalf of the Acquired Fund and by the MPAM Trust on
behalf of the Acquiring Fund.
The parties wish to effect a reorganization described in Section
368(a)(1)(C) of the United States Internal Revenue Code of 1986, as amended (the
"Code"), and this Agreement is intended to be and is adopted as a "plan of
reorganization" within the meaning of the regulations under the Code (the
"Regulations"). The reorganization will consist of the transfer of all of the
assets of the Acquired Fund in exchange for shares of beneficial interest, par
value $0.001 per share, in the Acquiring Fund designated MPAM shares, Investor
shares and Dreyfus Premier shares (collectively, the "Acquiring Fund Shares"),
and the assumption by the Acquiring Fund of stated liabilities of the Acquired
Fund and the distribution, after the Closing Date (as defined in paragraph 3.1),
of such Acquiring Fund Shares to the holders of the Acquired Fund's Class A,
Class B, Class C and Class R shares of beneficial interest, each without par
value (collectively, the "Acquired Fund Shares"), in liquidation of the Acquired
Fund as provided herein, all upon the terms and conditions hereinafter set forth
in this Agreement (all such transactions herein collectively referred to as the
"Reorganization"). In the Reorganization, holders of Class A and Class C shares
of the Acquired Fund would receive Investor shares of the Acquiring Fund,
holders of Class B shares of the Acquired Fund would receive Dreyfus Premier
shares of the Acquiring Fund, and holders of Class R shares of the Acquired Fund
would receive MPAM shares of the Acquiring Fund. Each Acquired Fund Shareholder
(as defined in paragraph 1.6) would receive Acquiring Fund Shares of the
corresponding class with an aggregate net asset value equal to the aggregate net
asset value of its investment in the Acquired Fund at the time of the
Reorganization.
WHEREAS, the Acquired Fund is a non-diversified series of the
Dreyfus Trust, a registered open-end management investment company, and the
Acquiring Fund is a non-diversified series of the MPAM Trust, a registered
open-end management investment company, and the Acquired Fund owns securities
that are assets of the character in which the Acquiring Fund is permitted to
invest;
WHEREAS, the Acquired Fund is authorized to issue Class A, Class B,
Class C and Class R shares of beneficial interest, and the Acquiring Fund is
authorized to issue MPAM shares, Investor shares and Dreyfus Premier shares of
beneficial interest;
WHEREAS, the MPAM Trust's Board of Trustees (the "MPAM Board") has
determined that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the Acquiring Fund's assumption of stated liabilities
of the Acquired Fund is in the best interests of the Acquiring Fund and that the
interests of the Acquiring Fund's existing shareholders would not be diluted as
a result of the Reorganization; and
2
WHEREAS, the Dreyfus Trust's Board of Trustees (the "Dreyfus Board")
has determined that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the Acquiring Fund's assumption of stated liabilities
of the Acquired Fund is in the best interests of the Acquired Fund and that the
interests of the Acquired Fund's existing shareholders would not be diluted as a
result of the Reorganization.
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND THE ACQUIRING FUND'S ASSUMPTION OF
ACQUIRED FUND LIABILITIES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the requisite approval of the shareholders of
the Acquired Fund and to the other terms and conditions contained herein:
(a) The Acquired Fund shall assign, transfer and convey
to the Acquiring Fund at the Closing (as defined in paragraph 3.1) all of the
Assets of the Acquired Fund (as defined in paragraph 1.2).
(b) The Acquiring Fund agrees in exchange therefor at the
Closing (i) to issue and deliver to the Acquired Fund the number and classes of
full and fractional Acquiring Fund Shares, determined as set forth in paragraph
2.3, and (ii) to assume the Liabilities of the Acquired Fund (as defined in
paragraph 1.3). In lieu of delivering certificates for the Acquiring Fund
Shares, the Acquiring Fund shall credit the Acquiring Fund Shares to the
Acquired Fund's account on the books of the Acquiring Fund and shall deliver a
confirmation thereof to the Acquired Fund.
1.2 (a) The assets of the Acquired Fund to be acquired by the
Acquiring Fund (the "Assets") shall consist of all property, including all cash,
cash equivalents, securities, commodities and futures interests, dividend and
interest receivables, claims and rights of action that are owned by the Acquired
3
Fund, and any deferred or prepaid expenses shown as assets on the books of the
Acquired Fund, on the Closing Date. The Assets shall be invested at all times
through the Closing in a manner that ensures compliance with paragraph 4.1(j).
(b) The Acquired Fund has provided the Acquiring Fund with
a list of all of its property as of the date of execution of this Agreement. The
Acquired Fund reserves the right to sell any of such property in the ordinary
course of its business. The Acquiring Fund will, within a reasonable time prior
to the Closing Date, furnish the Acquired Fund with a list of any property on
such list that does not conform to the Acquiring Fund's investment objective,
policies and restrictions or that the Acquiring Fund otherwise does not desire
to hold. The Acquired Fund will dispose of such property prior to the Closing
Date to the extent practicable and to the extent the Acquired Fund would not be
affected adversely by such disposition. In addition, if it is determined that
the portfolios of the Funds, when aggregated, would contain investments
exceeding certain percentage limitations imposed upon the Acquiring Fund with
respect to such investments, the Acquired Fund, if requested to do so by the
Acquiring Fund, will dispose of and/or reinvest a sufficient amount of such
investments as may be necessary to avoid violating such limitations as of the
Closing Date.
1.3 The Acquired Fund will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date. At the Closing, the
Acquiring Fund shall assume all liabilities, debts, obligations, expenses,
costs, charges and reserves reflected on an unaudited statement of assets and
liabilities of the Acquired Fund prepared by The Dreyfus Corporation ("Dreyfus")
as of the Valuation Date (as defined in paragraph 2.1) (collectively, the
"Liabilities").
1.4 The Assets shall be delivered on the Closing Date to Mellon
Bank, N.A., the Acquiring Fund's custodian (the "Custodian"), for the account of
4
the Acquiring Fund, with all securities not in bearer or book-entry form duly
endorsed, or accompanied by duly executed separate assignments or stock powers,
in proper form for transfer, with signatures guaranteed, and with all necessary
stock transfer stamps, sufficient to transfer good and marketable title thereto
(including all accrued interest and dividends and rights pertaining thereto) to
the Custodian for the account of the Acquiring Fund free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall be in
the form of immediately available funds payable to the order of the Custodian
for the account of the Acquiring Fund.
1.5 The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any interest received on or after the Closing Date with respect
to Assets transferred to the Acquiring Fund hereunder. The Acquired Fund will
transfer to the Acquiring Fund any distributions, rights or other assets
received by the Acquired Fund after the Closing Date as distributions on or with
respect to the Assets transferred. Such assets shall be deemed included in
Assets transferred to the Acquiring Fund on the Closing Date and shall not be
separately valued.
1.6 As soon after the Closing Date as is conveniently
practicable, the Acquired Fund will liquidate and distribute PRO RATA in
accordance with this paragraph to the Acquired Fund's shareholders of record -
some of which hold Acquired Fund Shares in omnibus accounts (the "Nominee
Shareholders") - determined as of the close of business on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares of the corresponding
class received by the Acquired Fund pursuant to paragraph 1.1. For purposes of
this Agreement, the MPAM shares of the Acquiring Fund shall be the
"corresponding class" to the Class R shares of the Acquired Fund, the Investor
5
shares of the Acquiring Fund shall be the "corresponding class" to the Class A
and Class C shares of the Acquired Fund and the Dreyfus Premier shares of the
Acquiring Fund shall be the "corresponding class" to the Class B shares of the
Acquired Fund. Such liquidation and distribution will be accomplished by
transferring the Acquiring Fund Shares of each class then credited to the
account of the Acquired Fund on the books of the Acquiring Fund to open
individual and omnibus accounts on such books for the benefit of (a) the
Acquired Fund Shareholders other than Nominee Shareholders and (b) the indirect
holders of Acquired Fund Shares through Nominee Shareholders of the
corresponding class (collectively, the "Beneficial Shareholders") and
representing the respective PRO RATA number of full and fractional Acquiring
Fund Shares of such class to which each such Beneficial Shareholder is entitled.
For these purposes, an Acquired Fund Shareholder shall be entitled to receive,
with respect to each full and fractional Acquired Fund Share of a class held by
such shareholder, that number of full and fractional Acquiring Fund Shares of
the corresponding class equal to the net asset value of such Acquired Fund Share
as of the Valuation Date (determined in accordance with paragraph 2.1) divided
by the net asset value of one Acquiring Fund Share of the corresponding class,
as of the Valuation Date (determined in accordance with paragraph 2.2). All
issued and outstanding shares of the Acquired Fund will be canceled on the books
of the Acquired Fund simultaneously with the distribution of Acquiring Fund
Shares to the Acquired Fund Shareholders.
1.7 Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will
be issued in the manner described in the Acquiring Fund's current prospectuses
and statement of additional information.
1.8 Any transfer taxes payable upon issuance of the Acquiring
Fund Shares in a name other than the registered holder of the Acquiring Fund
Shares on the books of the Acquired Fund as of that time shall, as a condition
of such issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
6
1.9 Any reporting responsibility of the Acquired Fund is and
shall remain the responsibility of the Acquired Fund up to and including the
Closing Date and such later date on which the Acquired Fund's existence is
terminated.
2. VALUATION.
2.1 The value of the Assets and the amount of the Liabilities,
the amount thereof attributable to each class of Acquired Fund Shares, and the
net asset value of a share of each such class all shall be computed as of the
close of trading on the floor of the New York Stock Exchange ("NYSE") (usually,
4:00 p.m., Eastern time), except that certain options and futures contracts may
be valued 15 minutes after the close of trading on the floor of the NYSE, on the
Closing Date (such time and date being hereinafter called the "Valuation Date"),
using the valuation procedures set forth in the Acquired Fund's then-current
prospectus and statement of additional information.
2.2 The net asset value of a share of each class of Acquiring
Fund Shares shall be computed as of the Valuation Date, using the valuation
procedures set forth in the Acquiring Fund's then-current prospectuses and
statement of additional information.
2.3 The number of MPAM shares, Investor shares and Dreyfus
Premier shares (including fractional shares, if any), respectively, to be issued
in exchange for the Acquired Fund's net assets shall be determined by dividing
the value of the Assets, less the amount of the Liabilities, attributable to the
corresponding class of the Acquired Fund, using the valuation procedures
referred to in paragraph 2.1, by the net asset value of one MPAM share, Investor
share and Dreyfus Premier share, respectively, determined in accordance with
paragraph 2.2.
2.4 All computations and calculations of value shall be made by
Dreyfus in accordance with its regular practices as fund accountant for each
Fund.
7
3. CLOSING AND CLOSING DATE.
3.1 Consummation of the Reorganization and related acts (the
"Closing") shall occur on August 29, 2002 or such other date as to which the
parties may mutually agree (the "Closing Date"). All acts taking place at the
Closing shall be deemed to take place simultaneously as of the close of business
on the Closing Date unless otherwise provided. The Closing shall be held at 4:30
p.m., Eastern time, at the offices of Dreyfus, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, or such other time and/or place as the parties may mutually agree.
3.2 The Acquired Fund shall deliver to the Acquiring Fund at
the Closing a statement of assets and liabilities, including a schedule of the
Assets setting forth for all portfolio securities thereon their adjusted tax
basis and holding period by lot, as of the Closing, certified by the Dreyfus
Trust's Treasurer or Assistant Treasurer. The Custodian shall deliver at the
Closing a certificate of an authorized officer stating that the Assets have been
presented for examination to the Acquiring Fund prior to the Closing Date and
have been delivered in proper form to the Acquiring Fund.
3.3 If on the Valuation Date (a) the NYSE or another primary
trading market for portfolio securities of either Fund 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 the value of the
net assets of either Fund or determination of the net asset value of any class
of their shares is impracticable, the Closing Date shall be postponed until the
first business day after the day when trading has been fully resumed and
reporting has been restored.
3.4 The transfer agent for the Acquired Fund shall deliver 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
8
and percentage ownership of outstanding Acquired Fund shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall issue and
deliver a confirmation evidencing the Acquiring Fund Shares to be credited to
the Acquired Fund on the Closing Date to the Secretary of the Dreyfus Trust or
provide evidence satisfactory to the Acquired Fund that such Acquiring Fund
Shares have been credited to the Acquired Fund's account on the books of the
Acquiring Fund. At the Closing, each party shall deliver to the other such bills
of sale, checks, assignments, receipts or other documents as such other party or
its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Dreyfus Trust, on behalf of the Acquired Fund,
represents and warrants to the MPAM Trust as follows:
(a) The Acquired Fund is a duly established and designated
series of the Dreyfus Trust, an unincorporated business trust duly organized and
validly existing under the laws of the Commonwealth of Massachusetts, and has
power to carry on its business as it is now being conducted and to carry out
this Agreement.
(b) The Dreyfus Trust is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company, and such registration has not been revoked or rescinded and
is in full force and effect.
(c) The current prospectus and statement of additional
information of the Acquired Fund and any supplements thereto conform in all
material respects to the applicable requirements of the Securities Act of 1933,
as amended (the "1933 Act"), and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "Commission") thereunder and do not
include any untrue statement of a material fact or omit to state any material
9
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.
(d) The Acquired Fund is not, and the execution, delivery
and performance of this Agreement will not result, in material violation of the
Dreyfus Trust's Agreement and Declaration of Trust dated March 28, 1983, as
amended and restated December 9, 1992 (the "Trust Instrument"), or its By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which the Acquired Fund is a party or by which it is bound.
(e) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will be terminated
with liability to it on or prior to the Closing Date.
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently pending
or to its knowledge threatened against the Acquired Fund or any of its
properties that, if adversely determined, would materially and adversely affect
its financial condition or the conduct of its business. The Acquired Fund knows
of no facts that 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 that materially and adversely affects
its business or its ability to consummate the transactions herein contemplated.
(g) The Statements of Assets and Liabilities of the
Acquired Fund as of June 30, 2001, June 30, 2000 and June 30, 1999 have been
audited by KPMG LLP, independent auditors, and are in accordance with generally
accepted accounting principles, consistently applied, and such statements
(copies of which have been furnished to the MPAM Trust) fairly reflect the
10
financial condition of the Acquired Fund as of such dates, and there are no
known contingent liabilities of the Acquired Fund as of such dates not disclosed
therein.
(h) Since June 30, 2001, 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, except as disclosed on the
unaudited statement of assets and liabilities referred to in paragraph 1.3.
(i) At the Closing Date, all Federal and other tax returns
and reports of the Acquired Fund required by law then to have been filed shall
have been filed, and all Federal and other taxes shall have been paid so far as
due, or provision shall have been made for the payment thereof, and to the best
of the Dreyfus Trust's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) The Acquired Fund is a "fund" as defined in section
851(g)(2) of the Code; for each taxable year of its operation, the Acquired Fund
met all the requirements of Subchapter M of the Code ("Subchapter M") for
qualification and treatment as a "regulated investment company"; it will
continue to meet all such requirements for its taxable year that includes the
Closing Date; and it has no earnings and profits accumulated in any taxable year
in which the provisions of Subchapter M did not apply to it.
(k) The Liabilities were incurred by the Acquired Fund in
the ordinary course of its business.
(l) The Acquired Fund is not under the jurisdiction of a
court in a "title 11 or similar case" (within the meaning of section
368(a)(3)(A) of the Code).
11
(m) Not more than 25% of the value of the 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.
(n) The Acquired Fund will be terminated as soon as
reasonably practicable after the Reorganization, but in all events within six
months after the Closing Date.
(o) All issued and outstanding shares of the Acquired Fund
are, and at the Closing Date will be, duly and validly issued and outstanding,
fully paid upon receipt of full payment in accordance with the terms
contemplated by the Acquired Fund's then-current prospectus and statement of
additional information, and non-assessable by the Acquired Fund. All of the
issued and outstanding shares of the Acquired Fund will, on the Closing Date, be
held by the persons and in the amounts set forth in the records of the transfer
agent, as certified in paragraph 3.4. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Acquired Fund Shares, nor is there outstanding any security convertible into
any Acquired Fund Shares.
(p) On the Closing Date, the Acquired Fund will have full
right, power and authority to sell, assign, transfer and deliver the Assets.
(q) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Dreyfus Board, and, subject to the approval
of the Acquired Fund's shareholders, this Agreement will constitute the valid
and legally binding obligation of the Acquired Fund, enforceable in accordance
with its terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect thereto,
12
and to general principles of equity and the discretion of the court (regardless
of whether the enforceability is considered in a proceeding in equity or at
law).
(r) The proxy statement of the Acquired Fund (the "Proxy
Statement") included in the Registration Statement referred to in paragraph 5.5
(other than information therein that has been furnished by the Acquiring Fund)
will, on the effective date of the Registration Statement and on the Closing
Date, 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.
4.2 The MPAM Trust, on behalf of the Acquiring Fund, represents
and warrants to the Dreyfus Trust as follows:
(a) The Acquiring Fund is a duly established and designated
series of the MPAM Trust, an unincorporated business trust duly organized and
validly existing under the laws of the Commonwealth of Massachusetts, and has
power to carry on its business as it is now being conducted and to carry out
this Agreement.
(b) The MPAM Trust is registered under the 1940 Act as an
open-end management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) The current prospectuses and statement of additional
information of the Acquiring Fund and any supplements thereto conform 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 do not
include any untrue statement of a material fact or omit to state any material
13
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.
(d) The Acquiring Fund is not, and the execution, delivery
and performance of this Agreement will not result, in material violation of the
MPAM Trust's Amended and Restated Agreement and Declaration of Trust dated June
5, 2000 (the "Declaration of Trust") or its Bylaws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquiring Fund is a party or by which it is bound.
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently pending
or to its knowledge threatened against the Acquiring Fund or any of its
properties that, if adversely determined, would materially and adversely affect
its financial condition or the conduct of its business. The Acquiring Fund knows
of no facts that 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 that materially and adversely affects
its business or its ability to consummate the transactions contemplated hereby.
(f) The Statements of Assets and Liabilities of the
Acquiring Fund as of August 31, 2001 and as of September 1, 2000 have been
audited by KPMG LLP, independent auditors, and are in accordance with generally
accepted accounting principles, consistently applied, and such statements
(copies of which have been furnished to the Dreyfus Trust) fairly reflect the
financial condition of the Acquiring Fund as of such dates.
(g) Since August 31, 2001, 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
14
from the date such indebtedness was incurred, except as disclosed in writing to
the Dreyfus Trust.
(h) At the Closing Date, all Federal and other tax returns
and reports of the Acquiring Fund required by law then to have been filed shall
have been filed, and all Federal and other taxes shall have been paid so far as
due, or provision shall have been made for the payment thereof, and to the best
of the MPAM Trust's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(i) The Acquiring Fund is a "fund" as defined in section
851(g)(2) of the Code; for each taxable year of its operation, the Acquiring
Fund met all the requirements of Subchapter M for qualification and treatment as
a regulated investment company; it will continue to meet all such requirements
for its taxable year that includes the Closing Date; and it has no earnings and
profits accumulated in any taxable year in which the provisions of Subchapter M
did not apply to it.
(j) No consideration other than the Acquiring Fund Shares
(and the Acquiring Fund's assumption of the Liabilities) will be issued in
exchange for the Assets in the Reorganization.
(k) The 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 the Acquiring Fund, or any person "related" (within
the meaning of section 1.368-1(e)(3) of the Regulations) to the Acquiring Fund,
have any plan or intention to redeem or otherwise reacquire -- during the
five-year period beginning at the Closing Date, 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
15
to the Acquired Fund Shareholders pursuant to the Reorganization, other than
through redemptions arising in the ordinary course of that business as required
by section 22(e) of the 1940 Act.
(l) The Acquiring Fund will, after the Reorganization, (i)
continue the "historic business" (within the meaning of section 1.368-1(d)(2) of
the Regulations) that the Acquired Fund conducted before the Reorganization and
(ii) use a significant portion of the Acquired Fund's "historic business assets"
(within the meaning of section 1.368-1(d)(3) of the Regulations) in that
business.
(m) There is no plan or intention for the Acquiring Fund to
be dissolved or merged into another business trust or corporation or any "fund"
thereof (within the meaning of section 851(g)(2) of the Code) following the
Reorganization.
(n) Immediately after the Reorganization (i) not more than
25% of the value of the 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 (ii) not more than 50% of the value of such
assets will be invested in the stock and securities of five or fewer issuers.
(o) The Acquiring Fund does not directly or indirectly own,
nor on the Closing Date will it directly or indirectly own, nor has it directly
or indirectly owned at any time during the past five years, any shares of the
Acquired Fund.
(p) All Acquiring Fund Shares, when issued pursuant to the
Reorganization, will be duly and validly issued and outstanding, fully paid and
non-assessable by the Acquiring Fund. 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.
16
(q) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the MPAM Board and, if required, the Acquiring
Fund shareholders, and this Agreement will constitute the valid and legally
binding obligation of the Acquiring Fund, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally and court decisions with respect thereto,
and to general principles of equity and the discretion of the court (regardless
of whether the enforceability is considered in a proceeding in equity or at
law).
(r) The Proxy Statement included in the Registration
Statement referred to in paragraph 5.5 (only insofar as it relates to the
Acquiring Fund and is based on information furnished by the Acquiring Fund)
will, on the effective date of the Registration Statement and on the Closing
Date, 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.
5. COVENANTS OF THE FUNDS.
5.1 Each Fund 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 payment of customary dividends and
other distributions.
5.2 The Dreyfus Trust will call a meeting of the Acquired
Fund's shareholders to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions contemplated
hereby.
17
5.3 Subject to the provisions of this Agreement, each Fund will
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.
5.4 As promptly as practicable, but in any case within sixty
days after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund,
in form reasonably satisfactory to the Acquiring Fund, a statement of the
earnings and profits of the Acquired Fund for Federal income tax purposes that
will be carried over to the Acquiring Fund under Section 381 of the Code, which
statement shall be certified by the Dreyfus Trust's President or Vice President
and its Treasurer.
5.5 The MPAM Trust shall prepare a prospectus that, together
with the Proxy Statement, shall be included in a registration statement on Form
N-14 of the MPAM Trust relating to the Acquiring Fund Shares issuable hereunder
(the "Registration Statement") to be filed in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act
and the rules thereunder.
5.6 The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1934 Act,
the 1940 Act and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
5.7 The Funds shall cooperate in the preparation and filing as
promptly as practicable with the Commission of an application, in form and
substance reasonably satisfactory to their counsel, for exemptive relief from
the provisions of Section 17 of the 1940 Act, and from any other provision of
the 1940 Act deemed necessary or advisable by such counsel, to permit
18
consummation of the Reorganization as contemplated hereby (the "Exemptive
Application"). The Funds shall use all reasonable efforts to obtain the relief
requested by the Exemptive Application.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of the Dreyfus Trust on
behalf of the Acquired 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 The Acquired Fund shall have delivered to the Acquiring
Fund the statement of the Acquired Fund's assets and liabilities referred to in
paragraph 1.3 and the schedule of Assets referred to in paragraph 3.2.
6.3 The Dreyfus Trust shall have delivered to the MPAM Trust on
the Closing Date a certificate executed in its name by the Dreyfus Trust's
President or Vice President and its Treasurer, in form and substance reasonably
satisfactory to the MPAM Trust, to the effect that the representations and
warranties of the Dreyfus Trust made in this Agreement on behalf of the Acquired
Fund 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 MPAM Trust reasonably requests.
19
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by 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 conditions:
7.1 All representations and warranties of the MPAM Trust 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.
7.2 The MPAM Trust shall have delivered to the Dreyfus Trust on
the Closing Date a certificate executed in its name by the MPAM Trust's
President or Vice President and its Treasurer, in form and substance reasonably
satisfactory to the Dreyfus Trust, to the effect that the representations and
warranties of the MPAM Trust made in this Agreement on behalf of the Acquiring
Fund 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 Dreyfus Trust reasonably requests.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUNDS.
If any of the conditions set forth below does not exist on or before
the Closing Date with respect to either Fund, the other Fund shall, at its
option, not be required to consummate the transactions contemplated by this
Agreement.
20
8.1 This Agreement and the transactions contemplated hereby
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 Trust
Instrument.
8.2 On the Closing Date, 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 obtain damages or other relief in connection with,
this Agreement or the transactions contemplated hereby.
8.3 All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities authorities) deemed
necessary by either Fund 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 either 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, 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 0000 Xxx.
8.5 The relief requested by the Exemptive Application shall
have been granted in form and substance reasonably satisfactory to the counsel
for each Fund.
8.6 The Acquired Fund shall have declared a dividend or
dividends that, together with all previous dividends, shall have the effect of
distributing to the Acquired Fund's shareholders all of (a) the Acquired Fund's
investment company taxable income (computed without regard to any deduction for
21
dividends paid) for all taxable years or periods ending on or prior to the
Closing Date, (b) the excess of its interest income excludable from gross income
under Section 103(a) of the Code over its disallowed deductions under Sections
265 and 171(a)(2) of the Code for all such years or periods and (c) its net
capital gain realized in all such years or periods (after reduction for any
capital loss carry forward).
8.7 The parties shall have received an opinion ("Tax Opinion")
of Xxxxxxxxxxx & Xxxxxxxx LLP ("Counsel") 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:
(a) The Acquiring Fund's acquisition of the Assets in
exchange solely for Acquiring Fund Shares and the assumption by the Acquiring
Fund of the Liabilities, followed by the Acquired Fund's distribution of those
shares PRO RATA to the Acquired Fund Shareholders constructively in exchange for
their Acquired Fund Shares, will qualify as a "reorganization" within the
meaning of 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;
(b) The Acquired Fund will recognize no gain or loss on the
transfer of the Assets to the Acquiring Fund in exchange solely for Acquiring
Fund Shares and the Acquiring Fund's assumption of the Liabilities or on the
subsequent distribution (whether actual or constructive) of those shares to the
Acquired Fund Shareholders in exchange for their Acquired Fund Shares;
(c) The 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;
22
(d) The Acquiring Fund's tax basis in the Assets will be
the same as the Acquired Fund's tax basis therein immediately before the
Reorganization, and the Acquiring Fund's holding period for the Assets will
include the Acquired Fund's holding period therefor;
(e) A Beneficial Shareholder will recognize no gain or loss
on the actual or constructive exchange of all its Acquired Fund Shares solely
for Acquiring Fund Shares pursuant to the Reorganization; and
(f) A Beneficial Shareholder's aggregate tax basis in the
Acquiring Fund Shares it receives pursuant to the Reorganization will be the
same as the aggregate tax basis in its Acquired Fund Shares it surrenders in
exchange for those Acquiring Fund Shares, and its holding period for those
Acquiring Fund Shares will include its holding period for those Acquired Fund
Shares (provided the shareholder held them as capital assets on the Closing
Date).
In rendering the Tax Opinion, Counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations and warranties made in this Agreement, which Counsel may treat
as representations and warranties made to it, and in separate letters addressed
to Counsel and the certificates delivered pursuant to paragraphs 6.3 and 7.2.
Notwithstanding the foregoing, the Tax Opinion will state that no
opinion is expressed as to the effect of the Reorganization on the Funds or any
Beneficial 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.
9. TERMINATION OF AGREEMENT; EXPENSES.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Dreyfus Board or of the MPAM
Board, as the case may be, at any time prior to the Closing Date (and
23
notwithstanding any vote of the Acquired Fund's shareholders) if circumstances
develop that, in the opinion of either such Board, make proceeding with the
Reorganization inadvisable.
9.2 If this Agreement is terminated and the transactions
contemplated hereby are abandoned pursuant to the provisions of paragraph 9.1,
this Agreement shall become void and have no effect, without any liability in
respect of this Agreement on the part of either party hereto or their respective
Trustees, officers or shareholders.
9.3 The expenses of the Reorganization shall be borne by Mellon
Bank, N.A. or its affiliates.
10. WAIVER.
At any time prior to the Closing Date, any of the conditions
described in Sections 6, 7 and 8 may be waived by the MPAM Board or the Dreyfus
Board if, in the judgment of either, such waiver will not have a material
adverse effect on the benefits intended under this Agreement to the shareholders
of the Acquiring Fund or of the Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or
provided for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and merges and supersedes all prior discussions, agreements and
understandings of every kind and nature between them relating to the subject
matter hereof. Neither party shall be bound by any condition, definition,
warranty or representation, other than as set forth or provided in this
24
Agreement or as may be, on or subsequent to the date hereof, set forth in a
writing signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws; provided, however, that the due
authorization, execution and delivery of this Agreement by either Fund shall be
governed and construed in accordance with the internal laws of the Commonwealth
of Massachusetts, in each case 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.
11.4 This Agreement may be executed in counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
11.5 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.
11.6 (a) References herein to the "MPAM Funds Trust" (or the
"MPAM Trust") or its Trustees refer to them, respectively, not individually or
personally, but as acting from time to time under the Declaration of Trust, a
copy of which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and at the principal office of the MPAM Trust. The obligations of
the MPAM Trust entered into in the name or on behalf of the Acquiring Fund, its
representatives or agents, are made not individually, but in such capacities,
and are not binding upon any of the other series of the MPAM Trust or on the
25
shareholders or representatives of the Acquiring Fund personally, but bind only
the Acquiring Fund's property; and all persons dealing with the Acquiring Fund
must look solely to the Acquiring Fund's property for the enforcement of any
claims against the Acquiring Fund.
(b) References herein to the "The Dreyfus/Laurel Tax-Free
Municipal Funds" (or the "Dreyfus Trust") or its Trustees refer to them,
respectively, not individually or personally, but as acting from time to time
under the Trust Instrument, a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and at the principal office of
the Dreyfus Trust. The obligations of the Dreyfus Trust entered into in the name
or on behalf of the Acquired Fund, its representatives or agents, are made not
individually, but in such capacities, and are not binding upon any of the other
series of the Dreyfus Trust or on the shareholders or representatives of the
Acquired Fund personally, but bind only the Acquired Fund's property; and all
persons dealing with the Acquired Fund must look solely to the Acquired Fund's
property for the enforcement of any claims against the Acquired Fund.
11.7 Any references in this Agreement to actions taken,
deliveries by or to, representations and warranties made by or to, or
obligations of, the Acquired Fund shall be deemed references to actions taken,
deliveries by or to, representations and warranties made by or to, or
obligations of, the Dreyfus Trust on behalf of the Acquired Fund.
11.8 Any references in this Agreement to actions taken,
deliveries by or to, representations and warranties made by or to, or
obligations of, the Acquiring Fund shall be deemed references to actions taken,
deliveries by or to, representations and warranties made by or to, or
obligations of, the MPAM Trust on behalf of the Acquiring Fund.
26
11.9 If this Agreement is not approved by any class of the
Acquired Fund's shareholders, the Dreyfus Board will consider appropriate
courses of action for that class and the Acquired Fund as a whole, including
liquidating that class of the Acquired Fund Shares, continuing only certain
Acquired Fund Share classes and/or exchanging shares of classes of the Acquired
Fund that approve this Agreement for the shares of corresponding classes of the
Acquiring Fund.
IN WITNESS WHEREOF, the MPAM Trust and the Dreyfus Trust each have
caused this Agreement to be executed and attested on its behalf by its duly
authorized representatives as of the date first above written.
THE DREYFUS / LAUREL TAX-FREE MUNICIPAL FUNDS, on
behalf of Dreyfus Premier Limited Term Municipal Fund
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx,
President
ATTEST: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx,
Secretary
MPAM FUNDS TRUST,
on behalf of MPAM National Intermediate Municipal Bond Fund
By: /s/ Xxxxx X Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx,
President
ATTEST: /s/ Xxxx X. Xxxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxxx,
Secretary
27
