AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER
("Agreement") is made as of this day of
10th day of June, 2016, between LMP Real
Estate Income Fund Inc. (the
"Acquired Fund"), a Maryland corporation
with its principal place of business
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇
Funds Trust (the "Trust"), a Maryland
statutory trust with its principal place
of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on
behalf of its series, ClearBridge Real
Estate Opportunities Fund (the
"Acquiring Fund").
WHEREAS, the Acquired Fund is a
closed-end management investment company
registered pursuant to the Investment
Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, the Acquiring Fund is
a series of the Trust, an open-end
management investment company
registered pursuant to the 1940 Act;
WHEREAS, it is intended that,
for United States federal income tax
purposes (i) the transactions
contemplated by this Agreement shall qualify as a
"reorganization" within the meaning
of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"),
and (ii) that the Agreement shall
constitute a "plan of reorganization"
for purposes of the Code;
WHEREAS, the reorganization will
consist of the merger of the Acquired
Fund with and into the Trust pursuant
to the Maryland General Corporation Law
("MGCL") and Maryland Statutory Trust
Act ("MSTA") as provided herein, and upon
the terms and conditions hereinafter
set forth in this Agreement;
WHEREAS, the Acquired Fund currently
owns securities that are generally
assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Board of Trustees of the Trust
(the "Trust Board") has
determined, with respect to the Acquiring Fund,
that the Merger (as hereinafter
defined) is in the best interests of the
Acquiring Fund and its shareholders and
that the interests of the existing
shareholders of the Acquiring Fund will not
be diluted as a result of this transaction;
WHEREAS, the Board of Directors of
the Acquired Fund (the "Acquired Fund
Board") has determined, with respect to
the Acquired Fund, that the Merger
(as hereinafter defined) is in the best
interests of the Acquired Fund and its
stockholders and that the interests of
the existing stockholders of the Acquired
Fund will not be diluted as a result of
this transaction;
NOW, THEREFORE, in consideration of
the premises and of the covenants and
agreements hereinafter set forth, the p
arties hereto, intending to be legally
bound, agree as follows:
1. BASIC TRANSACTION
1.1 The Merger. On and subject to the
1.2 terms and conditions of this
Agreement, the Acquired Fund will merge
with and into the Trust (the "Merger")
at the Effective Date (as defined
in paragraph 1.3 below) in accordance with
the MGCL and MSTA. The Trust shall
be the surviving entity and investment
company registered pursuant to the
1940 Act. The Acquired Fund shall cease to
exist as a separate corporation and
investment company.
Each share of the Acquired Fund's
common stock, par value $0.001 per share
(the "Acquired Fund Common Stock"),
issued and outstanding immediately prior to
the Effective Date will be converted into an
equivalent dollar amount (to
the
nearest one tenth of one cent) of
Acquiring Fund Shares (as defined in paragraph
2.1(l)), based on the net asset value
per share of each of the parties at 4:00
p.m. Eastern Time on the Business Day
prior to the Effective Date (the
"Valuation Time"). The Effective Date
and the Business Day prior to it must each
be a day on which the New York Stock
Exchange is open for trading (a "Business
Day").
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From and after the Effective Date,
the Acquiring Fund shall possess all of
the properties, assets, rights,
privileges and powers and shall be subject to
all of the restrictions, liabilities,
obligations, disabilities and duties of
the Acquired Fund (other than the investment
objectives, policies, strategies
or limitations of the Acquired Fund,
whether fundamental or non- fundamental),
all as provided under Maryland law.
1.3 Actions at Closing. At the
1.4 closing of the transactions contemplated by
this Agreement (the "Closing") on the
date thereof (the "Closing Date"), (i)
the Acquired Fund will deliver to the
Trust, on behalf of the Acquiring Fund,
the various certificates and documents
referred to in Article 6 below, (ii) the
Trust, on behalf of the Acquiring Fund,
will deliver to the Acquired Fund the
various certificates and documents referred
to in Article 5 below, (iii) the
Acquired Fund will file with the State
Department of Assessments and Taxation
of Maryland (the "Department") articles
of merger (the "Articles of Merger")
and make all other filings or recordings
required by Maryland law in connection
with the Merger.
1.3 Effect of Merger. Subject to the
requisite approvals of the stockholdes
of the Acquired Fund, and to the other
terms and conditions described herein,
the Merger shall become effective at such
time as the Articles of Merger are
accepted for record by the Department or
at such later time, not to exceed 30
days after such acceptance, as is specified
in the Articles of Merger (the
"Effective Date"), and the separate corporate
existence of the Acquired Fund
shall cease. As promptly as practicable after
the Merger, the Acquired Fund
shall delist the Acquired Fund Common Stock
from the New York Stock Exchange
("NYSE") and its registration under the 1940
Act shall be terminated. Any
reporting responsibility of the Acquired Fund
is, and shall remain, the
responsibility of the Acquired Fund up to and
including the Effective Date.
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the
Acquiring Fund. The Trust, on
behalf of itself or the Acquiring Fund, as
applicable, represents and warrants
to the Acquired Fund that the statements
contained in this paragraph 2.1 are
correct and complete in all material respects
as of the execution of this
Agreement on the date hereof. The Trust,
on behalf of the Acquiring Fund,
represents and warrants to, and agrees with,
the Acquired Fund that:
(a) The Acquiring Fund is a duly
(b) classified series of the Trust, which is
duly organized, validly existing under the
laws of the State of Maryland and
is in good standing with the Department,
and has the power to own assets and
to carry on its business as contemplated
by this Agreement.
(c) The Trust is duly registered
(d) under the 1940 Act as an open-end
management investment company (File No.
811- 23107) and such registration has
not been revoked or rescinded and is in
full force and effect. Prior to the
Closing, the Acquiring Fund will have no
assets (except cash in payment for the
Initial Shares, as defined in paragraph
7.7), liabilities or operations of any
kind. The Trust, with respect to the
Acquiring Fund, intends to qualify for the
special tax treatment afforded regulated
investment companies ("RICs") under
Sections 851-855 of the Code for the taxable
year that will include the Closing
Date and each subsequent taxable year. The
Trust is qualified as a foreign
corporation in every jurisdiction where
required, except to the extent that
failure to so qualify would not have a
material adverse effect on the Trust or
the Acquiring Fund.
(c) No consent, approval, authorization
or order of any court or
governmental authority is required for the
consummation by the Trust, on behalf
of the Acquiring Fund, of the transactions
contemplated herein, except (i) such
as have been obtained or applied for under
the Securities Act of 1933, as
amended (the "1933 Act"), the Securities
Exchange Act of 1934, as amended (the
"1934 Act"), and the 1940 Act, (ii) such
as may be required by state securities
laws and (iii) such as may be required
under Maryland law for the acceptance for
record of the Articles of Merger by the
Department.
(e) The Trust is not, and the
(f) execution, delivery and performance of this
Agreement by the Trust, on behalf of the
Acquiring Fund, will not result, in
violation of the laws of the State of
Maryland or of the Trust's Declaration of
Trust (the "Acquiring Fund Declaration of
Trust") or the Bylaws of the Trust
(the "Acquiring Fund Bylaws"), or of any
material agreement, indenture,
instrument, contract, lease or other
undertaking to which the Trust is a party
or by which it is bound, and the execution,
delivery and performance of this
Agreement by the Trust, on behalf of the
Acquiring Fund, will not result in the
acceleration of any obligation, or the
imposition of any penalty, under any
agreement, indenture, instrument,
contract, lease, judgment or decree to which
the Trust is a party or by which it is bound.
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(e) The Trust, on behalf of the
Acquiring Fund, has been furnished with the
Acquired Fund's Annual Report to
Stockholders for the year ended December 31,
201[5].
(g) The Trust, on behalf of
(h) the Acquiring Fund, has full power and
authority to enter into and perform
its obligations under this Agreement. The
execution, delivery and performance
of this Agreement has been duly authorized
by all necessary action of the Trust
Board, and, subject to shareholder
approval, this Agreement constitutes
a valid and binding contract enforceable
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.
(g) No material litigation or
administrative proceeding or investigation of
or before any court or governmental body
is presently pending or to its
knowledge threatened against the Trust,
with respect to the Acquiring Fund or
any properties or assets held by it. The
Trust knows of no facts that might
form the basis for the institution of such
proceedings which would materially
and adversely affect its business and is not
a party to or subject to the
provisions of any order, decree or judgment
of any court or governmental body
which materially and adversely affects its
business or its ability to consummate
the transactions herein contemplated.
(i) There are no material contracts
(j) outstanding to which the Trust is a
party that have not been disclosed in the
Registration Statement (as defined
in paragraph 2.1(j) below) or will not be
otherwise disclosed to the Acquired
Fund prior to the Effective Date.
(i) The Trust, on behalf of the
(ii) Acquiring Fund, has not taken any action and
does not know of any fact or circumstance
that could reasonably be expected to
prevent the Merger from qualifying as a
reorganization within the meaning
of Section 368(a) of the Code.
(k) The registration statement has
(l) been filed with the Securities and
Exchange Commission (the "SEC") by
the Trust, with respect to the Acquiring Fund,
on Form N-14 relating to the Acquiring
Fund Shares to be issued pursuant to this
Agreement, and any supplement or amendment
thereto or to the documents therein
(as amended, the "Registration Statement"),
on the effective date of the
Registration Statement, at the time of the
stockholders' meeting referred to in
Article 4 of this Agreement and at the
Effective Date, insofar as it relates to
the Acquiring Fund (i) shall have complied
or will comply in all material respects
with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules
and regulations thereunder and (ii) did
not or will 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 not misleading; and
the prospectus included therein did not
or will not contain any untrue statement
of a material fact or omit to state any
material fact necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading; provided, however, that
the representations and warranties in this
paragraph 2.1(j) shall not apply to statements
in, or omissions from, the
Registration Statement made in reliance upon
and in conformity with information
furnished by the Acquired Fund for use in the
Registration Statement.
(k) Before the Closing, the Acquiring
Fund will not have any issued and
outstanding Acquiring Fund Shares or any
outstanding any options, warrants or
other rights to subscribe for or purchase
any Acquiring Fund Shares, nor is
there outstanding any security convertible
into, or exchangeable for, any
Acquiring Fund Shares, other than the Initial
Shares (as defined in paragraph 7.7).
(m) The Trust, on behalf of the Acquiring
(n) Fund, is authorized to issue [ ] class O
shares of beneficial interest, par value
$0.00001 per share (the "Acquiring Fund Shares"),
each outstanding share of which
is fully paid, non-assessable and has full
voting rights.
(m) The offer and sale of the Acquiring
Fund Shares to be issued pursuant to this
Agreement will be in compliance with all
applicable federal and state securities
laws.
(o) At or prior to the Effective Date,
(p) the Trust, on behalf of the Acquiring
Fund, will have obtained any and all regulatory,
board and shareholder approvals
necessary to issue the Acquiring Fund Shares to
be issued pursuant to this
Agreement.
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(o) The books and records of the Acquiring
Fund made available to the Acquired
Fund are substantially true and correct and
contain no material misstatements or
omissions with respect to the operations of
the Acquiring Fund.
(q) The Trust Board has not adopted
(r) a resolution electing to be subject to the
Maryland Business Combination Act or the
Maryland Control Share
Acquisition Act.
2.2 Representations and Warranties
of the Acquired Fund. The Acquired Fund
represents and warrants to the Trust
and the Acquiring Fund that the statements
contained in this paragraph 2.2 are
correct and complete in all material respects
as of the execution of this Agreement
on the date hereof. The Acquired Fund
represents and warrants to, and agrees
with, the Trust and the Acquiring Fund that:
(a) The Acquired Fund is a
(b) corporation duly organized,
validly existing under the
laws of the State of Maryland and is in
good standing with the Department, and has
the power to own all of its assets and
to carry on its business as it is now
being conducted and to carry out this
Agreement.
(c) The Acquired Fund is duly
registered under the 1940 Act as a closed-end,
non-diversified management investment
company (File No. 811-21098), and such
registration has not been revoked or
rescinded and is in full force and effect.
The Acquired Fund has elected and qualified
for the special tax treatment afforded
RICs under Sections 851-855 of the Code at
all times since its inception. The
Acquired Fund is qualified as a foreign
corporation in every jurisdiction where
required, except to the extent that failure
to so qualify would not have a material
adverse effect on the Acquired Fund.
(d) 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
(i) such as have been obtained or
applied for under the 1933 Act, the 1934
Act and the 1940 Act, (ii) such as may
be required by state securities laws and
(iii) such as may be required under Maryland
(iv) law for the acceptance for record of the
Articles of Merger by the Department.
(e) The Acquired Fund is not, and the
execution, delivery and performance of this
Agreement by the Acquired Fund will not
result, in violation of the laws of the
State of Maryland or of the charter of
the Acquired Fund (the "Acquired Fund
Charter") or the Bylaws, as amended
(the "Acquired Fund Bylaws"), of the Acquired
Fund, or of any material agreement,
indenture, instrument, contract, lease or other
undertaking to which the Acquired Fund
is a party or by which it is bound, and the
execution, delivery and performance of
this Agreement by the Acquired Fund will
not result in the acceleration of any
obligation, or the imposition of any
penalty, under any agreement, indenture,
instrument, contract, lease, judgment or
decree to which the Acquired Fund is a party
or by which it is bound.
(f) The Trust, on behalf of the Acquiring
Fund, has been furnished with the
Acquired Fund's Annual Report to Stockholders
for the year ended December 31,
201[5].
(f) The Acquired Fund has full power
and authority to enter into
and perform its
obligations under this Agreement.
The execution, delivery and performance
of this
Agreement has been duly authorized by
all necessary action of the
Acquired Fund
Board, and, subject to stockholder
approval, this Agreement constitutes a
valid
and binding contract enforceable 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.
(g) No material litigation or
administrative proceeding or
investigation of or
before any court or governmental body
is presently pending (in which
service of
process has been received) or to its
knowledge threatened against the
Acquired Fund
or any properties or assets held by it.
The Acquired Fund knows of no
facts that
might form the basis for the institution
of such proceedings which would
materially
and adversely affect its business and is
not a party to or subject to the
provisions of any order, decree or judgment
of any court or governmental
body
which materially and adversely affects
its business or its ability to
consummate
the transactions herein contemplated.
(h) There are no material contracts
outstanding to which the
Acquired Fund is a
party that have not been disclosed in the
Registration Statement or will
not be
otherwise disclosed to the Trust and
the Acquiring Fund prior to the
Effective
Date.
(i) Since December 31, 201[5],
there has not been any material
adverse change
in the Acquired Fund's financial condition,
assets, liabilities or
business and
the Acquired Fund has no known liabilities
of a material amount,
contingent or
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otherwise, required to be disclosed in
a balance sheet in accordance with
GAAP
other than those shown on the Acquired
Fund's statements of assets,
liabilities
and capital referred to above, those
incurred in the ordinary course of
its
business as an investment company since
December 31, 201[5], and those
incurred in
connection with the Merger. Prior to the
Effective Date, the Acquired
Fund will
advise the Trust and the Acquiring Fund in
writing of all known
liabilities,
contingent or otherwise, whether or not incurred
in the ordinary course
of
business, existing or accrued. For purposes
of this paragraph 2.2(i), a
decline
in net asset value per share of the Acquired
Fund due to declines in
market
values of securities in the Acquired Fund's
portfolio or the discharge of
the
Acquired Fund liabilities will not constitute
a material adverse change.
(j) All material federal and other tax
returns and information
reports of the
Acquired Fund required by law to have been filed
shall have been timely
filed
(including any extensions) and are or will be
correct in all material
respects, and
all federal and other taxes shown as due or
required to be shown as due
on said
returns and reports shall have been paid or
provision shall have been
made for the
payment thereof, and, to the best of the
Acquired Fund's knowledge, no
such return
is currently under audit and no assessment
has been asserted with respect
to such
returns. 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 Effective
Date
occurs.
(k) For each taxable year of its operation, the
Acquired Fund has met the requirements of Subchapter
M of the Code for qualification as a RIC, and has been
eligible to and has computed its federal income tax under
Section 852 of the Code.
(l) The Acquired Fund has not taken any action and does
know of any fact or circumstance that could reasonably be
expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of
the Code.
(m) The Registration Statement, on the effective date
of the Registration Statement, at the time of the
stockholders' meetings referred to in Article 4 of
this Agreement and at the Effective Date, insofar as it
relates to the Acquired Fund
(i) shall have complied or will comply in all material
respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations
thereunder and (ii) did not or will 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 not misleading; and the prospectus
included therein did not or will not contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that the representations and warranties
in this paragraph
2.2(m) shall only apply to statements in, or omissions from
the Registration Statement made in reliance upon and in
conformity with information furnished by the Trust, on behalf
of the Acquiring Fund, for use in the Registration Statement.
(n) All issued and outstanding shares of Acquired Fund
Common Stock (i) have been offered and sold in compliance
in all material respects with applicable registration
requirements of the 1933 Act and state securities laws, (ii)
are, and on the Effective Date will be, duly and validly
issued and outstanding, fully paid and non-assessable, and
(iii) will be held at the time of the Closing by the
persons and in the amounts set forth in the records of the
transfer agent as provided in paragraph4.7.
The Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or
purchase any shares of Acquired Fund Common Stock, nor
is there outstanding any security convertible into, or
exchangeable for, any shares of Acquired Fund Common Stock.
(o) The books and records of the Acquired Fund made
available to the Trust and the Acquiring Fund are
substantially true and correct and contain no material
misstatements or omissions with respect to the operations of
the Acquired Fund.
(p) The Acquired Fund Board has not adopted a resolution
electing to be subject to the Maryland Business Combination Act
or the Maryland Control Share Acquisition Act.
3. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE ACQUIRED FUND
3.1 Merger of Acquired Fund Common Stock.
(a) Merger. Subject to the requisite approval of the stockholders
of the Acquired Fund, and the other terms and conditions contained
herein, on the Effective Date, each share of Acquired Fund Common Stock
will be converted into an
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equivalent dollar amount (to the nearest one tenth of one cent) of
Acquiring Fund
Shares, computed based on the net asset value per share of each of the
parties at
the Valuation Time (the "Merger Consideration").
(b) Computation of Net Asset Value. The net asset value per share of
the
Acquired Fund Common Stock and the Acquiring Fund Shares shall be
determined as
of the Valuation Time, and no formula will be used to adjust the net
asset value
per share so determined of either of the parties' common stock to take
into
account differences in realized and unrealized gains and losses. The
value of the
assets of the Acquired Fund to be transferred to the Acquiring Fund shall
be
determined by the Trust, on behalf of the Acquiring Fund, pursuant to the
principles and procedures consistently utilized by the Trust in valuing
the
Acquiring Fund's assets and determining its liabilities for purposes of
the
Merger, which principles and procedures are substantially similar to
those employed
by the Acquired Fund when valuing its own assets and determining its own
liabilities. Such valuation and determination shall be made by the Trust,
on
behalf of the Acquiring Fund, in cooperation with the Acquired Fund and
shall be
confirmed in writing by the Trust, on behalf of the Acquiring Fund, to
the
Acquired Fund. The net asset value per share of Acquiring Fund Shares
shall be
determined in accordance with such procedures, and the Trust, on behalf
of the
Acquiring Fund, shall certify the computations involved.
(c) Cancellation of Acquired Fund Common Stock. On the Effective
Date, all
shares of the Acquired Fund Common Stock shall cease to be outstanding,
shall
automatically be cancelled and shall cease to exist and the holders of
certificates (the "Common Certificates") or book entry shares ("Common
Book-Entry
Shares") which, immediately prior to the Effective Date, represented such
shares
of the Acquired Fund Common Stock shall cease to have any rights with
respect
thereto, except the right to receive, upon surrender of such Common
Certificates or
Common Book-Entry Shares in accordance with paragraph 3.2, the Merger
Consideration.
3.2 Surrender of Shares.
(a) Paying Agent. Prior to the Effective Date, the Trust, on behalf
of the
Acquiring Fund, shall designate [ ] as paying agent for the payment of
the Merger
Consideration (the "Paying Agent") as provided in this Article 3.
(b) Payment Procedures.
(i) As promptly as practicable after the Effective Date, the
Trust, on behalf of
the Acquiring Fund, shall cause to be mailed to each record holder, as of
the
Effective Date, of a Certificate or a Book-Entry Share a letter of
transmittal
(which shall be in customary form and shall specify that delivery shall
be
effected, and risk of loss and title to the Certificates shall pass, only
upon
proper delivery of the Certificates to the Paying Agent or, in the case
of Book-
Entry Shares, upon adherence to the procedures set forth in the letter of
transmittal) and instructions for use in effecting the surrender of the
Certificates or, in the case of Book-Entry Shares, the surrender of such
shares for
payment of the Merger Consideration.
(ii) Upon surrender to the Paying Agent of Common Certificates
or of Common Book-
Entry Shares, together with such letter of transmittal, duly completed
and validly
executed in accordance with the instructions thereto, and such other
documents
as may be required pursuant to such instructions, the holder of such
Common
Certificates or Common Book- Entry Shares shall be entitled to receive in
exchange therefor Merger Consideration in the form of separate
certificates or
share deposit receipts for Acquiring Fund Shares for each share formerly
represented by such Common Certificate or Common Book-Entry Shares (less
any
required withholding taxes) and such Common Certificate or Common Book-
Entry
Shares shall then be canceled.
(iii) If payment of the Merger Consideration is to be made to a
person other
than the person in whose name the surrendered Certificate or Book-Entry
Share is
registered, it shall be a condition of payment that the Certificate or
Book-
Entry Share so surrendered shall be properly endorsed or shall be
otherwise in
proper form for transfer and that the person requesting such payment
shall have
paid any transfer and other taxes required by reason of the payment of
the
Merger Consideration, as applicable, to a person other than the
registered holder
of the Certificate or Book-Entry Share surrendered or shall have
established to
the satisfaction of the Trust and the Acquiring Fund that such tax either
has been
paid or is not applicable.
(iv) Until surrendered as contemplated by, and in accordance
with, this paragraph
3.2, each Certificate and each Book- Entry Share shall be deemed at any
time after
the Effective Date to represent only the right to receive upon such
surrender the
applicable Merger Consideration as contemplated by this paragraph 3.
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(v) At any time following the date that is six months after the
Effective Date,
the Trust, on behalf of the Acquiring Fund, shall be entitled to require
the Paying
Agent to deliver to it any funds (including any interest received with
respect
thereto) which have been deposited with the Paying Agent and which have
not been
disbursed to holders of Certificates or Book- Entry Shares and thereafter
such
holders shall be entitled to look to the Acquiring Fund (subject to
abandoned
property, escheat or other similar laws) only as general creditors
thereof with
respect to the Merger Consideration payable (without interest) upon due
surrender
of their Certificates or Book-Entry Shares. The Trust, on behalf of the
Acquiring
Fund, shall pay all charges and expenses, including those of the Paying
Agent, in
connection with the exchange of Acquired Fund Common Stock for Merger
Consideration. None of the Trust, on behalf of the Acquiring Fund, the
Acquired
Fund or the Paying Agent shall be liable to any person in respect of any
cash
delivered to a public official pursuant to any applicable abandoned
property,
escheat or similar law.
(vi) After the Effective Date, the stock transfer books of the
Acquired Fund shall
be closed and thereafter there shall be no further registration of
transfers of
Acquired Fund Common Stock that were outstanding prior to the Effective
Date. After
the Effective Date, Certificates or Book-Entry Shares presented to the
Paying
Agent for transfer shall be canceled and exchanged for the Merger
Consideration,
as applicable, provided for, and in accordance with the procedures set
forth in,
this Article 3.
3.3 Withholding Taxes. The Trust, on behalf of the Acquiring Fund, or
the
Paying Agent will be entitled to deduct and withhold from amounts
otherwise
payable pursuant to this Agreement to any holder of shares of Acquired
Fund
Common Stock such amounts as the Trust, on behalf of the Acquiring Fund,
or the
Paying Agent shall determine in good faith are required to be deducted
and
withheld with respect to such payments under the Code and the rules and
Treasury
Regulations promulgated thereunder, or any provision of state, local or
foreign
tax law. Any amounts so deducted and withheld will be timely paid to the
applicable tax authority and will be treated for all purposes of this
Agreement as
having been paid to the holder of the shares of Acquired Fund Common
Stock in
respect of which such deduction and withholding was made.
3.4 Lost, Stolen or Destroyed Certificates. In the event any
Certificate has
been lost, stolen or destroyed, upon the making of an affidavit of that
fact by
the person claiming such Certificate to be lost, stolen or destroyed and,
if
required by the Trust, on behalf of the Acquiring Fund, the posting by
such person
of a bond in customary amount and upon such terms as the Trust, on behalf
of the
Acquiring Fund, may determine are necessary as indemnity against any
claim that may
be made against it with respect to such Certificate, the Paying Agent
will
issue in exchange for such lost, stolen or destroyed Certificate the
Merger
Consideration, as applicable, pursuant to this Agreement.
4. COVENANTS
4.1 Operations in the Normal Course. Each party covenants to operate
its
business in the ordinary course between the date hereof and the Effective
Date, it
being understood that such ordinary course of business will include (i)
the
declaration and payment of customary dividends and other distributions
and (ii)
in the case of the Acquired Fund, preparing for its deregistration.
4.2 Stockholders' Meetings.
(a) The Acquired Fund shall hold a meeting of its stockholders
for the purpose of
considering the Merger as described herein, which meeting has been called
for [ ],
2016, and any adjournments or postponements thereof.
(b) The Acquired Fund has mailed to each of its stockholders of
record entitled
to vote at the meeting of stockholders at which action is to be
considered
regarding the Merger, in sufficient time to comply with requirements as
to notice
thereof, a combined Proxy Statement and Prospectus which complies in all
material
respects with the applicable provisions of Section 14(a) of the 1934
Act and
Section 20(a) of the 1940 Act, and the rules and regulations,
respectively,
thereunder.
4.3 Articles of Merger. The parties agree that, as soon as
practicable after
satisfaction of all conditions to the Merger, they will jointly file
executed
Articles of Merger with the Department and make all other filings or
recordings
required by Maryland law in connection with the Merger.
A-7
4.4 Regulatory Filings.
(a) The Acquired Fund undertakes that, if the Merger is
consummated, it will
file, or cause its agents to file, an application pursuant to Section
8(f) of
the 1940 Act for an order declaring that the Acquired Fund has ceased to
be a
registered investment company.
(b) The Trust, on behalf of the Acquiring Fund, has filed the
Registration
Statement with the SEC, which has become effective. The Acquired Fund
agrees to
cooperate fully with the Trust, on behalf of the Acquiring Fund, and has
furnished
the information relating to itself to be set forth in the Registration
Statement as
required by the 1933 Act, the 1934 Act, the 1940 Act, and the rules and
regulations
thereunder and the state securities or blue sky laws.
4.5 Preservation of Assets. The Trust, on behalf of the Acquiring
Fund, agrees
that it has no plan or intention to sell or otherwise dispose of the
assets of
the Acquired Fund to be acquired in the Merger, except for dispositions
made in
the ordinary course of business.
4.6 Stockholder List. Prior to the Effective Date, the Acquired Fund
shall
have made arrangements with its transfer agent to deliver to the Trust,
on behalf
of the Acquiring Fund, a list of the names and addresses of all of the
holders of
record of Acquired Fund Common Stock on the Effective Date and the
respective
number of shares of Acquired Fund Common Stock owned by each such
stockholder,
certified by the Acquired Fund's transfer agent or President to the best
of
their knowledge and belief. The Trust, on behalf of the Acquiring Fund,
and the
Acquired Fund will (i) use all reasonable best efforts to cause the
Merger to
constitute a reorganization under Section 368(a) of the Code and (ii)
shall execute
and deliver officer's certificates containing appropriate representations
at such
time or times as may be reasonably requested by counsel, including the
effective
date of the Registration Statement and the Closing Date, for purposes of
rendering opinions with respect to the tax treatment of the Merger.
4.7 Delisting, Termination of Registration as an Investment Company.
The
Acquired Fund agrees that the (i) delisting of the shares of the Acquired
Fund
with the NYSE and (ii) termination of its registration as an investment
company
will be effected in accordance with applicable law as soon as practicable
following
the Effective Date.
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided
for herein shall be subject, at the Acquired Fund's election, to the
following
conditions:
5.1 Certificates and Statements by the Acquiring Fund.
(a) The Trust, on behalf of the Acquiring Fund, shall have
furnished a statement
of assets, liabilities and capital, together with a schedule of
investments with
their respective dates of acquisition and tax costs, certified on its
behalf by
the Trust's President (or any Vice President) and Treasurer, and a
certificate
executed by both such officers, dated the Effective Date, certifying that
there
has been no material adverse change in its financial position since
December 31,
201[5], other than changes in its portfolio securities since that date or
changes
in the market value of its portfolio securities.
(b) The Trust, on behalf of the Acquiring Fund, shall have
furnished to the
Acquired Fund a certificate signed by its President (or any Vice
President), dated
the Effective Date, certifying that as of the Effective Date, all
representations
and warranties made by the Trust, on behalf of the Acquiring Fund, in
this
Agreement are true and correct in all material respects as if made at and
as of
such date and the Trust, on behalf of the Acquiring Fund, has complied
with all of
the agreements and satisfied all of the conditions on its part to be
performed or
satisfied at or prior to such dates.
5.2 Absence of Litigation. There shall be no material litigation
pending with
respect to the matters contemplated by this Agreement.
A-8
5.3 Legal Opinion. The Acquired Fund shall have received an opinion
of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel to the Trust, in form and substance
reasonably
satisfactory to the Acquired Fund and dated the Effective Date, to the
effect
that:
(i) the Trust is duly organized, validly existing under the law
of the State of
Maryland and in good standing with the Department;
(ii) the Trust has the statutory power to carry on its business
as an open-end investment company registered under the 1940 Act;
(iii) the Agreement has been duly authorized, executed and
delivered by the Trust,
on behalf of the Acquiring Fund, and, assuming due authorization,
execution and
delivery of the Agreement by the Acquired Fund, constitutes a valid and
legally
binding obligation of the Trust , enforceable in accordance with its
terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization
or other similar laws pertaining to the enforcement of creditors' rights
generally
and by equitable principles;
(iv) to such counsel's knowledge, no consent, approval,
authorization or order of
any United States federal or Maryland or New York state court or
governmental
authority is required for the consummation by the Trust, on behalf of the
Acquiring
Fund, of the Merger, except such as may be required under the 1933 Act,
the 1934
Act, the 1940 Act and the published rules and regulations of the SEC
thereunder
and under Maryland law, New York law and such as may be required under
state
securities or blue sky laws;
(v) the Registration Statement has become effective under the
1933 Act and the
Proxy Statement and Prospectus was filed on [ ], 2015, pursuant to Rule
497(c) of
the rules and regulations of the SEC under the 1933 Act and, to such
counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued or proceeding for that purpose has been
instituted or
threatened by the SEC;
(vi) to such counsel's knowledge, there are no legal or
governmental proceedings
or contracts to which the Trust, with respect to the Acquiring Fund, is a
party or
by which it is bound required to be described in the Registration
Statement which
are not described therein or, if required to be filed, filed as required;
(vii) the execution and delivery of this Agreement does not, and
the consummation
of the Merger will not, violate any material provision of the Acquiring
Fund
Declaration of Trust, the Acquiring Fund Bylaws, or any agreement set
forth in a
schedule to the opinion, which the Trust, on behalf of the Acquiring
Fund, has
advised such counsel are all material contracts to which the Trust is a
party or
by which the Trust is bound, except insofar as the parties have agreed to
amend
such provision as a condition precedent to the Merger; and
(viii) to such counsel's knowledge, no material suit, action or
legal or
administrative proceeding is pending or threatened against the Trust,
with respect
to the Acquiring Fund.
In giving the opinion set forth above, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may
state
that it is relying on certificates of officers of the Trust, on behalf of
the
Acquiring Fund, with regard to matters of fact and certain certificates
and written
statements of governmental officials with respect to the good standing of
the
Trust and on the opinion of ▇▇▇▇▇ & Lardner LLP as to matters of Maryland
law.
5.4 Regulatory Orders. The Trust, on behalf of the Acquiring Fund,
shall
have received from any relevant state securities administrator such order
or
orders as are reasonably necessary or desirable under the 1933 Act, the
1934 Act,
the 1940 Act, and any applicable state securities or blue sky laws in
connection
with the transactions contemplated hereby, and that all such orders shall
be in
full force and effect.
5.5 Satisfaction of the Acquired Fund. All proceedings taken by the
Trust,
the Acquiring Fund and its counsel in connection with the Merger and all
documents incidental thereto shall be satisfactory in form and substance
to the
Acquired Fund.
A-9
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST OR THE ACQUIRING
FUND
The obligations of the Trust, on behalf of the Acquiring Fund, to
consummate the
transactions provided for herein shall be subject, at the Trust's
election, to the
following conditions:
6.1 Certificates and Statements by the Acquired Fund.
(a) The Acquired Fund shall have furnished a statement of assets,
liabilities
and capital, together with a schedule of investments with their
respective dates
of acquisition and tax costs, certified on its behalf by its President
(or any
Vice President) and its Treasurer, and a certificate executed by both
such
officers, dated the Effective Date, certifying that there has been no
material
adverse change in its financial position since December 31, 201[5], other
than
changes in its portfolio securities since that date or changes in the
market value
of its portfolio securities.
(b) The Acquired Fund shall have furnished to the Trust, on
behalf of the
Acquiring Fund, a certificate signed by its President (or any Vice
President),
dated the Effective Date, certifying that as of the Effective Dates, all
representations and warranties made by the Acquired Fund in this
Agreement are true
and correct in all material respects as if made at and as of such date
and that the
Acquired Fund has complied with all of the agreements and satisfied all
of the
conditions on its part to be performed or satisfied at or prior to such
date.
6.2 Absence of Litigation. There shall be no material litigation
pending with
respect to the matters contemplated by this Agreement.
6.3 Legal Opinion. The Trust, on behalf of the Acquiring Fund, shall
have
received an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as counsel to the
Acquired
Fund, in form and substance reasonably satisfactory to the Trust and
dated the
Effective Date, to the effect that:
(i) the Acquired Fund is a corporation duly organized, validly
existing under
the law of the State of Maryland and in good standing with the
Department;
(ii) the Acquired Fund has the corporate power to carry on its
business as a
closed-end investment company registered under the 1940 Act;
(iii) the Agreement has been duly authorized, executed and
delivered by the
Acquired Fund, and, assuming due authorization, execution and delivery of
the
Agreement by the Trust, on behalf of the Acquiring Fund, constitutes a
valid and
legally binding obligation of the Acquired Fund enforceable in accordance
with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws pertaining to the enforcement of
creditors'
rights generally and by equitable principles;
(iv) to such counsel's knowledge, no consent, approval,
authorization or order of
any United States federal or Maryland or New York state court or
governmental
authority is required for the consummation by the Acquired Fund of the
Merger,
except such as may be required under the 1933 Act, the 1934 Act, the 1940
Act and
the published rules and regulations of the SEC thereunder and under
Maryland law,
New York law and such as may be required under state securities or blue
sky laws;
(v) to such counsel's knowledge, there are no legal or
governmental proceedings
or contracts to which the Acquired Fund is a party or by which it is
bound
required to be described in the Registration Statement which are not
described
therein or, if required to be filed, filed as required;
(vi) the execution and delivery of this Agreement does not, and
the consummation
of the Merger will not, violate any material provision of the Acquired
Fund
Charter, the Acquired Fund Bylaws, or any agreement set forth in a
schedule to the
opinion, which the Acquired Fund has advised such counsel are all
material
contracts to which the Acquired Fund is a party or by which it is bound,
except
insofar as the parties have agreed to amend such provision as a condition
precedent to the Merger; and
▇-
▇▇
(▇▇▇) to such counsel's knowledge, no material suit, action or legal
or
administrative proceeding is pending or threatened against the Acquired
Fund.
In giving the opinion set forth above, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may
state
that it is relying on certificates of officers of the Acquired Fund with
regard to
matters of fact and certain certificates and written statements of
governmental
officials with respect to the good standing of the Acquired Fund and on
the
opinion of ▇▇▇▇▇ & Lardner LLP, as to matters of Maryland law.
6.4 Satisfaction of the Acquiring Fund. All proceedings taken by the
Acquired
Fund and its counsel in connection with the Merger and all documents
incidental
thereto shall be satisfactory in form and substance to the Trust and the
Acquiring
Fund.
6.5 Custodian's Certificate. The Acquired Fund's custodian shall have
delivered
to the Trust, on behalf of the Acquiring Fund, a certificate identifying
all of the
assets of the Acquired Fund held or maintained by such custodian as of
the
Valuation Time.
6.6 Books and Records. The Acquired Fund's transfer agent shall have
provided to
the Trust, on behalf of the Acquiring Fund, (i) the originals or true
copies of all
of the records of the Acquired Fund in the possession of such transfer
agent as of
the Effective Date, (ii) a certificate setting forth the number of shares
of
Acquired Fund Common Stock outstanding as of the Valuation Time, and
(iii) the
name and address of each holder of record of any shares and the number of
shares
held of record by each such stockholder.
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND AND
ACQUIRED
FUND
If any of the conditions set forth below have not been satisfied on
or before
the Closing Date with respect to the Trust, on behalf of the Acquiring
Fund,, the
other party to this Agreement shall be entitled, at its option, to refuse
to
consummate the transactions contemplated by this Agreement:
7.1 Approval of Merger. The Merger shall have been approved by the
affirmative
vote of a majority of the outstanding shares of Acquired Fund Common
Stock; the
Trust, on behalf of the Acquiring Fund, shall have delivered to the
Acquired Fund
a copy of the resolutions approving this Agreement pursuant to this
Agreement
adopted by the Trust Board, certified by its secretary; and the Acquired
Fund
shall have delivered to the Trust, on behalf of the Acquiring Fund, a
copy of
the resolutions approving this Agreement adopted by the Acquired Fund
Board and
the Acquired Fund's shareholders, certified by its secretary.
7.2 Regulatory Filings.
(a) Any applicable waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust
Improvements Act of 1976, as amended, relating to the transactions
contemplated
hereby shall have expired or been terminated.
(b) The SEC shall not have issued an unfavorable advisory report
under Section
25(b) of the 1940 Act, nor instituted or threatened to institute any
proceeding
seeking to enjoin consummation of the Merger under Section 25(c) of the
1940 Act;
no other legal, administrative or other proceeding shall be instituted or
threatened which would materially affect the financial condition of the
Acquired
Fund or would prohibit the Merger.
(c) On the Closing Date, no court or governmental agency of
competent
jurisdiction shall have issued any order that remains in effect and that
restrains or enjoins the Acquired Fund or the Trust, with respect to the
Acquiring Fund, from completing the transactions contemplated by this
Agreement.
7.3 Consents. All consents of other parties and all other consents,
orders
and permits of federal, state and local regulatory authorities deemed
necessary
by the Trust, on behalf of the Acquiring 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 the Acquiring Fund or the Acquired Fund, provided that
either party
hereto may for itself waive any of such conditions.
7.4 Registration Statement. The Registration Statement shall have
become
effective under the 1933 Act and no stop orders suspending the
effectiveness
thereof shall have been issued and, to the best knowledge of the parties
hereto,
no investigation or proceeding for that purpose shall have been
instituted or be
pending.
7.5 Tax Opinion. The parties shall have received the opinion of
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, dated the Closing Date, substantially to the
effect that,
based upon certain facts, assumptions and representations made by the
Acquired
Fund, the Trust, on behalf of the Acquiring Fund, and their respective
authorized
officers:
(i) the Merger will constitute a reorganization within the
meaning of Section
368(a)(1) of the Code and that the Acquiring Fund and the Acquired Fund
will each
be a "party to a reorganization" within the meaning of Section 368(b) of
the Code;
(ii) no gain or loss will be recognized by the Acquired Fund
as a result of the Merger or upon the conversion of shares of Acquired
Fund Common Stock into Acquiring Fund Shares;
(iii) no gain or loss will be recognized by the Acquiring Fund
as a result of the Merger or upon the conversion of shares of Acquired
Fund Common Stock into Acquiring Fund Shares;
(iv) no gain or loss will be recognized by the holders of the
Acquired Fund Common
Stock upon the conversion of their shares of Acquired Fund Common Stock
into
Acquiring Fund Shares;
(v) the tax basis of the Acquired Fund 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 Merger;
(vi) immediately after the Merger, the aggregate tax basis of the
Acquiring Fund
Shares received by each holder of Acquired Fund Common Stock in the
Merger will
be equal to the aggregate tax basis of the shares of Acquired Fund Common
Stock
owned by such shareholder immediately prior to the Merger;
(vii) a shareholder's holding period for Acquiring Fund Shares will
be determined
by including the period for which such shareholder held shares of
Acquired Fund
Common Stock converted pursuant to the Merger, provided that such shares
of
Acquired Fund Common Stock were held by such shareholder as capital
assets; and
(viii) the Acquiring Fund's holding period with respect to the
Acquired Fund's
assets transferred pursuant to the Merger will include the period for
which such
assets were held by the Acquired Fund.
The delivery of such opinion is conditioned upon the receipt by
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP of representations it shall request of the Trust, on
behalf of the
Acquiring Fund, and the Acquired Fund. Notwithstanding anything herein to
the
contrary, neither the Trust, on behalf of the Acquiring Fund, nor the
Acquired Fund
may waive the condition set forth in this paragraph 7.5.
7.6 Assets and Liabilities. The assets and liabilities of the
Acquired Fund to
be transferred to the Acquiring Fund shall not include any assets or
liabilities
which the Acquiring Fund, by reason of limitations in its Registration
Statement
or the Acquiring Fund Declaration of Trust, may not properly acquire or
assume. The
Trust, on behalf of the Acquiring Fund, does not anticipate that there
will be any
such assets or liabilities but the Trust, on behalf of the Acquiring
Fund, will
notify the Acquired Fund if any do exist and will reimburse the Acquired
Fund for
any reasonable transaction costs incurred by the Acquired Fund for the
liquidation
of such assets and liabilities.
7.7 Initial Shares. The Trust Board shall have authorized the
issuance of, and
the Trust shall have issued, Acquiring Fund Shares ("Initial Shares") to
▇▇▇▇
▇▇▇▇▇ Partners Fund Advisor, LLC or an affiliate thereof, in
consideration of the
payment of $[100,000] of initial seed capital (or other amount that the
Trust
Board determines), to vote on the investment management and subadvisory
contracts,
distribution and service plan, and other agreements and plans referred to
in
paragraph 7.8 and to take whatever action it may be required to take as
the
Acquiring Fund's sole shareholder.
▇-
▇▇
7.8 Agreements and Plans. The Trust, on behalf of the Acquiring Fund,
shall have
entered into, or adopted, as appropriate, an investment management
contract, a
subadvisory contract, a distribution and service plan pursuant to Rule
12b-1
under the 1940 Act, and other agreements and plans necessary for the
Acquiring
Fund's operation as a series of an open-end management investment
company. Each
such contract, plan and agreement shall have been approved by the Trust
Board and,
to the extent required by law (as interpreted by SEC staff positions), by
its
trustees who are not "interested persons" thereof (as that term is
defined in the
▇▇▇▇ ▇▇▇) and by ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC or its affiliate
as the
Acquiring Fund's sole shareholder.
8. INDEMNIFICATION
8.1 The Acquiring Fund. The Trust, on behalf of the Acquiring Fund,
out of its
assets and property, agrees to indemnify and hold harmless the Acquired
Fund and
the members of the Acquired Fund Board and its officers from and against
any and
all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquired Fund and those board members and
officers may
become subject, insofar as such loss, claim, damage, liability or expense
(or
actions with respect thereto) arises out of or is based on (a) any breach
by the
Trust, on behalf of the Acquiring Fund, of any of its representations,
warranties,
covenants or agreements set forth in this Agreement or (b) any act,
error,
omission, neglect, misstatement, materially misleading statement, breach
of duty or
other act wrongfully done or attempted to be committed by the Trust, the
Acquiring
Fund, or the members of the Trust Board or its officers prior to the
Closing Date,
provided that such indemnification by the Trust, on behalf of the
Acquiring Fund,
is not (i) in violation of any applicable law or (ii) otherwise
prohibited as a
result of any applicable order or decree issued by any governing
regulatory
authority or court of competent jurisdiction. In no event shall the
Trust's
indemnification responsibilities to the Acquired Fund under this
paragraph 8.1
extend to any other series of the Trust other than the Acquiring Fund.
8.2 The Acquired Fund. The Acquired Fund, out of its assets and
property,
agrees to indemnify and hold harmless the Trust, the Acquiring Fund, and
the
members of the Trust Board and its officers from and against any and all
losses,
claims, damages, liabilities or expenses (including, without limitation,
the
payment of reasonable legal fees and reasonable costs of investigation)
to which
the Trust, with respect to the Acquiring Fund, and those board members
and
officers may become subject, insofar as such loss, claim, damage,
liability or
expense (or actions with respect thereto) arises out of or is based on
(a) any breach by the Acquired Fund of any of its representations,
warranties,
covenants or agreements set forth in this Agreement or (b) any act,
error,
omission, neglect, misstatement, materially misleading statement, breach
of duty or
other act wrongfully done or attempted to be committed by the Acquired
Fund or
the members of the Acquired Fund Board or its officers prior to the
Closing Date,
provided that such indemnification by the Acquired Fund is not (i) in
violation
of any applicable law or (ii) otherwise prohibited as a result of any
applicable
order or decree issued by any governing regulatory authority or court of
competent
jurisdiction.
9. BROKER FEES AND EXPENSES
9.1 No Broker Fees. The Trust, on behalf of the Acquiring Fund, and
the
Acquired Fund represent and warrant to each other that there are no
brokers or
finders entitled to receive any payments in connection with the
transactions
provided for herein.
9.2 Payment of Expenses. The costs of the Merger, including legal,
audit, and
the preparing, printing, assembling and mailing material in connection
with this
solicitation of proxies, are estimated to be approximately $518,000.
LMPFA, or an
affiliate thereof, will bear half the costs of the Merger, with the
remaining costs
borne by the Acquired Fund. Such expenses shall include, but not be
limited to,
all costs related to the preparation and distribution of the Registration
Statement, proxy solicitation expenses, and SEC registration fees.
Neither of the
Trust, with respect to the Acquiring Fund, nor the Acquired Fund owes any
broker's
or finder's fees in connection with the transactions provided for herein.
10. COOPERATION FOLLOWING EFFECTIVE DATE
In case at any time after the Effective Date any further action is
necessary to
carry out the purposes of this Agreement, each of the parties will take
such
further action (including the execution and delivery of such further
instruments
and documents) as the other party may reasonably request, all at the sole
cost
and expense of the requesting party (unless the
▇-
▇▇
requesting party is entitled to indemnification as described below). The
Trust, on
behalf of the Acquired Fund, acknowledges and agrees that from and after
the
Effective Date, the Trust, on behalf of the Acquiring Fund, shall be
entitled to
possession of all documents, books, records, agreements and financial
data of any
sort pertaining to the Acquired Fund.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 Entire Agreement. The Trust, on behalf of the Acquiring Fund,
and the
Acquired Fund agree that neither party has made any representation,
warranty or
covenant not set forth herein and that this Agreement constitutes the
entire
agreement between the parties.
11.2 Survival of Warranties. The covenants to be performed after the
Closing by
the Trust, on behalf of the Acquiring Fund, and the Acquired Fund, and
the
obligations of the Trust and the Acquiring Fund in Article 8, shall
survive the
Closing. All other representations, warranties and covenants contained in
this
Agreement or in any document delivered pursuant hereto or in connection
herewith
shall not survive the consummation of the transactions contemplated
hereunder and
shall terminate on the Closing.
12. TERMINATION AND WAIVERS
12.1 Termination. This Agreement may be terminated and the
transactions
contemplated hereby may be abandoned at any time prior to the Closing
Date by
resolution of either the Trust Board or the Acquired Fund Board, if
circumstances
should develop that, in the opinion of that board, make proceeding with
the
Agreement inadvisable with respect to the Acquiring Fund or the Acquired
Fund,
respectively. Any such termination resolution to be effective shall be
promptly
communicated to the other party and, in any event, prior to the Closing
Date. In
the event of termination of this Agreement pursuant to the provisions
hereof, the
Agreement shall become void and have no further effect, and there shall
not be
any liability hereunder on the part of either of the parties or their
respective
board members or officers, except for any such material breach or
intentional
misrepresentation, as to each of which all remedies at law or in equity
of the
party adversely affected shall survive.
12.2 Waiver. At any time prior to the Effective Date, any of the
terms or
conditions of this Agreement may be waived by either the Acquired Fund
Board or the
Trust Board (whichever is entitled to the benefit thereof), if, in the
judgment of
such board after consultation with its counsel, such action or waiver
will not have
a material adverse effect on the benefits intended in this Agreement to
the
stockholders or shareholders of their respective fund, on behalf of which
such
action is taken.
13. TRANSFER RESTRICTION
Pursuant to Rule 145 under the 1933 Act, and in connection with the
issuance
of any shares to any person who at the time of the Merger is, to its
knowledge, an
affiliate of a party to the Merger pursuant to Rule 145(c), the Trust, on
behalf
of the Acquiring Fund, will cause to be affixed upon the certificate(s)
issued to
such person (if any) a legend as follows:
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO
CLEARBRIDGE REAL
ESTATE OPPORTUNITIES FUND. (OR ITS STATUTORY SUCCESSOR) UNLESS (I) A
REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF
1933 OR
(II) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE FUND, SUCH
REGISTRATION IS NOT REQUIRED.
and, further, that stop transfer instructions will be issued to the
Trust's 's
transfer agent with respect to such shares. The Acquired Fund will
provide the
Trust, on behalf of the Acquiring Fund, on the Effective Date with the
name of any
Acquired Fund stockholder who is to the knowledge of the Acquired Fund an
affiliate
of it on such date.
14. MATERIAL PROVISIONS
All covenants, agreements, representations and warranties made under
this
Agreement and any certificates delivered pursuant to this Agreement shall
be deemed
to have been material and relied upon by each of the parties,
notwithstanding any
investigation made by them or on their behalf.
▇-
▇▇
▇▇. AMENDMENTS
This Agreement may be amended, modified or supplemented in such
manner as may
be deemed necessary or advisable by the authorized officers of the
Acquired Fund
and the Trust, on behalf of the Acquiring Fund; provided, however, that
following
the meeting of the Acquired Fund stockholders called by the Acquired Fund
pursuant to paragraph 4.2 of this Agreement, no such amendment may have
the
effect of changing the provisions for determining the number of Acquiring
Fund
Shares to be issued to the holders of Acquired Fund Common Stock under
this
Agreement to the detriment of such stockholders without their further
approval.
16. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions
of this Agreement shall be in writing and shall be given by facsimile,
electronic
delivery (i.e., e-mail), personal service or prepaid or certified mail
addressed to
the Trust, on behalf of the Acquiring Fund, or the Acquired Fund, at its
address
set forth in the preamble to this Agreement, in each case to the
attention of its
President.
17. ENFORCEABILITY; HEADINGS; COUNTERPARTS; GOVERNING LAW;
SEVERABILITY;
ASSIGNMENT; LIMITATION OF LIABILITY
17.1 Enforceability. Any term or provision of this Agreement that is
invalid
or unenforceable in any situation in any jurisdiction shall not affect
the
validity or enforceability of the remaining terms and provisions hereof
or the
validity or enforceability of the offending term or provision in any
other
situation or in any other jurisdiction.
17.2 Headings. The Article headings contained in this Agreement are
for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17.3 Counterparts. This Agreement may be executed in any number of
counterparts,
each of which shall be deemed an original.
17.4 Governing Law. This Agreement shall be governed by and construed
and
interpreted in accordance with the internal laws of the State of New
York.
17.5 Successors and Assigns. 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.
17.6 Limitation of Liability. The obligations of the Acquired Fund,
and the
Trust, on behalf of the Acquiring Fund, shall not bind any of the
directors or
trustees, shareholders, nominees, officers, employees or agents of the
parties
personally, but shall bind only the Acquired Fund or the Trust , as
appropriate.
The execution and delivery of this Agreement by an officer of a party
shall not
be deemed to have been made by the officer individually or to impose any
liability on the officer personally, but shall bind only the Acquired
Fund or the
Trust , as appropriate. No other series of the Trust other than the
Acquiring Fund
shall be liable for the obligations of the Acquiring Fund or the Acquired
Fund.
▇-
▇▇
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be
executed by its duly authorized
officer.
LMP Real Estate Income Fund Inc.
By: /s/ ▇▇▇▇ Trust
Name: ▇▇▇▇ Trust
Title: Chairman, President and Chief Executive Officer
▇▇▇▇ ▇▇▇▇▇ Funds Trust, on behalf of its series,
ClearBridge Real Estate Opportunities Fund
By:/s/ ▇▇▇▇ Trust
Name: ▇▇▇▇ Trust
Title: Chairman, President and Chief Executive Officer
