[Subject to Completion]
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF [____________, 2002]
TABLE OF CONTENTS
PAGE NO.
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1. Defined Terms; Sections and Exhibits; Miscellaneous Terms................................................2
a. Definitions.....................................................................................2
b. Use of Defined Terms............................................................................5
c. Sections and Exhibits...........................................................................5
d. Miscellaneous Terms.............................................................................5
2. The Reorganization(s)....................................................................................6
a. Transfer of Assets..............................................................................6
b. Assumption of Liabilities.......................................................................6
c. Issuance and Valuation of Corresponding Shares in the Reorganization............................6
d. Distribution of Corresponding Shares to the Acquired Fund Shareholders..........................6
e. Interest; Proceeds..............................................................................6
f. Valuation Time..................................................................................7
g. Evidence of Transfer............................................................................7
h. Termination.....................................................................................7
i. Separate Agreements; Reorganizations Not Conditioned on One Another.............................7
3. Representations and Warranties of the Acquired Fund......................................................7
a. Formation and Qualification.....................................................................7
b. Tax Status......................................................................................7
c. Authority.......................................................................................7
d. Financial Statements............................................................................8
e. Semi-Annual Report to Shareholders..............................................................8
f. Prospectuses and Statement of Additional Information............................................8
g. Litigation......................................................................................8
h. Material Contracts..............................................................................8
i. No Conflict.....................................................................................9
j. Undisclosed Liabilities.........................................................................9
k. Taxes...........................................................................................9
l. Assets..........................................................................................9
m. Consents........................................................................................9
n. N-14 Registration Statement.....................................................................9
o. Capitalization.................................................................................10
p. Books and Records..............................................................................10
4. Representations and Warranties of the Acquiring Fund....................................................10
a. Formation and Qualification....................................................................10
b. Tax Status.....................................................................................10
c. Authority......................................................................................10
d. Financial Statements...........................................................................11
e. Semi-Annual Report to Shareholders.............................................................11
f. Prospectus and Statement of Additional Information.............................................11
g. Litigation.....................................................................................11
h. Material Contracts.............................................................................11
i. No Conflict....................................................................................11
j. Undisclosed Liabilities........................................................................12
i
k. Taxes..........................................................................................12
l. Consents.......................................................................................12
m. N-l4 Registration Statement....................................................................12
n. Capitalization.................................................................................12
o. Corresponding Shares...........................................................................13
5. Covenants of the Acquired Fund and the Acquiring Fund...................................................13
a. Special Shareholders' Meeting..................................................................13
b. Unaudited Financial Statements.................................................................13
c. Share Ledger Records of the Acquiring Fund.....................................................14
d. Conduct of Business............................................................................14
e. Termination of the Acquired Fund...............................................................14
f. Filing of N-14 Registration Statement..........................................................14
g. Corresponding Shares...........................................................................14
h. Tax Returns....................................................................................14
i. Combined Proxy Statement and Prospectus Mailing................................................14
j. Confirmation of Tax Basis......................................................................15
k. Shareholder List...............................................................................15
6. Closing Date............................................................................................15
7. Conditions of the Acquired Fund.........................................................................15
a. Representations and Warranties.................................................................15
b. Performance....................................................................................15
c. Shareholder Approval...........................................................................15
d. Approval of Board of Directors.................................................................16
e. Deliveries by the Acquiring Fund...............................................................16
f. No Material Adverse Change.....................................................................17
g. Absence of Litigation..........................................................................17
h. Proceedings and Documents......................................................................17
i. N-14 Registration Statement; Acquiring Fund Post-Effective Amendment...........................17
j. Compliance with Laws; No Adverse Action or Decision............................................17
k. Commission Orders or Interpretations...........................................................17
8. Conditions of the Acquiring Fund........................................................................18
a. Representations and Warranties.................................................................18
b. Performance....................................................................................18
c. Shareholder Approval...........................................................................18
d. Approval of Board of Directors.................................................................18
e. Deliveries by the Acquired Fund................................................................18
f. No Material Adverse Change.....................................................................18
g. Absence of Litigation..........................................................................19
h. Proceedings and Documents......................................................................19
i. N-l4 Registration Statement; Acquiring Fund Post-Effective Amendment...........................19
j. Compliance with Laws; No Adverse Action or Decision............................................19
k. Commission Orders or Interpretations...........................................................19
l. Dividends......................................................................................19
9. Termination, Postponement and Waivers...................................................................20
a. Termination of Agreement.......................................................................20
b. Commission Order...............................................................................20
ii
c. Effect of Termination..........................................................................20
d. Waivers; Non-Material Changes..................................................................21
10. Survival of Representations and Warranties..............................................................21
11. Other Matters...........................................................................................21
a. Further Assurances.............................................................................21
b. Notices........................................................................................21
c. Entire Agreement...............................................................................22
d. Amendment......................................................................................22
e. Governing Law..................................................................................22
f. Assignment.....................................................................................22
g. Costs of the Reorganization....................................................................22
h. Severability...................................................................................22
i. Headings.......................................................................................23
j. Counterparts...................................................................................23
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as
of the ___ day of [_________], by SUNAMERICA STYLE SELECT SERIES, INC., a
Maryland corporation (the "Corporation"), on behalf of and between each of the
Large-Cap Growth Portfolio and Mid-Cap Growth Portfolio (each an "Acquired Fund"
and collectively, the "Acquired Funds") and each of the Focused Large-Cap Growth
Portfolio and Focused Multi-Cap Growth Portfolio (each an "Acquiring Fund" and
collectively, the "Acquiring Funds"), respectively, each a separate investment
portfolio of the Corporation.
PLANS OF REORGANIZATION
WHEREAS, this Agreement constitutes a separate agreement and plan of
reorganization between each Acquired Fund and each Acquiring Fund as set forth
below:
ACQUIRED FUND: ACQUIRING FUND:
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Large-Cap Growth Portfolio Focused Large-Cap Growth Portfolio
Mid-Cap Growth Portfolio Focused Multi-Cap Growth Portfolio
WHEREAS, each Acquired Fund owns securities that are assets of the
character in which the respective Acquiring Fund is permitted to invest;
WHEREAS, each reorganization will consist of (i) the acquisition of an
Acquired Fund's Assets (as defined herein), and assumption of that Acquired
Fund's Assumed Liabilities (as defined herein), by the respective Acquiring Fund
solely in exchange for an aggregate value of newly issued shares of common
stock, $.0001 par value per share, of such Acquiring Fund (the "Shares"), equal
to the net asset value of such Acquired Fund's Assets determined in accordance
with Section 2(c) hereof, and (ii) the subsequent distribution by that Acquired
Fund of the Shares to its shareholders in liquidation of the Acquired Fund, all
upon and subject to the terms hereinafter set forth (each a "Reorganization" and
collectively the "Reorganizations");
WHEREAS, in the course of each Reorganization, Shares of an Acquiring
Fund will be issued to an Acquired Fund and distributed to the shareholders
thereof as follows: each holder, if any, of Class A, Class B and Class II shares
of an Acquired Fund will be entitled to receive Class A, Class B and Class II
Shares, respectively (the "Corresponding Shares"), of the respective Acquiring
Fund on the Closing Date (as defined herein);
WHEREAS, the aggregate net asset value of the Corresponding Shares to
be received by each shareholder of an Acquired Fund will equal the aggregate net
asset value of the respective Acquired Fund shares owned by such shareholder as
of the Valuation Time (as defined herein);
WHEREAS, it is intended that each Reorganization described herein shall
be a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and any successor provision and the
parties intend, by executing this
Agreement, to adopt a plan of reorganization for purposes of Section 368 of the
Code and the regulations thereunder; and
WHEREAS, the consummation of one Reorganization is not conditioned upon
the consummation of any other Reorganization.
AGREEMENT
NOW, THEREFORE, in order to consummate each Reorganization and in
consideration of the premises and the covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, each
Acquired Fund and each Acquiring Fund hereby agree as follows:
1. DEFINED TERMS; SECTIONS AND EXHIBITS; MISCELLANEOUS TERMS.
a. DEFINITIONS. As used herein the following terms have the following
respective meanings:
"ACQUIRED FUND" has the meaning ascribed thereto in the
introduction hereof. For purposes of this Agreement, the term "Acquired Fund"
shall refer to the Large-Cap Growth Portfolio in respect of the Large-Cap Growth
Portfolios Reorganization, and the Mid-Cap Growth Portfolio in respect of the
Mid-Cap Growth Portfolios Reorganization.
"ACQUIRING FUND" has the meaning ascribed thereto in the
introduction hereof. For purposes of this Agreement, the term "Acquiring Fund"
shall refer to the Focused Large-Cap Growth Portfolio in respect of the
Large-Cap Growth Portfolios Reorganization, and the Focused Multi-Cap Growth
Portfolio in respect of the Mid-Cap Growth Portfolios Reorganization.
"AGREEMENT" has the meaning ascribed thereto in the
introduction hereof.
"ASSETS" has the meaning ascribed thereto in Section 2(a)
hereof. For purposes of this Agreement, the term "Assets" shall refer to Assets
of (i) the Large-Cap Growth Portfolio in the case of the Large-Cap Growth
Portfolios Reorganization, and (ii) the Mid-Cap Growth Portfolio in the case of
the Mid-Cap Growth Portfolios Reorganization.
"ASSUMED LIABILITIES" has the meaning ascribed thereto in
Section 2(b) hereof. For purposes of this Agreement, the term "Assumed
Liabilities" shall refer to the Assumed Liabilities of (i) the Large-Cap Growth
Portfolio in the case of the Large-Cap Growth Portfolios Reorganization, and
(ii) the Mid-Cap Growth Portfolio in the case of the Mid-Cap Growth Portfolios
Reorganization.
"CLOSING DATE" has the meaning ascribed thereto in Section 6
hereof.
"CODE" has the meaning ascribed thereto under the heading
"Plans of Reorganization."
"COMMISSION" shall mean the Securities and Exchange
Commission.
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"CORPORATION" shall mean SunAmerica Style Select Series, Inc.
"CORRESPONDING SHARES" has the meaning ascribed thereto under
the heading "Plans of Reorganization." For purposes of this Agreement, the term
"Corresponding Shares" shall refer to the Corresponding Shares of (i) the
Focused Large-Cap Growth Portfolio in the case of the Large-Cap Growth
Portfolios Reorganization, and (ii) the Focused Multi-Cap Growth Portfolio in
the case of the Mid-Cap Growth Portfolios Reorganization.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FOCUSED LARGE-CAP GROWTH PORTFOLIO" means the Focused
Large-Cap Growth Portfolio series of the Corporation.
"FOCUSED MULTI-CAP GROWTH PORTFOLIO" means the Focused
Multi-Cap Growth Portfolio series of the Corporation.
"GOVERNMENTAL AUTHORITY" shall mean any governmental or
quasi-governmental authority, including, without limitation, any Federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body, department or
other instrumentality or political unit or subdivision, whether domestic or
foreign.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act
of 1940, as amended.
"INVESTMENTS" shall mean, with respect to any Person, (i) the
investments of such Person shown on the schedule of its investments as of the
date set forth therein, with such additions thereto and deletions therefrom as
may have arisen in the course of such Person's business up to such date; and
(ii) all other assets owned by such Person or liabilities incurred as of such
date.
"LARGE-CAP GROWTH PORTFOLIO" means the Large-Cap Growth
Portfolio series of the Corporation.
"LARGE-CAP GROWTH PORTFOLIOS REORGANIZATION" consists of (i)
the acquisition of the Large-Cap Growth Portfolio's Assets, and assumption of
the Large-Cap Growth Portfolio's Assumed Liabilities, by the Focused Large-Cap
Growth Portfolio solely in exchange for an aggregate value of Corresponding
Shares of the Focused Large-Cap Growth Portfolio, equal to the net asset value
of the Large-Cap Growth Portfolio's Assets determined in accordance with Section
2(c) hereof, and (ii) the subsequent distribution by the Large-Cap Growth
Portfolio of such Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the Large-Cap Growth Portfolio in liquidation of the
Large-Cap Growth Portfolio.
"LIEN" shall mean any security agreement, financing statement
(whether or not filed), mortgage, lien (statutory or otherwise), charge, pledge,
hypothecation, conditional sales agreement, adverse claim, title retention
agreement or other security interest, encumbrance, restriction, deed of trust,
indenture, option, limitation, exception to or other title defect in or on any
interest or title of any vendor, lessor, lender or other secured party to or of
such Person under
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any conditional sale, lease, consignment or bailment given for security
purposes, trust receipt or other title retention agreement with respect to any
property or asset of such Person, whether direct, indirect, accrued or
contingent.
"MAJORITY SHAREHOLDER VOTE" shall mean [the lesser of (i) 67%
of the shares present at a meeting at which more than 50% of the outstanding
shares of the respective Acquired Fund are represented or (ii) more than 50% of
the respective Acquired Fund's outstanding shares.]
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any
Person, any event, circumstance or condition that, individually or when
aggregated with all other similar events, circumstances or conditions could
reasonably be expected to have, or has had, a material adverse effect on: (i)
the business, property, operations, condition (financial or otherwise), results
of operations or prospects of such Person or (ii) the ability of such Person to
consummate the transactions contemplated hereunder in the manner contemplated
hereby, other than, in each case, any change relating to the economy or
securities markets in general.
"MID-CAP GROWTH PORTFOLIO" means the Mid-Cap Growth Portfolio
series of the Corporation.
"MID-CAP GROWTH PORTFOLIOS REORGANIZATION" consists of (i) the
acquisition of the Mid-Cap Growth Portfolio's Assets, and assumption of the
Mid-Cap Growth Portfolio's Assumed Liabilities, by the Focused Multi-Cap Growth
Portfolio solely in exchange for an aggregate value of Corresponding Shares of
the Focused Multi-Cap Growth Portfolio, equal to the net asset value of the
Mid-Cap Growth Portfolio's Assets determined in accordance with Section 2(c)
hereof, and (ii) the subsequent distribution by the Mid-Cap Growth Portfolio of
such Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the Mid-Cap Growth Portfolio in liquidation of the
Mid-Cap Growth Portfolio.
"N-14 REGISTRATION STATEMENT" has the meaning ascribed thereto
in Section 3(n) hereof.
"PERMITTED LIENS" shall mean, with respect to any Person, any
Lien arising by reason of (i) taxes, assessments, governmental charges or claims
that are either not yet delinquent, or being contested in good faith for which
adequate reserves have been recorded, (ii) the Federal or state securities laws,
and (iii) imperfections of title or encumbrances as do not materially detract
from the value or use of the Assets or materially affect title thereto.
"PERSON" shall mean any individual, corporation, limited
liability company, limited or general partnership, joint venture, association,
joint stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"REORGANIZATION" has the meaning ascribed thereto under the
heading "Plans of Reorganization". For purposes of this Agreement, the term
"Reorganization" shall refer to the Large-Cap Growth Portfolios Reorganization
or the Mid-Cap Growth Portfolios Reorganization, as the context requires.
"RICs" has the meaning ascribed thereto in Section 3(b)
hereof.
4
"RULE 17A-8(a)" shall mean Rule 17a-8(a) under the Investment
Company Act.
"S&S" shall mean Shearman & Sterling, counsel to the
Corporation.
"SECTION 17 ORDER" shall mean an order obtained from the
Commission pursuant to Section 17(b) of the Investment Company Act to exempt
consummation of a Reorganization from the prohibitions of Section 17(a) of such
Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHARES" has the meaning ascribed thereto under the heading
"Plans of Reorganization."
"SUNAMERICA STYLE SELECT SERIES, INC. ARTICLES OF
INCORPORATION" shall mean the Articles of Incorporation of SunAmerica Style
Select Series, Inc., dated as of July 3, 1996 as amended or supplemented from
time to time.
"SUNAMERICA STYLE SELECT SERIES, INC. FOCUSED PORTFOLIOS
PROSPECTUS" shall mean the prospectus relating to the Acquiring Funds, dated
[July 2, 2002,] as amended or supplemented.
"SUNAMERICA STYLE SELECT SERIES, INC. PROSPECTUS" shall mean
the prospectus relating to the Acquired Funds, dated January 30, 2002, as
amended or supplemented.
"SUNAMERICA STYLE SELECT SERIES, INC. STATEMENT OF ADDITIONAL
INFORMATION" Shall mean the statement of additional information relating to the
Corporation, dated [July 2, 2002,] as amended or supplemented.
"VALUATION TIME" has the meaning ascribed thereto in Section
2(f) hereof.
b. USE OF DEFINED TERMS. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
c. SECTIONS AND EXHIBITS. References in this Agreement to Sections,
Exhibits and Schedules are to Sections, Exhibits and Schedules of and to this
Agreement. The Exhibits and Schedules to this Agreement are hereby incorporated
herein by this reference as if fully set forth herein.
d. MISCELLANEOUS TERMS. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific article,
section, paragraph or clause where such terms may appear. The term "including"
shall mean "including, but not limited to."
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2. THE REORGANIZATION(S).
a. TRANSFER OF ASSETS. Subject to receiving the requisite approval of the
shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquired Fund shall convey, transfer
and deliver to the Acquiring Fund, and the Acquiring Fund shall purchase,
acquire and accept from the Acquired Fund, free and clear of all Liens (other
than Permitted Liens), all of the property and assets (including cash,
securities, commodities, interests in futures and dividends, any deferred or
prepaid expenses and interest accrued on debt instruments, in each case as of
the Valuation Time) owned by the Acquired Fund (as to each Acquired Fund, such
assets are collectively referred to herein as the "Assets").
b. ASSUMPTION OF LIABILITIES. Subject to receiving the requisite approval
of the shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquiring Fund will assume and agree
to pay, perform and discharge when due all of the obligations and liabilities of
the Acquired Fund then existing, whether absolute, accrued, contingent or
otherwise (as to each Acquired Fund, such liabilities are collectively referred
to herein as the "Assumed Liabilities").
c. ISSUANCE AND VALUATION OF CORRESPONDING SHARES IN THE REORGANIZATION.
Full Corresponding Shares, and to the extent necessary, a fractional
Corresponding Share, of an aggregate net asset value equal to the net asset
value of the Assets (after deducting the Assumed Liabilities) acquired by the
Acquiring Fund hereunder, determined as hereinafter provided, shall be issued by
the Acquiring Fund to the Acquired Fund in exchange for such Assets. The net
asset value of each of the Acquired Fund's Assets and the Acquiring Fund's
Corresponding Shares shall be determined in accordance with the procedures
described in the SunAmerica Style Select Series, Inc. Prospectus and the
SunAmerica Style Select Series, Inc. Statement of Additional Information as of
the Valuation Time. Such valuation and determination shall be made by the
Acquiring Fund in cooperation with the Acquired Fund.
d. DISTRIBUTION OF CORRESPONDING SHARES TO THE ACQUIRED FUND SHAREHOLDERS.
Pursuant to this Agreement, as soon as practicable after the Valuation Time, the
Acquired Fund will distribute all Corresponding Shares received by it from the
Acquiring Fund in connection with the Reorganization to its shareholders in
proportion to such shareholders' interest in the Acquired Fund. Such
distribution shall be accomplished by the opening of shareholder accounts on the
share ledger records of the Acquiring Fund in the amounts due the shareholders
of the Acquired Fund based on their respective holdings in the Acquired Fund as
of the Valuation Time.
e. INTEREST; PROCEEDS. The Acquired Fund will pay or cause to be paid to
the Acquiring Fund any interest or proceeds it receives on or after the Closing
Date with respect to its Assets.
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f. VALUATION TIME.
i. The Valuation Time shall be the close of the New York Stock
Exchange (generally 4:00 P.M., New York time) on [_________, 2002], or such
earlier or later date and time as may be mutually agreed upon in writing between
the parties hereto (the "Valuation Time").
ii. In the event that at the Valuation Time (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted; or (b) trading or the reporting of trading on said
Exchange or elsewhere shall be disrupted so that accurate appraisal of the value
of the net assets of the Acquiring Fund or the Acquired Fund is impracticable,
the Valuation Time shall be postponed until the close of the New York Stock
Exchange on the first business day after the day when trading shall have been
fully resumed and reporting shall have been restored.
g. EVIDENCE OF TRANSFER. The Acquiring Fund and the Acquired Fund will
jointly or severally, as necessary, file any instrument as may be required by
the State of Maryland to effect the transfer of the Assets to the Acquiring
Fund.
h. TERMINATION. The Acquired Fund's existence as a separate investment
portfolio of the Corporation will be terminated as soon as practicable following
the consummation of the applicable Reorganization by making any required filings
with the State of Maryland, as provided in Section 5(e) hereof.
i. SEPARATE AGREEMENTS; REORGANIZATIONS NOT CONDITIONED ON ONE ANOTHER.
Each of the respective parties hereto hereby agrees that this Agreement shall
constitute a separate agreement and plan of reorganization as to each of (i) the
Large-Cap Growth Portfolios Reorganization, and (ii) the Mid-Cap Growth
Portfolios Reorganization. The parties further agree that the consummation of
one Reorganization shall not be conditioned on the consummation of any other
Reorganization.
3. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUND.
The Acquired Fund represents and warrants to the Acquiring Fund as
follows:
a. FORMATION AND QUALIFICATION. The Acquired Fund is a separate investment
portfolio of the Corporation.
b. TAX STATUS. The Acquired Fund has elected and qualified for the special
tax treatment afforded regulated investment companies ("RICs") under Sections
851-855 of the Code at all times since its inception and intends to continue to
so qualify for its taxable year ending upon the liquidation of the Acquired
Fund.
c. AUTHORITY. The Corporation, on behalf of the Acquired Fund, has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary
7
action on the part of the Acquired Fund and no other proceedings on the part of
the Corporation or the Acquired Fund are necessary to authorize this Agreement
or the consummation of the transactions contemplated hereby, except for the
approval of the Acquired Fund shareholders as provided in Section 7(c) hereof.
This Agreement has been duly and validly executed by the Corporation, on behalf
of the Acquired Fund, and, subject to receipt of the requisite shareholder
approval, and assuming due authorization, execution and delivery of this
Agreement by the Acquiring Fund, this Agreement constitutes a legal, valid and
binding obligation of the Acquired Fund enforceable against the Acquired Fund in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto and the
remedy of specific performance and injunctive and other forms of equitable
relief.
d. FINANCIAL STATEMENTS. The Acquiring Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquired Fund, each dated as of October 31, 2001,
said financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly present
in all material respects the financial position of the Acquired Fund as of the
dates and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis.
e. SEMI-ANNUAL REPORT TO SHAREHOLDERS. The Acquiring Fund has been
furnished with the Acquired Fund's Semi-Annual Report to Shareholders for the
six month period ended April 30, 2002, and the unaudited financial statements
appearing therein fairly present in all material respects the financial position
of the Acquired Fund as of the dates and for the periods referred to therein and
in conformity with generally accepted accounting principles applied on a
consistent basis.
f. PROSPECTUSES AND STATEMENT OF ADDITIONAL INFORMATION. The Acquiring Fund
has been furnished with the SunAmerica Style Select Series, Inc. Prospectus and
the SunAmerica Style Select Series, Inc. Statement of Additional Information,
and insofar as they relate to the Acquired Fund, said Prospectus and Statement
of Additional Information do not contain 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 the light of the circumstances under which they
were made, not misleading.
g. LITIGATION. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquired Fund,
threatened against the Acquired Fund that could reasonably be expected to have a
Material Adverse Effect on the Acquired Fund. The Acquired Fund is not charged
with or, to its knowledge, threatened with any violation, or investigation of
any possible violation, of any provisions of any Federal, state or local law or
regulation or administrative ruling relating to any aspect of its business that
could reasonably be expected to have a Material Adverse Effect on the Acquired
Fund.
h. MATERIAL CONTRACTS. There are no material contracts outstanding to which
the Corporation, on behalf of the Acquired Fund, is a party that have not been
disclosed in the N-14 Registration Statement, the SunAmerica Style Select
Series, Inc. Prospectus or the SunAmerica Style Select Series, Inc. Statement of
Additional Information.
8
i. NO CONFLICT. The execution and delivery of this Agreement by the
Corporation, on behalf of the Acquired Fund, and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) SunAmerica Style Select Series, Inc. Articles of
Incorporation or by-laws, each as amended, supplemented and in effect as of the
date hereof, (ii) any agreement or contract (or require the consent of any
Person under any agreement or contract that has not been obtained) to which the
Corporation, on behalf of the Acquired Fund, is a party or to which its assets
or properties are subject, or (iii) any judgment, injunction, order or decree,
or other instrument binding upon the Acquired Fund or any of its assets or
properties, except where such contravention, default or violation would not have
a Material Adverse Effect on the Acquired Fund.
j. UNDISCLOSED LIABILITIES. The Acquired Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business since [April 30, 2002], and those incurred in connection with the
Reorganization.
k. TAXES. The Acquired Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. 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 by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. ASSETS. The Acquired Fund has good and marketable title to the Assets,
free and clear of all Liens, except for Permitted Liens. The Acquired Fund is
the direct sole and exclusive owner of the Assets. At the Closing Date, upon
consummation of the transactions contemplated hereby, the Acquiring Fund will
have good and marketable title to the Assets, free and clear of all Liens,
except for Permitted Liens.
m. CONSENTS. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquired Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), (ii) a Majority Shareholder Vote, and
(iii) if necessary, receipt of a Section 17 Order.
n. N-14 REGISTRATION STATEMENT. The registration statement filed, or to be
filed, by the Corporation on Form N-14 relating to the Corresponding Shares to
be issued pursuant to this Agreement, which includes the proxy statement of the
Acquired Fund and the prospectus of the Acquiring Fund with respect to the
transactions contemplated hereby, and any supplement or amendment thereto or to
the documents therein (as amended and supplemented, the "N-14 Registration
Statement"), on the effective date of the N-14 Registration Statement, at the
time of the shareholders' meeting referred to in Section 5(a) hereof and on the
Closing Date, insofar as it relates to the Acquired Fund (i) complied, or will
comply, as the case may be, in all material
9
respects, with the applicable provisions of the Securities Act, the Exchange Act
and the Investment Company Act and the rules and regulations promulgated
thereunder, and (ii) did not, or will not, as the case may be, contain 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.
o. CAPITALIZATION. Under SunAmerica Style Select Series, Inc. Articles of
Incorporation, the Corporation is authorized to issue 2,000,000,000 shares of
common stock, par value $0.0001 per share, of which 100,000,000 shares have been
designated as the Large-Cap Growth Portfolio and of which 100,000,000 shares
have been designated as the Mid-Cap Growth Portfolio. The shares designated as
the Large-Cap Growth Portfolio have been divided into four classes designated
Class A, Class B, Class II and Class Z. The shares designated as the Mid-Cap
Growth Portfolio have been divided into three classes designated Class A, Class
B and Class II. All issued and outstanding shares of the Acquired Fund are duly
authorized, validly issued, fully paid and non-assessable and free of preemptive
rights. Except for (i) the right of Class B shares of the Acquired Fund to
automatically convert to Class A shares of the Acquired Fund approximately eight
years after the purchase thereof, or (ii) in connection with any automatic
dividend reinvestment plan available to the Acquired Fund shareholders, there
are no options warrants, subscriptions, calls or other rights, agreements or
commitments obligating the Acquired Fund to issue any of its shares or
securities convertible into its shares.
p. BOOKS AND RECORDS. The books and records of the Acquired Fund made
available to the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect to the
operations of the Acquired Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND.
The Acquiring Fund represents and warrants to the Acquired Fund as
follows:
a. FORMATION AND QUALIFICATION. The Acquiring Fund is a separate investment
portfolio of the Corporation.
b. TAX STATUS. The Acquiring Fund has elected and qualified for the special
tax treatment afforded to RICs under Sections 851-855 of the Code at all times
since its inception (if applicable) and intends to continue to so qualify both
until consummation of the Reorganization and thereafter.
c. AUTHORITY. The Corporation, on behalf of the Acquiring Fund, has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Corporation or the
Acquiring Fund and no other proceedings on the part of the Acquiring Fund are
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed by the
Corporation, on behalf of the Acquiring Fund, and assuming due authorization,
execution and delivery of this Agreement by the Acquired Fund, this Agreement
constitutes a legal, valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance with its terms, subject to
the effects of bankruptcy, insolvency, moratorium, fraudulent
10
conveyance and similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto and the remedy of specific performance
and injunctive and other forms of equitable relief.
d. FINANCIAL STATEMENTS. The Acquired Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquiring Fund, as of October 31, 2001, said
financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly present
in all material respects the financial position of the Acquiring Fund as of the
dates and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis.
e. SEMI-ANNUAL REPORT TO SHAREHOLDERS. The Acquired Fund has been furnished
with the Acquiring Fund's Semi-Annual Report to Shareholders for the six months
ended April 30, 2002, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquiring
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION. The Acquired Fund
has been furnished with the SunAmerica Style Select Series, Inc. Focused
Portfolios Prospectus and the SunAmerica Style Select Series, Inc. Statement of
Additional Information, and insofar as they relate to the Acquiring Fund, said
Prospectus and Statement of Additional Information do not contain 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 the light of the
circumstances under which they were made, not misleading.
g. LITIGATION. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquiring Fund,
threatened against the Acquiring Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal, state
or local law or regulation or administrative ruling relating to any aspect of
its business that could reasonably be expected to have a Material Adverse Effect
on the Acquiring Fund.
h. MATERIAL CONTRACTS. There are no material contracts outstanding to which
the Corporation, on behalf of the Acquiring Fund, is a party that have not been
disclosed in the N-14 Registration Statement, the SunAmerica Style Select
Series, Inc. Focused Portfolios Prospectus, or the SunAmerica Style Select
Series, Inc. Statement of Additional Information.
i. NO CONFLICT. The execution and delivery of this Agreement by the
Corporation on behalf of the Acquiring Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) the SunAmerica Style Select Series, Inc. Articles of
Incorporation or by-laws, each as amended, supplemented and in effect as of the
date hereof, (ii) any agreement or contract (or require the consent of any
Person under any agreement or contract that has not been obtained) to which the
Corporation, on behalf of the Acquiring Fund, is a party or to which its assets
or properties are subject, or (iii) any judgment,
11
injunction, order or decree, or other instrument binding upon the Acquiring Fund
or any of its assets or properties, except where such contravention, default or
violation would not have a Material Adverse Effect on the Acquiring Fund.
j. UNDISCLOSED LIABILITIES. The Acquiring Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business as an investment company since [April 30, 2002] and those incurred in
connection with the Reorganization.
k. TAXES. The Acquiring Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing, and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquiring Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquiring Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. CONSENTS. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquiring Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act, or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), and (ii) if necessary, receipt of a
Section 17 Order.
m. N-14 REGISTRATION STATEMENT. The N-14 Registration Statement, on its
effective date, at the time of the shareholders' meeting referred to in Section
5(a) hereof and on the Closing Date, insofar as it relates to the Acquiring Fund
(i) complied, or will comply, as the case may be, in all material respects, with
the applicable provisions of the Securities Act, the Exchange Act and the
Investment Company Act and the rules and regulations promulgated thereunder, and
(ii) did not, or will not, as the case may be, contain 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.
n. CAPITALIZATION. Under SunAmerica Style Select Series, Inc. Articles of
Incorporation, the Corporation is authorized to issue 2,000,000,000 shares of
common stock, par value $0.0001 per share, of which 100,000,000 shares have been
designated as the Focused Large-Cap Growth Portfolio and of which 100,000,000
shares have been designated as the Focused Multi-Cap Growth Portfolio and have
each been divided into four classes, designated Class A, Class B, Class II and
Class Z. All issued and outstanding shares of the Acquiring Fund, if any, are
duly authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B shares of the Acquiring
Fund to automatically convert to Class A shares of the Acquiring Fund
approximately eight years after the purchase thereof or (ii) in connection with
any automatic dividend reinvestment plan available to the Acquiring Fund
shareholders, there are no options, warrants,
12
subscriptions, calls or other rights, agreements or commitments obligating the
Acquiring Fund to issue any of its shares or securities convertible into its
shares.
o. CORRESPONDING SHARES.
i. The Corresponding Shares to be issued by the Acquiring Fund and
subsequently distributed by the Acquired Fund to its shareholders as provided in
this Agreement have been, or will be, as applicable, duly and validly authorized
and, when issued and delivered pursuant to this Agreement, will be legally and
validly issued and will be fully paid and nonassessable and will have full
voting rights, and no shareholder of the Acquiring Fund will have any preemptive
right of subscription or purchase in respect thereof.
ii. At or prior to the Closing Date, the Corresponding Shares to be
issued by the Acquiring Fund to the Acquired Fund will be duly qualified for
offering to the public in all states of the United States in which the sale of
shares of the Acquiring Fund presently are qualified, and there are a sufficient
number of such shares registered under the Securities Act, the Investment
Company Act and with each pertinent state securities commission to permit the
Reorganization to be consummated.
5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
a. SPECIAL SHAREHOLDERS' MEETING. The Acquired Fund agrees to call a
special meeting of its shareholders to be held as soon as practicable after the
effective date of the N-14 Registration Statement for the purpose of considering
the Reorganization as described in this Agreement and to take all other
reasonable action necessary to obtain shareholder approval of the transactions
contemplated herein.
b. UNAUDITED FINANCIAL STATEMENTS.
i. The Acquired Fund hereby agrees to furnish or cause its agents to
furnish to the Acquiring Fund, at or prior to the Closing Date, for the purpose
of determining the number of Corresponding Shares to be issued by the Acquiring
Fund to the Acquired Fund pursuant to Section 2(c) hereof, an accurate, correct
and complete unaudited statement of assets and liabilities of the Acquired Fund
with values determined in accordance with Section 2(c) hereof and an unaudited
schedule of Investments of the Acquired Fund (including the respective dates and
costs of acquisition thereof), each as of the Valuation Time. Such unaudited
financial statements will fairly present in all material respects the financial
position of the Acquired Fund as of the dates and for the periods referred to
therein and in conformity with generally accepted accounting principles applied
on a consistent basis.
ii. The Acquiring Fund hereby agrees to furnish or cause its agents
to furnish to the Acquired Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by the
Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and liabilities of
the Acquiring Fund with values determined in accordance with Section 2(c) hereof
and an unaudited schedule of Investments of the Acquiring Fund (including the
respective dates
13
and costs of acquisition thereof), each as of the Valuation Time. Such unaudited
financial statements will fairly present in all material respects the financial
position of the Acquiring Fund as of the dates and for the periods referred to
therein and in conformity with generally accepted accounting principles applied
on a consistent basis.
c. SHARE LEDGER RECORDS OF THE ACQUIRING FUND. The Acquiring Fund agrees,
as soon as practicable after the Valuation Time, to open shareholder accounts on
its share ledger records for the shareholders of the Acquired Fund in connection
with the distribution of Corresponding Shares by the Acquired Fund to such
shareholders in accordance with Section 2(d) hereof.
d. CONDUCT OF BUSINESS. The Acquired Fund and the Acquiring Fund each
covenants and agrees to operate its respective business in the ordinary course
as presently conducted between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and distributions.
e. TERMINATION OF THE ACQUIRED FUND. The Corporation agrees that as soon as
practicable following the consummation of the Reorganization, it will terminate
the existence of the Acquired Fund in accordance with the laws of the State of
Maryland and any other applicable law and the Acquired Fund will not conduct any
business except in connection with its termination.
f. FILING OF N-14 REGISTRATION STATEMENT. The Corporation, on behalf of the
Acquiring Fund, will file or cause its agents to file the N-14 Registration
Statement with the Commission and will use its best efforts to cause the N-14
Registration Statement to become effective as promptly as practicable after the
filing thereof. The Acquired Fund and the Acquiring Fund agree to cooperate
fully with each other, and each will furnish to the other the information
relating to itself to be set forth in the N-14 Registration Statement as
required by the Securities Act, the Exchange Act, the Investment Company Act,
and the rules and regulations thereunder and the state securities or blue sky
laws (if applicable).
g. CORRESPONDING SHARES. The Acquired Fund will not sell or otherwise
dispose of any of the Corresponding Shares to be received by it from the
Acquiring Fund in connection with the Reorganization, except in distribution to
the shareholders of the Acquired Fund in accordance with the terms hereof.
h. TAX RETURNS. The Acquired Fund and the Acquiring Fund each agrees that
by the Closing Date all of its Federal and other tax returns and reports
required to be filed on or before such date shall have been filed and all taxes
shown as due on said returns either shall have been paid or adequate liability
reserves shall have been provided for the payment of such taxes. In connection
with this provision, the Acquiring Fund and the Acquired Fund agree to cooperate
with each other in filing any tax return, amended return or claim for refund,
determining a liability for taxes or a right to a refund of taxes or
participating in or conducting any audit or other proceeding in respect of
taxes.
i. COMBINED PROXY STATEMENT AND PROSPECTUS MAILING. The Acquired Fund
agrees to mail to its shareholders of record entitled to vote at the special
meeting of shareholders at which action is to be considered regarding this
Agreement, in sufficient time to comply with
14
requirements as to notice thereof, a combined Proxy Statement and Prospectus
which complies in all material respects (except as to information therein
relating to the Acquiring Fund) with the applicable provisions of Section 14(a)
of the Exchange Act and Section 20(a) of the Investment Company Act, and the
rules and regulations promulgated thereunder.
j. CONFIRMATION OF TAX BASIS. The Acquired Fund will deliver to the
Acquiring Fund on the Closing Date confirmations or other adequate evidence as
to the tax basis of each of the Assets delivered to the Acquiring Fund
hereunder.
k. SHAREHOLDER LIST. As soon as practicable after the close of business on
the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list
of the names and addresses of all of the shareholders of record of the Acquired
Fund on the Closing Date and the number of shares of the Acquired Fund owned by
each such shareholder as of such date, certified to the best of its knowledge
and belief by the transfer agent or by the Corporation on behalf of the Acquired
Fund.
6. CLOSING DATE.
The closing of the transactions contemplated by this Agreement shall be at
the offices of Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
after the close of the New York Stock Exchange on [____________, 2002], or at
such other place, time and date agreed to by the Acquired Fund and the Acquiring
Fund. The date and time upon which such closing is to take place shall be
referred to herein as the "Closing Date." To the extent that any Assets, for any
reason, are not transferable on the Closing Date, the Acquired Fund shall cause
such Assets to be transferred to the Acquiring Fund's custody account with State
Street Bank and Trust Company at the earliest practicable date thereafter.
7. CONDITIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquired Fund only and, other than with respect to the condition set
forth in Section 7(c) hereof, may be waived, in whole or in part, by the
Acquired Fund at any time in its sole discretion.
a. REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Acquiring Fund made in this Agreement shall be true and correct in all
material respects when made, as of the Valuation Time and as of the Closing Date
all with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
b. PERFORMANCE. The Acquiring Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be performed,
satisfied or complied with by it under this Agreement at or prior to the Closing
Date.
c. SHAREHOLDER APPROVAL. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
15
d. APPROVAL OF BOARD OF DIRECTORS. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Directors of the
Corporation, on behalf of the Acquiring Fund, including a majority of the
Directors who are not "interested persons" of the Corporation as defined in
Section 2(a)(19) of the Investment Company Act, which shall have found, as
required by Rule 17a-8(a), that (i) participation in the Reorganization is in
the best interests of the Acquiring Fund and (ii) the interests of the existing
shareholders of the Acquiring Fund will not be diluted as a result of the
Reorganization.
e. DELIVERIES BY THE ACQUIRING FUND. At or prior to the Closing Date, the
Acquiring Fund shall deliver to the Acquired Fund the following:
i. a certificate, in form and substance reasonably satisfactory to
the Acquired Fund, executed by the President (or a Vice President) of the
Corporation on behalf of the Acquiring Fund, dated as of the Closing Date,
certifying that the conditions specified in Sections 7(a), (b), (d) and (f) have
been fulfilled;
ii. the unaudited financial statements of the Acquiring Fund
required by Section 5(b)(ii) hereof; and
iii. an opinion of S&S, in form and substance reasonably
satisfactory to the Acquired Fund, to the effect that, for Federal income tax
purposes, (i) the transfer of the Assets to the Acquiring Fund in return solely
for the Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement will constitute a
reorganization within the meaning of Section 368(a) of the Code, and assuming
that such transfer, issuance and assumption qualifies as a reorganization within
the meaning of Section 368(a) of the Code, the Acquired Fund and the Acquiring
Fund will each be deemed to be a "party to a reorganization" within the meaning
of Section 368(b) of the Code; (ii) in accordance with Sections 357 and 361 of
the Code, no gain or loss will be recognized to the Acquired Fund as a result of
the Asset transfer solely in return for the Corresponding Shares and the
assumption by the Acquiring Fund of the Assumed Liabilities or on the
distribution (whether actual or constructive) of the Corresponding Shares to the
Acquired Fund shareholders as provided for in the Agreement; (iii) under Section
1032 of the Code, no gain or loss will be recognized to the Acquiring Fund on
the receipt of the Assets in return for the Corresponding Shares and the
assumption by the Acquiring Fund of the Assumed Liabilities as provided for in
the Agreement; (iv) in accordance with Section 354(a)(1) of the Code, no gain or
loss will be recognized to the shareholders of the Acquired Fund on the receipt
(whether actual or constructive) of Corresponding Shares in return for their
shares of the Acquired Fund; (v) in accordance with Section 362(b) of the Code,
the tax basis of the Assets in the hands of the Acquiring Fund will be the same
as the tax basis of such Assets in the hands of the Acquired Fund immediately
prior to the consummation of the Reorganization; (vi) in accordance with Section
358 of the Code, immediately after the Reorganization, the tax basis of the
Corresponding Shares received (whether actually or constructively) by the
shareholders of the Acquired Fund in the Reorganization will be equal, in the
aggregate, to the tax basis of the shares of the Acquired Fund surrendered in
return therefor; (vii) in accordance with Section 1223 of the Code, a
shareholder's holding period for the Corresponding Shares will be determined by
including the period for which such shareholder held the shares of the Acquired
Fund exchanged therefor, provided that the Acquired Fund shares were held as a
capital asset; (viii) in accordance
16
with Section 1223 of the Code, the Acquiring Fund's holding period with respect
to the Assets acquired by it will include the period for which such Assets were
held by the Acquired Fund; (ix) in accordance with Section 381(a) of the Code
and regulations thereunder, the Acquiring Fund will succeed to and take into
account certain tax attributes of the Acquired Fund, subject to applicable
limitations, such as earnings and profits, capital loss carryovers and method of
accounting; and (x) the taxable year of the Acquired Fund will end on the
effective date of the Reorganization.
f. NO MATERIAL ADVERSE CHANGE. There shall have occurred no material
adverse change in the financial position of the Acquiring Fund since [April 30,
2002] other than, if applicable, changes in its portfolio securities since that
date, changes in the market value of its portfolio securities or changes in
connection with the payment of the Acquiring Fund's customary operating
expenses, each in the ordinary course of business.
g. ABSENCE OF LITIGATION. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. PROCEEDINGS AND DOCUMENTS. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquired Fund and its counsel, and the
Acquired Fund and its counsel shall have received all such counterpart originals
or certified or other copies of such documents as the Acquired Fund or its
counsel may reasonably request.
i. N-14 REGISTRATION STATEMENT; ACQUIRING FUND POST-EFFECTIVE AMENDMENT.
The N-14 Registration Statement shall have become effective under the Securities
Act, and no stop order suspending such effectiveness shall have been instituted
or, to the knowledge of the Acquiring Fund or the Acquired Fund, contemplated by
the Commission.
j. COMPLIANCE WITH LAWS; NO ADVERSE ACTION OR DECISION. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have been
promulgated, enacted or entered that restrains, enjoins, prevents, materially
delays, prohibits or otherwise makes illegal the performance of this Agreement,
the Reorganization or the consummation of any of the transactions contemplated
hereby and thereby; (ii) the Commission shall not have issued an unfavorable
advisory report under Section 25(b) of the Investment Company Act, nor
instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment Company
Act, and (iii) no other legal, administrative or other proceeding shall be
instituted or threatened by any Governmental Authority which would materially
affect the financial condition of the Acquiring Fund or that seeks to restrain,
enjoin, prevent, materially delay, prohibit or otherwise make illegal the
performance of this Agreement, the Reorganization or the consummation of any of
the transactions contemplated hereby or thereby.
k. COMMISSION ORDERS OR INTERPRETATIONS. The Acquired Fund shall have
received from the Commission such orders or interpretations, including a Section
17 Order, as counsel to the Acquired Fund deems reasonably necessary or
desirable under the Securities Act and the Investment Company Act in connection
with the Reorganization; provided that such counsel shall have requested such
orders or interpretations as promptly as practicable, and all such orders shall
be in full force and effect.
17
8. CONDITIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquiring Fund only and, other than with respect to the condition set
forth in Section 8(c) hereof, may be waived, in whole or in part, by the
Acquiring Fund at any time in its sole discretion.
a. REPRESENTATIONS AND WARRANTIES. The representations and warranties made
by the Acquired Fund in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date with the
same effect as if made at and as of such dates, except that any representations
and warranties that relate to a particular date or period shall be true and
correct in all material respects as of such date or period.
b. PERFORMANCE. The Acquired Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be performed,
satisfied or complied with by it under this Agreement at or prior to the Closing
Date.
c. SHAREHOLDER APPROVAL. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. APPROVAL OF BOARD OF DIRECTORS. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Directors of the
Corporation, on behalf of the Acquired Fund, including a majority of the
Directors who are not "interested persons" of the Corporation within the meaning
of Section 2(a)(19) of the Investment Company Act, which shall have found, as
required by Rule 17a-8(a), that (i) participation in the Reorganization is in
the best interests of the Acquired Fund and (ii) the interests of the existing
shareholders of the Acquired Fund will not be diluted as a result of the
Reorganization.
e. DELIVERIES BY THE ACQUIRED FUND. At or prior to the Closing Date, the
Acquired Fund shall deliver to the Acquiring Fund the following:
i. a certificate, in form and substance reasonably satisfactory to
the Acquiring Fund, executed by the President (or a Vice President) of the
Corporation on behalf of the Acquired Fund, dated as of the Closing Date,
certifying that the conditions specified in Sections 8(a), (b), (c), (d) and (f)
have been fulfilled;
ii. the unaudited financial statements of the Acquired Fund required
by Section 5(b)(i) hereof; and
iii. an opinion of S&S, in form and substance reasonably
satisfactory to the Acquiring Fund, with respect to the matters specified in
Section 7(e)(iii) hereof.
f. NO MATERIAL ADVERSE CHANGE. There shall have occurred no material
adverse change in the financial position of the Acquired Fund since [APRIL 30,
2002] other than changes in its portfolio securities since that date, changes in
the market value of its portfolio securities or changes in connection with the
payment of the Acquired Fund's customary operating expenses, each in the
ordinary course of business. The Acquired Fund reserves the right to sell any of
its
18
portfolio securities in the ordinary course of business, but will not, without
the prior written consent of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund is
permitted to invest.
g. ABSENCE OF LITIGATION. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. PROCEEDINGS AND DOCUMENTS. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquiring Fund and its counsel, and the
Acquiring Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquiring Fund
or its counsel may reasonably request.
i. N-14 REGISTRATION STATEMENT; ACQUIRING FUND POST-EFFECTIVE AMENDMENT.
The N-14 Registration Statement shall have become effective under the Securities
Act, and no stop order suspending such effectiveness shall have been instituted
or, to the knowledge of the Acquired Fund or the Acquiring Fund, contemplated by
the Commission.
j. COMPLIANCE WITH LAWS; NO ADVERSE ACTION OR DECISION. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have been
promulgated, enacted or entered that restrains, enjoins, prevents, materially
delays, prohibits or otherwise makes illegal the performance of this Agreement,
the Reorganization or the consummation of any of the transactions contemplated
hereby and thereby; (ii) the Commission shall not have issued an unfavorable
advisory report under Section 25(b) of the Investment Company Act, nor
instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment Company
Act, and (iii) no other legal, administrative or other proceeding shall be
instituted or threatened by any Governmental Authority which would materially
affect the financial condition of the Acquired Fund or that seeks to restrain,
enjoin, prevent, materially delay, prohibit or otherwise make illegal the
performance of this Agreement, the Reorganization or the consummation of any of
the transactions contemplated hereby or thereby.
k. COMMISSION ORDERS OR INTERPRETATIONS. The Acquiring Fund shall have
received from the Commission such orders or interpretations, including a Section
17 Order, as counsel to the Acquiring Fund, deems reasonably necessary or
desirable under the Securities Act and the Investment Company Act in connection
with the Reorganization; PROVIDED that such counsel shall have requested such
orders or interpretations as promptly as practicable, and all such orders shall
be in full force and effect.
l. DIVIDENDS. Prior to the Closing Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its shareholders all of its
investment company taxable income as of the Closing Date, if any (computed
without regard to any deduction for dividends paid), and all of its net capital
gain, if any, realized as of the Closing Date.
19
9. TERMINATION, POSTPONEMENT AND WAIVERS.
a. TERMINATION OF AGREEMENT. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 10 hereof, this Agreement may be
terminated and the Reorganization abandoned at any time (whether before or after
approval thereof by the shareholders of the Acquired Fund) prior to the Closing
Date, or the Closing Date may be postponed, by notice in writing prior to the
Closing Date:
i. by the Acquired Fund or the Acquiring Fund if:
(1) the majority of the Board of Directors of the Corporation so
determines; or
(2) any Governmental Authority of competent jurisdiction shall have issued
any judgment, injunction, order, ruling or decree or taken any other
action restraining, enjoining or otherwise prohibiting this Agreement,
the Reorganization or the consummation of any of the transactions
contemplated hereby or thereby and such judgment, injunction, order,
ruling, decree or other action becomes final and non-appealable;
provided that the party seeking to terminate this Agreement pursuant
to this Section 9(a)(i)(3) shall have used its reasonable best efforts
to have such judgment, injunction, order, ruling, decree or other
action lifted, vacated or denied;
ii. by the Acquired Fund if any condition of the Acquired Fund's
obligations set forth in Section 7 of this Agreement has not been fulfilled or
waived by it; or
iii. by the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 8 of this Agreement has not been fulfilled or
waived by it.
b. COMMISSION ORDER. If any order or orders of the Commission with respect
to this Agreement, the Reorganization or any of the transactions contemplated
hereby or thereby shall be issued prior to the Closing Date and shall impose any
terms or conditions which are determined by action of the Board of Directors of
the Corporation to be acceptable to both the Acquired Fund and the Acquiring
Fund, such terms and conditions shall be binding as if a part of this Agreement
without further vote or approval of the shareholders of the Acquired Fund,
unless such terms and conditions shall result in a change in the method of
computing the number of Corresponding Shares to be issued by the Acquiring Fund
to the Acquired Fund in which event, unless such terms and conditions shall have
been included in the proxy solicitation materials furnished to the shareholders
of the Acquired Fund prior to the meeting at which the Reorganization shall have
been approved, this Agreement shall not be consummated and shall terminate
unless the Acquired Fund promptly shall call a special meeting of shareholders
at which such conditions so imposed shall be submitted for approval and the
requisite approval of such conditions shall be obtained.
c. EFFECT OF TERMINATION. In the event of termination of this Agreement
pursuant to the provisions hereof, the same shall become null and void and have
no further force or effect, and there shall not be any liability on the part of
either the Acquired Fund or the Acquiring Fund
20
or the Corporation, or Persons who are their directors, trustees, officers,
agents or shareholders in respect of this Agreement.
d. WAIVERS; NON-MATERIAL CHANGES. At any time prior to the Closing Date,
any of the terms or conditions of this Agreement may be waived by the party that
is entitled to the benefit thereof if such action or waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of such party on behalf of which such action is taken. In addition,
each party has delegated to its investment adviser the ability to make
non-material changes to this Agreement if such investment adviser deems it to be
in the best interests of the Acquired Fund or Acquiring Fund for which it serves
as investment adviser to do so.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The respective representations and warranties contained in Sections 3
and 4 hereof shall expire with, and be terminated by, the consummation of the
Reorganization, and neither the Acquired Fund nor the Acquiring Fund nor any of
their officers, trustees, directors, agents or shareholders shall have any
liability with respect to such representations or warranties after the Closing
Date. This provision shall not protect any officer, trustee, director or agent
of the Acquired Fund or the Acquiring Fund, or of the Corporation against any
liability to the entity for which such Person serves in such capacity, or to its
shareholders, to which such Person would be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties in
the conduct of such office.
11. OTHER MATTERS.
a. FURTHER ASSURANCES. Each party hereto covenants and agrees to provide
the other party hereto and its agents and counsel with any and all
documentation, information, assistance and cooperation that may become necessary
from time to time with respect to the transactions contemplated by this
Agreement.
b. NOTICES. Any notice, report or other communication hereunder shall be in
writing and shall be given to the Person entitled thereto by hand delivery,
prepaid certified mail or overnight service, addressed to the Acquired Fund or
the Acquiring Fund, as applicable, at the address set forth below. If the notice
is sent by certified mail, it shall be deemed to have been given to the Person
entitled thereto upon receipt and if the notice is sent by overnight service, it
shall be deemed to have been given to the Person entitled thereto one (1)
business day after it was deposited with the courier service for delivery to
that Person. Notice of any change in any address listed below also shall be
given in the manner set forth above. Whenever the giving of notice is required,
the giving of such notice may be waived by the party entitled to receive such
notice.
21
To the Acquired Fund or the Acquiring Fund, c/o SunAmerica Style Select Series, Inc.
as applicable: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
With a copy to: Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
c. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated herein and
supersedes all previous agreements or understandings between the parties related
to such matters.
d. AMENDMENT. Except as set forth in Section 9(d) hereof, this Agreement
may be amended, modified, superseded, canceled, renewed or extended, and the
terms or covenants hereof may be waived, only by a written instrument executed
by all of the parties hereto or, in the case of a waiver, by the party waiving
compliance; provided that, following the meeting of shareholders of the Acquired
Fund pursuant to Section 5(a) hereof, no such amendment may have the effect of
changing the provisions for determining the number of Corresponding Shares to be
issued to the Acquired Fund shareholders under this Agreement to the detriment
of such shareholders without their further approval. Except as otherwise
specifically provided in this Agreement, no waiver by either party hereto of any
breach by the other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time.
e. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York applicable to agreements made and to be performed in said
state, without giving effect to the principles of conflict of laws thereof.
F. ASSIGNMENT. This Agreement shall not be assigned by any of the parties
hereto, in whole or in part, whether by operation of law or otherwise, without
the prior written consent of the other party hereto. Any purported assignment
contrary to the terms hereof shall be null, void and of no effect. 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.
g. COSTS OF THE REORGANIZATION. The costs of the Reorganization shall be
borne equally by SunAmerica Asset Management Corp. and each respective Acquired
Fund, regardless of whether the Reorganization is consummated.
h. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms
22
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms and provisions of this Agreement in any other jurisdiction.
i. HEADINGS. Headings to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading of any section.
j. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original but all such counterparts together shall constitute but one
instrument.
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
ATTEST: SUNAMERICA STYLE SELECT SERIES, INC. ON BEHALF OF
LARGE-CAP GROWTH PORTFOLIO
MID-CAP GROWTH PORTFOLIO
By: By:
-------------------------------------- ----------------------------------------------
Name: Name:
Title: Title:
ATTEST: SUNAMERICA STYLE SELECT SERIES, INC. ON BEHALF OF
FOCUSED LARGE-CAP GROWTH PORTFOLIO
FOCUSED MULTI-CAP GROWTH PORTFOLIO
By: By:
-------------------------------------- ----------------------------------------------
Name: Name:
Title: Title: