EXHIBIT NO. 99.4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this
25th day of October, 2006, by and between MFS Government Limited Maturity Fund,
a Massachusetts business trust (the "Acquired Fund"), and MFS Series Trust IX, a
Massachusetts business trust ("Trust IX"), on behalf of MFS Limited Maturity
Fund, a segregated portfolio of assets ("series") thereof (the "Surviving
Fund"), each with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Each of the Acquired Fund and the Surviving Fund
are also referred to herein as a "Fund" and, together, as the "Funds."
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of the regulations under Section 368(a) (the
"Regulations") of the United States Internal Revenue Code of 1986, as amended
(the "Code"). The reorganization will consist of (1) the transfer of the Assets
(as defined herein) of the Acquired Fund to the Surviving Fund in exchange
solely for the assumption by the Surviving Fund of the Liabilities (as defined
herein) of the Acquired Fund and the issuance to the Acquired Fund of shares of
beneficial interest, no par value ("shares"), in the Surviving Fund (the
"Reorganization Shares"), (2) the distribution of the Reorganization Shares to
the shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein and (3) the termination of the Acquired Fund, all upon the terms
and conditions hereinafter set forth in this Agreement (collectively, the
"Reorganization").
All representations, warranties, covenants and obligations of the
Surviving Fund and the Acquired Fund (each a "Fund") contained herein shall be
deemed to be representations, warranties, covenants and obligations of the
Acquired Fund and Trust IX, acting on behalf of the Surviving Fund,
respectively, and all rights and benefits created hereunder in favor of the
Surviving Fund and the Acquired Fund shall inure to, and shall be enforceable
by, the Acquired Fund and Trust IX, acting on behalf of the Surviving Fund,
respectively.
The Acquired Fund's shares are divided into four classes, designated Class
A, Class B, Class C, and Class I shares (the "Class A Acquired Fund Shares,"
"Class B Acquired Fund Shares," "Class C Acquired Fund Shares", and "Class I
Acquired Fund Shares," respectively, and together, the "Acquired Fund Shares").
The Surviving Fund's shares are divided into thirteen classes, including four
classes designated Class A, Class B, Class C, and Class I shares (the "Class A
Reorganization Shares," "Class B Reorganization Shares," "Class C Reorganization
Shares", and "Class I Reorganization Shares," respectively), which four classes
are the only classes of the Surviving Fund's shares involved in the
Reorganization and thus included in the term "Reorganization Shares." Each class
of Acquired Fund Shares is substantially similar to the corresponding class of
Reorganization Shares, i.e., the Funds' Class A, Class B, Class C and Class I
shares
correspond to each other.
In consideration of the premises of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. The Reorganization
1.1 The Acquired Fund will transfer to the Surviving Fund all of its
assets (consisting of, without limitation, portfolio securities and instruments,
dividend and interest receivables, claims and rights of action, cash and other
assets) as set forth in a statement of assets and liabilities as of the
Valuation Date (as defined in paragraph 2.1 hereof) prepared in accordance with
generally accepted accounting principles consistently applied, certified by the
Acquired Fund's Treasurer or Assistant Treasurer and delivered by the Acquired
Fund to the Surviving Fund pursuant to paragraph 5.6 hereof (the "Statement of
Assets and Liabilities") (collectively, the "Assets"), free and clear of all
liens and encumbrances, except as otherwise provided herein, in exchange solely
for (a) the assumption by the Surviving Fund of all of the liabilities of the
Acquired Fund as set forth in the Statement of Assets and Liabilities
(collectively, the "Liabilities") and (b) the issuance and delivery by the
Surviving Fund to the Acquired Fund, for distribution in accordance with
paragraph 1.3 hereof pro rata to the Acquired Fund shareholders of record
determined as of the close of business on the Valuation Date (the "Acquired Fund
Shareholders"), of the number of full and fractional (rounded to the third
decimal place) Reorganization Shares determined as provided in paragraph 2.2
hereof. Such transactions shall take place at the closing provided for in
paragraph 3.1 hereof (the "Closing").
1.2 The Acquired Fund has provided the Surviving Fund with a list of the
current securities holdings and other assets of the Acquired Fund as of the date
of execution of this Agreement. The Acquired Fund reserves the right to sell any
of these securities or other assets prior to the Closing.
1.3 On or as soon after the closing date established in paragraph 3.1
hereof (the "Closing Date") as is conveniently practicable (the "Liquidation
Date"), the Acquired Fund will distribute the Reorganization Shares it received
pursuant to paragraph 1.1 hereof pro rata to the Acquired Fund Shareholders in
actual or constructive exchange for their Acquired Fund Shares in complete
liquidation of the Acquired Fund. Such distribution will be accomplished by the
transfer of the Class A, Class B, Class C, and/or Class I Reorganization Shares
then credited to the account of the Acquired Fund on the books of the Surviving
Fund to open accounts on the share records of the Surviving Fund in the names of
the Acquired Fund Shareholders and representing the respective pro rata number
of full and fractional (rounded to the third decimal place) Class A, Class B,
Class C, and/or Class I Reorganization Shares due such shareholders, by class
(i.e., the account for each Acquired Fund Shareholder of Class A, Class B, Class
C, and/or Class I Acquired Fund Shares shall be credited with the respective pro
rata number of
Class A, Class B, Class C, and/or Class I (as applicable) Reorganization Shares
due that shareholder). The Surviving Fund will not issue share certificates
representing the Reorganization Shares in connection with such distribution,
except in connection with pledges and assignments and in certain other limited
circumstances.
1.4 Acquired Fund Shareholders holding certificates representing their
ownership of Acquired Fund Shares shall surrender such certificates or deliver
an affidavit with respect to lost certificates, in such form and accompanied by
such surety bonds as the Acquired Fund may require (collectively, an
"Affidavit"), to the Acquired Fund prior to the Closing Date. Any Acquired Fund
Share certificate that remains outstanding on the Closing Date shall be deemed
to be cancelled, shall no longer show evidence of ownership of Acquired Fund
Shares and shall not evidence ownership of any Reorganization Shares. Unless and
until any such certificate shall be so surrendered or an Affidavit relating
thereto shall be delivered, any dividends and other distributions payable by the
Surviving Fund subsequent to the Closing Date with respect to the Reorganization
Shares allocable to a holder of such certificate(s) shall be paid to such
holder, but such holder may not redeem or transfer such Reorganization Shares.
1.5 Any transfer taxes payable upon issuance of the Reorganization Shares
in a name other than the registered holder of the Acquired Fund Shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Reorganization Shares
are to be issued and transferred.
2. Valuation
2.1 The net asset value of each class of the Reorganization Shares and the
net value of the Assets shall in each case be determined as of the close of
business on the last business day preceding the Closing Date (the "Valuation
Date"). The net asset value of each class of the Reorganization Shares shall be
computed by State Street Bank and Trust Company (the "Custodian"), as custodian
and pricing agent for the Surviving Fund, using the valuation procedures set
forth in the Trust IX's Amended and Restated Declaration of Trust ("the Trust
IX's Declaration of Trust") or By-laws and the Surviving Fund's then-current
prospectus and statement of additional information (collectively, the "Surviving
Fund Valuation Procedures"), to not less than two decimal places. The net value
of the Assets shall be computed by the Custodian, as custodian and pricing agent
for the Acquired Fund, by calculating the value of the Assets and subtracting
therefrom the amount of the Liabilities, using the valuation procedures set
forth in the Acquired Fund's Amended and Restated Declaration of Trust
("Acquired Fund's Declaration of Trust") or By-laws and the Acquired Fund's
then-current prospectus and statement of additional information (collectively,
the "Acquired Fund Valuation Procedures"). The determinations of the Custodian
shall be conclusive and binding on all parties in interest; provided,
however, that, in computing each Fund's net asset value in accordance with this
paragraph 2.1, any fair value determination required to be made by the Surviving
Fund Valuation Procedures or Acquired Fund Valuation Procedures with respect to
a portfolio security or other asset of either Fund shall be made in accordance
with the applicable Fund's Valuation Procedures, and any such fair value
determinations shall be conclusive and binding on the Custodian and all parties
in interest.
2.2 The number of each class of Reorganization Shares (including
fractional shares, if any, rounded to the third decimal place) the Surviving
Fund shall issue pursuant to paragraph 1.1(b) hereof shall be as follows: (a)
the number of Class A Reorganization Shares shall be determined by dividing the
net value of the Assets (computed as set forth in paragraph 2.1 hereof) (the
"Acquired Fund Value") attributable to the Class A Acquired Fund Shares by the
net asset value of a Class A Reorganization Share (computed as set forth in such
paragraph), (b) the number of Class B Reorganization Shares shall be determined
by dividing the Acquired Fund Value attributable to the Class B Acquired Fund
Shares by the net asset value of a Class B Reorganization Share (as so
computed), (c) the number of Class C Reorganization Shares shall be determined
by dividing the Acquired Fund Value attributable to the Class C Acquired Fund
Shares by the net asset value of a Class C Reorganization Share (as so
computed), and (d) the number of Class I Reorganization Shares shall be
determined by dividing the Acquired Fund Value attributable to the Class I
Acquired Fund Shares by the net asset value of a Class I Reorganization Share
(as so computed).
2.3 Except for certain fair value determinations as described in paragraph
2.1 hereof, all computations of value shall be made by the Custodian in its
capacity as pricing agent for the Surviving Fund and the Acquired Fund, as
applicable, and in accordance with its regular practice in pricing the shares
and assets of the Surviving Fund and the Acquired Fund, as applicable, using the
relevant Fund's Valuation Procedures.
3. Closing and Closing Date
3.1 The Closing Date shall be as soon as practicable after the
Reorganization is approved by shareholders of the Acquired Fund, but in no event
later than November 30, 2006. The Closing shall be held at 8:00 a.m., Boston
time, at the offices of the Surviving Fund, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other time and/or place as the parties may
agree.
3.2 Portfolio securities shall be transferred by the Acquired Fund to the
Custodian for the account of the Surviving Fund on the Closing Date, duly
endorsed in proper form for transfer, in such condition as to constitute good
delivery thereof in accordance with the custom of brokers or, in the case of
portfolio securities held in the US Treasury Department's book-entry system or
by
the Depository Trust Company or other third-party depositories, by transfer
to the account of the Custodian in accordance with Rule 17f-4, Rule 17f-5, or
Rule 17f-7, as the case may be, under the Investment Company Act of 1940, as
amended (the "1940 Act") and shall be accompanied by all necessary federal and
state stock transfer stamps or a check for the appropriate purchase price
thereof. The cash delivered shall be in the form of currency, certified or
official bank check or federal fund wire, payable to the order of "State Street
Bank and Trust Company, Custodian for the MFS Limited Maturity Fund" or in the
name of any successor organization.
3.3 If on the Valuation Date (a) the New York Stock Exchange shall be
closed to trading or trading thereon 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 net value of the Assets or the net asset value of each
class of the Reorganization Shares is impracticable, the Valuation Date shall be
postponed until the next business day when trading shall have been fully resumed
and reporting shall have been restored and the Closing Date shall be adjusted
accordingly to the first business day following the Valuation Date; provided
that if trading shall not be fully resumed and reporting restored on or before
December 31, 2006, this Agreement may be terminated by either Fund upon the
giving of written notice to the other.
3.4 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status of the Acquired Fund Shareholders and the
number of outstanding Acquired Fund Shares owned by each such shareholder, all
as of the close of business on the Valuation Date (the "Shareholder List"). The
Surviving Fund shall issue and deliver to the Acquired Fund a confirmation
evidencing the Reorganization Shares to be credited on the Liquidation Date, or
provide evidence satisfactory to the Acquired Fund that such Reorganization
Shares have been credited to the Acquired Fund's account on the books of the
Surviving Fund. At the Closing each party shall deliver to the other such bills
of sale, checks, assignments, stock certificates, receipts or other documents as
such other party or its counsel may reasonably request.
4. Representations and Warranties
4.1 The Acquired Fund represents and warrants to Trust IX, on behalf of
the Surviving Fund, as follows:
(a) The Acquired Fund is a business trust that is duly organized,
validly existing and in good standing under the laws of The Commonwealth
of Massachusetts and has the power to own all of its properties and assets
and, subject to approval by the shareholders of the Acquired Fund, to
carry out its obligations under this Agreement. The Acquired Fund is not
required to qualify to do business in any other jurisdiction. This
Agreement has been
duly authorized by the Acquired Fund, subject to the
approval of the shareholders of the Acquired Fund. The Acquired Fund has
all necessary federal, state and local authorizations to own all of the
properties and assets of the Acquired Fund and to carry on its business as
now being conducted.
(b) The Acquired Fund is a duly registered investment company
classified as a management company of the open-end type, and its
registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the 1940 Act, is in full
force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement by the Acquired Fund will not result, in
violation of any provision of the Acquired Fund's Declaration of Trust or
By-Laws or of any agreement, indenture, instrument, contract, lease or
other undertaking to which Acquired Fund is a party or by which the
Acquired Fund is bound;
(d) The Acquired Fund has no material contracts or other commitments
(other than this Agreement and agreements for the purchase and sale of
securities entered into in the ordinary course of business and consistent
with the Fund's obligations under this Agreement) that will not be
terminated at or prior to the Closing Date and no such termination will
result in liability to the Acquired Fund (or the Surviving Fund);
(e) Except as otherwise disclosed in writing to and accepted by
Trust IX, on behalf of the Surviving Fund, no material litigation or
administrative proceeding or investigation of or before any court or
governmental body is currently pending or, to the knowledge of the
Acquired Fund, threatened against the Acquired Fund or any of its
properties or assets. The Acquired Fund knows of no facts that might form
the basis for the institution of such proceedings, and 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 that materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
(f) The statement of assets and liabilities, including the schedule
of portfolio investments, of the Acquired Fund as of December 31, 2005,
and the related statement of operations for the fiscal year then ended,
and the statement of changes in net assets for the fiscal years ended
December 31, 2005 and December 31, 2004 (copies of which have been
furnished to the Surviving Fund) have been audited by Ernst & Young LLP,
Independent Registered Public Accountants, and present fairly in all
material respects the financial position of the Acquired Fund as of
December 31, 2005 and the results of its operations and changes in net
assets for the respective stated periods in accordance with accounting
principles generally accepted in the
United States of America consistently applied, and there are no known
actual or contingent liabilities of the Acquired Fund as of the
respective dates thereof not disclosed therein. The unaudited
statement of assets and liabilities, including the schedule of
portfolio investments, of the Acquired Fund as of June 30, 2006, and
the related statement of operations for the fiscal semi-annual period
then ended, and the statement of changes in net assets for the fiscal
semi-annual period ended June 30, 2006 (copies of which have been
furnished to the Surviving Fund) present fairly in all material
respects the financial position of the Acquired Fund as of June 30,
2006 and the results of its operations and changes in net assets for
the semi-annual period in accordance with accounting principles
generally accepted in the United States of America consistently
applied, and there are no known actual or contingent liabilities of
the Acquired Fund as of June 30, 2006 not disclosed therein;
(g) Since December 31, 2005, there has not been any material
adverse change in the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary
course of business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was incurred,
except as otherwise disclosed to and accepted by Trust IX, on behalf of
the Surviving Fund. For the purposes of this subparagraph (g), a decline
in net asset value per Acquired Fund Share resulting from losses upon the
disposition of investments or from changes in the value of investments
held by the Acquired Fund, or a distribution or a payment of dividends
shall not constitute a material adverse change;
(h) As of the Closing Date, the Acquired Fund will have, within the
times and in the manner prescribed by law, properly filed all required
federal and other tax returns and reports which, to the knowledge of the
Acquired Fund's officers, are required to have been filed by the Acquired
Fund by such date and all such returns and reports were complete and
accurate in all material respects. The Acquired Fund has timely paid or
will timely pay, in the manner prescribed by law, all federal and other
taxes shown to be due on said returns or on any assessments received by
the Acquired Fund. All tax liabilities of the Acquired Fund have been
adequately provided for on its books, and no tax deficiency or liability
of the Acquired Fund has been asserted, and no question with respect
thereto has been raised or is under audit, by the Internal Revenue Service
or by any state, local or other tax authority for taxes in excess of those
already paid.
(i) For each taxable year of its operations and since its
inception, for federal income tax purposes, the Acquired Fund has
satisfied, and for the current taxable year, it will satisfy the
requirements of Subchapter M of the Code for qualification and treatment
as a "regulated investment company," and the provisions of sections 851
through 855 of the Code have applied and will continue to apply to
Acquired Fund for each taxable year since its
inception and for the remainder of its current taxable year beginning
January 1, 2006 and ending on the Closing Date.
Acquired Fund will declare to Acquired Fund shareholders of record
on or prior to the Closing Date a dividend or dividends which together
with all previous such dividends shall have the effect of distributing to
the Acquired Fund shareholders (a) all of the excess of (i) Acquired
Fund's investment income excludable from gross income under section 103(a)
of the Code over (ii) Acquired Fund's deductions disallowed under sections
265 and 171(a)(2) of the Code, (b) all of Acquired Fund's investment
company taxable income (as defined in section 852 of the Code), (computed
in each case without regard to any deduction for dividends paid), and (c)
all of Acquired Fund's net realized capital gain (after reduction for any
capital loss carryover) in each case for both the taxable year ending on
December 31, 2005 and the short taxable year beginning on January 1, 2006
and ending on the Closing Date. Such dividends will be made to ensure
continued qualification of Acquired Fund as a "regulated investment
company" for tax purposes and to eliminate fund-level tax.
(j) The authorized capital of the Acquired Fund consists of an
unlimited number of shares, divided into four classes at the date hereof.
All issued and outstanding Acquired Fund Shares are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
nonassessable by the Acquired Fund (except as described in the Acquired
Fund's current prospectus and statement of additional information). 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
Shareholder List. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Acquired Fund
Shares, nor is there outstanding any security convertible into any
Acquired Fund Shares;
(k) Except as previously disclosed to Trust IX, at the Closing Date
the Acquired Fund will have good and marketable title to the Assets and
full right, power and authority to sell, assign, transfer and deliver the
Assets hereunder, and upon delivery and payment for the Assets, the
Surviving 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 Securities Act of 1933, as amended (the "1933
Act");
(l) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquired
Fund (with the exception of the approval of this Agreement by the Acquired
Fund's shareholders holding at least a majority of the outstanding voting
securities (as defined by the ▇▇▇▇ ▇▇▇) of the Acquired Fund), and this
Agreement constitutes a valid and binding obligation of the Acquired Fund
enforceable in accordance with its terms, subject to the approval of such
shareholders and, 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 information to be furnished by the Acquired Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply fully
with federal securities and other laws and regulations thereunder
applicable thereto;
(n) The proxy statement of the Acquired Fund (the "Proxy Statement")
to be included in the Registration Statement (as defined in paragraph 5.7
hereof) (other than written information furnished by the Surviving Fund
for inclusion therein, as covered by the Trust IX's representation and
warranty in paragraph 4.2(n) hereof), on the effective date of the
Registration Statement, on the date of the Meeting (as defined in
paragraph 5.2 hereof) and on the Closing Date, will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
(o) 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 by this Agreement, except such as
have been obtained under the 1933 Act, the Securities Exchange Act of
1934, as amended, and the 1940 Act and the rules and regulations
thereunder (collectively, the "Acts"), and such as may be required under
state securities laws;
(p) All of the issued and outstanding Acquired Fund Shares have been
offered for sale and sold in conformity with all applicable federal and
state securities laws, except as may have been previously disclosed in
writing to the Surviving Fund;
(q) The current prospectus and statement of additional information
of the Acquired Fund, each dated May 1, 2006, as supplemented and updated
from time to time, will conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder on the date of the Proxy
Statement, on the date of the Meeting and on the Closing Date and will not
on any of such dates include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and
(r) The Acquired Fund incurred the Liabilities in the ordinary
course of its business.
4.2 Trust IX, on behalf of the Surviving Fund, represents and warrants to
the Acquired Fund, as follows:
(a) Trust IX is a business trust that is duly organized, validly
existing and in good standing under the laws of The Commonwealth of
Massachusetts and has the power to own all of its properties and assets
and to carry out its obligations under this Agreement. Neither Trust IX
nor the Surviving Fund is required to qualify to do business in any other
jurisdiction. This Agreement has been duly authorized by Trust IX on
behalf of the Surviving Fund. Trust IX has all necessary federal, state
and local authorizations to own all of its properties and assets and to
carry on its business as now being conducted.
(b) Trust IX is a duly 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 is in full force
and effect; and the Surviving Fund is a separate series of Trust IX duly
constituted in accordance with the applicable provisions of the Trust IX's
Declaration of Trust and By-laws and the laws of the Commonwealth of
Massachusetts;
(c) The current prospectus and statement of additional information
of the Surviving Fund, each dated September 1, 2005, as supplemented and
updated from time to time (collectively, the "Surviving Fund Prospectus"),
and the Registration Statement (other than written information furnished
by the Acquired Fund for inclusion therein as covered by the Acquired
Fund's representation and warranty in paragraph 4.1(m) hereof) will
conform in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder on the date of the Proxy Statement, on the date of the Meeting
and on the Closing Date and will not on any of such dates include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) At the Closing Date, the Surviving Fund will have good and
marketable title to its assets;
(e) The Surviving Fund is not, and the execution, delivery and
performance of this Agreement will not result, in violation of Trust IX's
Declaration of Trust or By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which Trust IX or the
Surviving Fund is a party or by which Trust IX or the Surviving Fund is
bound;
(f) Unless otherwise disclosed to the Acquired Fund, no material
litigation or administrative proceeding or investigation of or before any
court or governmental body is currently pending or, to the knowledge of
Trust IX or the Surviving Fund, threatened against Trust IX or the
Surviving Fund or any of its properties or assets, except as previously
disclosed in writing to the Acquired Fund. The Surviving Fund knows of no
facts that might form the basis for the institution of such proceedings,
and Trust IX or the Surviving Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body that materially and adversely affects its business or its ability to
consummate the transaction herein contemplated;
(g) The statement of assets and liabilities, including the schedule
of portfolio investments, of the Surviving Fund as of April 30, 2006, and
the related statement of operations for the fiscal year then ended, and
the statement of changes in net assets for the fiscal years ended April
30, 2006 and April 30, 2005 (copies of which have been furnished to the
Acquired Fund) have been audited by Deloitte & Touche LLP, Independent
Registered Public Accountants, and present fairly in all material respects
the financial position of the Surviving Fund as of April 30, 2006 and the
results of its operations and changes in net assets for the respective
stated periods in accordance with accounting principles generally accepted
in the United States of America consistently applied, and there are no
known actual or contingent liabilities of the Surviving Fund as of the
respective dates thereof not disclosed therein;
(h) Since April 30, 2006, there has not been any material adverse
change in the Surviving Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business,
or any incurrence by the Surviving Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund. For the purposes of this
subparagraph (h), a decline in net asset value per Surviving Fund Share
resulting from losses upon the disposition of investments or from changes
in the value of investments held by the Surviving Fund, or a distribution
or a payment of dividends, shall not constitute a material adverse change;
(i) As of the Closing Date, Trust IX, on behalf of the Surviving
Fund, will have, within the times and in the manner prescribed by law,
properly filed all federal and other tax returns and reports which, to the
knowledge of the officers of Trust IX, are required to be filed by the
Trust IX on behalf of the Surviving Fund, and all such returns and reports
were complete and accurate in all material respects. Trust IX, on behalf
of the Surviving Fund, has timely paid or will timely pay, in the manner
prescribed by law, all federal and other taxes shown to be due on said
returns or on any assessments received by the Surviving Fund. All tax
liabilities of the Surviving Fund have been
adequately provided for on its books, and no tax deficiency or
liability of the Surviving Fund has been asserted, and no question
with respect thereto has been raised or is under audit, by the
Internal Revenue Service or by any state, local or other tax authority
for taxes in excess of those already paid.
(j) For each taxable year of its operations since its inception,
for federal income tax purposes, the Surviving Fund has satisfied, and for
the current taxable year, it will satisfy the requirements of Subchapter M
of the Code for qualification and treatment as a regulated investment
company, and the provisions of sections 851 through 855 of the Code have
applied and will continue to apply to the Surviving Fund for each taxable
year since its inception and for the remainder of its current taxable year
beginning May 1, 2006 and ending on the Closing Date.
(k) The authorized capital of the Surviving Fund consists of an
unlimited number of shares and divided into thirteen classes, at the date
hereof. All issued and outstanding Surviving Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and nonassessable by the Surviving Fund (except as described in the
Surviving Fund's current prospectus and statement of additional
information). The Surviving Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Surviving Fund
Shares, nor is there outstanding any security convertible into any such
shares;
(l) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of Trust IX, on
behalf of the Surviving Fund, and this Agreement constitutes a valid and
binding obligation of the Surviving 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 Reorganization Shares to be issued and delivered to the
Acquired Fund pursuant to the terms of this Agreement will be duly
authorized at the Closing Date and, when so issued and delivered, will be
duly and validly issued Surviving Fund Shares and will be fully paid and
nonassessable by the Surviving Fund (except as described in the Surviving
Fund's current prospectus and statement of additional information);
(n) The information to be furnished by the Surviving Fund for use in
applications for orders, registration statements, proxy materials and
other documents that may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply fully
with federal securities and other laws and regulations applicable thereto;
(o) Trust IX, on behalf of the Surviving Fund, agrees to use all
reasonable efforts to obtain the approvals and authorizations required by
the 1933 Act, the 1940 Act and such state securities laws or other
securities laws as it may deem appropriate in order to continue its
operations and the operations of the Surviving Fund after the Closing
Date;
(p) All of the Surviving Fund's issued and outstanding Surviving
Fund Shares have been offered for sale and sold in conformity with all
applicable federal and state securities laws, except as may have been
previously disclosed in writing to the Acquired Fund;
(q) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Surviving
Fund, of the transactions contemplated by this Agreement, except such as
have been obtained under the Acts and such as may be required under state
securities laws; and
(r) No consideration other than Reorganization Shares (and the
Surviving Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization.
5. Covenants
5.1 Each Fund will operate its business in the ordinary course between the
date hereof and the Closing Date, it being understood that such ordinary course
of business will include the declaration and payment of customary dividends and
other distributions.
5.2 The Acquired Fund will call a meeting of shareholders of the Acquired
Fund (the "Meeting") 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 Acquired Fund covenants that the Reorganization 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.
5.4 The Acquired Fund will provide such information as Trust IX reasonably
requests concerning the ownership of Acquired Fund Shares, including the
information specified in paragraph 3.4 hereof.
5.5 Subject to the provisions of this Agreement, the Acquired Fund and
Trust IX 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 Acquired Fund will furnish to Trust IX on the Closing Date the
Statement of Assets and Liabilities. As promptly as practicable, but in any case
within 60 days after the Closing Date, the Acquired Fund or its designee will
furnish to Trust IX, in such form as is reasonably satisfactory to Trust IX, a
statement of the earnings and profits of the Acquired Fund for federal income
tax purposes, and of any capital loss carryovers and other items that the
Surviving Fund will succeed to and take into account as a result of Section 381
of the Code.
5.7 Trust IX, on behalf of the Surviving Fund, will prepare and file with
the Commission a Registration Statement on Form N-14 (the "Registration
Statement") in compliance with the 1933 Act and the 1940 Act, in connection with
the issuance of the Reorganization Shares as contemplated herein.
5.8 Trust IX, on behalf of the Surviving Fund, will prepare a Proxy
Statement, to be included in the Registration Statement in compliance with the
Acts, in connection with the Meeting to consider approval of this Agreement.
5.9 The Acquired Fund agrees to provide the Surviving Fund with
information applicable to the Acquired Fund required under the Acts for
inclusion in the Registration Statement and the Proxy Statement.
6. Conditions Precedent to Obligations of the Acquired Fund
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be, at its election, subject to the performance by the
Surviving 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 Trust IX, on behalf of the
Surviving 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 Trust IX, on behalf of the Surviving Fund, shall have delivered to the
Acquired Fund on the Closing Date a certificate executed in its name by its
President, Vice President, Secretary or Assistant Secretary and Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Acquired Fund and
dated as of the Closing Date, to the effect that the representations and
warranties of the Surviving 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, and that Trust IX and the Surviving Fund shall
have complied with all covenants and agreements and satisfied all conditions on
their parts to be performed or satisfied under this Agreement at or prior to the
Closing Date, and as to such other matters as the Acquired Fund shall reasonably
request; and
6.3 The Acquired Fund shall have received on the Closing Date a favorable
opinion from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Associate General Counsel and Senior Vice
President of Massachusetts Financial Services Company ("MFS"), the Surviving
Fund's investment adviser, dated as of the Closing Date, in a form satisfactory
to the Acquired Fund, to the effect that:
(i) Trust IX is a business trust duly organized and validly existing
under the laws of The Commonwealth of Massachusetts and has power to
own all of its properties and assets and to carry on its business as
currently conducted, as described in the Registration Statement. The
Surviving Fund is a separate series of Trust IX duly constituted in
accordance with Trust IX's Declaration of Trust and By-laws;
(ii) this Agreement has been duly authorized, executed and delivered by
the Surviving Fund and, assuming that the Surviving Fund prospectus
contained in the Registration Statement, the Registration Statement
and the Proxy Statement comply with the Acts, and assuming due
authorization, execution and delivery of this Agreement by the
Acquired Fund, is a valid and binding obligation of Trust IX and the
Surviving Fund enforceable against Trust IX and the Surviving Fund in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and other
equitable principles;
(iii) assuming that consideration therefor of not less than the net asset
value thereof has been paid, the Reorganization Shares to be issued
and delivered to the Acquired Fund on behalf of the Acquired Fund
Shareholders as provided by this Agreement are duly authorized and
upon such issuance and delivery will be validly issued and
outstanding and fully paid and nonassessable by the Surviving Fund
(except as described in the Surviving Fund's current prospectus and
statement of additional information), and no shareholder of the
Surviving Fund has any preemptive right to subscription or purchase
in respect thereof pursuant to any federal or Massachusetts law or
the Trust IX's Declaration of Trust or By-laws;
(iv) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not,
violate Trust IX's Declaration of Trust or By-Laws, or any material
provision of any agreement (known to such counsel) to which the Trust
IX or the Surviving Fund is a party or by which it is bound or, to
the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement,
judgment or decree to which the Trust IX or the Surviving Fund is a
party or by which it is bound;
(v) to the knowledge of such counsel, no consent, approval, authorization
or
order of any court or governmental authority is required for the
consummation by the Trust IX or the Surviving Fund of the
transactions contemplated herein, except such as have been
obtained under the Acts and such as may be required under state
securities laws;
(vi) the descriptions in the Registration Statement of statutes, legal and
governmental proceedings and contracts and other documents, if any,
only insofar as they relate to Trust IX or the Surviving Fund, are
accurate in all material respects;
(vii) to the knowledge of such counsel, there are no legal or governmental
proceedings relating to Trust IX or the Surviving Fund existing on or
before the date of mailing the Proxy Statement or the Closing Date
required to be described in the Registration Statement that are not
described as required;
(viii) to the knowledge of such counsel, Trust IX is a duly registered
investment company and, to the knowledge of such counsel, its
registration with the Commission as an investment company under the
1940 Act is in full force and effect; and
(ix) except as may have been previously disclosed by Trust IX, on
behalf of the Surviving Fund, in writing, to the knowledge of
such counsel, no litigation or administrative proceeding or
investigation of or before any court or governmental body
currently is pending or threatened as to Trust IX or the
Surviving Fund or any of their properties or assets, and neither
Trust IX nor the Surviving Fund is a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby.
Such opinion shall also state that while such counsel has not
independently verified, and is not passing upon and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement, she generally
reviewed and discussed certain of such statements with certain
officers of the Surviving Fund and that in the course of such review
and discussion no facts came to the attention of such counsel that
led her to believe that, on the effective date of the Registration
Statement, the date of the Meeting or the Closing Date and only
insofar as such statements relate to the Surviving Fund, the
Registration Statement contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under
which they were made, not misleading. Such opinion may state that
such counsel does not express any opinion or belief as to the
financial statements or other financial or
statistical data, or as to the information relating to the
Acquired Fund, contained in the Proxy Statement or Registration
Statement. Such opinion may also state that such opinion is
solely for the benefit of the Acquired Fund, its Board of
Trustees and its officers. Such opinion shall also include such
other matters incidental to the transaction contemplated hereby
as the Acquired Fund may reasonably request.
7. Conditions Precedent to Obligations of the Surviving Fund
The obligations of the Surviving Fund to complete the transactions
provided for herein shall be, at its election, subject to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties 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 Fund shall have delivered to the Surviving Fund the
Statement of Assets and Liabilities, together with a list of the Acquired Fund's
portfolio securities showing the federal income tax bases of and holding periods
for such securities as of the Closing Date, certified by the Treasurer or
Assistant Treasurer of the Acquired Fund;
7.3 The Acquired Fund shall have delivered to Trust IX on the Closing Date
a certificate executed in its name by its President, Vice President, Secretary
or Assistant Secretary and Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Surviving Fund and dated as of the Closing Date,
to the effect that the representations and warranties 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, and
that the Acquired Fund shall have complied with all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied under this
Agreement at or prior to the Closing Date, and as to such other matters as the
Surviving Fund shall reasonably request;
7.4 Trust IX shall have received on the Closing Date a favorable opinion
from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Associate General Counsel and Senior Vice President of
MFS, the Acquired Fund's investment adviser, dated as of the Closing Date, in a
form satisfactory to the Surviving Fund to the effect that:
(a) The Acquired Fund is a business trust duly organized and validly
existing under the laws of The Commonwealth of Massachusetts and
has power to own all of its properties and assets and to carry on
its business as
currently conducted, as described in the Registration Statement;
(b) this Agreement has been duly authorized, executed and delivered by
the Acquired Fund and, assuming that the Surviving Fund prospectus
contained in the Registration Statement, the Registration
Statement and the Proxy Statement comply with the Acts, and
assuming due authorization, execution and delivery of this
Agreement by the Surviving Fund, is a valid and binding obligation
of the Acquired Fund enforceable against the Acquired Fund in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and other
equitable principles;
The Acquired Fund has power to sell, assign, convey, transfer and
deliver the assets contemplated hereby and, upon consummation of
the transactions contemplated hereby in accordance with the terms
of this Agreement, the Acquired Fund will have duly, sold,
assigned, conveyed, transferred and delivered such assets to the
Surviving Fund.
(c) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not,
violate the Acquired Fund's Declaration of Trust or By-Laws, or
any material provision of any agreement (known to such counsel) to
which the Acquired Fund is a party or by which it is bound or, to
the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement,
judgment or decree to which the Surviving Fund is a party or by
which it is bound;
(d) to the knowledge of such counsel, 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 have been
obtained under the Acts and such as may be required under state
securities laws;
(e) the descriptions in the Proxy Statement of statutes, legal and
governmental proceedings and contracts and other documents, if
any, only insofar as they relate to the Acquired Fund, are
accurate in all material respects;
(f) to the knowledge of such counsel, there are no legal or
governmental proceedings relating to the Acquired Fund existing on
or before the date of mailing the Proxy Statement or the Closing
Date required to be described in the Proxy Statement that are not
described as required;
(g) assuming that consideration therefor of not less than the net
asset value and the par value thereof has been paid, and assuming
that such
shares were issued in accordance with the terms of the Acquired
Fund's registration statement or any amendment thereto in effect
at the time of such issuance, all issued and outstanding shares
of the Acquired Fund are validly issued and outstanding and fully
paid and nonassessable (except as described in the Acquired
Fund's current prospectus and statement of additional
information);
(h) to the knowledge of such counsel, the Acquired Fund is a duly
registered investment company and, to the knowledge of such
counsel, its registration with the Commission as an investment
company under the 1940 Act is in full force and effect; and
(i) except as may have been previously disclosed by the Acquired Fund,
in writing, to the knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court
or governmental body is currently pending or threatened as to the
Acquired Fund or any of the Acquired Fund's properties or assets,
and 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 that materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby.
Such opinion shall also state that while such counsel has not
verified, and is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Proxy Statement, she generally
reviewed and discussed certain of such statements with certain
officers of the Acquired Fund and that in the course of such
review and discussion no facts came to the attention of such
counsel that led her to believe that, on the effective date of the
Registration Statement or on the date of the Meeting and only
insofar as such statements relate to the Acquired Fund, the Proxy
Statement contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading. Such opinion may state that
such counsel does not express any opinion or belief as to the
financial statements or other financial or statistical data, or as
to the information relating to Trust IX or the Surviving Fund,
contained in the Proxy Statement or Registration Statement. Such
opinion may also state that such opinion is solely for the benefit
of the Trust IX, its Board of Trustees and its officers, and the
Surviving Fund. Such opinion shall also include such other matters
incidental to the transaction contemplated hereby as the Surviving
Fund may reasonably request; and
7.5 The assets of the Acquired Fund to be acquired by the Surviving
Fund will include no assets which the Surviving Fund, by reason of limitations
contained in Trust IX's Declaration of Trust or of investment restrictions
disclosed in the Surviving Fund's prospectus and statement of additional
information in effect on the Closing Date, may not properly acquire.
8. Further Conditions Precedent to Obligations of Trust IX and the Acquired Fund
The obligations of the Acquired Fund hereunder are, at the option of Trust
IX, and the obligations of the Trust IX hereunder are, at the option of the
Acquired Fund, each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of outstanding Acquired Fund
Shares in accordance with the provisions of the Acquired Fund's Declaration of
Trust and By-Laws and the 1940 Act and the rules thereunder, and certified
copies of the resolutions evidencing such approval shall have been delivered to
the Surviving Fund;
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state "Blue Sky" and other securities authorities,
including "no-action" positions of such federal or state authorities) deemed
necessary by Trust IX, on behalf of the Surviving Fund, or the Acquired Fund to
permit consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of either Fund, provided that either Trust IX, on
behalf of the Surviving Fund, or the Acquired Fund may waive any such conditions
for itself, respectively;
8.4 The Registration Statement shall have become effective under the 1933
Act and, as of the Closing Date, 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 Acquired Fund shall have declared to Acquired Fund shareholders of
record on or prior to the Closing Date a dividend or dividends which together
with all previous such dividends shall have the effect of distributing to the
Acquired Fund shareholders (a) all of the excess of (i) the Acquired Fund's
investment income excludable from gross income under section 103(a) of the
Code over (ii) the Acquired Fund's deductions disallowed under sections 265 and
171(a)(2) of the Code, (b) all of the Acquired Fund's investment company taxable
income as defined in section 852 of the Code, (computed in each case without
regard to any deduction for dividends paid), and (c) all of the Acquired Fund's
net realized capital gain (after reduction for any capital loss carryover) in
each case for both the taxable year ending on December 31, 2005 and the short
taxable year beginning on January 1, 2006 and ending on the Closing Date;
8.6 The Acquired Fund and Trust IX shall have received an opinion of Ropes
& ▇▇▇▇ LLP ("Tax Counsel"), reasonably satisfactory to them, as to the federal
income tax consequences mentioned below (the "Tax Opinion"). In rendering the
Tax Opinion, Tax Counsel may rely as to factual matters, exclusively and without
independent verification, on the representations and warranties made in this
Agreement, which Tax Counsel may treat as representations and warranties made to
it, and in separate letters addressed to Tax Counsel and certificates delivered
pursuant to this Agreement. The Tax Opinion shall be substantially to the effect
that, although not free from doubt, based on the existing provisions of the
Code, Treasury regulations, current administrative rules, and court decisions,
on the basis of the facts and assumptions stated therein and conditioned on
consummation of the Reorganization in accordance with this Agreement, for
federal income tax purposes:
(a) the Reorganization will constitute a reorganization within the
meaning of Section 368(a) of the Code, and Surviving Fund and
Acquired Fund each will be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(b) no gain or loss will be recognized by Surviving Fund upon the receipt
of the Assets of Acquired Fund in exchange for Reorganization Shares
and the assumption by Surviving Fund of the Liabilities of Acquired
Fund;
(c) the basis in the hands of Surviving Fund of the Assets of Acquired
Fund transferred to Surviving Fund in the Transaction will be the
same as the basis of such Assets in the hands of Acquired Fund
immediately prior to the transfer;
(d) the holding periods of the Assets of Acquired Fund in the hands of
Surviving Fund will include the periods during which such Assets were
held by Acquired Fund;
(e) no gain or loss will be recognized by Acquired Fund Shareholders upon
the transfer of Acquired Fund's Assets to Surviving Fund in exchange
for Reorganization Shares and the assumption by Surviving Fund of the
Liabilities of Acquired Fund, or upon the distribution of
Reorganization Shares by Acquired Fund to its shareholders in
liquidation pursuant to this Agreement;
(f) no gain or loss will be recognized by Acquired Fund Shareholders upon
the exchange of their Acquired Fund shares for Reorganization Shares;
(g) the aggregate basis of Reorganization Shares that an Acquired Fund
Shareholder receives in connection with the Reorganization will be
the same as the aggregate basis of his or her Acquired Fund shares
exchanged therefore;
(h) an Acquired Fund Shareholder's holding period for his or her
Reorganization Shares will be determined by including the period for
which he or she held the Acquired Fund shares exchanged therefore,
provided that he or she held such Acquired Fund shares as capital
assets; and
(i) the Surviving Fund will succeed to and take into account the items of
the Acquired Fund described in Section 381(c) of the Code, subject to
the conditions and limitations specified in Sections 381, 382, 383
and 384 of the Code and the regulations thereunder.
Notwithstanding the above, the Tax Opinion will state that no opinion is
expressed as to the effect of the Reorganization on the Funds or any Acquired
Fund Shareholder with respect to any Asset as to which any unrealized gain or
loss is required to be recognized for federal income tax purposes at the end of
a taxable year (or on the termination or transfer thereof) under federal income
tax principles. Trust IX and the Acquired Fund each agrees to make and provide
additional representations to Tax Counsel with respect to the Surviving Fund and
the Acquired Fund, respectively, that are reasonably necessary to enable Tax
Counsel to deliver the Tax Opinion. Notwithstanding anything herein to the
contrary, Trust IX and the Acquired Fund may not waive in any material respect
the condition set forth in this paragraph 8.6.
8.7 The Board of Trustees of each Fund shall have determined, with respect
to each Fund, that the Reorganization is in the best interests of the Fund and
is not dilutive of the interests of the Fund's existing shareholders and, based
on such determinations, shall have approved this Agreement and the transactions
contemplated thereby.
9. Brokerage Fees and Expenses; Contingent Deferred Sales Charges; Certain Tax
Matters; Certain Records
9.1 Trust IX and the Acquired Fund each represents and warrants to the
other that there are no brokers or finders entitled to receive any payments from
either party to this Agreement in connection with the transactions provided for
herein.
9.2 Each Fund will be liable for its own expenses incurred in connection
with entering into and carrying out the provisions of this Agreement, whether or
not
the Reorganization is consummated.
9.3 Reorganization Shares issued in connection with the Reorganization
will not be subject to any initial sales charge; however, if any Acquired Fund
Shares are at the Closing Date subject to a contingent deferred sales charge (a
"CDSC"), the Surviving Fund CDSC schedule and the methodology of aging such
shares as set forth in the Surviving Fund Prospectus will apply to the
Reorganization Shares issued in respect of such Acquired Fund Shares, and the
Reorganization Shares received by Acquired Fund Shareholders pursuant to
paragraph 1.4 hereof will, for purposes of calculating the CDSC, if applicable,
and determining when the Surviving Fund's Class B shares will convert to Class A
shares of the Surviving Fund, be treated as if purchased on the original date of
purchase of such Acquired Fund Shares.
9.4 The Acquired Fund agrees that it or its designee shall file or furnish
all federal, state and other tax returns, forms and reports, including
information returns and payee statements, if applicable, of the Acquired Fund
required by law to be filed or furnished by such dates as required by law to be
filed or furnished, and shall provide such other federal and state tax
information to shareholders of the Acquired Fund as has been customarily
provided by the Acquired Fund, all with respect to the fiscal period commencing
January 1, 2006 and ending on the Closing Date.
9.5 The Acquired Fund agrees that it or its designee shall deliver to
Trust IX, on behalf of the Surviving Fund, on the Closing Date or as soon
thereafter as possible: (a) Acquired Fund shareholder statements and tax forms
(i.e., Forms 1099) for the taxable years ended December 31, 2004 and December
31, 2005, and the short taxable year commencing on January 1, 2006 and ending on
the Closing Date (all on microfilm or microfiche, if available); (b) detailed
records indicating the status of all certificates representing ownership of the
Acquired Fund Shares issued since inception of the Acquired Fund (e.g.,
indicating whether the certificates are outstanding or cancelled); and (c) for
each Acquired Fund Shareholder, a record indicating the dollar amount of such
shareholder's Acquired Fund Share holdings as of such date representing that
portion of such holdings subject to a CDSC as of such date and that portion of
such holdings not subject to a CDSC as of such date, together with such other
information with respect thereto as the Surviving Fund may reasonably request.
10. Entire Agreement
Trust IX and the Acquired Fund agree that neither party has made any
representation, warranty or covenant not set forth herein or referred to in
Article 4 hereof or required in connection with paragraph 8.6 hereof and that
this Agreement constitutes the entire agreement between the parties.
11. Termination
11.1 This Agreement may be terminated by the mutual agreement of Trust IX
and the Acquired Fund. In addition, either party may at its option terminate
this Agreement unilaterally at or prior to the Closing Date because of:
(a) a material breach by the other of any representation, warranty or
agreement contained herein to be performed at or prior to the
Closing Date; or
(b) a condition herein expressed to be precedent to the obligations of
the terminating party that has not been met and that reasonably
appears will not or cannot be met.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of either Trust IX or the Acquired Fund, or their respective
trustees or officers, to the other party or its trustees or officers, but each
shall bear the expenses incurred by it incidental to the preparation and
carrying out of this Agreement.
12. Amendments
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Fund and Trust IX; provided, however, that following the Meeting, no
such amendment may have the effect of changing the provisions for determining
the number of Reorganization Shares to be issued to the Acquired Fund
Shareholders under this Agreement to their detriment without their further
approval; and provided further that nothing contained in this Article 12 shall
be construed to prohibit the parties from amending this Agreement to change the
Closing Date or the Valuation Date.
13. Notices
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be personally
delivered or given by prepaid telegraph, telecopy or certified mail addressed to
Trust IX or the Acquired Fund (as applicable), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Secretary.
14. Miscellaneous
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 may be executed in any number of counterparts, each
of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
14.4 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 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.
14.5 A copy of Trust IX's Declaration of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The Acquired Fund
acknowledges that the obligations of or arising out of this instrument are not
binding upon any of the Surviving Fund's trustees, officers, employees, agents
or shareholders individually, but are binding solely upon the assets and
property of the Surviving Fund in accordance with its proportionate interest
hereunder. The Acquired Fund further acknowledges that the assets and
liabilities of each series of the Surviving Fund are separate and distinct and
that the obligations of or arising out of this instrument are binding solely
upon the assets or property of the Surviving Fund.
14.6 A copy of the Acquired Fund's Declaration of Trust is on file with
the Secretary of State of The Commonwealth of Massachusetts. Trust IX
acknowledges that the obligations of or arising out of this instrument are not
binding upon any of the Acquired Fund's trustees, officers, employees, agents or
shareholders individually, but are binding solely upon the assets and property
of the Acquired Fund in accordance with its proportionate interest hereunder.
14.7 Notwithstanding Article 12 of this Agreement, but subject to the
first proviso contained therein, either party to this Agreement, with the
consent of its President, Vice President, Secretary or Assistant Secretary, may
waive any condition (other than that contained in paragraph 8.6 hereof) or
covenant to which the other party is subject or may modify such condition or
covenant in a manner deemed appropriate by any such officer.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by a duly authorized officer thereof.
MFS SERIES TRUST IX, on its
behalf and on behalf of MFS
LIMITED MATURITY FUND, one
of its series By:
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Assistant Secretary
MFS GOVERNMENT LIMITED MATURITY FUND, on its behalf
By:
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President