AGREEMENT AND PLAN OF
REORGANIZATION
THIS AGREEMENT AND PLAN OF
REORGANIZATION ("Agreement") is made as of this
25th day of September, 2017, by The Hartford Mutual
Funds, Inc., a Maryland corporation (the "Company"),
with its principal place of business at ▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, on behalf of The Hartford Strategic
Income Fund ("Acquiring Fund") and The Hartford
Unconstrained Bond Fund ("Acquired Fund"), each a
separate series of the Company.
This Agreement is intended to be and is adopted as a
plan of reorganization and liquidation within the
meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended ("Code").
The reorganization and liquidation will consist of (1) the
sale, assignment, conveyance, transfer and delivery of all
of the property and assets of the Acquired Fund to the
Acquiring Fund in exchange solely for shares of
common stock of the Acquiring Fund ("Acquiring Fund
Shares") corresponding to the class of outstanding shares
of common stock of the Acquired Fund ("Acquired Fund
Shares"), as described herein, (2) the assumption by the
Acquiring Fund of all liabilities of the Acquired Fund,
and (3) the distribution of the Acquiring Fund Shares to
the shareholders of the Acquired Fund in complete
liquidation of the Acquired Fund, as provided herein
("Reorganization"), all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund
are each a series of the Company, a registered
investment company classified as a management
company of the open-end type, and the Acquired Fund
owns securities that generally are assets of the character
in which the Acquiring Fund is permitted to invest;
WHEREAS, the Directors of the Company have
determined, with respect to the Acquiring Fund, that the
sale, assignment, conveyance, transfer and delivery of all
of the property and assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all
liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquiring Fund and that the
interests of the existing shareholders of the Acquiring
Fund would not be diluted as a result of this transaction;
and
WHEREAS, the Directors of the Company have
determined, with respect to the Acquired Fund, that the
sale, assignment, conveyance, transfer and delivery of all
of the property and assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all
liabilities of the Acquired Fund by the Acquiring Fund is
in the best interests of the Acquired Fund and that the
interests of the existing shareholders of the Acquired
Fund would not be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the promises
and of the covenants and agreements hereinafter set
forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED
FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR ACQUIRING FUND
SHARES, THE ASSUMPTION OF ALL
ACQUIRED FUND LIABILITIES AND THE
LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the terms and
conditions herein set forth and on the basis of
the representations and warranties contained
herein, the Acquired Fund agrees to sell, assign,
convey, transfer and deliver all of the property
and assets of the Acquired Fund, as set forth in
paragraph 1.2 herein, to the Acquiring Fund,
and the Acquiring Fund agrees in exchange
therefor: (i) to deliver to the Acquired Fund the
number of full and fractional Class A, Class T,
Class B, Class C, Class I, Class R3, Class R4,
Class R5, Class Y and Class F Acquiring Fund
Shares determined by dividing the value of the
Acquired Fund's net assets with respect to the
corresponding class of Acquired Fund Shares,
computed in the manner and as of the time and
date set forth in paragraph 2.1 herein, by the net
asset value of one Acquiring Fund Share of the
corresponding class, computed in the manner
and as of the time and date set forth in
paragraph 2.2 herein; and (ii) to assume all
liabilities of the Acquired Fund, as set forth in
paragraph 1.3 herein. Such transactions shall
take place on the date of the closing provided
for in paragraph 3.1 herein ("Closing Date").
1.2. The property and assets of the
Company attributable to the Acquired Fund to
be acquired by the Acquiring Fund shall consist
of all property and assets, including, without
limitation, all rights, cash, securities,
commodities and futures interests and dividends
or interests receivable that are owned by the
Acquired Fund and any deferred or prepaid
expenses shown as an asset on the books of the
Acquired Fund on the Valuation Date as
defined in paragraph 2.1 (collectively,
"Assets"). The Acquired Fund will sell, assign,
convey, transfer and deliver to the Acquiring
Fund any rights, stock dividends, or other
securities received by the Acquired Fund after
the Closing Date as stock dividends or other
distributions on or with respect to the property
and assets transferred, which rights, stock
dividends, and other securities shall be deemed
included in the property and assets transferred
to the Acquiring Fund at the Closing Date and
shall not be separately valued, in which case
any such distribution that remains unpaid as of
the Closing Date shall be included in the
determination of the value of the assets of the
Acquired Fund acquired by the Acquiring Fund.
1.3. The Acquired Fund will make
reasonable efforts to discharge all of its known
liabilities and obligations prior to the Valuation
Date. The Acquiring Fund shall assume all of
the liabilities of the Acquired Fund, whether
accrued or contingent, known or unknown,
existing at the Valuation Date (collectively,
"Liabilities"). On or as soon as practicable
prior to the Closing Date, the Acquired Fund
will declare and pay to its shareholders of
record one or more dividends and/or other
distributions so that it will have distributed
substantially all (and in no event less than 98%)
of its investment company taxable income
(computed without regard to any deduction for
dividends paid) and realized net capital gain, if
any, for the current taxable year through the
Closing Date.
1.4. Immediately following the
actions contemplated by paragraph 1.1 herein,
the Company shall take such actions necessary
to complete the liquidation of the Acquired
Fund. To complete the liquidation, the
Company, on behalf of the Acquired Fund,
shall (a) distribute to the Acquired Fund's
shareholders of record with respect to each
class of its shares as of the Closing as defined
in paragraph 3.1 herein ("Acquired Fund
Shareholders"), on a pro rata basis within the
class, the Acquiring Fund Shares of the
corresponding class received by the Acquired
Fund pursuant to paragraph 1.1 herein, and (b)
completely liquidate. Such distribution and
liquidation will be accomplished, with respect
to each class of Acquired Fund shares, by the
transfer of the Acquiring Fund Shares then
credited to the account of the Acquired Fund on
the books of the Acquiring Fund to open
accounts on the share records of the Acquiring
Fund in the names of the Acquired Fund
Shareholders. The aggregate net asset value of
Class A, Class T, Class B, Class C, Class I,
Class R3, Class R4, Class R5, Class Y and
Class F Acquiring Fund Shares to be so
credited to the Class A, Class T, Class B, Class
C, Class I, Class R3, Class R4, Class R5, Class
Y and Class F Acquired Fund Shareholders,
respectively, shall, with respect to the class, be
equal to the aggregate net asset value of the
Acquired Fund Shares of the corresponding
class owned by Acquired Fund Shareholders on
the Closing Date. All issued and outstanding
Acquired Fund Shares will simultaneously be
canceled on the books of the Acquired Fund,
although share certificates representing interests
in Class A, Class T, Class B, Class C, Class I,
Class R3, Class R4, Class R5, Class Y and
Class F Acquired Fund Shares will thereafter
represent interests in the corresponding class of
Acquiring Fund Shares after the Closing Date,
as determined in accordance with paragraph
2.3. The Acquiring Fund shall not issue
certificates representing the Class A, Class T,
Class B, Class C, Class I, Class R3, Class R4,
Class R5, Class Y and Class F Acquiring Fund
Shares in connection with the Reorganization.
1.5. Ownership of Acquiring Fund
Shares will be shown on the books of the
Acquiring Fund's Transfer Agent, as defined in
paragraph 3.3 herein.
1.6. Any reporting responsibility of
the Acquired Fund, including, but not limited
to, the responsibility for filing regulatory
reports, tax returns, or other documents with the
Securities and Exchange Commission
("Commission"), any state securities
commission, and any Federal, state or local tax
authorities or any other relevant regulatory
authority, is and shall remain the responsibility
of the Acquired Fund.
2. VALUATION
2.1. The value of the Assets shall be
the value of such Assets as of the close of
business of the New York Stock Exchange and
after the declaration of any dividends on the last
business day before the Closing Date (such time
and date being hereinafter called the "Valuation
Date"), computed using the valuation
procedures set forth in the then-current
prospectus and statement of additional
information with respect to the Acquired Fund
and valuation procedures established by the
Company's Board of Directors.
2.2. The net asset value of each
Acquiring Fund Share shall be the net asset
value per share computed with respect to the
corresponding class as of the Valuation Date,
using the valuation procedures set forth in the
Acquiring Fund's then-current prospectus and
statement of additional information, and
valuation procedures established by the
Company's Board of Directors.
2.3. The number of the Acquiring
Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired
Fund's Assets shall be determined by dividing
the value of the net assets with respect to the
Acquired Fund Shares determined using the
same valuation procedures referred to in
paragraph 2.1 herein, by the net asset value of
the corresponding class of Acquiring Fund
Shares, determined in accordance with
paragraph 2.2 herein.
2.4. All computations of value shall
be made by Hartford Funds Management
Company, LLC ("HFMC"), in its capacity as
Fund Accountant for the Company, and shall be
subject to confirmation by the Company's
Treasurer.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be a date
to be determined by an officer of the Company,
or such other date as the parties may agree. All
acts taking place at the closing of the
transactions provided for in this Agreement
("Closing") shall be deemed to take place
simultaneously at a time immediately prior to
the opening of business on the Closing Date
unless otherwise agreed to by the parties. The
Closing shall be held at the offices of the
Company.
3.2. The Company shall direct State
Street Bank and Trust Company, as custodian
for the Acquired Fund ("Custodian"), to deliver
to the Company at the Closing a certificate of
an authorized officer of the Custodian stating
that the Assets of the Acquired Fund have been
delivered in proper form to the Acquiring Fund
within two business days prior to or on the
Closing Date. The Acquired Fund's portfolio
securities represented by a certificate or other
written instrument shall be presented by the
Custodian to those persons at the Custodian
who have primary responsibility for the
safekeeping of the assets of the Acquiring
Fund, as the Custodian also serves as the
custodian for the Acquiring Fund. Such
presentation shall be made for examination no
later than five business days preceding the
Closing Date, and such certificates and other
written instruments shall be transferred and
delivered by the Acquired Fund as of the
Closing Date for the account of the Acquiring
Fund duly endorsed in proper form for transfer
in such condition as to constitute good delivery
thereof. The Custodian shall deliver to those
persons at the Custodian who have primary
responsibility for the safekeeping of the assets
of the Acquiring Fund as of the Closing Date by
book entry, in accordance with the customary
practices of the Custodian and of each securities
depository, as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended
("1940 Act"), in which the Acquired Fund's
Assets are deposited, the Acquired Fund's
Assets deposited with such depositories. The
cash to be transferred by the Acquired Fund
shall be delivered by wire transfer of Federal
funds on the Closing Date.
3.3. The Company shall direct
Hartford Administrative Services Company, in
its capacity as transfer agent for the Company
("Transfer Agent"), to deliver to the Company
at the Closing a certificate of an authorized
officer of the Transfer Agent stating that its
records contain the names and addresses of the
Acquired Fund Shareholders and the number
and percentage ownership of outstanding shares
owned by each such shareholder immediately
prior to the Closing. The Secretary of the
Company shall confirm that (a) the appropriate
number of Acquiring Fund Shares have been
credited to the Acquired Fund's account on the
books of the Acquiring Fund pursuant to
paragraph 1.1 herein prior to the actions
contemplated by paragraph 1.4 herein and (b)
the appropriate number of Acquiring Fund
Shares have been credited to the accounts of the
Acquired Fund Shareholders on the books of
the Acquiring Fund pursuant to paragraph 1.4
herein. At the Closing, the Company shall
execute such bills of sale, checks, assignments,
share certificates, if any, receipts or other
documents as necessary to effect the
Reorganization.
3.4. In the event that on the
Valuation Date (a) the New York Stock
Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the
Acquired Fund (each, an "Exchange") shall be
closed to trading or trading thereupon shall be
restricted, or (b) trading or the reporting of
trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of HFMC or
the Board of Directors of the Company,
accurate appraisal of the value of the net assets
of the Acquiring Fund or the Acquired Fund,
respectively, is impracticable, the Closing Date
shall be postponed until the first business day
after the day when trading shall have been fully
resumed and reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been fully
disclosed to the Acquiring Fund prior to the
date of this Agreement in a written instrument
executed by an officer of the Company, the
Company, on behalf of the Acquired Fund,
represents and warrants to the Acquiring Fund
as follows:
(a) The Acquired Fund is duly
organized as a series of the Company, which is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, with
power under the Company's Articles of Incorporation, as
amended from time to time ("Charter"), to own all of its
Assets and to carry on its business as it is now being
conducted;
(b) The Company is a registered
investment company classified as a management
company of the open-end type, and its registration with
the Commission as an investment company under the
1940 Act, and the registration of the Class A, Class T,
Class B, Class C, Class I, Class R3, Class R4, Class R5,
Class Y and Class F Acquired Fund Shares under the
Securities Act of 1933, as amended ("1933 Act"), is in
full force and effect;
(c) No consent, approval,
authorization, or order of any court or governmental
authority is required for the consummation by the
Acquired Fund of the transactions contemplated herein,
except such as may be required under the 1933 Act, the
Securities Exchange Act of 1934, as amended ("1934
Act"), the 1940 Act and state securities laws;
(d) The current prospectus and
statement of additional information of the Acquired
Fund and each prospectus and statement of additional
information of the Acquired Fund used at all times prior
to the date of this Agreement conforms or conformed at
the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission
thereunder; and does not or did not at the time of its use
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not
materially misleading;
(e) On the Valuation Date, the
Company, on behalf of the Acquired Fund, will have
good and marketable title to the Assets of the Acquired
Fund and full right, power, and authority to sell, assign,
transfer and deliver such Assets hereunder free of any
liens or other encumbrances, and upon delivery and
payment for such Assets, the Company, on behalf of the
Acquiring Fund, will acquire good and marketable title
thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under
the 1933 Act;
(f) The Acquired Fund is not
engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a
material violation of the Company's Charter or Bylaws,
as amended from time to time, or of any agreement,
indenture, instrument, contract, lease or other
undertaking to which the Company, on behalf of the
Acquired Fund, is a party or by which it is bound, or (ii)
the acceleration of any material obligation, or the
imposition of any material penalty, under any
agreement, indenture, instrument, contract, lease,
judgment or decree to which the Company, on behalf of
the Acquired Fund, is a party or by which it is bound;
(g) All material contracts or other
commitments of the Acquired Fund (other than this
Agreement and certain investment contracts including
options, futures, and forward contracts) will terminate
without liability to the Acquired Fund on or prior to the
Closing Date;
(h) No litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or, to the
Company's knowledge, threatened against the Company,
with respect to the Acquired Fund or any of its
properties or assets, that, if adversely determined, would
materially and adversely affect its financial condition or
the conduct of its business. The Company, on behalf of
the Acquired Fund, knows of no facts which might form
the basis for the institution of such proceedings and is
not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body
which materially and adversely affects its business or its
ability to consummate the transactions herein
contemplated;
(i) The Statement of Assets and
Liabilities of the Acquired Fund as of October 31, 2016,
and the related Statement of Operations, Statement of
Changes in Net Assets, Schedule of Investments and
Financial Highlights for the periods then ended, have
been audited by Ernst & Young LLP ("EY"),
independent registered public accounting firm, included
in its report dated December 30, 2016, who issued an
unqualified opinion thereon, and present fairly, in all
material respects, the financial condition of the Acquired
Fund as of such date in accordance with U.S. generally
accepted accounting principles ("GAAP"), and there are
no known contingent liabilities of the Acquired Fund
required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date
not disclosed therein;
(j) The Statement of Assets and
Liabilities, Statements of Operations and Changes in Net
Assets and Schedule of Investments of the Acquired
Fund at April 30, 2017 present fairly, in all material
respects, the financial condition of the Acquired Fund as
of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquired Fund
required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date
not disclosed therein;
(k) Since October 31, 2016, 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 other than in the ordinary course in
accordance with the Acquired Fund's investment
restrictions. For the purposes of this subparagraph (j), a
decline in net asset value per share of Acquired Fund
Shares due to declines in market values of securities held
by the Acquired Fund, the discharge of Acquired Fund
liabilities, or the redemption of Acquired Fund Shares by
shareholders of the Acquired Fund shall not constitute a
material adverse change;
(l) On the Closing Date, all Federal
and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquired Fund required
by law to have been filed by such date (including any
extensions) shall have been filed and are or will be
correct in all material respects, and all Federal and other
taxes shown as due or required to be shown as due on
said returns and reports shall have been paid or provision
shall have been made for the payment thereof and, to the
best knowledge of the Company, no such return is
currently under audit and no assessment has been
asserted with respect to such returns;
(m) For each taxable year of its
operation (including the taxable year ending on the
Closing Date), the Acquired Fund has met (or will meet)
the requirements of Subchapter M of the Code for
qualification as a regulated investment company, has
been (or will be) eligible to and has computed (or will
compute) its Federal income tax under Section 852 of
the Code, and will have distributed all of its investment
company taxable income (computed without regard to
any deduction for dividends paid) and net capital gain
(as defined in the Code) that has accrued through the
Closing Date, and before the Closing Date will have
declared dividends sufficient to distribute all of its
investment company taxable income (computed without
regard to any deduction for dividends paid) and net
capital gain (after reduction for any available capital loss
carryover) for the period ending on the Closing Date;
(n) All issued and outstanding
Acquired Fund Shares are, and on the Closing Date will
be, duly and validly issued and outstanding, fully paid
and non-assessable by the Company and have been
offered and sold in every state, territory and the District
of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and
other securities laws. All of the issued and outstanding
Acquired Fund Shares will, at the time of Closing, be
held by the persons and in the amounts set forth in the
records of the Transfer Agent, on behalf of the Acquired
Fund, as provided in paragraph 3.3 herein. The
Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any
of the Acquired Fund Shares, nor is there outstanding
any security convertible into any of the Acquired Fund
Shares;
(o) The execution, delivery and
performance of this Agreement and the transactions
contemplated herein have been duly authorized by all
necessary action, if any, on the part of the Directors of
the Company, on behalf of the Acquired Fund, and this
Agreement constitutes a valid and binding obligation of
the Company, on behalf of the Acquired Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(p) The information to be furnished
by the Acquired Fund for use in registration statements,
information statement materials and other documents
filed or to be filed with any Federal, state or local
regulatory authority (including the Financial Industry
Regulatory Authority, Inc.), which may be necessary in
connection with the transactions contemplated hereby,
shall be accurate and complete in all material respects
and shall comply in all material respects with Federal
securities and other laws and regulations thereunder
applicable thereto; and
(q) The combined information
statement and prospectus ("Information Statement") to
be included in the Registration Statement referred to in
paragraph 5.5 herein (and any amendment and
supplement thereto), insofar as it relates to the Acquired
Fund, will, on the effective date of the Registration
Statement and on the Closing Date (i) not contain any
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the
circumstances under which such statements were made,
not materially misleading, provided, however, that the
representations and warranties of this subparagraph (p)
shall not apply to statements in or omissions from the
Information Statement and the Registration Statement
made in reliance upon and in conformity with
information that was furnished by the Acquiring Fund
for use therein, and (ii) comply in all material respects
with the provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the rules and regulations thereunder.
4.2. Except as has been fully
disclosed to the Acquired Fund prior to the date
of this Agreement in a written instrument
executed by an officer of the Company, the
Company, on behalf of the Acquiring Fund,
represents and warrants to the Acquired Fund as
follows:
(a) The Acquiring Fund is duly
organized as a series of the Company, which is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Maryland, with
power under the Charter to own all of its properties and
assets and to carry on its business as it is now being
conducted;
(b) The Company is a registered
investment company classified as a management
company of the open-end type, and its registration with
the Commission as an investment company under the
1940 Act and the registration of the Class A, Class T,
Class B, Class C, Class I, Class R3, Class R4, Class R5,
Class R6, Class Y and Class F Acquiring Fund Shares
under the 1933 Act, is in full force and effect;
(c) No consent, approval,
authorization, or order of any court or governmental
authority is required for the consummation by the
Acquiring Fund of the transactions contemplated herein,
except such as may be required under the 1933 Act, the
1934 Act, the 1940 Act and state securities laws;
(d) The current prospectus and
statement of additional information of the Acquiring
Fund and each prospectus and statement of additional
information of the Acquiring Fund used at all times prior
to the date of this Agreement conforms or conformed at
the time of its use in all material respects to the
applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission
thereunder and does not or did not at the time of its use
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not
materially misleading;
(e) The Acquiring Fund is not
engaged currently, and the execution, delivery and
performance of this Agreement will not result, in (i) a
material violation of the Company's Charter or Bylaws,
as amended from time to time, or of any agreement,
indenture, instrument, contract, lease or other
undertaking to which the Company, on behalf of the
Acquiring Fund, is a party or by which it is bound, or (ii)
the acceleration of any material obligation, or the
imposition of any material penalty, under any
agreement, indenture, instrument, contract, lease,
judgment or decree to which the Company, on behalf of
the Acquiring Fund, is a party or by which it is bound;
(f) No litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or, to its
knowledge, threatened against the Company, with
respect to the Acquiring Fund or any of the Acquiring
Fund's properties or assets, that, if adversely determined,
would materially and adversely affect the Acquiring
Fund's financial condition or the conduct of its business.
The Company, on behalf of the Acquiring Fund, knows
of no facts which might form the basis for the institution
of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court
or governmental body which materially and adversely
affects the Acquiring Fund's business or its ability to
consummate the transactions herein contemplated;
(g) The Statement of Assets and
Liabilities of the Acquired Fund as of October 31, 2016,
and the related Statement of Operations, Statement of
Changes in Net Assets, Schedule of Investments and
Financial Highlights for the periods then ended, have
been audited by EY, independent registered public
accounting firm, included in its report dated December
30, 2016, who issued an unqualified opinion thereon,
and present fairly, in all material respects, the financial
condition of the Acquired Fund as of such date in
accordance with GAAP, and there are no known
contingent liabilities of the Acquired Fund required to be
reflected on a balance sheet (including the notes thereto)
in accordance with GAAP as of such date not disclosed
therein;
(h) The Statement of Assets and
Liabilities, Statements of Operations and Changes in Net
Assets and Schedule of Investments of the Acquiring
Fund at April 30, 2017 present fairly, in all material
respects, the financial condition of the Acquiring Fund
as of such date in accordance with GAAP, and there are
no known contingent liabilities of the Acquiring Fund
required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date
not disclosed therein;
(i) Since October 31, 2016, 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 other than in the ordinary course in
accordance with the Acquiring Fund's investment
restrictions. For purposes of this subparagraph (i), a
decline in net asset value per share of the Acquiring
Fund Shares due to declines in market values of
securities held by the Acquiring Fund, the discharge of
Acquiring Fund liabilities, or the redemption of
Acquiring Fund Shares by shareholders of the Acquiring
Fund, shall not constitute a material adverse change;
(j) On the Closing Date, all Federal
and other tax returns, dividend reporting forms, and
other tax-related reports of the Acquiring Fund required
by law to have been filed by such date (including any
extensions) shall have been filed and are or will be
correct in all material respects, and all Federal and other
taxes shown as due or required to be shown as due on
said returns and reports shall have been paid or provision
shall have been made for the payment thereof, and to the
best knowledge of the Company no such return is
currently under audit and no assessment has been
asserted with respect to such returns;
(k) For each taxable year of its
operation (including the taxable year that includes the
Closing Date), the Acquiring Fund has met (or will
meet) the requirements of Subchapter M of the Code for
qualification as a regulated investment company, has
been eligible to (or will be eligible to) and has computed
(or will compute) its Federal income tax under Section
852 of the Code;
(l) All issued and outstanding
Acquiring Fund Shares are, and on the Closing Date will
be, duly and validly issued and outstanding, fully paid
and non-assessable by the Company and have been
offered and sold in every state, territory and the District
of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and
other securities laws. 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;
(m) The execution, delivery and
performance of this Agreement and the transactions
contemplated herein, have been duly authorized by all
necessary action, if any, on the part of the Directors of
the Company, on behalf of the Acquiring Fund, and this
Agreement constitutes a valid and binding obligation of
the Company, on behalf of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(n) The Class A, Class T, Class B,
Class C, Class I, Class R3, Class R4, Class R5, Class
R6, Class Y and Class F Acquiring Fund Shares to be
issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to
the terms of this Agreement, will on the Closing Date
have been duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring
Fund Shares, and will be fully paid and non-assessable
by the Acquiring Fund;
(o) The information to be furnished
by the Acquiring Fund for use in registration statements,
information statement materials and other documents
that may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all
material respects with Federal securities and other laws
and regulations applicable thereto; and
(p) The Information Statement to be
included in the Registration Statement referred to in
paragraph 5.5 herein (and any amendment or supplement
thereto), insofar as it relates to the Acquiring Fund and
the Acquiring Fund Shares, will, from the effective date
of the Registration Statement through the Closing Date
(i) not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which such statements were
made, not materially misleading, provided, however, that
the representations and warranties of this subparagraph
(o) shall not apply to statements in or omissions from the
Information Statement and the Registration Statement
made in reliance upon and in conformity with
information that was furnished by the Acquired Fund for
use therein, and (ii) comply in all material respects with
the provisions of the 1933 Act, the 1934 Act, and the
1940 Act and the rules and regulations thereunder.
5. COVENANTS OF THE ACQUIRING FUND
AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the
Acquired Fund each will operate its business in
the ordinary course between the date hereof and
the Closing Date, it being understood that such
ordinary course of business will include the
declaration and payment of customary
dividends and distributions, and any other
distribution that may be advisable.
5.2. Class A, Class T, Class B, Class
C, Class I, Class R3, Class R4, Class R5, Class
Y and Class F Acquiring Fund Shares to be
issued hereunder are not being acquired for the
purpose of making any distribution thereof,
other than in accordance with the terms of this
Agreement.
5.3. Subject to the provisions of this
Agreement, the Acquiring Fund and the
Acquired Fund will each take, or cause to be
taken, all action, and do or cause to be done, all
things reasonably necessary, proper or
advisable to consummate and make effective
the transactions contemplated by this
Agreement.
5.4. The Company, on behalf of the
Acquired Fund, will prepare and file an
Information Statement (referred to in paragraph
4.1(p) herein) to be included in a Registration
Statement on Form N-14 ("Registration
Statement"), in compliance with the 1933 Act,
the 1934 Act and the 1940 Act. The Acquired
Fund will provide to the Acquiring Fund such
information regarding the Acquired Fund as
may be reasonably necessary for the
preparation of the Registration Statement.
5.5. The Acquiring Fund and the
Acquired Fund shall each use its reasonable
best efforts to fulfill or obtain the fulfillment of
the conditions precedent to effect the
transactions contemplated by this Agreement as
promptly as practicable.
5.6. The Company, on behalf of the
Acquired Fund, shall execute and deliver or
cause to be executed and delivered all such
assignments and other instruments, and will
take or cause to be taken such further action as
may be necessary or desirable in order to (1)
vest in and confirm (a) the title and possession
of the Company, on behalf of the Acquired
Fund, of the Acquiring Fund Shares to be
delivered hereunder and (b) the title and
possession of the Company, on behalf of the
Acquiring Fund, of all the Assets and (2)
otherwise to carry out the intent and purpose of
this Agreement.
5.7. The Acquiring Fund will use all
reasonable efforts to obtain the approvals and
authorizations required by the 1933 Act, the
1940 Act and such of the state blue sky or
securities laws as may be necessary in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Company, on behalf of
the Acquired Fund, to consummate the transactions
provided for herein shall be subject, at the Company's
election, to the performance by the Company, on behalf
of the Acquiring Fund, of all the obligations to be
performed by it hereunder on or before the Closing Date,
and, in addition thereto, the following further conditions:
6.1. All representations and
warranties of the Company, on behalf of the
Acquiring Fund, contained in this Agreement
shall be true and correct in all material respects
as of the date hereof and, except as they may be
affected by the transactions contemplated by
this Agreement, as of the Closing Date, with the
same force and effect as if made on and as of
the Closing Date;
6.2. The Company, on behalf of the
Acquiring Fund, shall have delivered to the
Acquired Fund a certificate executed by the
Company's President or Vice President and its
Treasurer or Assistant Treasurer, and dated as
of the Closing Date, to the effect that the
representations and warranties of the Company,
on behalf of the Acquiring Fund, made in this
Agreement are true and correct at and as of the
Closing Date, except as they may be affected by
the transactions contemplated by this
Agreement;
6.3. The Company, on behalf of the
Acquiring Fund, shall have performed all of the
covenants and complied with all of the
provisions required by this Agreement to be
performed or complied with by the Company,
on behalf of the Acquiring Fund, on or before
the Closing Date; and
6.4. The number of full and
fractional Acquiring Fund Shares to be issued
in connection with the Reorganization shall
have been calculated in accordance with
paragraph 1.1 herein.
7. CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Company, on behalf of
the Acquiring Fund, to consummate the transactions
provided for herein shall be subject, at the Company's
election, to the performance by the Company, on behalf
of the Acquired Fund, of all of the obligations to be
performed by it hereunder on or before the Closing Date
and, in addition thereto, the following conditions:
7.1. All representations and
warranties of the Company, on behalf of the
Acquired Fund, contained in this Agreement
shall be true and correct in all material respects
as of the date hereof and, except as they may be
affected by the transactions contemplated by
this Agreement, as of the Closing Date, with the
same force and effect as if made on and as of
the Closing Date;
7.2. The Company shall have
delivered to the Acquiring Fund a statement of
the Acquired Fund's Assets and Liabilities, as
of the Closing Date, certified by the Treasurer
of the Company;
7.3. The Company, on behalf of the
Acquired Fund, shall have delivered to the
Acquiring Fund a certificate executed in the
name of the Acquired Fund by its President or
Vice President and its Treasurer or Assistant
Treasurer and dated as of the Closing Date to
the effect that the representations and
warranties of the Company, on behalf of the
Acquired Fund, made in this Agreement are
true and correct at and as of the Closing Date,
except as they may be affected by the
transactions contemplated by this Agreement;
7.4. The Company, on behalf of the
Acquired Fund, shall have performed all of the
covenants and complied with all of the
provisions required by this Agreement to be
performed or complied with by the Company,
on behalf of the Acquired Fund, on or before
the Closing Date;
7.5. The number of full and
fractional Acquiring Fund Shares to be issued
in connection with the Reorganization shall
have been calculated in accordance with
paragraph 1.1 herein; and
7.6. The Acquired Fund shall have
declared and paid a distribution or distributions
prior to the Closing that, together with all
previous distributions, shall have the effect of
distributing to its shareholders (i) all of its
investment company taxable income and all of
its net realized capital gains, if any, for the
period from the close of its last fiscal year to
4:00 p.m. Eastern Time on the Valuation Date;
and (ii) any undistributed investment company
taxable income and net realized capital gains
from any period to the extent not otherwise
already distributed.
8. FURTHER CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE ACQUIRING FUND
AND THE ACQUIRED FUND
If any of the conditions set forth below have not
been satisfied on or before the Closing Date with respect
to the Company, on behalf of the Acquired Fund, the
Company may, at its option, refuse to consummate the
transactions contemplated by this Agreement. If any of
the conditions set forth below have not been satisfied on
or before the Closing Date with respect to the Company,
on behalf of the Acquiring Fund, the Company may, at
its option, refuse to consummate the transactions
contemplated by this Agreement:
8.1. The Agreement and the
transactions contemplated herein shall have
been approved by the Board of Directors of the
Company, and each party shall have delivered
to the other certified copies of the resolutions
evidencing such approval;
8.2. On the Closing Date no action,
suit or other proceeding shall be pending or, to
the Company's knowledge, threatened before
any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages
or other relief in connection with, this
Agreement or the transactions contemplated
herein;
8.3. All consents of other parties and
all other consents, orders and permits of
Federal, state and local regulatory authorities
deemed necessary by the Company to permit
consummation, in all material respects, of the
transactions contemplated hereby shall have
been obtained, except where failure to obtain
any such consent, order or permit would not
involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or
the Acquired Fund;
8.4. The Registration Statement shall
have become effective under the 1933 Act and
no stop orders suspending the effectiveness
thereof shall have been issued and, to the best
knowledge of the parties hereto, no
investigation or proceeding for that purpose
shall have been instituted or be pending,
threatened or contemplated under the 1933 Act;
8.5. The Company shall have
received the opinion of counsel to the Company
addressed to the Company substantially to the
effect that, based upon certain facts,
assumptions, and representations, the
transaction contemplated by this Agreement
shall constitute a tax-free reorganization for
Federal income tax purposes. The delivery of
such opinion is conditioned upon receipt by
counsel to the Company of representations it
shall request of the Company. Notwithstanding
anything herein to the contrary, the Company
may not consummate such transactions
contemplated by the Agreement if this
condition is not satisfied; and
9. INDEMNIFICATION
9.1. The Company, out of the
Acquiring Fund's assets and property
(including any amounts paid to the Acquiring
Fund pursuant to any applicable liability
insurance policies or indemnification
agreements), agrees to indemnify and hold
harmless the Acquired Fund from and against
any and all losses, claims, damages, liabilities
or expenses (including, without limitation, the
payment of reasonable legal fees and
reasonable costs of investigation) to which the
Acquired Fund may become subject, insofar as
such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or
is based on any breach by the Acquiring Fund
of any of its representations, warranties,
covenants or agreements set forth in this
Agreement, provided that such indemnification
by the Acquiring Fund is not in violation of any
applicable law.
9.2. The Company, out of the
Acquired Fund's assets and property (including
any amounts paid to the Acquired Fund
pursuant to any applicable liability insurance
policies or indemnification agreements), agrees
to indemnify and hold harmless the Acquiring
Fund from and against any and all losses,
claims, damages, liabilities or expenses
(including, without limitation, the payment of
reasonable legal fees and reasonable costs of
investigation) to which the Acquiring Fund may
become subject, insofar as such loss, claim,
damage, liability or expense (or actions with
respect thereto) arises out of or is based on any
breach by the Acquired Fund of any of its
representations, warranties, covenants or
agreements set forth in this Agreement,
provided that such indemnification by the
Acquired Fund is not in violation of any
applicable law.
10. BROKERAGE FEES AND EXPENSES
10.1. The Company, on behalf of the
Acquiring Fund and on behalf of the Acquired
Fund, represents and warrants that there are no
brokers or finders entitled to receive any
payments in connection with the transactions
provided for herein.
10.2. The legal and shareholder
communication expenses relating to the
proposed Reorganization will be borne solely
by HFMC or its affiliate. All other expenses,
including any brokerage fees and brokerage-
related expenses, incurred in connection with
the proposed Reorganization will be borne by
the Acquired Fund and the Acquiring Fund.
The costs of the Reorganization shall include,
but not be limited to, costs associated with
preparation of the Registration Statement,
printing and distributing the Information
Statement, legal fees, accounting fees and
securities registration fees. Notwithstanding
any of the foregoing, expenses will in any event
be paid by the party directly incurring such
expenses if and to the extent that the payment
by another person of such expenses would
result in the disqualification of such party as a
"regulated investment company" within the
meaning of Section 851 of the Code.
11. ENTIRE AGREEMENT; SURVIVAL OF
WARRANTIES
11.1. The Company has not made any
representation, warranty or covenant, on behalf
of either the Acquired Fund or the Acquiring
Fund, as applicable, not set forth herein, and
this Agreement constitutes the entire agreement
between the Acquiring Fund and Acquired
Fund with respect to the Reorganization.
11.2. The representations, warranties
and covenants contained in this Agreement or
in any document delivered pursuant hereto or in
connection herewith shall survive the
consummation of the transactions contemplated
hereunder. The covenants to be performed after
the Closing and the obligations of each of the
Acquired Fund and Acquiring Fund in
paragraphs 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by
resolution of the Company's Board of Directors, on
behalf of either the Acquiring Fund or the Acquired
Fund, at any time prior to the Closing Date, if
circumstances should develop that, in its opinion, make
proceeding with the Agreement inadvisable.
13. AMENDMENTS
This Agreement may be amended, modified or
supplemented in such manner as may be deemed
necessary or advisable by the authorized officers of the
Company.
14. HEADINGS; GOVERNING LAW;
ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The Article and paragraph
headings contained in this Agreement are for
reference purposes only and shall not affect in
any way the meaning or interpretation of this
Agreement.
14.2. This Agreement shall be
governed by and construed in accordance with
the laws of the State of Maryland without
regard to its principles of conflicts of laws.
14.3. This Agreement shall bind and
inure to the benefit of the parties hereto and
their respective successors and assigns, but no
assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any
party without the written consent of the other
party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or
give any person, firm or corporation, other than
the parties hereto and their respective
successors and assigns, any rights or remedies
under or by reason of this Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be executed by its duly
authorized officer.
THE
▇▇▇▇
FORD
MUTU
AL
FUND
S,
INC.,
on
behalf
of its
series,
THE
▇▇▇▇
FORD
UNCO
NSTR
AINED
BOND
FUND
By: /s/
▇▇▇▇▇
▇.
Davey_
______
______
_
Name:
▇▇▇▇▇
▇.
▇▇▇▇▇
Title:
Preside
nt
THE
▇▇▇▇
FORD
MUTU
AL
FUND
S,
INC.,
on
behalf
of its
series,
THE
▇▇▇▇
FORD
STRA
TEGIC
INCO
ME
FUND
By: /s/
▇▇▇▇▇
▇.
Davey_
______
______
______
_
Name:
▇▇▇▇▇
▇.
▇▇▇▇▇
Title:
Preside
nt
With
respect
to
Paragr
aph
10.2 of
this
Agreem
ent,
Accepte
d and
Ackno
wledge
d by:
▇▇▇▇
FORD
FUNDS
MANA
GEME
NT
COMP
ANY,
LLC
By: /s/
Gregor
y A.
Frost__
______
______
______
Name:
Gregor
y ▇.
▇▇▇▇▇
Title:
Chief
Financi
al
Officer
1