AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (Agreement) is
made as of this 8th day of September, 2006, by and among
Salomon Brothers Investors Value Fund Inc, a Maryland
corporation (the Acquiring Fund), with its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ Partners Funds, Inc., a Maryland corporation (the
Acquired Entity), with its principal place of business at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on behalf of its
series ▇▇▇▇ ▇▇▇▇▇ Partners Large Cap Value Fund (the Acquired
Fund), and, solely for purposes of paragraph 10.2 hereof, ▇▇▇▇
▇▇▇▇▇ Partners Fund Advisor, LLC.
WHEREAS, each of the Acquired Fund and the Acquiring Fund
is a series or the sole series of an open-end management
investment company registered pursuant to the Investment
Company Act of 1940, as amended (the 1940 Act);
WHEREAS, it is intended that, for United States federal
income tax purposes (i) the transactions contemplated by this
Agreement shall qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the Code) and (ii) this Agreement shall constitute a
plan of reorganization within the meaning of Treasury
Regulation Section 1.368-2(g);
WHEREAS, the reorganization will consist of (1) the sale,
assignment, conveyance, transfer and delivery of all of the
property and assets of the Acquired Fund to the Acquiring Fund
in exchange solely for classes of shares of common stock of
the Acquiring Fund (the Acquiring Fund Shares) corresponding
to the classes of outstanding shares of common stock of the
Acquired Fund (the Acquired Fund Shares), as described herein,
(2) the assumption by the Acquiring Fund of all liabilities of
the Acquired Fund, and (3) the subsequent distribution of the
Acquiring Fund Shares and any of the remaining properties and
assets to the shareholders of the Acquired Fund and the
termination of the Acquired Fund, as provided herein (the
Reorganization), all upon the terms and conditions hereinafter
set forth in this Agreement;
WHEREAS, the Acquired Fund currently owns securities that
are generally assets of the character in which the Acquiring
Fund is permitted to invest;
WHEREAS, the Board of Directors of the Acquiring Fund (the
Acquiring Fund Board) has determined that the sale,
assignment, conveyance, transfer and delivery of all of the
property and assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of all liabilities of the Acquired
Fund by the Acquiring Fund is in the best interests of the
Acquiring Fund and its shareholders and that the interests of
the existing shareholders of the Acquiring Fund will not be
diluted as a result of this transaction;
WHEREAS, the Board of Directors of the Acquired Entity (the
Acquired Entity Board) has determined, with respect to the
Acquired Fund, that the sale, assignment, conveyance, transfer
and delivery of all of the property and assets of the Acquired
Fund for Acquiring Fund Shares and the assumption of all
liabilities of the Acquired Fund by the Acquiring Fund is in
the best interests of the Acquired Fund and its shareholders
and that the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of this
transaction;
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties
hereto covenant and agree as follows:
1
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TRANSFER OF THE ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING
FUND IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION
OF ALL ACQUIRED FUND LIABILITIES, THE SUBSEQUENT
DISTRIBUTION OF ACQUIRING FUND SHARES AND THE TERMINATION OF
THE ACQUIRED FUND
1.1 Subject to requisite approvals and the other terms and
conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired
Entity, on behalf of the Acquired Fund, agrees to sell,
assign, convey, transfer and deliver all of its property and
assets, as set forth in paragraph 1.2, to the Acquiring Fund,
and the Acquiring Fund agrees in exchange therefor: (a) to
deliver to the Acquired Fund the number of full and fractional
Acquiring Fund Shares corresponding to each class of the
Acquired Fund Shares as of the time and date set forth in
paragraph 3.1, determined by dividing the value of the
Acquired Fund?s net assets with respect to each class of the
Acquired Fund (computed in the manner and as of the time and
date set forth in paragraph 2.1) by the net asset value of one
share of the corresponding class of Acquiring Fund Shares
(computed in the manner and as of the time and date set forth
in paragraph 2.2); and (b) to assume all liabilities of the
Acquired Fund. Such transactions shall take place on a closing
date as provided for in paragraph 3.1 (the Closing Date).
1.2 The property and assets of the Acquired Entity,
attributable to the Acquired Fund, to be sold, assigned,
conveyed, transferred and delivered to and acquired by the
Acquiring Fund shall consist of all assets and property of
every kind and nature of the Acquired Fund, including, without
limitation, all rights, receivables (including dividend,
interest and other receivables), cash, cash equivalents,
claims (whether absolute or contingent, known or unknown),
securities, commodities and futures interests, good will and
other intangible property, any deferred or prepaid expenses
and all interests, rights, privileges and powers, the Acquired
Fund owns at the Valuation Date (as defined in paragraph 2.1)
(collectively, Assets). The Acquiring Fund shall assume all of
the liabilities and obligations of the Acquired Fund,
including, without limitation, all indemnification obligations
of the Acquired Fund with respect to the current and former
members of the Acquired Entity Board and officers of the
Acquired Entity, whether accrued or contingent, known or
unknown, existing at the Valuation Date (collectively,
Liabilities). The Acquired Fund will sell, assign, convey,
transfer and deliver to the Acquiring Fund, any rights, stock
dividends, or other securities received by the Acquired Fund
after the Closing Date as stock dividends or other
distributions on or with respect to the property and assets
transferred, which rights, stock dividends, and other
securities shall be deemed included in the property and assets
transferred to the Acquiring Fund at the Closing Date and
shall not be separately valued, in which case any such
distribution that remains unpaid as of the Closing Date shall
be included in the determination of the value of the assets of
the Acquired Fund acquired by the Acquiring Fund.
1.3 The Acquired Fund will make reasonable efforts to
discharge all of its known Liabilities prior to the Valuation
Date.
1.4 On or as soon as practicable prior to the Closing Date,
the Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so
that it will have distributed substantially all of its
investment company taxable income as defined in the Code
(computed without regard to any deduction for dividends paid)
and realized net capital gain as defined in the Code (after
deduction for any available capital loss carryover), if any,
for all tax periods ending on or before the Closing Date (and
treating the current taxable year as ending on the Closing
Date) such that the Acquired Fund will have no tax liability
under Section 852 or Section 4982 for the current and any
prior tax periods.
1.5 Immediately following the actions contemplated by
paragraph 1.1, the Acquired Entity shall take such actions
necessary to complete the reorganization of the Acquired Fund.
To complete the reorganization, the Acquired Entity, on behalf
of the Acquired Fund, shall (a) distribute to the latter?s
shareholders of record with respect to each class of Acquired
Fund Shares as of the Closing Date (Acquired Fund
Shareholders), on a pro rata basis within that class, the
Acquiring Fund Shares of the corresponding class received by
the Acquired Entity, on behalf of the Acquired Fund, pursuant
to paragraph 1.1, (b) thereafter, redeem or cancel, as the
case may be, shares of the Acquired Fund in accordance with
Maryland law and (c) terminate the Acquired Fund. Such
distribution shall be accomplished, with respect to each class
of Acquired Fund Shares, by the transfer of the corresponding
Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the
names of the Acquired Fund Shareholders. The aggregate net
asset value of each class of Acquiring Fund Shares to be so
credited to each corresponding class of Acquired Fund
Shareholders shall, with respect to each class, be equal to
the aggregate net asset value of the Acquired Fund Shares of
each corresponding class owned by Acquired Fund Shareholders
on the Closing Date. The Acquiring Fund shall not issue
certificates representing any class of Acquiring Fund Shares
in connection with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund?s transfer agent.
1.7 Any reporting responsibility of the Acquired Fund,
including, but not limited to, the responsibility for filing
regulatory reports, tax returns, or other documents with the
Securities and Exchange Commission (Commission), any state
securities commission, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and
shall remain the responsibility of the Acquired Entity, on
behalf of the Acquired Fund. The Acquiring Fund shall fully
cooperate to the extent necessary or desirable for these
responsibilities to be discharged.
2. VALUATION
2.1 The value of the Assets and the amount of the
Liabilities shall be determined as of the time for calculation
of net asset value as set forth in the then-current prospectus
for the Acquired Fund, and after the declaration of any
dividends by the Acquired Fund, on the Closing Date (such time
and date being hereinafter called the Valuation Date),
computed using the valuation procedures established by the
Acquired Entity Board. All computations of value and amounts
shall be made by (a) State Street Bank and Trust Company, in
its capacity as accounting agent for the Acquired Fund, or
(b) in the case of securities subject to fair valuation, in
accordance with the valuation procedures of the Acquired
Entity adopted in good faith by the Acquired Entity Board. All
computations of value and amounts pursuant to this paragraph
2.1 shall be subject to confirmation by the Acquiring Fund?s
independent registered public accounting firm.
2.2. The net asset value per share of each class of
Acquiring Fund Shares shall be determined to the nearest full
cent on the Valuation Date, using the valuation procedures
established by the Acquiring Fund Board. All computations of
value shall be made by (a) State Street Bank and Trust
Company, in its capacity as accounting agent for the Acquiring
Fund, or (b) in the case of securities subject to fair
valuation, in accordance with the valuation procedures of the
Acquiring Fund adopted in good faith by the Acquiring Fund
Board. All computations of value pursuant to this paragraph
2.2 shall be subject to confirmation by the Acquired Fund?s
independent registered public accounting firm.
2.3 The number of Acquiring Fund Shares of each class to be
issued in exchange for the Assets shall be determined with
respect to each such class by dividing the value of the net
assets with respect to each class of Acquired Fund Shares,
determined using the same valuation procedures referred to in
paragraph 2.1, by the net asset value of an Acquiring Fund
Share of the corresponding class, determined using the same
valuation procedures referred to in paragraph 2.2.
3. CLOSING AND CLOSING DATE
3.1 Subject to the terms and conditions set forth herein,
the Closing Date shall be March 2, 2007, or such other date as
the parties may agree. All acts taking place at the closing of
the transactions provided for in this Agreement (Closing)
shall be deemed to take place simultaneously as of the close
of business on the Closing Date unless otherwise agreed to by
the parties. The close of business on the Closing Date shall
be as of 4:00 p.m., Eastern Time or such later time on that
date as the Acquired Fund?s net asset value and/or the net
asset value per share of each class of shares of the Acquiring
Fund is calculated in accordance with paragraph 2.2 and after
the declaration of any dividends. The Closing shall be held at
the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP or at such other
time and/or place as the parties may agree.
3.2 The Acquired Entity shall direct State Street Bank and
Trust Company (the Custodian) to transfer ownership of the
Assets from the accounts of the Acquired Fund that the
Custodian maintains as custodian for the Acquired Fund to the
accounts of the Acquiring Fund that the Custodian maintains as
custodian for the Acquiring Fund and to deliver to the
Acquiring Fund, at the Closing, a certificate of an authorized
officer stating that (i) the Assets of the Acquired Fund have
been so transferred as of the Closing Date, and (ii) all
necessary taxes in connection with the delivery of the Assets
of the Acquired Fund, including all applicable federal and
state stock transfer stamps, if any, have been paid or
provision for payment has been made.
3.3 The Acquired Entity shall direct PFPC Inc., in its
capacity as transfer agent for the Acquired Fund (Transfer
Agent), to deliver to the Acquiring Fund at the Closing a
certificate of an authorized officer stating that its records
contain the name and address of each Acquired Fund Shareholder
and the number and percentage ownership of each outstanding
class of Acquired Fund Shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall
deliver to the Secretary of the Acquired Fund a confirmation
evidencing that (a) the appropriate number of Acquiring Fund
Shares have been credited to the Acquired Fund?s account on
the books of the Acquiring Fund pursuant to paragraph 1.1
prior to the actions contemplated by paragraph 1.4 and (b) the
appropriate number of Acquiring Fund Shares have been credited
to the accounts of the Acquired Fund Shareholders on the books
of the Acquiring Fund pursuant to paragraph 1.4. At the
Closing, each party shall deliver to the other party such
bills of sale, checks, assignments, share certificates, if
any, receipts or other documents as the other party or its
counsel may reasonably request.
3.4 In the event that on the Valuation Date (a) the New
York Stock Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the Acquired
Fund (each, an Exchange) shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting
of trading on such Exchange or elsewhere shall be disrupted so
that accurate appraisal of the value of the net assets of the
Acquired Fund or the Acquiring Fund is impracticable (in the
judgment of the Acquiring Fund Board and the Acquired Entity
Board with respect to the Acquired Fund), the Closing Date
shall be postponed until the first Friday (that is also a
business day) after the day when trading shall have been fully
resumed and reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as has been fully disclosed to the Acquiring
Fund in Schedule 4.1 of this Agreement, the Acquired Entity,
on behalf of the Acquired Fund, represents and warrants to the
Acquiring Fund as follows:
(a) The Acquired Fund is duly established as a series
of the Acquired Entity, which is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Maryland, with power under its
Articles of Incorporation, as amended and/or supplemented
(the Acquired Entity Charter), to own all of its assets and
to carry on its business as it is being conducted as of the
date hereof. The Acquired Entity is duly qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business makes such qualification
necessary except where the failure to so qualify would not
have a material adverse effect on the condition (financial
or otherwise), business, properties, net assets or results
of operations of the Acquired Entity. The Acquired Entity
has all necessary federal, state and local authorization to
carry on its business as now being conducted and to fulfill
the terms of this Agreement, except as set forth in
paragraph 4.1(c).
(b) The Acquired Entity is a registered open-end
management investment company, and its registration with
the Commission as an investment company under the 1940 Act,
and the registration of each class of Acquired Fund Shares
under the Securities Act of 1933, as amended (1933 Act), is
in full force and effect.
(c) No consent, approval, authorization, or order of
any court or governmental authority is required for the
consummation by the Acquired Fund of the transactions
contemplated herein, except such as may be required under
the 1933 Act, the Securities Exchange Act of 1934 (1934
Act), the ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ securities laws and the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Act.
(d) The current prospectus and statement of additional
information of the Acquired Fund (true and correct copies
of which have been delivered to the Acquiring Fund) and
each prospectus and statement of additional information of
the Acquired Fund used during the three (3) years prior to
the date of this Agreement conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
or did not at the time of its use include any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not materially misleading.
(e) On the Closing Date, the Acquired Entity, on behalf
of the Acquired Fund, will have good and marketable title
to the Assets and full right, power and authority to sell,
assign, convey, transfer and deliver such Assets hereunder
free of any liens or other encumbrances, and upon delivery
and payment for the Assets, the Acquiring Fund will acquire
good and marketable title thereto, subject to no
restrictions on the full transfer thereof, excluding such
restrictions as might arise under the 1933 Act.
(f) The Acquired Fund is not engaged currently, and the
execution, delivery and performance of this Agreement by
the Acquired Entity, on behalf of the Acquired Fund, will
not result, in a material violation of Maryland law or of
the Acquired Entity Charter or the by-laws of the Acquired
Entity, or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired
Entity, on behalf of the Acquired Fund, is a party or by
which it is bound, and the execution, delivery and
performance of this Agreement by the Acquired Entity, on
behalf of the Acquired Fund, will not result in the
acceleration of any material obligation, or the imposition
of any material penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which
the Acquired Entity, on behalf of the Acquired Fund, is a
party or by which it is bound.
(g) All material contracts or other commitments of the
Acquired Fund (other than this Agreement, certain
investment contracts, including options, futures, swaps and
forward contracts, the indemnification agreements of the
current and former members of the Acquired Entity Board,
and those contracts listed in Schedule 4.1) will terminate
without liability to the Acquired Fund on or prior to the
Closing Date. Each contract listed in Schedule 4.1 is a
valid, binding and enforceable obligation of the Acquired
Fund and, to the Acquired Fund?s knowledge, the other
parties thereto (assuming due authorization, execution and
delivery by the other parties thereto) and the assignment
by the Acquired Fund to the Acquiring Fund of each such
contract will not result in the termination of such
contract, any breach or default thereunder by the Acquired
Fund or the imposition of any penalty thereunder.
(h) No litigation or administrative proceeding or
investigation of or before any court or governmental body
is presently pending or, to the Acquired Entity?s
knowledge, threatened against the Acquired Entity, with
respect to the Acquired Fund or any of its properties or
assets, that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of
the Acquired Fund?s business. The Acquired Entity, on
behalf of the Acquired Fund, is not a party to or subject
to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely
affects the Acquired Fund?s business or the Acquired
Entity?s ability to consummate the transactions herein
contemplated on behalf of the Acquired Fund.
(i) The Statement of Assets and Liabilities, Statements
of Operations and Changes in Net Assets and Schedule of
Investments of the Acquired Fund as at the last day of and
for the most recently completed fiscal year of the Acquired
Fund prior to the date of this Agreement, have been audited
by KPMG LLP, an independent registered public accounting
firm, and are in accordance with accounting principles
generally accepted in the United States of America (GAAP)
consistently applied, and such statements (true and correct
copies of which have been furnished to the Acquiring Fund)
present fairly, in all material respects, the financial
condition of the Acquired Fund as of such date and for such
period in accordance with GAAP, and there are no known
contingent, accrued or other liabilities of the Acquired
Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date
that are not disclosed therein. The Statement of Assets and
Liabilities, Statements of Operations and Changes in Net
Assets and Schedule of Investments (unaudited) of the
Acquired Fund as at the last day of and for the most
recently completed fiscal half year of the Acquired Fund
following the date of the audited annual statements
referenced above are in accordance with GAAP consistently
applied, and such statements (true and correct copies of
which have been furnished to the Acquiring Fund) present
fairly, in all material respects, the financial condition
of the Acquired Fund, and all known contingent, accrued or
other liabilities of the Acquired Fund required to be
reflected on a balance sheet (including the notes thereto)
in accordance with GAAP as of such date are disclosed
therein.
(j) Since the last day of the most recently completed
fiscal year of the Acquired Fund prior to the date of this
Agreement, there has not been any material adverse change
in the Acquired Fund?s financial condition, assets,
liabilities or business, other than changes occurring in
the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness for money borrowed maturing
more than one year from the date such indebtedness was
incurred. For the purposes of this subparagraph (j), a
decline in net asset value per share of Acquired Fund
Shares due to declines in market values of securities held
by the Acquired Fund, the discharge of Acquired Fund
liabilities, or the redemption of Acquired Fund Shares by
shareholders of the Acquired Fund shall not constitute a
material adverse change.
(k) On the Closing Date, all federal and other tax
returns, dividend reporting forms and other tax-related
reports of the Acquired Fund required by law to have been
filed by such date (including any extensions) shall have
been filed and are or will be correct in all material
respects, and all federal and other taxes shown as due or
required to be shown as due on said returns and reports
shall have been paid or provision shall have been made for
the payment thereof and, to the best of the Acquired
Entity?s knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such
returns.
(l) For each taxable year of its operation (including
the current taxable year, assuming such year ends on the
Closing Date), the Acquired Fund has met (or will meet) the
requirements of Subchapter M of Chapter 1 of the Code for
qualification and treatment as a regulated investment
company, has elected to be treated as such, and has been
(or will be) eligible to compute and has computed (or will
compute) its federal income tax under Section 852 of the
Code, and on or before the Closing Date, will have
distributed or will have declared dividends intended to be
sufficient to distribute substantially all of (i) the
excess of (x) its investment income excludible from gross
income under Section 103 of the Code over (y) its
deductions disallowed under Sections 265 and 171 of the
Code (net tax-exempt income), (ii) its investment company
taxable income (as defined in the Code) (computed without
regard to any deduction for dividends paid) and (iii) any
net capital gain (after reduction for any allowable capital
loss carryover) (as defined in the Code) that has accrued
or been recognized, respectively, through the Closing Date
such that for all tax periods ending on or before the
Closing Date (and treating the current tax year as ending
on the Closing Date) the Acquired Fund will not have any
tax liability under Section 852 or Section 4982.
(m) All issued and outstanding Acquired Fund Shares
are, and on the Closing Date will be, duly authorized and
validly and legally issued and outstanding, fully paid and
non-assessable by the Acquired Entity and have been offered
and sold in any state, territory or the District of
Columbia in compliance in all material respects with
applicable registration requirements of all applicable
federal and state securities laws. All of the issued and
outstanding Acquired Fund Shares will, at the time of
Closing, be held by the persons and in the amounts set
forth in the records of the Transfer Agent, on behalf of
the Acquired Fund, as provided in paragraph 3.3. The
Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any
of the Acquired Fund Shares, nor is there outstanding any
security convertible into any of the Acquired Fund Shares.
(n) The Acquired Fund will review its assets to ensure
that at any time after its shareholders have approved this
Agreement and prior to the Closing Date its assets do not
include any assets that the Acquiring Fund is not
permitted, or reasonably believes to be unsuitable for it,
to acquire, including without limitation any security that,
prior to its acquisition by the Acquired Fund, is
unsuitable for the Acquiring Fund to acquire.
(o) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquired Entity Board, on behalf of the Acquired Fund,
and this Agreement constitutes a valid and binding
obligation of the Acquired Entity, on behalf of the
Acquired Fund, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors? rights and to general equity
principles.
(p) The combined proxy statement and prospectus (Proxy
Statement) to be included in the Registration Statement (as
defined in paragraph 5.6), insofar as it relates to the
Acquired Fund, from the effective date of the Registration
Statement through the date of the meeting of shareholders
of the Acquired Fund contemplated therein and on the
Closing Date, will (i) not contain any statement which, at
the time and in light of the circumstances under which it
is made, is false or misleading with respect to any
material fact, or which omits to state any material fact
necessary in order to make the statements therein not false
or misleading (provided that this representation and
warranty shall not apply to statements in or omissions from
the Proxy Statement made in reliance upon and in conformity
with information that was furnished by the Acquiring Fund
for use therein) and (ii) comply in all material respects
with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder. The
information to be furnished by the Acquired Fund for use in
registration statements and other documents filed or to be
filed with any federal, state or local regulatory
authority, which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all
material respects with federal securities and other laws
and regulations thereunder applicable thereto.
4.2 Except as has been fully disclosed to the Acquired
Entity in Schedule 4.2 to this Agreement, the Acquiring Fund
represents and warrants to the Acquired Entity and the
Acquired Fund as follows:
(a) The Acquiring Fund is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Maryland, with the power under its Articles of
Incorporation, as amended and/or supplemented (the
Acquiring Fund Charter), to own all of its assets and to
carry on its business as it is being conducted as of the
date hereof. The Acquiring Fund is duly qualified to do
business as a foreign corporation in each jurisdiction in
which the conduct of its business makes such qualification
necessary except where the failure to so qualify would not
have a material adverse effect on the condition (financial
or otherwise), business, properties, net assets or results
of operations of the Acquiring Fund. The Acquiring Fund has
all necessary federal, state and local authorization to
carry on its business as now being conducted and to fulfill
the terms of this Agreement except as described in
paragraph 4.2(c).
(b) The Acquiring Fund is a registered open-end
management investment company, and its registration with
the Commission as an investment company under the 1940 Act,
and the registration of each class of Acquiring Fund Shares
under the 1933 Act, is in full force and effect or will be
in full force and effect as of the Closing Date.
(c) No consent, approval, authorization, or order of
any court or governmental authority is required for the
consummation by the Acquiring Fund of the transactions
contemplated herein, except such as may be required under
the 1933 Act, the 1934 Act, the 1940 Act, state securities
laws and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.
(d) The current prospectus and statement of additional
information of the Acquiring Fund (true and correct copies
of which have been delivered to the Acquired Entity) and
each prospectus and statement of additional information of
the Acquiring Fund used during the three (3) years prior to
the date of this Agreement conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and does not
or did not at the time of its use include any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not materially misleading.
(e) The Acquiring Fund is not engaged currently, and
the execution, delivery and performance of this Agreement
by the Acquiring Fund will not result, in a material
violation of Maryland law or of the Acquiring Fund Charter
or the by-laws of the Acquiring Fund, or of any agreement,
indenture, instrument, contract, lease or other undertaking
to which the Acquiring Fund is a party or by which it is
bound, and the execution, delivery and performance of this
Agreement by the Acquiring Fund will not result in the
acceleration of any material obligation, or the imposition
of any material penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which
the Acquiring Fund is a party or by which it is bound.
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental body
is presently pending or, to the Acquiring Fund?s knowledge,
threatened against the Acquiring Fund, or any of its
properties or assets, that, if adversely determined, would
materially and adversely affect its financial condition or
the conduct of such Acquiring Fund?s business. The
Acquiring Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects
the Acquiring Fund?s business or the Acquiring Fund?s
ability to consummate the transactions herein contemplated.
(g) The Statement of Assets and Liabilities, Statements
of Operations and Changes in Net Assets and Schedule of
Investments of the Acquiring Fund as at the last day of and
for the most recently completed fiscal year of the
Acquiring Fund prior to the date of this Agreement, have
been audited by KPMG LLP, an independent registered public
accounting firm, and are in accordance with GAAP
consistently applied, and such statements (true and correct
copies of which have been furnished to the Acquired Entity)
present fairly, in all material respects, the financial
condition of the Acquiring Fund as of such date and for
such period in accordance with GAAP, and there are no known
contingent, accrued or other liabilities of the Acquiring
Fund required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date
that are not disclosed therein. The Statement of Assets
and Liabilities, Statements of Operations and Changes in
Net Assets and Schedule of Investments (unaudited) of the
Acquiring Fund as at the last day of and for the most
recently completed fiscal half year of the Acquiring Fund
following the date of the audited annual statements
referenced above are in accordance with GAAP consistently
applied, and such statements (true and correct copies of
which have been furnished to the Acquired Entity) present
fairly, in all material respects, the financial condition
of the Acquiring Fund, and all known contingent, accrued or
other liabilities of the Acquiring Fund required to be
reflected on a balance sheet (including the notes thereto)
in accordance with GAAP as of such date are disclosed
therein.
(h) Since the last day of the most recently completed
fiscal year of the Acquiring Fund prior to the date of this
Agreement, there has not been any material adverse change
in the Acquiring Fund?s financial condition, assets,
liabilities or business, other than changes occurring in
the ordinary course of business, or any incurrence by the
Acquiring Fund of indebtedness for money borrowed maturing
more than one year from the date such indebtedness was
incurred. For the purposes of this subparagraph (h), a
decline in net asset value per share of Acquiring Fund
Shares due to declines in market values of securities held
by the Acquiring Fund, the discharge of Acquiring Fund
liabilities, or the redemption of Acquiring Fund Shares by
shareholders of the Acquiring Fund shall not constitute a
material adverse change.
(i) On the Closing Date, all federal and other tax
returns, dividend reporting forms and other tax-related
reports of the Acquiring Fund required by law to have been
filed by such date (including any extensions) shall have
been filed and are or will be correct in all material
respects, and all federal and other taxes shown as due or
required to be shown as due on said returns and reports
shall have been paid or provision shall have been made for
the payment thereof and, to the best of the Acquiring
Fund?s knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such
returns.
(j) For each taxable year of its operation (including
the taxable year that includes the Closing Date), the
Acquiring Fund has met (or will meet) the requirements of
Subchapter M of Chapter 1 of the Code for qualification and
treatment as a regulated investment company, has elected to
be treated as such, and has been (or will be) eligible to
compute and has computed (or will compute) its federal
income tax under Section 852 of the Code, and will have
distributed (or will distribute pursuant to the provisions
of Section 855 of the Code) substantially all of (i) its
net tax-exempt income, (ii) its investment company taxable
income (computed without regard to any deduction for
dividends paid) (as defined in the Code) and (iii) any net
capital gain (after reduction for any capital loss
carryover) (as defined in the Code) for taxable years
ending prior to the Closing Date such that for all those
years the Acquiring Fund will have no tax liability under
Section 852 or Section 4982.
(k) All issued and outstanding Acquiring Fund Shares
are, and on the Closing Date will be, duly authorized and
validly and legally issued and outstanding, fully paid and
non-assessable by the Acquiring Fund and will have been
offered and sold in any state, territory or the District of
Columbia in compliance in all material respects with
applicable registration requirements of all applicable
federal and state securities laws. The Acquiring Fund does
not have outstanding any options, warrants or other rights
to subscribe for or purchase any Acquiring Fund Shares, nor
is there outstanding any security convertible into any
Acquiring Fund Shares. All of the Acquiring Fund Shares to
be issued and delivered to the Acquired Entity, for the
account of the Acquired Fund Shareholders, pursuant to this
Agreement, will on the Closing Date have been duly
authorized and, when so issued and delivered, will be duly
and validly and legally issued Acquiring Fund Shares and be
fully paid and non-assessable by the Acquiring Fund.
(l) The execution, delivery and performance of this
Agreement, and the transactions contemplated herein, have
been duly authorized by all necessary action on the part of
the Acquiring Fund Board, and this Agreement constitutes a
valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting
creditors? rights and to general equity principles.
(m) The Proxy Statement to be included in the
Registration Statement, insofar as it relates to the
Acquiring Fund and the Acquiring Fund Shares, from the
effective date of the Registration Statement through the
date of the meeting of shareholders of the Acquired Fund
contemplated therein and on the Closing Date, will (i) not
contain any statement which, at the time and in the light
of the circumstances under which it is made, is false or
misleading with respect to any material fact, or which
omits to state any material fact necessary to make the
statements therein not false or misleading (provided that
this representation and warranty shall not apply to
statements in or omissions from the Proxy Statement made in
reliance upon and in conformity with information that was
furnished by the Acquired Entity for use therein) and
(ii) comply in all material respects with the provisions of
the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder. The information to be furnished
by the Acquiring Fund for use in registration statements
and other documents filed or to be filed with any federal,
state or local regulatory authority, which may be necessary
in connection with the transactions contemplated hereby,
shall be accurate and complete in all material respects and
shall comply in all material respects with federal
securities and other laws and regulations applicable
thereto.
5. COVENANTS
The Acquired Entity, on behalf of the Acquired Fund, and
the Acquiring Fund, respectively, hereby further covenant as
follows:
5.1 The Acquired Fund and the Acquiring Fund each will
operate its business in the ordinary course and shall comply
in all material respects with all applicable laws, rules and
regulations between the date hereof and the Closing Date, it
being understood that such ordinary course of business will
include the declaration and payment of customary dividends and
other distributions, and any other distribution that may be
advisable.
5.2 The Acquired Entity will call and hold a meeting of the
shareholders of the Acquired Fund to consider and act upon
this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated herein.
5.3 The Acquiring Fund Shares to be acquired by the
Acquired Fund hereunder are not being acquired for the purpose
of making any distribution thereof, other than in accordance
with the terms of this Agreement.
5.4 The Acquired Entity, on behalf of the Acquired Fund,
will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund Shares.
5.5 Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Entity, on behalf of the
Acquired Fund, each will take, or cause to be taken, all
action, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
5.6 The Acquiring Fund shall prepare and file a
Registration Statement on Form N-14 in compliance with the
1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder with respect to the Reorganization (the
Registration Statement). The Acquired Entity, on behalf of the
Acquired Fund, will provide to the Acquiring Fund such
information regarding the Acquired Fund as may be reasonably
necessary for the preparation of the Registration Statement.
5.7 The Acquiring Fund and the Acquired Entity, on behalf
of the Acquired Fund, each will use its reasonable best
efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this
Agreement as promptly as practicable.
5.8 The Acquired Entity, on behalf of the Acquired Fund,
will, from time to time, as and when reasonably requested by
the Acquiring Fund, execute and deliver or cause to be
executed and delivered all such assignments and other
instruments and will take or cause to be taken such further
action as the Acquiring Fund may reasonably deem necessary or
desirable in order to vest in and confirm (a) the Acquired
Entity?s title to and possession of the Acquiring Fund Shares
to be delivered hereunder and (b) the Acquiring Fund?s title
to and possession of all the Assets and to otherwise to carry
out the intent and purpose of this Agreement.
5.9 The Acquiring Fund will use all reasonable efforts to
obtain the approvals and authorizations required by the 1933
Act, the 1940 Act and such of the state blue sky or securities
laws as may be necessary in order to continue its operations
after the Closing Date.
5.10 The Acquiring Fund shall not change the Acquiring Fund
Charter, prospectus or statement of additional information so
as to restrict permitted investments for the Acquiring Fund,
except as required by the Commission prior to the Closing.
5.11 Prior to the Valuation Date, the Acquired Entity Board
shall adopt the valuation procedures of the Acquiring Fund
with respect to the Acquired Fund.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED ENTITY
The obligations of the Acquired Entity, on behalf of the
Acquired Fund, to consummate the transactions provided for
herein shall be subject, at the Acquired Entity?s election, to
the following conditions:
6.1 All representations and warranties of the Acquiring
Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as
they may be affected by the transactions contemplated by this
Agreement, as of the Closing Date, with the same force and
effect as if made on and as of the Closing Date.
6.2 The Acquiring Fund shall have performed all of the
covenants and complied with all of the provisions required by
this Agreement to be performed or complied with by the
Acquiring Fund on or before the Closing Date.
6.3 The Acquiring Fund shall have executed and delivered an
assumption of the Liabilities and all such other agreements
and instruments as the Acquired Entity may reasonably deem
necessary or desirable in order to vest in and confirm (a) the
Acquired Fund?s title to and possession of the Acquiring Fund
Shares to be delivered hereunder and (b) the Acquiring Fund?s
assumption of all of the Liabilities and to otherwise to carry
out the intent and purpose of this Agreement.
6.4 The Acquiring Fund shall have delivered to the Acquired
Fund a certificate executed in the name of the Acquiring Fund
by the Acquiring Fund?s President or Vice President and its
Treasurer or Assistant Treasurer, in a form reasonably
satisfactory to the Acquired Entity and dated as of the
Closing Date, as to the matters set forth in paragraphs 6.1
and 6.2 and as to such other matters as the Acquired Entity
shall reasonably request.
6.5 The Acquiring Fund and the Acquired Entity, on behalf
of the Acquired Fund, shall have agreed on the number of full
and fractional Acquiring Fund Shares to be issued in
connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the
transactions provided for herein shall be subject, at the
Acquiring Fund?s election, to the following conditions:
7.1 All representations and warranties of the Acquired
Entity, on behalf of the Acquired Fund, contained in this
Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and
as of the Closing Date.
7.2 The Acquired Entity, on behalf of the Acquired Fund,
shall have performed all of the covenants and complied with
all of the provisions required by this Agreement to be
performed or complied with by the Acquired Entity, on behalf
of the Acquired Fund, on or before the Closing Date.
7.3 The Acquired Entity shall have delivered to the
Acquiring Fund a Statement of Assets and Liabilities of the
Acquired Fund as of the Closing Date, including a schedule of
investments, certified by the Treasurer of the Acquired Entity
on behalf of the Acquired Fund. The Acquired Entity, on behalf
of the Acquired Fund, shall have executed and delivered all
such assignments and other instruments of transfer as the
Acquiring Fund may reasonably deem necessary or desirable in
order to vest in and confirm (a) the Acquired Fund?s title to
and possession of the Acquiring Fund Shares to be delivered
hereunder and (b) the Acquiring Fund?s title to and possession
of all the Assets and to otherwise to carry out the intent and
purpose of this Agreement.
7.4 The Acquired Entity, on behalf of the Acquired Fund,
shall have delivered to the Acquiring Fund a certificate
executed in the name of the Acquired Entity, on behalf of the
Acquired Fund, by the Acquired Entity?s President or Vice
President and its Treasurer or Assistant Treasurer, in a form
reasonably satisfactory to the Acquiring Fund and dated as of
the Closing Date, as to the matters set forth in paragraphs
7.1 and 7.2 and as to such other matters as the Acquiring Fund
shall reasonably request.
7.5 The Acquired Entity, on behalf of the Acquired Fund,
and the Acquiring Fund shall have agreed on the number of full
and fractional Acquiring Fund Shares to be issued in
connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
8
..
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING
FUND AND ACQUIRED ENTITY
If any of the conditions set forth below have not been
satisfied on or before the Closing Date with respect to the
Acquired Entity, on behalf of the Acquired Fund, or the
Acquiring Fund, the other party to this Agreement shall be
entitled on behalf of the Acquired Fund or Acquiring Fund, as
applicable, at its option, to refuse to consummate the
transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders
of the outstanding shares of the Acquired Fund, in accordance
with the provisions of the Acquired Entity Charter, the by-
laws of the Acquired Entity, and Maryland law, and certified
copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the
Acquired Entity may waive the condition set forth in this
paragraph 8.1.
8.2 On the Closing Date, no court or governmental agency of
competent jurisdiction shall have issued any order that
remains in effect and that restrains or enjoins the Acquired
Entity, with respect to the Acquired Fund, or the Acquiring
Fund from completing the transactions contemplated by this
Agreement.
8.3 All consents of other parties and all other consents,
orders and permits of federal, state and local regulatory
authorities deemed necessary by the Acquiring Fund or the
Acquired Entity to permit consummation, in all material
respects, of the transactions contemplated hereby shall have
been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either
party hereto may for itself waive any of such conditions.
8.4 The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be
pending.
8.5 The parties shall have received the opinion of Dechert
LLP, dated the Closing Date, substantially to the effect that,
based upon certain facts, assumptions and representations made
by the Acquired Entity, on behalf of the Acquired Fund, the
Acquiring Fund and their respective authorized officers,
(i) the transactions contemplated by this Agreement will
constitute a reorganization within the meaning of
Section 368(a) of the Code; (ii) no gain or loss will be
recognized by the Acquiring Fund upon receipt of the Assets in
exchange for the Acquiring Fund Shares and the assumption by
the Acquiring Fund of the Acquired Fund Liabilities; (iii) the
basis in the hands of the Acquiring Fund in the Assets will be
the same as the basis of the Acquired Fund in the Assets
immediately prior to the transfer thereof; (iv) the holding
periods of the Assets in the hands of the Acquiring Fund will
include the periods during which the Assets were held by the
Acquired Fund (except where investment activities of the
Acquiring Fund have the effect of reducing or eliminating the
holding period with respect to an asset); (v) no gain or loss
will be recognized by the Acquired Fund upon the transfer of
the Assets to the Acquiring Fund in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of the
Acquired Fund Liabilities, or upon the distribution of the
Acquiring Fund Shares by the Acquired Fund to its shareholders
except for gain or loss that may be recognized with respect to
contracts subject to Section 1256 of the Code and/or stock in
a passive foreign investment company as defined in
Section 1297(a) of the Code; (vi) no gain or loss will be
recognized by the Acquired Fund shareholders upon the exchange
of their Acquired Fund Shares for the Acquiring Fund Shares;
(vii) the aggregate basis of the Acquiring Fund Shares that
each Acquired Fund shareholder receives in connection with the
transaction will be the same as the aggregate basis of his or
her Acquired Fund Shares exchanged therefor; and (viii) an
Acquired Fund shareholder?s holding period for his or her
Acquiring Fund Shares will be determined by including the
period for which he or she held the Acquired Fund Shares
exchanged therefor, provided that he or she held the Acquired
Fund Shares as capital assets. The delivery of such opinion is
conditioned upon the receipt by Dechert LLP of representations
it shall request of the Acquiring Fund and the Acquired
Entity. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Entity may waive
the condition set forth in this paragraph 8.5.
8.6 The Acquiring Fund shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, in a form
reasonably satisfactory to the Acquiring Fund, and dated as of
the Closing Date, substantially to the effect that, based upon
certain facts and certifications made by the Acquired Entity,
on behalf of the Acquired Fund, and its authorized officers:
(a) the Acquired Entity is a corporation existing under the
laws of the State of Maryland; (b) the Acquired Entity, with
respect to the Acquired Fund, has the corporate power to carry
on its business as an open-end investment company registered
under the 1940 Act; (c) this Agreement has been duly
authorized, executed and, so far as known to such counsel,
delivered by the Acquired Entity, on behalf of the Acquired
Fund, and assuming due authorization, execution and delivery
of this Agreement by the Acquiring Fund, constitutes a valid
and legally binding obligation of the Acquired Entity, on
behalf of the Acquired Fund, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and laws of
general applicability relating to or affecting creditors?
rights and to general equity principles (whether in a
proceeding under equity or at law); provided that such counsel
shall be entitled to state that it expresses no opinion with
respect to the validity, binding effect or enforceability of
any contractual provisions purporting to provide
indemnification of any person for any claims, damages,
liabilities or expenses which may be limited by any applicable
federal or state securities laws or as a matter of public
policy; (d) the execution and delivery of this Agreement did
not, and the transfer of the Assets for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the Liabilities
pursuant to this Agreement will not, violate the Acquired
Entity Charter or the by-laws of the Acquired Entity or any
contracts or other documents known to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP which can affect the rights or obligations of the Acquired
Entity; (e) to the knowledge of such counsel, all regulatory
or court consents, authorizations, approvals, orders or
filings required to be obtained or made by the Acquired
Entity, on behalf of the Acquired Fund, under the federal laws
of the United States or the laws of the State of Maryland for
the transfer of the Assets for Acquiring Fund Shares and the
assumption by the Acquiring Fund of the Liabilities pursuant
to this Agreement have been obtained or made, except such as
may be required under state securities or blue sky laws as to
which such counsel need express no opinion; and (f) to the
knowledge of such counsel, and without any independent
investigation, other than as disclosed on the schedule
provided by the Acquired Entity pursuant to paragraph 4.1 of
this Agreement, the Acquired Fund is not subject to any
litigation or administrative proceeding that could reasonably
be expected to have a materially adverse effect on the
operations of the Acquired Fund. Such opinion may state that
it is solely for the benefit of the Acquiring Fund and the
Acquiring Fund Board. Such opinion may contain such
assumptions and limitations as shall be in the opinion of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP appropriate to render the
opinions expressed therein. Such opinion also shall include
such other matters incident to the transactions contemplated
hereby as the Acquiring Fund may reasonably request. With
respect to all matters of Maryland law, such counsel shall be
entitled to state that, with the approval of the Acquiring
Fund, they have relied on the opinion of ▇▇▇▇▇▇▇ LLP and that
their opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as
are contained in the opinion of ▇▇▇▇▇▇▇ LLP.
8.7 The Acquired Entity, on behalf of the Acquired Fund,
shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, in a form reasonably satisfactory to
the Acquired Entity, and dated as of the Closing Date,
substantially to the effect that, based upon certain facts and
certifications made by the Acquiring Fund and its authorized
officers: (a) the Acquiring Fund is a corporation existing
under the laws of the State of Maryland; (b) the Acquiring
Fund has the corporate power to carry on its business as an
open-end investment company registered under the 1940 Act;
(c) this Agreement has been duly authorized, executed and, so
far as is known to such counsel, delivered by the Acquiring
Fund and assuming due authorization, execution and delivery of
this Agreement by the Acquired Entity, on behalf of the
Acquired Fund, constitutes a valid and legally binding
obligation of the Acquiring Fund, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and laws of
general applicability relating to or affecting creditors?
rights and to general equity principles (whether in a
proceeding under equity or at law); provided that such counsel
shall be entitled to state that it expresses no opinion with
respect to the validity, binding effect or enforceability of
any contractual provisions purporting to provide
indemnification of any person for any claims, damages,
liabilities or expenses which may be limited by any applicable
federal or state securities laws or as a matter of public
policy; (d) the execution and delivery of this Agreement did
not, and the issuance of the Acquiring Fund Shares and the
assumption of the Liabilities in exchange for the transfer of
the Assets pursuant to this Agreement will not, violate the
Acquiring Fund Charter or the by-laws of the or any contracts
or other documents known to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
which can affect the rights and obligations of the Acquiring
Fund; (e) to the knowledge of such counsel, all regulatory or
court consents, authorizations, approvals, orders or filings
required to be obtained or made by the Acquiring Fund under
the federal laws of the United States or the laws of the State
of Maryland with respect to the issuance of the Acquiring Fund
Shares and the assumption of the Liabilities in exchange for
the transfer of the Assets pursuant to this Agreement have
been obtained or made, except such as may be required under
state securities or blue sky laws, as to which such counsel
need express no opinion; and (f) to the knowledge of such
counsel, and without any independent investigation, other than
as disclosed on the schedule provided by the Acquiring Fund
pursuant to paragraph 4.2 of this Agreement, the Acquiring
Fund is not subject to any litigation or administrative
proceeding that could reasonably be expected to have a
materially adverse effect on the operations of the Acquiring
Fund. Such opinion may state that it is solely for the benefit
of the Acquired Entity and the Acquired Entity Board. Such
opinion may contain such assumptions and limitations as shall
be in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
appropriate to render the opinions expressed therein. Such
opinion also shall include such other matters incident to the
transactions contemplated hereby as the Acquired Entity, on
behalf of the Acquired Fund, may reasonably request. With
respect to all matters of Maryland law, such counsel shall be
entitled to state that, with the approval of the Acquired
Entity, they have relied on the opinion of ▇▇▇▇▇▇▇ LLP and
that their opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as
are contained in the opinion of ▇▇▇▇▇▇▇ LLP.
8.8 The Assets will include no assets which the Acquiring
Fund, by reason of limitations contained in the Acquiring Fund
Charter or in investment restrictions in effect on the Closing
Date, may not properly acquire.
9. INDEMNIFICATION
9.1 The Acquiring Fund, out of its assets and property
(including any amounts paid to the Acquiring Fund pursuant to
any applicable liability insurance policies or indemnification
agreements) agrees to indemnify and hold harmless the Acquired
Entity and the members of the Acquired Entity Board and its
officers from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of
investigation) to which the Acquired Entity and those board
members and officers may become subject, insofar as such loss,
claim, damage, liability or expense (or actions with respect
thereto) arises out of or is based on (a) any breach by the
Acquiring Fund of any of its representations, warranties,
covenants or agreements set forth in this Agreement or (b) any
act, error, omission, neglect, misstatement, materially
misleading statement, breach of duty or other act wrongfully
done or attempted to be committed by the Acquiring Fund or the
members of the Acquiring Fund Board or its officers prior to
the Closing Date, provided that such indemnification by 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.
9.2 The Acquired Entity, out of the Acquired Fund?s assets
and property (including any amounts paid to the Acquired Fund
pursuant to any applicable liability insurance policies or
indemnification agreements) agrees to indemnify and hold
harmless the Acquiring Fund and the members of the Acquiring
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 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 Entity, on behalf of the
Acquired Fund, of any of its representations, warranties,
covenants or agreements set forth in this Agreement or (b) any
act, error, omission, neglect, misstatement, materially
misleading statement, breach of duty or other act wrongfully
done or attempted to be committed by the Acquired Entity or
the members of the Acquired Entity Board or its officers prior
to the Closing Date, provided that such indemnification by the
Acquired Entity is not (i) in violation of any applicable law
or (ii) otherwise prohibited as a result of any applicable
order or decree issued by any governing regulatory authority
or court of competent jurisdiction.
10. BROKER FEES AND EXPENSES
10.1 The Acquiring Fund and the Acquired Entity, on behalf
of the Acquired Fund, represent and warrant to each other that
there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for
herein.
10.2 ▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC will pay the
printing, proxy solicitation, mailing and postage costs of the
Reorganization. Additional costs, including expenses related
to the preparation and filing of the Registration Statement,
legal fees and auditor fees, shall be divided equally between
▇▇▇▇ ▇▇▇▇▇ Partners Fund Advisor, LLC, on the one hand, and
the Acquiring Fund and the Acquired Entity, on the other hand.
Notwithstanding any of the foregoing, expenses will in any
event be paid by the party directly incurring such expenses if
and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as
a regulated investment company within the meaning of
Section 851 of the Code or would prevent the Reorganization
from qualifying as a tax-free reorganization.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The Acquiring Fund and the Acquired Entity agree that
neither party has made any representation, warranty or
covenant, on behalf of either the Acquiring Fund or the
Acquired Fund, respectively, not set forth herein and that
this Agreement constitutes the entire agreement between the
parties.
11.2 The covenants to be performed after the Closing by
both the Acquiring Fund and the Acquired Entity, and the
obligations of the Acquiring Fund in Article 9, shall survive
the Closing. All other representations, warranties and
covenants contained in this Agreement or in any document
delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated
hereunder and shall terminate on the Closing.
12. TERMINATION
This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the
Closing Date by resolution of either the Acquiring Fund Board
or the Acquired Entity Board, if circumstances should develop
that, in the opinion of that Board, make proceeding with the
Agreement inadvisable with respect to the Acquiring Fund or
the Acquired Fund, respectively. Any such termination
resolution to be effective shall be promptly communicated to
the other party and, in any event, prior to the Closing Date.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in
such manner as may be deemed necessary or advisable by the
authorized officers of the Acquired Entity and the Acquiring
Fund; provided, however, that following the meeting of the
Acquired Fund shareholders called by the Acquired Fund
pursuant to paragraph 5.2 of this Agreement, no such amendment
may have the effect of changing the provisions for determining
the number of Acquiring Fund Shares to be issued to Acquired
Fund shareholders under this Agreement to the detriment of
such shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or
permitted by any provisions of this Agreement shall be in
writing and shall be given by facsimile, electronic delivery
(i.e., e-mail), personal service or prepaid or certified mail
addressed to the Acquiring Fund or the Acquired Entity, at its
address set forth in the preamble to this Agreement, in each
case to the attention of its President.
15
..
HEADINGS; COUNTERPARTS; GOVERNING LAW; SEVERABILITY;
ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article headings contained in this Agreement are
for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
15.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
15.3 This Agreement shall be governed by and construed and
interpreted in accordance with the internal laws of the State
of New York.
15.4 This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and
assigns, but no assignment or transfer hereof or of any rights
or obligations hereunder shall be made by any party without
the written consent of the other parties. Nothing herein
expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation, other
than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officer.
SALOMON BROTHERS INVESTORS VALUE
FUND INC
▇▇▇▇ ▇▇▇▇▇ PARTNERS FUNDS, INC., on
behalf of its series ▇▇▇▇ ▇▇▇▇▇
PARTNERS LARGE CAP VALUE FUND
By
:
_______________________________
__
By
:
_______________________________
__
Name: R. ▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
Name: R. ▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
Solely for purposes of paragraph 10.2 of this Agreement:
▇▇▇▇ ▇▇▇▇▇ PARTNERS FUND ADVISOR, LLC
By
:
________________________________________
__
Name: R. ▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
SCHEDULE 4.1
None
SCHEDULE 4.2
NONE
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