AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
January 20, 2010 by and between (i) each of the Xxx Xxxxxx open-end registered
investment companies identified on Exhibit A hereto (each a "Target Entity")
separately, on behalf of its respective series identified on Exhibit A hereto
(each a "Target Fund"); and (ii) Xxxxxx Xxxxxxx Institutional Fund, Inc., SEC
File No. 033-23166 (the "Acquiring Entity"), on behalf of its respective series
identified on Exhibit A hereto (each an "Acquiring Fund").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Acquiring Entity, on behalf of each
Acquiring Fund (the "Acquiring Entity Board"), and the Board of
Directors/Trustees of each Target Entity, on behalf of its respective Target
Fund (collectively, the "Target Entity Board" and, together with the Acquiring
Entity Board, the "Boards"), have determined that entering into this Agreement
whereby each Target Fund would transfer all of its assets and liabilities to the
corresponding Acquiring Fund in exchange for shares of such Acquiring Fund, is
in the best interests of the shareholders of their respective Fund; and
WHEREAS, the parties hereto intend for each Acquiring Fund and its
corresponding Target Fund (as set forth in Exhibit A hereto) to enter into a
transaction pursuant to which: (i) the Acquiring Fund will acquire the assets
and liabilities of the Target Fund in exchange for the corresponding class or
classes of shares (as applicable) of the Acquiring Fund identified on Exhibit A
of equal value to the net assets of the Target Fund being acquired, (ii) the
Target Fund will distribute such shares of the Acquiring Fund to shareholders of
the corresponding class of the Target Fund, in connection with the liquidation
of the Target Fund, all upon the terms and conditions hereinafter set forth in
this Agreement, and (iii) the outstanding shares of the Acquired Fund held by
such shareholders will then be redeemed and cancelled as permitted by the
organizational documents of the Acquired Fund and applicable law (each such
transaction, a "Reorganization" and collectively, the "Reorganizations"). Each
Acquiring Fund is, and will be immediately prior to the Closing Date (defined in
Section II), a shell series, without assets (other than seed capital) or
liabilities, created for the purpose of acquiring the assets and liabilities of
the Target Fund;
WHEREAS, each Target Entity and the Acquiring Entity is a registered
open-end, investment company; and
WHEREAS, the parties intend that this transaction qualify as a
reorganization within the meaning of Section 368(a)(1)(F) of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and intending to be legally bound hereby, the parties hereto agree as follows:
I. PLAN OF TRANSACTION.
It is the intention of the parties hereto that each Reorganization
described herein shall be conducted separately of the others, and a party
that is not a party to a Reorganization shall incur no obligations, duties
or liabilities with respect to such Reorganization by reason of being a
party to this Agreement. If any one or more Reorganizations should fail to
be consummated, such failure shall not affect the other Reorganizations in
any way.
Provided that all conditions precedent to a Reorganization set forth
herein have been satisfied as of the Closing Date (as defined below), and
based on the representations and warranties each party provides to the
others, each Target Entity and the Acquiring Entity agree to take the
following steps with respect to their Reorganization(s), the parties to
which and classes of shares to be issued in connection with which are set
forth in Exhibit A:
A. TRANSFER OF ASSETS. Upon satisfaction of the conditions precedent to
a Reorganization set forth in Sections VII and VIII hereof, the
Target Fund will convey, transfer and deliver to the Acquiring Fund
at the closing, provided for in Section II hereof, all of the
existing assets of the Target Fund (including accrued interest to
the Closing Date (as defined below)), free and clear of all liens,
encumbrances and claims whatsoever (the assets so transferred
collectively being referred to as the "Assets").
B. CONSIDERATION. In consideration thereof, the Acquiring Fund agrees
that the Acquiring Fund at the closing will (i) deliver to the
Target Fund, full and fractional shares of common stock, $0.001 par
value per share, of each class of the Acquiring Fund that
corresponds to the class of shares of the Target Fund, as set forth
in Exhibit A, with an aggregate net asset value equal to the
aggregate dollar value of the Assets net of any liabilities of the
corresponding class of the Target Fund described in Section III.E.
hereof (the "Liabilities") determined pursuant to Section III.A. of
this Agreement (collectively, the "Acquiring Fund Shares") and (ii)
assume all of the Liabilities of the Target Fund. The calculation of
full and fractional Acquiring Fund Shares to be exchanged shall be
carried out to no less than two (2) decimal places. All Acquiring
Fund Shares delivered to the Target Fund in exchange for such Assets
shall be delivered at net asset value without sales load, commission
or other transactional fees being imposed.
II. CLOSING OF THE TRANSACTION.
A. CLOSING DATE. The closing of each Reorganization shall occur within
ten (10) business days after the later of the receipt of all
necessary regulatory approvals and the final adjournment of the
meeting of shareholders of the applicable Target Fund at which this
Agreement will be considered and approved, or such other date as the
parties may
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mutually agree (the "Closing Date"). On the Closing Date, the
Acquiring Fund shall deliver to the Target Fund the Acquiring Fund
Shares in the amount determined pursuant to Section I.B. hereof and
the Target Fund thereafter shall, in order to effect the
distribution of such shares to the Target Fund shareholders,
instruct the Acquiring Fund to register the pro rata interest in the
Acquiring Fund Shares (in full and fractional shares) of each of the
holders of record of shares of the Target Fund in accordance with
their holdings of the corresponding class of the Target Fund, as set
forth in Exhibit A, and shall provide as part of such instruction a
complete and updated list of such holders (including addresses and
taxpayer identification numbers), and the Acquiring Fund agrees
promptly to comply with said instruction. The Acquiring Fund shall
have no obligation to inquire as to the validity, propriety or
correctness of such instruction, but shall assume that such
instruction is valid, proper and correct.
III. PROCEDURE FOR REORGANIZATION.
A. VALUATION. With respect to each Reorganization, the value of the
Assets and Liabilities of the Target Fund to be transferred and
assumed, respectively, by the Acquiring Fund shall be computed as of
4:00 p.m. (New York time) on the business day immediately preceding
the Closing Date, in the manner set forth in the most recent
Prospectus and Statement of Additional Information of the Acquiring
Fund (collectively, the "Acquiring Fund Prospectus"), copies of
which have been delivered to the Target Fund.
B. DELIVERY OF FUND ASSETS. he Assets shall be delivered to JPMorgan
Chase Bank, N.A. or other custodian as designated by the Acquiring
Fund (collectively the "Custodian") for the benefit of the Acquiring
Fund, duly endorsed in proper form for transfer in such condition as
to constitute a good delivery thereof, free and clear of all liens,
encumbrances and claims whatsoever, in accordance with the custom of
brokers, and shall be accompanied by all necessary state stock
transfer stamps, if any, the cost of which shall be borne by the
investment adviser to the Target Fund, with respect to Xxx Xxxxxx
Core Growth Fund and Xxx Xxxxxx Global Growth Fund, and Xxx Xxxxxx
Equity Growth Fund.
C. FAILURE TO DELIVER SECURITIES. If the Target Fund is unable to make
delivery pursuant to Section III.B. hereof to the Custodian of any
of the securities of the Target Fund then, in lieu of such delivery,
the Target Fund shall deliver to the Custodian, with respect to said
securities, executed copies of an agreement of assignment and due
bills, together with such other documents as may be required by the
Acquiring Fund or Custodian.
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D. SHAREHOLDER ACCOUNTS. The Acquiring Fund, in order to assist the
Target Fund in the distribution of the Acquiring Fund Shares to the
Target Fund shareholders after delivery of the Acquiring Fund Shares
to the Target Fund, will establish pursuant to the request of the
Target Fund an open account with the Acquiring Fund for each
shareholder of the Target Fund and, upon request by the Target Fund,
shall transfer to such accounts, the exact number of Acquiring Fund
Shares then held by the Target Fund specified in the instruction
provided pursuant to Section II hereof. The Acquiring Fund is not
required to issue certificates representing Acquiring Fund Shares
unless requested to do so by a shareholder. Upon liquidation or
dissolution of the Target Fund, certificates representing shares of
the Target Fund shall become null and void.
E. LIABILITIES. The Liabilities shall include all of the Target 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 Closing Date, and whether or not specifically
referred to in this Agreement.
F. EXPENSES. In the event that the Reorganization of Xxx Xxxxxx Core
Growth Fund into Advantage Portfolio is consummated, and the
Reorganization of Xxx Xxxxxx Global Growth Fund into Global Growth
Portfolio is consummated, the expenses of each such Reorganization,
including the costs of the special meeting of shareholders of each
Target Fund, will be paid by Xxxxxx Xxxxxxx Investment Management,
Inc., the investment adviser to Advantage Portfolio and Global
Growth Portfolio. In the event that the Reorganization of Xxx Xxxxxx
Equity Growth Fund into Equity Growth Portfolio is consummated, the
expenses of such Reorganization, including the costs of the special
meeting of shareholders of Xxx Xxxxxx Equity Growth Fund, will be
paid by Xxx Xxxxxx Equity Growth Fund. In the event that the
transactions contemplated herein are not consummated by reason of a
Target Fund being either unwilling or unable to go forward (other
than by reason of the nonfulfillment or failure of any condition to
the Target Fund's obligations specified in this Agreement), the
Target Fund's only obligation hereunder shall be to reimburse the
corresponding Acquiring Fund for all reasonable out-of-pocket fees
and expenses incurred by the Acquiring Fund in connection with those
transactions. The investment adviser to the Target Fund will
reimburse the corresponding Acquiring Fund for any such amounts on
behalf of the Target Fund. In the event the transactions
contemplated herein are not consummated by reason of an Acquiring
Fund being either unwilling or unable to go forward (other than by
reason of the nonfulfillment or failure of any condition to the
Acquiring Fund's obligations specified in this Agreement), the
Acquiring Fund's only obligation hereunder shall be to reimburse the
corresponding Target Fund for all reasonable out-of-pocket fees and
expenses incurred by the Target
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Fund in connection with those transactions. The investment adviser
to the Acquiring Fund will reimburse the corresponding Target Fund
for any such amounts on behalf of the Acquiring Fund.
G. DISSOLUTION. As soon as practicable after the Closing Date but in no
event later than one year after the Closing Date, the Target Fund
shall voluntarily dissolve and completely liquidate by taking, in
accordance with the law in the state of its organization and federal
securities laws, all steps as shall be necessary and proper to
effect a complete liquidation and dissolution of the Target Fund.
Immediately after the Closing Date, the share transfer books
relating to the Target Fund shall be closed and no transfer of
shares shall thereafter be made on such books.
IV. REPRESENTATIONS AND WARRANTIES OF THE TARGET FUND.
Each Target Entity on behalf of itself or, where applicable, a Target Fund
hereby represents and warrants to the Acquiring Entity and its corresponding
Acquiring Fund, which representations and warranties are true and correct on the
date hereof, and agrees with the Acquiring Entity and its corresponding
Acquiring Fund that:
A. ORGANIZATION. The Target Fund is duly organized as a series of the
Target Entity, and the Target Entity is in good standing, under the
laws of the state of its organization and the Target Fund is duly
authorized to transact business in the state of its organization.
The Target Fund is qualified to do business in all jurisdictions in
which it is required to be so qualified, except jurisdictions in
which the failure to so qualify would not have a material adverse
effect on the Target Fund. The Target Fund has all material federal,
state and local authorizations necessary to own all of its
properties and assets and to carry on its business as now being
conducted, except authorizations which the failure to so obtain
would not have a material adverse effect on the Target Fund.
B. REGISTRATION. The Target Entity is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company and such registration has not been
revoked or rescinded. The Target Entity is in compliance in all
material respects with the 1940 Act, and the rules and regulations
thereunder with respect to its activities. All of the outstanding
common shares of the Target Fund have been duly authorized and are
validly issued, fully paid and nonassessable and not subject to
pre-emptive or dissenters' rights.
C. AUDITED FINANCIAL STATEMENTS. The statement of assets and
liabilities and the portfolio of investments and the related
statements of operations and changes in net assets of the Target
Entity, with respect to its corresponding Target Fund, audited as of
the most recently completed fiscal year, true and complete copies of
which have been heretofore
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furnished to the Acquiring Fund, fairly represent the financial
condition and the results of operations of the Target Fund as of and
for their respective dates and periods in conformity with generally
accepted accounting principles applied on a consistent basis during
the periods involved.
D. FINANCIAL STATEMENTS. The Target Entity, on behalf of the
corresponding Target Fund, shall furnish to the Acquiring Fund
within five (5) business days after the Closing Date, an unaudited
statement of assets and liabilities and the portfolio of investments
and the related statements of operations and changes in net assets
as of and for the interim period ending on the Closing Date; such
financial statements will represent fairly the financial position
and portfolio of investments and the results of the Target Fund's
operations as of, and for the periods ending on, the dates of such
statements in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved
and the results of its operations and changes in financial position
for the period then ended; and such financial statements shall be
certified by the Treasurer of the Target Entity as complying with
the requirements hereof.
E. CONTINGENT LIABILITIES. There are, and as of the Closing Date will
be, no contingent Liabilities of the Target Fund not disclosed in
the financial statements delivered pursuant to Sections IV.C. and
IV.D. which would materially affect the Target Fund's financial
condition, and there are no legal, administrative, or other
proceedings pending or, to the Target Entity's knowledge, threatened
against the Target Fund which would, if adversely determined,
materially affect the Target Fund's financial condition. All
Liabilities were incurred by the Target Fund in the ordinary course
of its business.
F. MATERIAL AGREEMENTS. The Target Fund is in compliance with all
material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and
except as referred to in the most recent Prospectus and Statement of
Additional Information of the Target Fund (collectively, the "Target
Fund Prospectus") there are no material agreements outstanding
relating to the Target Fund to which the Target Fund is a party.
G. STATEMENT OF EARNINGS. As promptly as practicable, but in any case
no later than thirty (30) calendar days after the Closing Date, the
Target Fund shall furnish the Acquiring Fund with a statement of the
earnings and profits of the Target Fund within the meaning of the
Code as of the Closing Date.
H. TAX RETURNS. At the date hereof and on the Closing Date, all federal
and other material tax returns and reports of the Target Fund
required by
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law to have been filed by such dates shall have been filed, and all
federal and other taxes shown thereon shall have been paid so far as
due, or provision shall have been made for the payment thereof, and
to the best of the Target Entity's knowledge no such return is
currently under audit and no assessment has been asserted with
respect to any such return.
I. CORPORATE AUTHORITY. The Target Entity, on behalf of its
corresponding Target Fund, has the necessary power to enter into
this Agreement and to consummate the transactions contemplated
herein. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein have
been duly authorized by the Target Fund Board, and except for
obtaining approval of the Target Fund shareholders, no other
corporate acts or proceedings by the Target Fund are necessary to
authorize this Agreement and the transactions contemplated herein.
This Agreement has been duly executed and delivered by the Target
Fund and constitutes a valid and binding obligation of the Target
Fund enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws affecting
creditors' rights generally, or by general principles of equity
(regardless of whether enforcement is sought in a proceeding at
equity or law).
J. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement by the Target Entity, on behalf of its
corresponding Target Fund, does not and will not (i) result in a
material violation of any provision of the Target Entity's
organizational documents, (ii) violate any statute, law, judgment,
writ, decree, order, regulation or rule of any court or governmental
authority applicable to the Target Entity, (iii) result in a
material violation or breach of, or constitute a default under any
material contract, indenture, mortgage, loan agreement, note, lease
or other instrument or obligation to which the Target Entity is
subject, or (iv) result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Target
Entity. Except as have been obtained, (i) no consent, approval,
authorization, order or filing with or notice to any court or
governmental authority or agency is required for the consummation by
the Target Entity, on behalf of its corresponding Target Fund, of
the transactions contemplated by this Agreement and (ii) no consent
of or notice to any third party or entity is required for the
consummation by the Target Entity, on behalf of its corresponding
Target Fund, of the transactions contemplated by this Agreement.
K. TITLE. On the Closing Date, the Target Fund will have good and
marketable title to the Assets, free and clear of all liens,
mortgages, pledges, encumbrances, charges, claims and equities
whatsoever, other than a lien for taxes not yet due and payable, and
full right, power and authority to sell, assign, transfer and
deliver such Assets; upon delivery of such Assets, the Acquiring
Fund will receive good and marketable title to
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such Assets, free and clear of all liens, mortgages, pledges,
encumbrances, charges, claims and equities whatsoever, other than a
lien for taxes not yet due and payable.
L. PROSPECTUS/PROXY STATEMENT. The Acquiring Entity's Registration
Statement on Form N-14 and the Prospectus/Proxy Statement contained
therein, as of the effective date of such Registration Statement,
and at all times subsequent thereto up to and including the Closing
Date, as amended or as supplemented if it shall have been amended or
supplemented, conform and will conform as they relate to the Target
Fund, in all material respects, to the applicable requirements of
the applicable federal securities laws and the rules and regulations
of the Securities and Exchange Commission (the "SEC") thereunder,
and do not and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except
that no representations or warranties in this Section IV.L. apply to
statements or omissions made in reliance upon and in conformity with
written information concerning the Acquiring Fund furnished to the
Target Entity by the Acquiring Fund.
M. TAX QUALIFICATION. The Target Fund has qualified as a regulated
investment company within the meaning of Section 851 of the Code for
each of its taxable years; and has satisfied the distribution
requirements imposed by Section 852 of the Code for each of its
taxable years.
N. FAIR MARKET VALUE. The fair market value on a going concern basis of
the Assets will equal or exceed the Liabilities to be assumed by the
Acquiring Fund and those to which the Assets are subject.
O. TARGET FUND LIABILITIES. Except as otherwise provided for herein,
the Target Fund shall use reasonable efforts, consistent with its
ordinary operating procedures, to repay in full any indebtedness for
borrowed money and to discharge or reserve against all of the Target
Fund's known debts, liabilities and obligations including expenses,
costs and charges whether absolute or contingent, accrued or
unaccrued.
V. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND.
The Acquiring Entity, on behalf of the applicable Acquiring Fund, hereby
represents and warrants to the corresponding Target Entity and Target Fund,
which representations and warranties are true and correct on the date hereof,
and agrees with the corresponding Target Entity and Target Fund that:
A. ORGANIZATION. The Acquiring Fund is duly organized as a series of
the Acquiring Entity, and in good standing under the laws of the
state of its organization and is duly authorized to transact
business in the state of
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its organization. The Acquiring Fund is qualified to do business in
all jurisdictions in which it is required to be so qualified, except
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Acquiring Fund. The Acquiring Fund
has all material federal, state and local authorizations necessary
to own all of its properties and assets and to carry on its business
and the business thereof as now being conducted, except
authorizations which the failure to so obtain would not have a
material adverse effect on the Acquiring Fund.
B. REGISTRATION. The Acquiring Entity is registered under the 1940 Act
as an open-end management investment company and such registration
has not been revoked or rescinded. The Acquiring Fund is in
compliance in all material respects with the 1940 Act, and the rules
and regulations thereunder with respect to its activities. All of
the outstanding shares of common stock of the Acquiring Fund have
been duly authorized and are validly issued, fully paid and
non-assessable and not subject to pre-emptive or dissenters' rights.
C. FINANCIAL STATEMENTS. The Acquiring Fund is, and will be on the
Closing Date, a newly created series of the Acquiring Entity,
without assets (other than seed capital) or liabilities, formed for
the purpose of receiving the Assets and Liabilities of the Target
Fund in connection with the Reorganization and, accordingly, the
Acquiring Fund has not prepared books of account and related records
or financial statements or issued any shares except those issued in
a private placement to Xxxxxx Xxxxxxx Investment Management Inc. or
its affiliate to secure any required initial shareholder approvals;
D. MATERIAL AGREEMENTS. The Acquiring Fund is in compliance with all
material agreements, rules, laws, statutes, regulations and
administrative orders affecting its operations or its assets; and,
except as referred to in the current Prospectus of the Acquiring
Fund there are no material agreements outstanding relating to the
Acquiring Fund to which the Acquiring Fund is a party.
E. CORPORATE AUTHORITY. The Acquiring Entity, on behalf of its
corresponding Acquiring Fund, has the necessary power to enter into
this Agreement and to consummate the transactions contemplated
herein. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein have
been duly authorized by the Acquiring Entity Board, no other
corporate acts or proceedings by the Acquiring Fund are necessary to
authorize this Agreement and the transactions contemplated herein.
This Agreement has been duly executed and delivered by the Acquiring
Fund and constitutes a valid and binding obligation of the Acquiring
Fund enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or
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similar laws affecting creditors' rights generally, or by general
principals of equity (regardless of whether enforcement is sought in
a proceeding at equity or law).
F. NO VIOLATION; CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement by the Acquiring Entity, on behalf of
its corresponding Acquiring Fund, does not and will not (i) result
in a material violation of any provision of the Acquiring Fund's
organizational documents, (ii) violate any statute, law, judgment,
writ, decree, order, regulation or rule of any court or governmental
authority applicable to the Acquiring Fund, (iii) result in a
material violation or breach of, or constitute a default under any
material contract, indenture, mortgage, loan agreement, note, lease
or other instrument or obligation to which the Acquiring Fund is
subject, or (iv) result in the creation or imposition or any lien,
charge or encumbrance upon any property or assets of the Acquiring
Fund. Except as have been obtained, (i) no consent, approval,
authorization, order or filing with or notice to any court or
governmental authority or agency is required for the consummation by
the Acquiring Entity, on behalf of its corresponding Acquiring Fund,
of the transactions contemplated by this Agreement and (ii) no
consent of or notice to any third party or entity is required for
the consummation by the Acquiring Entity, on behalf of its
corresponding Acquiring Fund, of the transactions contemplated by
this Agreement.
G. ABSENCE OF PROCEEDINGS. There are no legal, administrative or other
proceedings pending or, to its knowledge, threatened against the
Acquiring Fund which would materially affect its financial
condition.
H. ACQUIRING FUND SHARES: REGISTRATION. The Acquiring Fund Shares to be
issued pursuant to Section I hereof will be duly registered under
the Securities Act of 1933, as amended (the "Securities Act"), and
all applicable state securities laws.
I. ACQUIRING FUND SHARES: AUTHORIZATION. The Acquiring Fund Shares to
be issued pursuant to Section I hereof have been duly authorized
and, when issued in accordance with this Agreement, will be validly
issued, fully paid and non-assessable, will not be subject to
pre-emptive or dissenters' rights and will conform in all material
respects to the description thereof contained in the Acquiring
Fund's Prospectus furnished to the Target Fund.
J. REGISTRATION STATEMENT. The Acquiring Entity's Registration
Statement on Form N-14 and the Prospectus/Proxy Statement contained
therein as of the effective date of such Registration Statement, and
at all times subsequent thereto up to and including the Closing
Date, as amended or as supplemented if they shall have been amended
or supplemented, conforms and will conform, as they relate to the
Acquiring
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Fund, in all material respects, to the applicable requirements of
the applicable federal securities laws and the rules and regulations
of the SEC thereunder, and do not and will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading, except that no representations or warranties in this
Section V apply to statements or omissions made in reliance upon and
in conformity with written information concerning the Target Fund
furnished to the Acquiring Entity by the Target Fund.
K. TAX QUALIFICATION. The Acquiring Fund was formed for the purpose of
the respective Reorganization and intends to elect to be a regulated
investment company within the meaning of Section 851 of the Code.
The Acquiring Fund will satisfy the requirements of Part I of
Subchapter M of the Code to maintain qualification as a regulated
investment company for its current taxable year. The Acquiring Fund
has no earnings or profits accumulated in any taxable year in which
the provisions of Subchapter M of the Code did not apply to it.
VI. COVENANTS.
During the period from the date of this Agreement and continuing until the
Closing Date, with respect to each Reorganization, the Target Entity, on behalf
of its corresponding Target Fund, and Acquiring Entity, on behalf of its
corresponding Acquiring Fund, agree as follows (except as expressly contemplated
or permitted by this Agreement):
A. OTHER ACTIONS. The Target Fund and Acquiring Fund shall operate only
in the ordinary course of business consistent with prior practice.
No party shall take any action that would, or reasonably would be
expected to, result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material
respect.
B. GOVERNMENT FILINGS; CONSENTS. The Target Fund and Acquiring Fund
shall file all reports required to be filed by the Target Fund and
Acquiring Fund with the SEC between the date of this Agreement and
the Closing Date and shall deliver to the other party copies of all
such reports promptly after the same are filed. Except where
prohibited by applicable statutes and regulations, each party shall
promptly provide the other (or its counsel) with copies of all other
filings made by such party with any state, local or federal
government agency or entity in connection with this Agreement or the
transactions contemplated hereby. Each of the Target Fund and the
Acquiring Fund shall use all reasonable efforts to obtain all
consents, approvals and authorizations required in connection with
the
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consummation of the transactions contemplated by this Agreement and
to make all necessary filings with the appropriate federal and state
officials.
C. PREPARATION OF THE REGISTRATION STATEMENT ON FORM N-14 AND THE
PROSPECTUS/PROXY STATEMENT. In connection with the Registration
Statement on Form N-14 and the Prospectus/Proxy Statement, each
party hereto will cooperate with the other and furnish to the other
the information relating to the Target Fund or Acquiring Fund, as
the case may be, required by the Securities Act or the Securities
Exchange Act of 1934 and the rules and regulations thereunder, as
the case may be, to be set forth in such Registration Statement on
Form N-14 or the Prospectus/Proxy Statement, as the case may be. The
Target Entity shall promptly prepare for filing with the SEC the
Prospectus/Proxy Statement and the Acquiring Entity shall promptly
prepare and file with the SEC the Registration Statement, in which
the Prospectus/Proxy Statement will be included as a prospectus. In
connection with the Registration Statement, insofar as it relates to
the Target Fund and its affiliated persons, the Acquiring Entity
shall only include such information as is approved by the Target
Entity for use in the Registration Statement. The Acquiring Entity
shall not amend or supplement any such information regarding the
Target Fund and such affiliates without the prior written consent of
the Target Fund which consent shall not be unreasonably withheld or
delayed. The Acquiring Entity shall promptly notify and provide the
Target Fund with copies of all amendments or supplements filed with
respect to the Registration Statement. The Acquiring Entity shall
use all reasonable efforts to have the Registration Statement
declared effective under the Securities Act as promptly as
practicable after such filing. The Acquiring Entity shall also take
any action (other than qualifying to do business in any jurisdiction
in which it is now not so qualified) required to be taken under any
applicable state securities laws in connection with the issuance of
the Acquiring Fund Shares in the transactions contemplated by this
Agreement, and the Target Entity shall furnish all information
concerning the Target Fund and the holders of the Target Fund's
shares as may be reasonably requested in connection with any such
action.
D. ACCESS TO INFORMATION. During the period prior to the Closing Date,
the Target Fund shall make available to the Acquiring Fund a copy of
each report, schedule, registration statement and other document
(the "Documents") filed or received by it during such period
pursuant to the requirements of federal or state securities laws or
federal or state banking laws (other than Documents which such party
is not permitted to disclose under applicable law). During the
period prior to the Closing Date, the Acquiring Fund shall make
available to the Target Fund each Document pertaining to the
transactions contemplated hereby filed or received by it during such
period pursuant to federal or state securities laws or federal or
state banking laws (other than Documents which such party is not
permitted to disclose under applicable law).
12
E. SHAREHOLDERS MEETING. The Target Entity shall call a meeting of the
Target Fund shareholders to be held as promptly as practicable for
the purpose of voting upon the approval of this Agreement and the
transactions contemplated herein, and shall furnish a copy of the
Prospectus/Proxy Statement and form of proxy to each shareholder of
the Target Fund as of the record date for such meeting. The Target
Entity Board shall recommend to the Target Fund shareholders
approval of this Agreement and the transactions contemplated herein,
subject to fiduciary obligations under applicable law.
F. COORDINATION OF PORTFOLIOS. The Target Fund and Acquiring Fund
covenant and agree to coordinate the respective portfolios of the
Target Fund and Acquiring Fund from the date of the Agreement up to
and including the Closing Date in order that at Closing, when the
Assets are added to the Acquiring Fund's portfolio, the resulting
portfolio will meet the Acquiring Fund's investment objective,
policies and restrictions, as set forth in the Acquiring Fund's
Prospectus, a copy of which has been delivered to the Target Fund.
G. DISTRIBUTION OF THE SHARES. At closing the Target Fund covenants
that it shall cause to be distributed the Acquiring Fund Shares in
the proper pro rata amount for the benefit of Target Fund's
shareholders and such that the Target Fund shall not continue to
hold amounts of said shares so as to cause a violation of Section
12(d)(1) of the 1940 Act. The Target Fund covenants further that,
pursuant to Section III.G., it shall liquidate and dissolve as
promptly as practicable after the Closing Date. The Target Fund
covenants to use all reasonable efforts to cooperate with the
Acquiring Fund and the Acquiring Fund's transfer agent in the
distribution of said shares.
H. BROKERS OR FINDERS. Except as disclosed in writing to the other
party prior to the date hereof, each of the Target Fund and the
Acquiring Fund represents that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to
any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this
Agreement, and each party shall hold the other harmless from and
against any and all claims, liabilities or obligations with respect
to any such fees, commissions or expenses asserted by any person to
be due or payable in connection with any of the transactions
contemplated by this Agreement on the basis of any act or statement
alleged to have been made by such first party or its affiliate.
I. ADDITIONAL AGREEMENT. In case at any time after the Closing Date any
further action is necessary or desirable in order to carry out the
purposes of this Agreement, the proper directors, trustees and
officers of each party to this Agreement shall take all such
necessary action.
13
J. PUBLIC ANNOUNCEMENTS. For a period of time from the date of this
Agreement to the Closing Date, the Target Fund and the Acquiring
Fund will consult with each other before issuing any press releases
or otherwise making any public statements with respect to this
Agreement or the transactions contemplated herein and shall not
issue any press release or make any public statement prior to such
consultation, except as may be required by law.
K. TAX STATUS OF REORGANIZATION. The intention of the parties is that
the transaction will qualify as a reorganization within the meaning
of Section 368(a) of the Code. Neither the Acquiring Fund nor the
Target Fund shall take any action, or cause any action to be taken
(including, without limitation, the filing of any tax return) that
is inconsistent with such treatment or results in the failure of the
transaction to qualify as a reorganization within the meaning of
Section 368(a)(1)(F) of the Code. At or prior to the Closing Date,
the Acquiring Fund and the Target Fund will take such action, or
cause such action to be taken, as is reasonably necessary to enable
Dechert LLP, counsel to the Acquiring Entity, to render the tax
opinion required herein.
VII. CONDITIONS TO OBLIGATIONS OF THE TARGET FUND.
The obligations of the Target Entity, on behalf of the Target Fund,
hereunder with respect to the consummation of each Reorganization are subject to
the satisfaction of the following conditions, unless waived in writing by the
Target Entity, on behalf of the Target Fund:
A. SHAREHOLDER APPROVAL. With respect to Xxx Xxxxxx Core Growth Fund
and Xxx Xxxxxx Global Growth Fund, this Agreement and the
transactions contemplated herein shall have been approved by the
affirmative vote of the holders of a majority of the outstanding
shares of the Target Fund. With respect to Xxx Xxxxxx Equity Growth
Fund, this Agreement and the transactions contemplated herein shall
have been approved by the affirmative vote of the lesser of: (1)
more than 50% of the outstanding common shares of the Fund, or (2)
67% or more of the common shares of the Fund represented at the
shareholder meeting if the holders of more than 50% of the
outstanding common shares of the Fund are present or represented by
proxy.
B. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Acquiring Fund and the
Acquiring Entity contained herein shall be true in all material
respects as of the Closing Date, there shall have been no material
adverse change in the financial condition, results of operations,
business properties or assets of the Acquiring Fund as of the
Closing Date, and the Target Fund shall have received a certificate
of an authorized officer of the Acquiring Entity
14
satisfactory in form and substance to the Target Fund so stating.
The Acquiring Entity and the Acquiring Fund shall have performed and
complied in all material respects with all agreements, obligations
and covenants required by this Agreement to be so performed or
complied with by it on or prior to the Closing Date.
C. REGISTRATION STATEMENT EFFECTIVE. The Acquiring Entity's
Registration Statement on Form N-14 shall have become effective and
no stop orders under the Securities Act pertaining thereto shall
have been issued.
D. CLASS R SHARES REDEMPTION. All Class R Shares of each Acquired Fund,
as applicable, shall have been redeemed.
E. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been
obtained.
F. ABSENCE OF CHANGES. As of the Closing Date, there shall have been no
change in the business, results of operations, assets or financial
condition or the manner of conducting the business of the Acquiring
Fund, other than changes in the ordinary course of its business,
which has had a material adverse effect on such business, results of
operations, assets, financial condition or manner of conducting
business.
G. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or
prohibition (an "Injunction") preventing the consummation of the
transactions contemplated by this Agreement shall be in effect, nor
shall any proceeding by any state, local or federal government
agency or entity seeking any of the foregoing be pending. There
shall not have been any action taken or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable
to the transactions contemplated by this Agreement, which makes the
consummation of the transactions contemplated by this Agreement
illegal or which has a material adverse effect on business
operations of the Acquiring Fund.
H. TAX OPINION. The Target Entity shall have obtained an opinion from
Dechert LLP, counsel for the Acquiring Entity, dated as of the
Closing Date, addressed to the Target Entity, that absent a change
of law or change of fact between the date of this Agreement and the
Closing, the consummation of the transactions set forth in this
Agreement comply with the requirements of a reorganization as
described in Section 368(a)(1)(F) of the Code. In rendering such
opinion, Dechert LLP may request and rely upon representations
contained in certificates of officers of the Target
15
Entity and others, and the officers of the Target Entity shall use
their best efforts to make available such truthful certificates.
I. OPINION OF COUNSEL.
1. The Target Entity shall have received the opinion of Dechert
LLP, counsel for the Acquiring Entity, dated as of the Closing
Date, addressed to the Target Entity substantially in the form
and to the effect that:
(a) The Acquiring Entity is registered as an open-end,
management investment company under the 0000 Xxx.
(b) The Agreement constitutes the valid and binding
obligation of the Acquiring Entity on behalf of the
Acquiring Fund, enforceable against it in accordance
with its terms.
(c) Neither the execution, delivery or performance by the
Acquiring Entity, on behalf of the Acquiring Fund, of
the Agreement nor the compliance by the Acquiring
Entity, on behalf of the Acquiring Fund, with the terms
and provisions thereof will contravene any provision of
any applicable law of the United States of America.
(d) No approval by any court, regulatory body,
administrative agency or governmental body of the United
States of America, which has not been obtained or taken
and is not in full force and effect, is required to
authorize, or is required in connection with, the
execution or delivery of the Agreement by the Acquiring
Entity, on behalf of the Acquiring Fund, or the
consummation by the Acquiring Entity, on behalf of the
Acquiring Fund, of the transactions contemplated
thereby.
2. In addition, the Target Fund shall have received the opinion
of Xxxxxxx Xxxxx LLP, Maryland counsel for the Acquiring
Entity, dated as of the Closing Date, addressed to the Target
Fund substantially in the form and to the effect that:
(a) The Acquiring Fund is duly incorporated and validly
existing as a corporation in good standing under the
laws of the State of Maryland.
(b) The Acquiring Fund has the requisite corporate power and
authority under the Maryland General Corporation Law and
its charter and bylaws, to own its properties and assets
and to conduct its business as described in its charter
and to enter into and perform its obligations under the
Agreement.
16
(c) The execution and delivery of the Agreement by the
Acquiring Fund have been duly authorized by all
necessary corporate action on the part of the Acquiring
Fund under its charter and bylaws and the Maryland
General Corporation Law, and the Agreement has been duly
executed and, to the knowledge of such counsel,
delivered by the Acquiring Fund.
(d) The execution and delivery of the Agreement by the
Acquiring Fund, and the consummation of the transactions
contemplated thereby, do not and will not result in any
violation of the provisions of the charter or bylaws of
the Acquiring Fund or the Maryland General Corporation
Law.
(e) No approval of any court, regulatory body,
administrative agency or governmental body of the State
of Maryland is required to be obtained by the Acquiring
Fund under the Maryland General Corporation Law in
connection with the execution, delivery and performance
of the Agreement by the Acquiring Fund, except for such
as have been obtained.
(f) The issuance of the Acquiring Fund Shares has been duly
authorized by all necessary corporate action on the part
of the Acquiring Fund, and when such Acquiring Fund
Shares are issued and delivered by the Acquiring Fund as
contemplated by the Agreement in exchange for the
consideration therefor described in the Agreement, such
Acquiring Fund Shares will be validly issued, fully paid
and non-assessable, and the issuance of the Acquiring
Fund Shares by the Acquiring Fund will not be subject to
any pre-emptive or similar rights arising under the
charter or bylaws of the Acquiring Fund or under the
Maryland General Corporation Law.
J. OFFICER CERTIFICATES. The Target Fund shall have received a
certificate of an authorized officer of the Acquiring Entity, dated
as of the Closing Date, certifying that the representations and
warranties set forth in Section V are true and correct on the
Closing Date, together with certified copies of the resolutions
adopted by the Acquiring Entity Board.
VIII. CONDITIONS TO OBLIGATIONS OF ACQUIRING FUND.
The obligations of the Acquiring Entity, on behalf of the Acquiring Fund,
hereunder with respect to the consummation of the Reorganization are subject to
the satisfaction of the following conditions, unless waived in writing by the
Acquiring Entity, on behalf of the Acquiring Fund:
17
A. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each of the
representations and warranties of the Target Entity and the Target
Fund contained herein shall be true in all material respects as of
the Closing Date, there shall have been no material adverse change
in the financial condition, results of operations, business,
properties or assets of the Target Fund as of the Closing Date, and
the Acquiring Fund shall have received a certificate of an
authorized officer of the Target Entity satisfactory in form and
substance to the Acquiring Fund so stating. The Target Fund shall
have performed and complied in all material respects with all
agreements, obligations and covenants required by this Agreement to
be so performed or complied with by them on or prior to the Closing
Date.
B. REGISTRATION STATEMENT EFFECTIVE. The Acquiring Entity's
Registration Statement on Form N-14 shall have become effective and
no stop orders under the Securities Act pertaining thereto shall
have been issued.
C. REGULATORY APPROVAL. All necessary approvals, registrations, and
exemptions under federal and state securities laws shall have been
obtained.
D. ABSENCE OF CHANGES. As of the Closing Date, there shall not have
been:
1. any change in the business, results of operations, assets, or
financial condition or the manner of conducting the business
of the Target Fund, other than changes in the ordinary course
of its business, or any pending or threatened litigation,
which has had or may have a material adverse effect on such
business, results of operations, assets, financial condition
or manner of conducting business;
2. issued by the Target Fund any option to purchase or other
right to acquire shares of the Target Fund to any person other
than subscriptions to purchase shares at net asset value in
accordance with terms in the Target Fund Prospectus;
3. any entering into, amendment or termination of any contract or
agreement by the Target Fund, except as otherwise contemplated
by this Agreement (and except with respect to the deferred
compensation plan and the retirement plan applicable to the
Target Entity Board);
4. any indebtedness incurred, other than in the ordinary course
of business, by the Target Fund for borrowed money or any
commitment to borrow money entered into by the Target Fund;
18
5. any amendment of the Target Fund's organizational documents;
or
6. any grant or imposition of any lien, claim, charge or
encumbrance (other than encumbrances arising in the ordinary
course of business with respect to covered options) upon any
asset of the Target Fund other than a lien for taxes not yet
due and payable.
E. NO INJUNCTIONS OR RESTRAINTS: ILLEGALITY. No Injunction preventing
the consummation of the transactions contemplated by this Agreement
shall be in effect, nor shall any proceeding by any state, local or
federal government agency or entity seeking any of the foregoing be
pending. There shall not have been any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement, which
makes the consummation of the transactions contemplated by this
Agreement illegal.
F. TAX OPINION. The Acquiring Entity shall have obtained an opinion
from Dechert LLP, counsel for the Acquiring Entity, dated as of the
Closing Date, addressed to the Acquiring Entity, that absent a
change of law or a change in fact between the date of this Agreement
and the Closing, the consummation of the transactions set forth in
this Agreement comply with the requirements of a reorganization as
described in Section 368(a)(1)(F) of the Code. In rendering such
opinion, Dechert LLP may request and rely upon representations
contained in certificates of officers of the Acquiring Entity and
others, and the officers of the Acquiring Entity shall use their
best efforts to make available such truthful certificates.
G. OPINION OF COUNSEL.
1. The Acquiring Entity shall have received the opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("Skadden) counsel
for each Target Entity, dated as of the Closing Date,
addressed to the Acquiring Entity, substantially in the form
and to the effect that:
(a) The Target Entity is registered as an open-end,
management investment company under the 0000 Xxx.
(b) Neither the execution, delivery or performance by the
Target Entity, on behalf of the Target Fund, of the
Agreement nor the compliance by the Target Entity, on
behalf of the Target Fund, with the terms and provisions
thereof will contravene any provision of any applicable
law of the United States of America.
(c) No approval by any court, regulatory body,
administrative agency or governmental body of the United
States of America, which has not been obtained or taken
and is not in full force and effect, is required to
authorize, or is required
19
in connection with, the execution or delivery of the
Agreement by the Target Entity, on behalf of the Target
Fund, or the enforceability of the Agreement against the
Target Entity, on behalf of the Target Fund, in
connection with the opinion.
2. The Acquiring Fund shall have received the opinion of Skadden,
Delaware counsel for Xxx Xxxxxx Equity Trust II, on behalf of
Xxx Xxxxxx Core Growth Fund, and Xxx Xxxxxx Equity Trust, on
behalf of Xxx Xxxxxx Global Growth Fund, dated as of the
Closing Date, addressed to the Acquiring Fund substantially in
the form and to the effect that:
(a) The Target Fund is a statutory trust validly existing
and in good standing under the laws of the State of
Delaware.
(b) The Target Fund has the statutory trust power and
authority to execute, deliver and perform its
obligations under the Agreement and the applicable laws
of the State of Delaware.
(c) The Agreement constitutes the valid and binding
obligation of the Target Entity, on behalf of the Target
Fund, enforceable against the Target Entity in
accordance with its terms under the applicable laws of
the State of Delaware.
(d) The execution and delivery of the Agreement and the
consummation by the Target Fund of the transactions
contemplated thereby have been duly authorized by all
requisite statutory trust action on the part of the
Target Fund under the applicable laws of the State of
Delaware. The Agreement has been duly executed and, to
the knowledge of such counsel, delivered by the Target
Fund under the applicable laws of the State of Delaware.
3. In addition, the Acquiring Entity shall have received the
opinion of Xxxxxxx Xxxxx LLP, Maryland counsel for Xxx Xxxxxx
Series Fund, Inc., on behalf of Xxx Xxxxxx Equity Growth Fund,
dated as of the Closing Date, addressed to the Acquiring Fund
substantially in the form and to the effect that:
(a) The Target Fund is duly incorporated and validly
existing as a corporation in good standing under the
laws of the State of Maryland.
(b) The Target Fund has the requisite corporate power and
authority under the Maryland General Corporation Law and
its charter and bylaws, to own its properties and assets
and
20
to conduct its business as described in its charter and
to enter into and perform its obligations under the
Agreement.
(c) The execution and delivery of the Agreement by the
Target Fund have been duly authorized by all necessary
corporate action on the part of the Target Fund under
its charter and bylaws and the Maryland General
Corporation Law, and the Agreement has been duly
executed and, to the knowledge of such counsel,
delivered by the Target Fund.
(d) The Agreement constitutes the valid and binding
obligation of the Target Entity, on behalf of the Target
Fund, enforceable against the Target Entity in
accordance with its terms under the applicable laws of
the State of Maryland.
(e) The execution and delivery of the Agreement by the
Target Fund, and the consummation of the transactions
contemplated thereby, do not and will not result in any
violation of the provisions of the charter or bylaws of
the Target Fund or the Maryland General Corporation Law.
(f) No approval of any court, regulatory body,
administrative agency or governmental body of the State
of Maryland is required to be obtained by the Target
Fund under the Maryland General Corporation Law in
connection with the execution, delivery and performance
of the Agreement by the Target Fund, except for such as
have been obtained.
H. SHAREHOLDER LIST. The Target Entity, on behalf of the Target Fund,
shall have delivered to the Acquiring Fund an updated list of all
shareholders of the Target Fund, as reported by the Target Fund's
transfer agent, as of one (1) business day prior to the Closing Date
with each shareholder's respective holdings in the Target Fund,
taxpayer identification numbers, Form W9 and last known address.
I. OFFICER CERTIFICATES. The Acquiring Fund shall have received a
certificate of an authorized officer of the Target Entity, dated as
of the Closing Date, certifying that the representations and
warranties set forth in Section IV are true and correct on the
Closing Date, together with certified copies of the resolutions
adopted by the Target Entity Board and Target Fund shareholders.
IX. AMENDMENT, WAIVER AND TERMINATION.
A. The parties hereto may, by agreement in writing authorized by their
respective Boards, amend this Agreement at any time before or after
approval thereof by the shareholders of the Target Fund; provided,
21
however, that after receipt of Target Fund shareholder approval, no
amendment shall be made by the parties hereto which substantially
changes the terms of Sections I, II and III hereof without obtaining
Target Fund's shareholder approval thereof.
B. At any time prior to the Closing Date, either of the parties may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii)
waive compliance with any of the covenants or conditions made for
its benefit contained herein. No delay on the part of either party
in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party
of any such right, power or privilege, or any single or partial
exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or
privilege.
C. This Agreement may be terminated, and the transactions contemplated
herein may be abandoned with respect to one or more (or all)
Reorganizations at any time prior to the Closing Date:
1. by the consent of the Target Entity Board and the Acquiring
Entity Board;
2. by the Target Fund, if the Acquiring Fund breaches in any
material respect any of its representations, warranties,
covenants or agreements contained in this Agreement;
3. by the Acquiring Fund, if the Target Fund breaches in any
material respect any of its representations, warranties,
covenants or agreements contained in this Agreement;
4. by either the Target Fund or the Acquiring Fund, if the
Closing has not occurred on or prior to December 31, 2010
(provided that the rights to terminate this Agreement pursuant
to this subsection C.(4) shall not be available to any party
whose failure to fulfill any of its obligations under this
Agreement has been the cause of or resulted in the failure of
the closing to occur on or before such date);
5. by the Acquiring Fund in the event that: (a) all the
conditions precedent to the Target Fund's obligation to close,
as set forth in Section VII of this Agreement, have been fully
satisfied (or can be fully satisfied at the Closing); (b) the
Acquiring Fund gives the Target Fund written assurance of its
intent to close irrespective of the satisfaction or
nonsatisfaction of all conditions precedent to the Acquiring
Fund's obligation to close, as set forth in Section VIII of
this Agreement; and (c) the Target Fund then fails or refuses
to
22
close within the earlier of five (5) business days or
December 31, 2010; or
6. by the Target Fund in the event that: (a) all the conditions
precedent to the Acquiring Fund's obligation to close, as set
forth in Section VIII of this Agreement, have been fully
satisfied (or can be fully satisfied at the Closing); (b) the
Target Fund gives the Acquiring Fund written assurance of its
intent to close irrespective of the satisfaction or
nonsatisfaction of all the conditions precedent to the Target
Fund's obligation to close, as set forth in Section VII of
this Agreement; and (c) the Acquiring Fund then fails or
refuses to close within the earlier of five (5) business days
or December 31, 2010.
X. REMEDIES.
In the event of termination of this Agreement by either or both of the
Target Fund and Acquiring Fund pursuant to Section IX.C., written notice thereof
shall forthwith be given by the terminating party to the other party hereto, and
this Agreement shall therefore terminate and become void and have no effect, and
the transactions contemplated herein and thereby shall be abandoned, without
further action by the parties hereto.
XI. SURVIVAL OF WARRANTIES AND INDEMNIFICATION.
A. SURVIVAL. The representations and warranties included or provided
for herein, or in the schedules or other instruments delivered or to
be delivered pursuant hereto, shall survive the Closing Date for a
three (3) year period except that any representation or warranty
with respect to taxes shall survive for the expiration of the
statutory period of limitations for assessments of tax deficiencies
as the same may be extended from time to time by the taxpayer. The
covenants and agreements included or provided for herein shall
survive and be continuing obligations in accordance with their
terms. The period for which a representation, warranty, covenant or
agreement survives shall be referred to hereinafter as the "Survival
Period." Notwithstanding anything set forth in the immediately
preceding sentence, the right of the Acquiring Fund and the Target
Fund to seek indemnity pursuant to this Agreement shall survive for
a period of ninety (90) days beyond the expiration of the Survival
Period of the representation, warranty, covenant or agreement upon
which indemnity is sought. In no event shall the Acquiring Fund or
the Target Fund be obligated to indemnify the other if indemnity is
not sought within ninety (90) days of the expiration of the
applicable Survival Period.
B. INDEMNIFICATION. Each party (an "Indemnitor") shall indemnify and
hold the other and its directors, trustees, officers, agents and
persons
23
controlled by or controlling any of them (each an "Indemnified
Party") harmless from and against any and all losses, damages,
liabilities, claims, demands, judgments, settlements, deficiencies,
taxes, assessments, charges, costs and expenses of any nature
whatsoever (including reasonable attorneys' fees), including amounts
paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by such Indemnified
Party in connection with the defense or disposition of any claim,
action, suit or other proceeding, whether civil or criminal, before
any court or administrative or investigative body in which such
Indemnified Party may be or may have been involved as a party or
otherwise or with which such Indemnified Party may be or may have
been threatened (collectively, the "Losses") arising out of or
related to any claim of a breach of any representation, warranty or
covenant made herein by the Indemnitor, provided, however, that no
Indemnified Party shall be indemnified hereunder against any Losses
arising directly from such Indemnified Party's (i) willful
misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless
disregard of the duties involved in the conduct of such Indemnified
Party's position.
C. INDEMNIFICATION PROCEDURE. The Indemnified Party shall use its best
efforts to minimize any liabilities, damages, deficiencies, claims,
judgments, assessments, costs and expenses in respect of which
indemnity may be sought hereunder. The Indemnified Party shall give
written notice to the Indemnitor within the earlier of ten (10) days
of receipt of written notice to the Indemnified Party or thirty (30)
days from discovery by the Indemnified Party of any matters which
may give rise to a claim for indemnification or reimbursement under
this Agreement. The failure to give such notice shall not affect the
right of the Indemnified Party to indemnity hereunder unless such
failure has materially and adversely affected the rights of the
Indemnitor; provided that in any event such notice shall have been
given prior to the expiration of the Survival Period. At any time
after ten (10) days from the giving of such notice, the Indemnified
Party may, at its option, resist, settle or otherwise compromise, or
pay such claim unless it shall have received notice from the
Indemnitor that the Indemnitor intends, at the Indemnitor's sole
cost and expense, to assume the defense of any such matter, in which
case the Indemnified Party shall have the right, at no cost or
expense to the Indemnitor, to participate in such defense. If the
Indemnitor does not assume the defense of such matter, and in any
event until the Indemnitor states in writing that it will assume the
defense, the Indemnitor shall pay all costs of the Indemnified Party
arising out of the defense until the defense is assumed; provided,
however, that the Indemnified Party shall consult with the
Indemnitor and obtain the Indemnitor's prior written consent to any
payment or settlement of any such claim. The Indemnitor shall keep
the Indemnified Party fully apprised at all times as to the
24
status of the defense. If the Indemnitor does not assume the
defense, the Indemnified Party shall keep Indemnitor apprised at all
times as to the status of the defense. Following indemnification as
provided for hereunder, the Indemnitor shall be subrogated to all
rights of the Indemnified Party with respect to all third parties,
firms or corporations relating to the matter for which
indemnification has been made.
XII. SURVIVAL.
The provisions set forth in Sections X, XI and XVI hereof shall survive
the termination of this Agreement for any cause whatsoever.
XIII. NOTICES.
All notices hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered personally or sent by registered mail or
certified mail, postage prepaid. Notice to the Target Entity, with respect to
its corresponding Target Fund shall be addressed to the Target Entity c/o Xxx
Xxxxxx Asset Management, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel, or at such other address as the Target Entity may designate by
written notice to the Acquiring Entity. Notice to the Acquiring Entity, with
respect to its corresponding Acquiring Fund shall be addressed to the Acquiring
Fund c/o Morgan Xxxxxxx Investment Management, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel, or at such other address and to the
attention of such other person as the Acquiring Entity may designate by written
notice to the Target Entity. Any notice shall be deemed to have been served or
given as of the date such notice is delivered personally or mailed.
XIV. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns. This Agreement shall not be
assigned by any party without the prior written consent of the other party
hereto.
XV. BOOKS AND RECORDS.
The Target Fund and the Acquiring Fund agree that copies of the books and
records of the Target Fund relating to the Assets including, but not limited to,
all files, records, written materials (e.g., closing transcripts, surveillance
files and credit reports) shall be delivered by the Target Fund to the Acquiring
Fund on or prior to the Closing Date. In addition to, and without limiting the
foregoing, the Target Fund and the Acquiring Fund agree to take such action as
may be necessary in order that the Acquiring Fund shall have reasonable access
to such other books and records as may be reasonably requested, all for three
(3) complete fiscal and tax years after the Closing Date; namely, general
ledgers, journal entries, voucher registers, distribution journals, payroll
registers, monthly balance owing reports, income tax returns, tax depreciation
schedules, and investment tax credit basis schedules.
25
XVI. GENERAL.
This Agreement supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement of the
terms of the Agreement between the parties and may not be amended, modified or
changed, or terminated orally. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been executed by the
Target Fund and Acquiring Fund and delivered to each of the parties hereto. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. This
Agreement is for the sole benefit of the parties hereto, and nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies under or by reason of this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Maryland without regard to principles of conflicts or choice of law.
26
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first written above.
XXXXXX XXXXXXX INSTITUTIONAL FUND INC.,
ON BEHALF OF ITS SERIES IDENTIFIED ON
EXHIBIT A HERETO
----------------------------------------
Name: Xxxxx Xxxxxx
Title: President
ATTEST:
/s/ Xxxx X. Xxxxxx
-------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
XXX XXXXXX EQUITY TRUST II,
ON BEHALF OF XXX XXXXXX CORE
GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal Executive
Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
XXX XXXXXX SERIES FUND, INC., ON BEHALF
OF XXX XXXXXX EQUITY GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal Executive
Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
XXX XXXXXX EQUITY TRUST, ON BEHALF OF
XXX XXXXXX GLOBAL GROWTH FUND
/s/ Xxxxxx X. Xxxx III
----------------------------------------
Name: Xxxxxx X. Xxxx III
Title: President and Principal Executive
Officer
ATTEST:
/s/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Secretary
EXHIBIT A
CHART OF REORGANIZATIONS
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND
ENTITY SHARE CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Core Growth Fund, a series of Xxx Xxxxxx Advantage Portfolio, a series of Xxxxxx
Equity Trust II Xxxxxxx Institutional Fund, Inc.
CLASS A --> CLASS H
CLASS B
CLASS C --> CLASS L
CLASS I --> CLASS I
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND
ENTITY SHARE CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Equity Growth Fund, a series of Van Equity Growth Portfolio, a series of Xxxxxx
Xxxxxx Series Fund, Inc. Xxxxxxx Institutional Fund, Inc.
CLASS A --> CLASS H
CLASS B
CLASS C --> CLASS L
CLASS I --> CLASS I
TARGET FUND (AND SHARE CLASSES) AND TARGET CORRESPONDING ACQUIRING FUND (AND
ENTITY SHARE CLASSES) AND ACQUIRING ENTITY
Xxx Xxxxxx Global Growth Fund, a series of Van Global Growth Portfolio, a series of
Kampen Equity Trust Xxxxxx Xxxxxxx Institutional Fund, Inc.
CLASS A --> CLASS H
CLASS B
CLASS C --> CLASS L
CLASS I --> CLASS I
A-1
