3494002.3
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is
made as of this 8th day of September, 2006, by and among ▇▇▇▇
▇▇▇▇▇ Partners Trust II, a Massachusetts business trust (the
"Acquiring Entity"), with its principal place of business at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on behalf of its series
▇▇▇▇ ▇▇▇▇▇ Partners International Large Cap Fund (the "Acquiring
Fund"), ▇▇▇▇ ▇▇▇▇▇ Partners Investment Series, a Massachusetts
business trust (the "Acquired Entity"), with its principal place
of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on
behalf of its series ▇▇▇▇ ▇▇▇▇▇ Partners International Fund (the
"Acquired Fund"), and, solely for purposes of paragraph 10.2
hereof, ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC.
WHEREAS, each of the Acquired Fund and the Acquiring Fund is
a series of an open-end management investment company registered
pursuant to the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, it is intended that, for United States federal
income tax purposes (i) the transactions contemplated by this
Agreement shall qualify as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code") and (ii) this Agreement shall constitute a
plan of reorganization within the meaning of Treasury Regulation
Section 1.368-2(g);
WHEREAS, the reorganization 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 classes of shares of beneficial interest of
the Acquiring Fund (the "Acquiring Fund Shares") corresponding to
the classes of outstanding shares of beneficial interest of the
Acquired Fund (the "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 and liquidation
of the Acquired Fund, as provided herein (the "Reorganization"),
all upon the terms and conditions hereinafter set forth in this
Agreement;
WHEREAS, the Acquired Fund currently owns securities that
are generally assets of the character in which the Acquiring Fund
is permitted to invest;
WHEREAS, the Board of Trustees of the Acquiring Entity (the
"Acquiring Entity Board") has 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 its shareholders and
that the interests of the existing shareholders of the Acquiring
Fund will not be diluted as a result of this transaction;
WHEREAS, the Board of Trustees of the Acquired Entity (the
"Acquired Entity Board") has 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 its shareholders and that
the interests of the existing shareholders of the Acquired Fund
will not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties
hereto covenant and agree as follows:
1 TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND
.. IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL
ACQUIRED FUND LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED
FUND
1.1 Subject to requisite approvals and the other terms and
conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired
Entity, on behalf of the Acquired Fund, agrees to sell, assign,
convey, transfer and deliver all of its property and assets, as
set forth in paragraph 1.2, to the Acquiring Fund, and the
Acquiring Entity, on behalf of the Acquiring Fund, agrees in
exchange therefor: (a) to deliver to the Acquired Fund the number
of full and fractional Acquiring Fund Shares corresponding to
each class of the Acquired Fund Shares as of the time and date
set forth in paragraph 3.1, determined by dividing the value of
the Acquired Fund's net assets with respect to each class of the
Acquired Fund (computed in the manner and as of the time and date
set forth in paragraph 2.1) by the net asset value of one share
of the corresponding class of Acquiring Fund Shares (computed in
the manner and as of the time and date set forth in paragraph
2.2); and (b) to assume all liabilities of the Acquired Fund.
Such transactions shall take place on a closing date as provided
for in paragraph 3.1 (the "Closing Date").
1.2 The property and assets of the Acquired Entity,
attributable to the Acquired Fund, to be sold, assigned,
conveyed, transferred and delivered to and acquired by the
Acquiring Entity, on behalf of the Acquiring Fund, shall consist
of all assets and property of every kind and nature of the
Acquired Fund, including, without limitation, all rights,
receivables (including dividend, interest and other receivables),
cash, cash equivalents, claims (whether absolute or contingent,
known or unknown), securities, commodities and futures interests,
good will and other intangible property, any deferred or prepaid
expenses and all interests, rights, privileges and powers, the
Acquired Fund owns at the Valuation Date (as defined in paragraph
2.1) (collectively, "Assets"). The Acquiring Entity, on behalf of
the Acquiring Fund, shall assume all of the liabilities and
obligations of the Acquired Fund, including, without limitation,
all indemnification obligations of the Acquired Fund with respect
to the current and former members of the Acquired Entity Board
and officers of the Acquired Entity, whether accrued or
contingent, known or unknown, existing at the Valuation Date
(collectively, "Liabilities"). The Acquired Fund will sell,
assign, convey, transfer and deliver to the Acquiring Entity, on
behalf of 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 Entity, on
behalf of 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 Entity on behalf of the Acquiring Fund.
1.3 The Acquired Fund will make reasonable efforts to
discharge all of its known Liabilities prior to the Valuation
Date.
1.4 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 of its investment
company taxable income as defined in the Code (computed without
regard to any deduction for dividends paid) and realized net
capital gain as defined in the Code (after deduction for any
available capital loss carryover), if any, for all tax periods
ending on or before the Closing Date (and treating the current
taxable year as ending on the Closing Date) such that the
Acquired Fund will have no tax liability under Section 852 or
Section 4982 for the current and any prior tax periods.
1.5 Immediately following the actions contemplated by
paragraph 1.1, the Acquired Entity shall (a) distribute to the
latter's shareholders of record with respect to each class of
Acquired Fund Shares as of the Closing Date ("Acquired Fund
Shareholders"), on a pro rata basis within that class, the
Acquiring Fund Shares of the corresponding class received by the
Acquired Entity, on behalf of the Acquired Fund, pursuant to
paragraph 1.1 and (b) completely liquidate and dissolve in
accordance with Massachusetts law. Such distribution and
liquidation shall be accomplished, with respect to each class of
Acquired Fund Shares, by the transfer of the corresponding
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 each
class of Acquiring Fund Shares to be so credited to each
corresponding class of Acquired Fund Shareholders shall, with
respect to each class, be equal to the aggregate net asset value
of the Acquired Fund Shares of each corresponding class owned by
Acquired Fund Shareholders on the Closing Date. All issued and
outstanding Acquired Fund Shares will be canceled on the books of
the Acquired Fund. The Acquiring Fund shall not issue
certificates representing any class of Acquiring Fund Shares in
connection with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund's transfer agent.
1.7 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 Entity, on behalf
of the Acquired Fund. The Acquiring Entity shall fully cooperate
to the extent necessary or desirable for these responsibilities
to be discharged.
2. VALUATION
2.1 The value of the Assets and the amount of the Liabilities
shall be determined as of the time for calculation of net asset
value as set forth in the then-current prospectus for the
Acquired Fund, and after the declaration of any dividends by the
Acquired Fund, on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), computed using the
valuation procedures established by the Acquired Entity Board.
All computations of value and amounts shall be made by (a) State
Street Bank and Trust Company, in its capacity as accounting
agent for the Acquired Fund, or (b) in the case of securities
subject to fair valuation, in accordance with the valuation
procedures of the Acquired Entity adopted in good faith by the
Acquired Entity Board. All computations of value and amounts
pursuant to this paragraph 2.1 shall be subject to confirmation
by the Acquiring Fund's independent registered public accounting
firm.
2.2. The net asset value per share of each class of Acquiring
Fund Shares shall be determined to the nearest full cent on the
Valuation Date, using the valuation procedures established by the
Acquiring Entity Board. All computations of value shall be made
by (a) State Street Bank and Trust Company, in its capacity as
accounting agent for the Acquiring Fund, or (b) in the case of
securities subject to fair valuation, in accordance with the
valuation procedures of the Acquiring Entity adopted in good
faith by the Acquiring Entity Board. All computations of value
pursuant to this paragraph 2.2 shall be subject to confirmation
by the Acquired Fund's independent registered public accounting
firm.
2.3 The number of Acquiring Fund Shares of each class to be
issued in exchange for the Assets shall be determined with
respect to each such class by dividing the value of the net
assets with respect to each class of Acquired Fund Shares,
determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of an Acquiring Fund Share
of the corresponding class, determined using the same valuation
procedures referred to in paragraph 2.2.
3. CLOSING AND CLOSING DATE
3.1 Subject to the terms and conditions set forth herein, the
Closing Date shall be December 1, 2006, 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 as of the "close of business"
on the Closing Date unless otherwise agreed to by the parties.
The close of business on the Closing Date shall be as of 4:00
p.m., Eastern Time or such later time on that date as the
Acquired Fund's net asset value and/or the net asset value per
share of each class of shares of the Acquiring Fund is calculated
in accordance with paragraph 2.2 and after the declaration of any
dividends. The Closing shall be held at the offices of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP or at such other time and/or place as the
parties may agree.
3.2 The Acquired Entity shall direct State Street Bank and
Trust Company (the "Custodian") to transfer ownership of the
Assets from the accounts of the Acquired Fund that the Custodian
maintains as custodian for the Acquired Fund to the accounts of
the Acquiring Fund that the Custodian maintains as custodian for
the Acquiring Fund and to deliver to the Acquiring Entity, at the
Closing, a certificate of an authorized officer stating that
(i) the Assets of the Acquired Fund have been so transferred as
of the Closing Date, and (ii) all necessary taxes in connection
with the delivery of the Assets of the Acquired Fund, including
all applicable federal and state stock transfer stamps, if any,
have been paid or provision for payment has been made.
3.3 The Acquired Entity shall direct PFPC, Inc., in its
capacity as transfer agent for the Acquired Fund ("Transfer
Agent"), to deliver to the Acquiring Entity at the Closing a
certificate of an authorized officer stating that its records
contain the name and address of each Acquired Fund Shareholder
and the number and percentage ownership of each outstanding class
of Acquired Fund Shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall
deliver to the Secretary of the Acquired Fund a confirmation
evidencing that (a) the appropriate number of Acquiring Fund
Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund pursuant to paragraph 1.1 prior to
the actions contemplated by paragraph 1.5 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 1.5. At the Closing, each
party shall deliver to the other party such bills of sale,
checks, assignments, share certificates, if any, receipts or
other documents as the other party or its counsel may reasonably
request.
3.4 In the event that on the Valuation Date (a) the New York
Stock Exchange or another primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund (each, an
"Exchange") shall be closed to trading or trading thereupon shall
be restricted, or (b) trading or the reporting of trading on such
Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquired Fund or
the Acquiring Fund is impracticable (in the judgment of the
Acquiring Entity Board with respect to the Acquiring Fund and the
Acquired Entity Board with respect to the Acquired Fund), the
Closing Date shall be postponed until the first Friday (that is
also a 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
Entity in Schedule 4.1 of this Agreement, the Acquired Entity, on
behalf of the Acquired Fund, represents and warrants to the
Acquiring Entity and the Acquiring Fund as follows:
(a) The Acquired Fund is duly established as a series of
the Acquired Entity, which is a business trust duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, with power under
its Amended and Restated Declaration of Trust, as amended
and/or supplemented (the "Acquired Entity Declaration"), to
own all of its assets and to carry on its business as it is
being conducted as of the date hereof. The Acquired Entity is
duly qualified to do business as a foreign trust in each
jurisdiction in which the conduct of its business makes such
qualification necessary except where the failure to so
qualify would not have a material adverse effect on the
condition (financial or otherwise), business, properties, net
assets or results of operations of the Acquired Entity. The
Acquired Entity has all necessary federal, state and local
authorization to carry on its business as now being conducted
and to fulfill the terms of this Agreement, except as set
forth in paragraph 4.1(c).
(b) The Acquired Entity is a registered open-end
management investment company, and its registration with the
Commission as an investment company under the 1940 Act, and
the registration of each class of 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 ("1934 Act"),
the ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ securities laws and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Act.
(d) The current prospectus and statement of additional
information of the Acquired Fund (true and correct copies of
which have been delivered to the Acquiring Entity) and each
prospectus and statement of additional information of the
Acquired Fund used during the three (3) years prior to the
date of this Agreement conforms or conformed at the time of
its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not materially misleading.
(e) On the Closing Date, the Acquired Entity, on behalf of
the Acquired Fund, will have good and marketable title to the
Assets and full right, power and authority to sell, assign,
convey, transfer and deliver such Assets hereunder free of
any liens or other encumbrances, and upon delivery and
payment for the Assets, the Acquiring Entity, on behalf of
the Acquiring Fund, will acquire good and marketable title
thereto, subject to no restrictions on the full transfer
thereof, excluding 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 by the
Acquired Entity, on behalf of the Acquired Fund, will not
result, in a material violation of Massachusetts law or of
the Acquired Entity Declaration or the by-laws of the
Acquired Entity, or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired
Entity, on behalf of the Acquired Fund, is a party or by
which it is bound, and the execution, delivery and
performance of this Agreement by the Acquired Entity, on
behalf of the Acquired Fund, will not result in 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
Acquired Entity, 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, certain investment
contracts, including options, futures, swaps and forward
contracts, the indemnification agreements of the current and
former members of the Acquired Entity Board, and those
contracts listed in Schedule 4.1) will terminate without
liability to the Acquired Fund on or prior to the Closing
Date. Each contract listed in Schedule 4.1 is a valid,
binding and enforceable obligation of the Acquired Fund and,
to the Acquired Fund's knowledge, the other parties thereto
(assuming due authorization, execution and delivery by the
other parties thereto) and the assignment by the Acquired
Fund to the Acquiring Fund of each such contract will not
result in the termination of such contract, any breach or
default thereunder by the Acquired Fund or the imposition of
any penalty thereunder.
(h) No litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to the Acquired Entity's knowledge,
threatened against the Acquired Entity, 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 the Acquired Fund's
business. The Acquired Entity, on behalf of the Acquired
Fund, 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 Acquired Fund's
business or the Acquired Entity's ability to consummate the
transactions herein contemplated on behalf of the Acquired
Fund.
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of
Investments of the Acquired Fund as at the last day of and
for the most recently completed fiscal year of the Acquired
Fund prior to the date of this Agreement, have been audited
by KPMG LLP, an independent registered public accounting
firm, and are in accordance with accounting principles
generally accepted in the United States of America ("GAAP")
consistently applied, and such statements (true and correct
copies of which have been furnished to the Acquiring Entity)
present fairly, in all material respects, the financial
condition of the Acquired Fund as of such date and for such
period in accordance with GAAP, and there are no known
contingent, accrued or other 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 that
are not disclosed therein. The Statement of Assets and
Liabilities, Statements of Operations and Changes in Net
Assets and Schedule of Investments (unaudited) of the
Acquired Fund as at the last day of and for the most recently
completed fiscal half year of the Acquired Fund following the
date of the audited annual statements referenced above are in
accordance with GAAP consistently applied, and such
statements (true and correct copies of which have been
furnished to the Acquiring Entity) present fairly, in all
material respects, the financial condition of the Acquired
Fund, and all known contingent, accrued or other 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 are disclosed therein.
(j) Since the last day of the most recently completed
fiscal year of the Acquired Fund prior to the date of this
Agreement, 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 for money borrowed maturing more than one year
from the date such indebtedness was incurred. 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.
(k) 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 of the Acquired Entity's knowledge,
no such return is currently under audit and no assessment has
been asserted with respect to such returns.
(l) For each taxable year of its operation (including the
current taxable year, assuming such year ends on the Closing
Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of Chapter 1 of the Code for
qualification and treatment as a "regulated investment
company," has elected to be treated as such, and has been (or
will be) eligible to compute and has computed (or will
compute) its federal income tax under Section 852 of the
Code, and on or before the Closing Date, will have
distributed or will have declared dividends intended to be
sufficient to distribute substantially all of (i) the excess
of (x) its investment income excludible from gross income
under Section 103 of the Code over (y) its deductions
disallowed under Sections 265 and 171 of the Code ("net tax-
exempt income"), (ii) its investment company taxable income
(as defined in the Code) (computed without regard to any
deduction for dividends paid) and (iii) any net capital gain
(after reduction for any allowable capital loss carryover)
(as defined in the Code) that has accrued or been recognized,
respectively, through the Closing Date such that for all tax
periods ending on or before the Closing Date (and treating
the current tax year as ending on the Closing Date) the
Acquired Fund will not have any tax liability under
Section 852 or Section 4982.
(m) All issued and outstanding Acquired Fund Shares are,
and on the Closing Date will be, duly authorized and validly
and legally issued and outstanding, fully paid and non-
assessable by the Acquired Entity and have been offered and
sold in any state, territory or the District of Columbia in
compliance in all material respects with applicable
registration requirements of all applicable federal and state
securities laws. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held by the
persons and in the amounts set forth in the records of the
Transfer Agent, on behalf of the Acquired Fund, as provided
in paragraph 3.3. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or
purchase any of the Acquired Fund Shares, nor is there
outstanding any security convertible into any of the Acquired
Fund Shares.
(n) The Acquired Fund will review its assets to ensure
that at any time after its shareholders have approved this
Agreement and prior to the Closing Date its assets do not
include any assets that the Acquiring Fund is not permitted,
or reasonably believes to be unsuitable for it, to acquire,
including without limitation any security that, prior to its
acquisition by the Acquired Fund, is unsuitable for the
Acquiring Fund to acquire.
(o) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquired Entity Board, on behalf of the Acquired Fund,
and this Agreement constitutes a valid and binding obligation
of the Acquired Entity, 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 combined proxy statement and prospectus ("Proxy
Statement") to be included in the Registration Statement (as
defined in paragraph 5.6), insofar as it relates to the
Acquired Fund, from the effective date of the Registration
Statement through the date of the meeting of shareholders of
the Acquired Fund contemplated therein and on the Closing
Date, will (i) not contain any statement which, at the time
and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or
which omits to state any material fact necessary in order to
make the statements therein not false or misleading (provided
that this representation and warranty shall not apply to
statements in or omissions from the Proxy Statement made in
reliance upon and in conformity with information that was
furnished by the Acquiring Entity 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. The information to be furnished by
the Acquired Fund for use in registration statements and
other documents filed or to be filed with any federal, state
or local regulatory authority, 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.
4.2 Except as has been fully disclosed to the Acquired Entity
in Schedule 4.2 to this Agreement, the Acquiring Entity, on
behalf of the Acquiring Fund, represents and warrants to the
Acquired Entity and the Acquired Fund as follows:
(a) The Acquiring Fund is duly established as a series of
the Acquiring Entity, which is a business trust duly
organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, with the power
under its Amended and Restated Declaration of Trust, as
amended and/or supplemented (the "Acquiring Entity
Declaration"), to own all of its assets and to carry on its
business as it is being conducted as of the date hereof. The
Acquiring Entity is duly qualified to do business as a
foreign trust in each jurisdiction in which the conduct of
its business makes such qualification necessary except where
the failure to so qualify would not have a material adverse
effect on the condition (financial or otherwise), business,
properties, net assets or results of operations of the
Acquiring Entity. The Acquiring Entity has all necessary
federal, state and local authorization to carry on its
business as now being conducted and to fulfill the terms of
this Agreement except as described in paragraph 4.2(c).
(b) The Acquiring Entity is a registered open-end
management investment company, and its registration with the
Commission as an investment company under the 1940 Act, and
the registration of each class of Acquiring Fund Shares under
the 1933 Act, is in full force and effect or will be in full
force and effect as of the Closing Date.
(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, state securities laws
and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(d) The current prospectus and statement of additional
information of the Acquiring Fund (true and correct copies of
which have been delivered to the Acquired Entity) and each
prospectus and statement of additional information of the
Acquiring Fund used during the three (3) years 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 by the
Acquiring Entity, on behalf of the Acquiring Fund, will not
result, in a material violation of Massachusetts law or of
the Acquiring Entity Declaration or the by-laws of the
Acquiring Entity, or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring
Entity, on behalf of the Acquiring Fund, is a party or by
which it is bound, and the execution, delivery and
performance of this Agreement by the Acquiring Entity, on
behalf of the Acquiring Fund, will not result in 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
Acquiring Entity, 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 the Acquiring Entity's knowledge,
threatened against the Acquiring Entity, with respect to the
Acquiring Fund, or any of its properties or assets, that, if
adversely determined, would materially and adversely affect
its financial condition or the conduct of such Acquiring
Fund's business. The Acquiring Entity, on behalf of the
Acquiring Fund, 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 the Acquiring Entity's ability
to consummate the transactions herein contemplated on behalf
of the Acquiring Fund.
(g) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of
Investments of the Acquiring Fund as at the last day of and
for the most recently completed fiscal year of the Acquiring
Fund prior to the date of this Agreement, have been audited
by KPMG LLP, an independent registered public accounting
firm, and are in accordance with GAAP consistently applied,
and such statements (true and correct copies of which have
been furnished to the Acquired Entity) present fairly, in all
material respects, the financial condition of the Acquiring
Fund as of such date and for such period in accordance with
GAAP, and there are no known contingent, accrued or other
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 that are not disclosed therein. The
Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Schedule of Investments
(unaudited) of the Acquiring Fund as at the last day of and
for the most recently completed fiscal half year of the
Acquiring Fund following the date of the audited annual
statements referenced above are in accordance with GAAP
consistently applied, and such statements (true and correct
copies of which have been furnished to the Acquired Entity)
present fairly, in all material respects, the financial
condition of the Acquiring Fund, and all known contingent,
accrued or other 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 are
disclosed therein.
(h) Since the last day of the most recently completed
fiscal year of the Acquiring Fund prior to the date of this
Agreement, 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 for money borrowed maturing more than one
year from the date such indebtedness was incurred. For the
purposes of this subparagraph (h), a decline in net asset
value per share of 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.
(i) 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 of the Acquiring Entity's knowledge,
no such return is currently under audit and no assessment has
been asserted with respect to such returns.
(j) 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 Chapter 1 of the Code for qualification and treatment as a
"regulated investment company," has elected to be treated as
such, and has been (or will be) eligible to compute and has
computed (or will compute) its federal income tax under
Section 852 of the Code, and will have distributed (or will
distribute pursuant to the provisions of Section 855 of the
Code) substantially all of (i) its net tax-exempt income,
(ii) its investment company taxable income (computed without
regard to any deduction for dividends paid) (as defined in
the Code) and (iii) any net capital gain (after reduction for
any capital loss carryover) (as defined in the Code) for
taxable years ending prior to the Closing Date such that for
all those years the Acquiring Fund will have no tax liability
under Section 852 or Section 4982.
(k) All issued and outstanding Acquiring Fund Shares are,
and on the Closing Date will be, duly authorized and validly
and legally issued and outstanding, fully paid and non-
assessable by the Acquiring Entity and will have been offered
and sold in any state, territory or the District of Columbia
in compliance in all material respects with applicable
registration requirements of all applicable federal and state
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. All
of the Acquiring Fund Shares to be issued and delivered to
the Acquired Entity, for the account of the Acquired Fund
Shareholders, pursuant to this Agreement, will on the Closing
Date have been duly authorized and, when so issued and
delivered, will be duly and validly and legally issued
Acquiring Fund Shares and be fully paid and non-assessable by
the Acquiring Entity.
(l) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquiring Entity Board, on behalf of the Acquiring Fund,
and this Agreement constitutes a valid and binding obligation
of the Acquiring Entity, 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.
(m) The Proxy Statement to be included in the Registration
Statement, insofar as it relates to the Acquiring Fund and
the Acquiring Fund Shares, from the effective date of the
Registration Statement through the date of the meeting of
shareholders of the Acquired Fund contemplated therein and on
the Closing Date, will (i) not contain any statement which,
at the time and in the light of the circumstances under which
it is made, is false or misleading with respect to any
material fact, or which omits to state any material fact
necessary to make the statements therein not false or
misleading (provided that this representation and warranty
shall not apply to statements in or omissions from the Proxy
Statement made in reliance upon and in conformity with
information that was furnished by the Acquired Entity 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. The information to be
furnished by the Acquiring Fund for use in registration
statements and other documents filed or to be filed with any
federal, state or local regulatory authority, 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 applicable
thereto.
5. COVENANTS
The Acquired Entity, on behalf of the Acquired Fund, and the
Acquiring Entity, on behalf of the Acquiring Fund, respectively,
hereby further covenant as follows:
5.1 The Acquired Fund and the Acquiring Fund each will
operate its business in the ordinary course and shall comply in
all material respects with all applicable laws, rules and
regulations 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
other distributions, and any other distribution that may be
advisable.
5.2 The Acquired Entity will call and hold a meeting of the
shareholders of the Acquired Fund to consider and act upon this
Agreement and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.3 The Acquiring Fund Shares to be acquired by the Acquired
Fund hereunder are not being acquired for the purpose of making
any distribution thereof, other than in accordance with the terms
of this Agreement.
5.4 The Acquired Entity, on behalf of the Acquired Fund, will
assist the Acquiring Entity in obtaining such information as the
Acquiring Entity reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares.
5.5 Subject to the provisions of this Agreement, the
Acquiring Entity, on behalf of the Acquiring Fund, and the
Acquired Entity, on behalf of the Acquired Fund, each will take,
or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this
Agreement.
5.6 The Acquiring Entity, on behalf of the Acquiring Fund,
shall prepare and file a Registration Statement on Form N-14 in
compliance with the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations thereunder with respect to the
Reorganization (the "Registration Statement"). The Acquired
Entity, on behalf of the Acquired Fund, will provide to the
Acquiring Entity such information regarding the Acquired Fund as
may be reasonably necessary for the preparation of the
Registration Statement.
5.7 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the Acquired Fund, each
will use its reasonable best efforts to fulfill or obtain the
fulfillment of the conditions precedent to effect the
transactions contemplated by this Agreement as promptly as
practicable.
5.8 The Acquired Entity, on behalf of the Acquired Fund,
will, from time to time, as and when reasonably requested by the
Acquiring Entity, 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 the Acquiring
Entity, on behalf of the Acquiring Fund, may reasonably deem
necessary or desirable in order to vest in and confirm (a) the
Acquired Entity's title to and possession of the Acquiring Fund
Shares to be delivered hereunder and (b) the Acquiring Entity's
title to and possession of all the Assets and to otherwise to
carry out the intent and purpose of this Agreement.
5.9 The Acquiring Entity, on behalf of 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.
5.10 The Acquiring Entity shall not change the Acquiring
Entity Declaration, prospectus or statement of additional
information so as to restrict permitted investments for the
Acquiring Fund, except as required by the Commission prior to the
Closing.
5.11 Prior to the Valuation Date, the Acquired Entity Board
shall adopt the valuation procedures of the Acquiring Entity with
respect to the Acquired Fund.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED ENTITY
The obligations of the Acquired Entity, on behalf of the
Acquired Fund, to consummate the transactions provided for herein
shall be subject, at the Acquired Entity's election, to the
following conditions:
6.1 All representations and warranties of the Acquiring
Entity, 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 Acquiring Entity, 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 Acquiring Entity, on behalf of the Acquiring
Fund, on or before the Closing Date.
6.3 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have executed and delivered an assumption of the
Liabilities and all such other agreements and instruments as the
Acquired Entity may reasonably deem necessary or desirable in
order to vest in and confirm (a) the Acquired Fund's title to and
possession of the Acquiring Fund Shares to be delivered hereunder
and (b) the Acquiring Entity's assumption of all of the
Liabilities and to otherwise to carry out the intent and purpose
of this Agreement.
6.4 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have delivered to the Acquired Fund a certificate executed
in the name of the Acquiring Entity on behalf of the Acquiring
Fund, by the Acquiring Entity's President or Vice President and
its Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquired Entity and dated as of the Closing
Date, as to the matters set forth in paragraphs 6.1 and 6.2 and
as to such other matters as the Acquired Entity shall reasonably
request.
6.5 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the Acquired Fund, shall
have agreed on the number of full and fractional Acquiring Fund
Shares to be issued in connection with the Reorganization after
such number has been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING ENTITY
The obligations of the Acquiring Entity, on behalf of the
Acquiring Fund, to consummate the transactions provided for
herein shall be subject, at the Acquiring Entity's election, to
the following conditions:
7.1 All representations and warranties of the Acquired
Entity, 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 Acquired Entity, 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 Acquired Entity, on behalf of the Acquired
Fund, on or before the Closing Date.
7.3 The Acquired Entity shall have delivered to the Acquiring
Entity, on behalf of the Acquiring Fund, a Statement of Assets
and Liabilities of the Acquired Fund as of the Closing Date,
including a schedule of investments, certified by the Treasurer
of the Acquired Entity on behalf of the Acquired Fund. The
Acquired Entity, on behalf of the Acquired Fund, shall have
executed and delivered all such assignments and other instruments
of transfer as the Acquiring Entity may reasonably deem necessary
or desirable in order to vest in and confirm (a) the Acquired
Fund's title to and possession of the Acquiring Fund Shares to be
delivered hereunder and (b) the Acquiring Fund's title to and
possession of all the Assets and to otherwise to carry out the
intent and purpose of this Agreement.
7.4 The Acquired Entity, on behalf of the Acquired Fund,
shall have delivered to the Acquiring Entity a certificate
executed in the name of the Acquired Entity, on behalf of the
Acquired Fund, by the Acquired Entity's President or Vice
President and its Treasurer or Assistant Treasurer, in a form
reasonably satisfactory to the Acquiring Entity and dated as of
the Closing Date, as to the matters set forth in paragraphs 7.1
and 7.2 and as to such other matters as the Acquiring Entity
shall reasonably request.
7.5 The Acquired Entity, on behalf of the Acquired Fund, and
the Acquiring Entity, on behalf of the Acquiring Fund, shall have
agreed on the number of full and fractional Acquiring Fund Shares
to be issued in connection with the Reorganization after such
number has been calculated in accordance with paragraph 1.1.
8 FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING ENTITY
.. AND ACQUIRED ENTITY
If any of the conditions set forth below have not been
satisfied on or before the Closing Date with respect to the
Acquired Entity, on behalf of the Acquired Fund, or the Acquiring
Entity, on behalf of the Acquiring Fund, the other party to this
Agreement shall be entitled on behalf of the Acquired Fund or
Acquiring Fund, as applicable, at its option, to refuse to
consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of
the outstanding shares of the Acquired Fund, in accordance with
the provisions of the Acquired Entity Declaration, the by-laws of
the Acquired Entity, and Massachusetts law, and certified copies
of the resolutions evidencing such approval shall have been
delivered to the Acquiring Entity. Notwithstanding anything
herein to the contrary, neither the Acquiring Entity nor the
Acquired Entity may waive the condition set forth in this
paragraph 8.1.
8.2 On the Closing Date, no court or governmental agency of
competent jurisdiction shall have issued any order that remains
in effect and that restrains or enjoins the Acquired Entity, with
respect to the Acquired Fund, or the Acquiring Entity, with
respect to the Acquiring Fund, from completing the transactions
contemplated by this Agreement.
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 Acquiring Entity or the
Acquired Entity to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit
would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may for itself waive any of
such conditions.
8.4 The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending.
8.5 The parties shall have received the opinion of Dechert
LLP, dated the Closing Date, substantially to the effect that,
based upon certain facts, assumptions and representations made by
the Acquired Entity, on behalf of the Acquired Fund, the
Acquiring Entity, on behalf of the Acquiring Fund, and their
respective authorized officers, (i) the transactions contemplated
by this Agreement will constitute a reorganization within the
meaning of Section 368(a) of the Code; (ii) no gain or loss will
be recognized by the Acquiring Fund upon receipt of the Assets in
exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of the Acquired Fund Liabilities; (iii) the basis
in the hands of the Acquiring Fund in the Assets will be the same
as the basis of the Acquired Fund in the Assets immediately prior
to the transfer thereof; (iv) the holding periods of the Assets
in the hands of the Acquiring Fund will include the periods
during which the Assets were held by the Acquired Fund (except
where investment activities of the Acquiring Fund have the effect
of reducing or eliminating the holding period with respect to an
asset); (v) no gain or loss will be recognized by the Acquired
Fund upon the transfer of the Assets to the Acquiring Fund in
exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of the Acquired Fund Liabilities, or upon the
distribution of the Acquiring Fund Shares by the Acquired Fund to
its shareholders except for gain or loss that may be recognized
with respect to contracts subject to Section 1256 of the Code
and/or stock in a "passive foreign investment company" as defined
in Section 1297(a) of the Code; (vi) no gain or loss will be
recognized by the Acquired Fund shareholders upon the exchange of
their Acquired Fund Shares for the Acquiring Fund Shares;
(vii) the aggregate basis of the Acquiring Fund Shares that each
Acquired Fund shareholder receives in connection with the
transaction will be the same as the aggregate basis of his or her
Acquired Fund Shares exchanged therefor; and (viii) an Acquired
Fund shareholder's holding period for his or her Acquiring Fund
Shares will be determined by including the period for which he or
she held the Acquired Fund Shares exchanged therefor, provided
that he or she held the Acquired Fund Shares as capital assets.
The delivery of such opinion is conditioned upon the receipt by
Dechert LLP of representations it shall request of the Acquiring
Entity and the Acquired Entity. Notwithstanding anything herein
to the contrary, neither the Acquiring Entity nor the Acquired
Entity may waive the condition set forth in this paragraph 8.5.
8.6 The Acquiring Entity, on behalf of the Acquiring Fund,
shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP, in a form reasonably satisfactory to the Acquiring
Entity, and dated as of the Closing Date, substantially to the
effect that, based upon certain facts and certifications made by
the Acquired Entity, on behalf of the Acquired Fund, and its
authorized officers: (a) the Acquired Entity is a business trust
existing under the laws of the Commonwealth of Massachusetts;
(b) the Acquired Entity, with respect to the Acquired Fund, has
the power as a business trust to carry on its business as an open-
end investment company registered under the 1940 Act; (c) this
Agreement has been duly authorized, executed and, so far as known
to such counsel, delivered by the Acquired Entity, on behalf of
the Acquired Fund, and assuming due authorization, execution and
delivery of this Agreement by the Acquiring Entity, on behalf of
the Acquiring Fund, constitutes a valid and legally binding
obligation of the Acquired Entity, on behalf of the Acquired
Fund, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (whether in a proceeding under equity or at law);
provided that such counsel shall be entitled to state that it
expresses no opinion with respect to the validity, binding effect
or enforceability of any contractual provisions purporting to
provide indemnification of any person for any claims, damages,
liabilities or expenses which may be limited by any applicable
federal or state securities laws or as a matter of public policy;
(d) the execution and delivery of this Agreement did not, and the
transfer of the Assets for Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Liabilities pursuant to
this Agreement will not, violate the Acquired Entity Declaration
or the by-laws of the Acquired Entity or any contracts or other
documents known to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP which can affect the
rights or obligations of the Acquired Entity; (e) to the
knowledge of such counsel, all regulatory or court consents,
authorizations, approvals, orders or filings required to be
obtained or made by the Acquired Entity, on behalf of the
Acquired Fund, under the federal laws of the United States or the
laws of the Commonwealth of Massachusetts for the transfer of the
Assets for Acquiring Fund Shares and the assumption by the
Acquiring Fund of the Liabilities pursuant to this Agreement have
been obtained or made, except such as may be required under state
securities or blue sky laws as to which such counsel need express
no opinion; and (f) to the knowledge of such counsel, and without
any independent investigation, other than as disclosed on the
schedule provided by the Acquired Entity pursuant to paragraph
4.1 of this Agreement, the Acquired Fund is not subject to any
litigation or administrative proceeding that could reasonably be
expected to have a materially adverse effect on the operations of
the Acquired Fund. Such opinion may state that it is solely for
the benefit of the Acquiring Entity and the Acquiring Entity
Board. Such opinion may contain such assumptions and limitations
as shall be in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP appropriate
to render the opinions expressed therein. Such opinion also shall
include such other matters incident to the transactions
contemplated hereby as the Acquiring Entity, on behalf of the
Acquiring Fund, may reasonably request.
8.7 The Acquired Entity, on behalf of the Acquired Fund,
shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ LLP, in a form reasonably satisfactory to the Acquired
Entity, and dated as of the Closing Date, substantially to the
effect that, based upon certain facts and certifications made by
the Acquiring Entity, on behalf of the Acquiring Fund and its
authorized officers: (a) the Acquiring Entity is a business trust
existing under the laws of the Commonwealth of Massachusetts;
(b) the Acquiring Entity, with respect to the Acquiring Fund, has
the power as a business trust to carry on its business as an open-
end investment company registered under the 1940 Act; (c) this
Agreement has been duly authorized, executed and, so far as is
known to such counsel, delivered by the Acquiring Entity, on
behalf of the Acquiring Fund, and assuming due authorization,
execution and delivery of this Agreement by the Acquired Entity,
on behalf of the Acquired Fund, constitutes a valid and legally
binding obligation of the Acquiring Entity, on behalf of the
Acquiring Fund, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (whether in a proceeding under equity or at law);
provided that such counsel shall be entitled to state that it
expresses no opinion with respect to the validity, binding effect
or enforceability of any contractual provisions purporting to
provide indemnification of any person for any claims, damages,
liabilities or expenses which may be limited by any applicable
federal or state securities laws or as a matter of public policy;
(d) the execution and delivery of this Agreement did not, and the
issuance of the Acquiring Fund Shares and the assumption of the
Liabilities in exchange for the transfer of the Assets pursuant
to this Agreement will not, violate the Acquiring Entity
Declaration or the by-laws of the Acquiring Entity or any
contracts or other documents known to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP which
can affect the rights and obligations of the Acquiring Entity;
(e) to the knowledge of such counsel, all regulatory or court
consents, authorizations, approvals, orders or filings required
to be obtained or made by the Acquiring Entity, on behalf of the
Acquiring Fund, under the federal laws of the United States or
the laws of the Commonwealth of Massachusetts with respect to the
issuance of the Acquiring Fund Shares and the assumption of the
Liabilities in exchange for the transfer of the Assets pursuant
to this Agreement have been obtained or made, except such as may
be required under state securities or blue sky laws, as to which
such counsel need express no opinion; and (f) to the knowledge of
such counsel, and without any independent investigation, other
than as disclosed on the schedule provided by the Acquiring
Entity pursuant to paragraph 4.2 of this Agreement, the Acquiring
Fund is not subject to any litigation or administrative
proceeding that could reasonably be expected to have a materially
adverse effect on the operations of the Acquiring Fund. Such
opinion may state that it is solely for the benefit of the
Acquired Entity and the Acquired Entity Board. Such opinion may
contain such assumptions and limitations as shall be in the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP appropriate to render the
opinions expressed therein. Such opinion also shall include such
other matters incident to the transactions contemplated hereby as
the Acquired Entity, on behalf of the Acquired Fund, may
reasonably request..
8.8 The Assets will include no assets which the Acquiring
Fund, by reason of limitations contained in the Acquiring Entity
Declaration or in investment restrictions in effect on the
Closing Date, may not properly acquire.
9. INDEMNIFICATION
9.1 The Acquiring Entity, 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 Entity and the members of the Acquired Entity Board
and its officers 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 Entity and those board
members and officers may become subject, insofar as such loss,
claim, damage, liability or expense (or actions with respect
thereto) arises out of or is based on (a) any breach by the
Acquiring Entity, on behalf of the Acquiring Fund, of any of its
representations, warranties, covenants or agreements set forth in
this Agreement or (b) any act, error, omission, neglect,
misstatement, materially misleading statement, breach of duty or
other act wrongfully done or attempted to be committed by the
Acquiring Entity or the members of the Acquired Entity Board or
its officers prior to the Closing Date, provided that such
indemnification by the Acquiring Entity is not (i) in violation
of any applicable law or (ii) otherwise prohibited as a result of
any applicable order or decree issued by any governing regulatory
authority or court of competent jurisdiction.
9.2 The Acquired Entity, 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 Entity and the members of the Acquiring Entity
Board and its officers 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 Entity and those
board members and officers may become subject, insofar as such
loss, claim, damage, liability or expense (or actions with
respect thereto) arises out of or is based on (a) any breach by
the Acquired Entity, on behalf of the Acquired Fund, of any of
its representations, warranties, covenants or agreements set
forth in this Agreement or (b) any act, error, omission, neglect,
misstatement, materially misleading statement, breach of duty or
other act wrongfully done or attempted to be committed by the
Acquired Entity or the members of the Acquired Entity Board or
its officers prior to the Closing Date, provided that such
indemnification by the Acquired Entity is not (i) in violation of
any applicable law or (ii) otherwise prohibited as a result of
any applicable order or decree issued by any governing regulatory
authority or court of competent jurisdiction.
10. BROKER FEES AND EXPENSES
10.1 The Acquiring Entity, on behalf of the Acquiring Fund,
and the Acquired Entity, on behalf of the Acquired Fund,
represent and warrant to each other that there are no brokers or
finders entitled to receive any payments in connection with the
transactions provided for herein.
10.2 ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC will pay the
printing, proxy solicitation, mailing and postage costs of the
Reorganization. Additional costs, including expenses related to
the preparation and filing of the Registration Statement, legal
fees and auditor fees, shall be divided equally between ▇▇▇▇
▇▇▇▇▇ Partners Fund Advisor, LLC, on the one hand, and the
Acquiring Entity and the Acquired Entity, on the other hand.
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 or would prevent the Reorganization from qualifying
as a tax-free reorganization.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Acquiring Entity and the Acquired Entity agree that
neither party has made any representation, warranty or covenant,
on behalf of either the Acquiring Fund or the Acquired Fund,
respectively, not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
11.2 The covenants to be performed after the Closing by both
the Acquiring Entity and the Acquired Entity, and the obligations
of the Acquiring Entity, on behalf of the Acquiring Fund, in
Article 9, shall survive the Closing. All other representations,
warranties and covenants contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions
contemplated hereunder and shall terminate on the Closing.
12. TERMINATION
This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the
Closing Date by resolution of either the Acquiring Entity Board
or the Acquired Entity Board, if circumstances should develop
that, in the opinion of that Board, make proceeding with the
Agreement inadvisable with respect to the Acquiring Fund or the
Acquired Fund, respectively. Any such termination resolution to
be effective shall be promptly communicated to the other party
and, in any event, prior to the Closing Date.
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 Acquired Entity and the Acquiring
Entity; provided, however, that following the meeting of the
Acquired Fund shareholders called by the Acquired Fund pursuant
to paragraph 5.2 of this Agreement, no such amendment may have
the effect of changing the provisions for determining the number
of Acquiring Fund Shares to be issued to Acquired Fund
shareholders under this Agreement to the detriment of such
shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted
by any provisions of this Agreement shall be in writing and shall
be given by facsimile, electronic delivery (i.e., e-mail),
personal service or prepaid or certified mail addressed to the
Acquiring Entity or the Acquired Entity, at its address set forth
in the preamble to this Agreement, in each case to the attention
of its President.
15 HEADINGS; COUNTERPARTS; GOVERNING LAW; SEVERABILITY;
.. ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
15.3 This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State of
New York.
15.4 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 parties. 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.
15.5 The Acquired Entity Declaration is on file with the
Secretary of State of the Commonwealth of Massachusetts.
Consistent with the Acquired Entity Declaration, the obligations
of the Acquired Entity with respect to the Acquired Fund entered
into in the name or on behalf the Acquired Entity by any of its
Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, officers, employees, agents or shareholders
of the Acquired Entity, personally, but bind only the assets of
the Acquired Entity belonging to the Acquired Fund, and all
persons dealing with any series or funds of the Acquired Entity
must look solely to the assets of the Acquired Entity belonging
to such series or fund for the enforcement of any claims against
the Acquired Entity.
15.6 The Acquiring Entity Declaration is on file with the
Secretary of State of the Commonwealth of Massachusetts.
Consistent with the Acquiring Entity Declaration, the obligations
of the Acquiring Entity with respect to the Acquiring Fund
entered into in the name or on behalf of the Acquiring Entity by
any of its Trustees, officers, employees or agents are made not
individually, but in such capacities, and are not binding upon
any of the Trustees, officers, employees, agents or shareholders
of the Acquiring Entity, personally, but bind only the assets of
the Acquiring Entity belonging to the Acquiring Fund, and all
persons dealing with any series or funds of the Acquiring Entity
must look solely to the assets of the Acquiring Entity belonging
to such series or fund for the enforcement of any claims against
the Acquiring Entity.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officer.
▇▇▇▇ ▇▇▇▇▇ PARTNERS ▇▇▇▇ ▇▇▇▇▇ PARTNERS
TRUST II, on behalf of its series INVESTMENT SERIES,
on behalf of
▇▇▇▇ ▇▇▇▇▇ PARTNERS its series ▇▇▇▇ ▇▇▇▇▇ PARTNERS
INTERNATIONAL LARGE CAP FUND INTERNATIONAL FUND
By: /s/ R. ▇▇▇ ▇▇▇▇▇▇ By: /s/ R. ▇▇▇
▇▇▇▇▇▇
Name: R. ▇▇▇ ▇▇▇▇▇▇ Name: R. ▇▇▇
▇▇▇▇▇▇
Title: Chairman, President and Chief Title: Chairman,
President and Chief
Executive Officer Executive Officer
Solely for purposes of paragraph 10.2 of this Agreement:
▇▇▇▇ ▇▇▇▇▇ PARTNERS FUND ADVISOR, LLC
By /s/ R. ▇▇▇ ▇▇▇▇▇▇
:
Name: R. ▇▇▇ ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
SCHEDULE 4.1
NONE
SCHEDULE 4.2
NONE