Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
Dated as of October 30, 2003
Table of Contents
Page No.
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1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.... 2
a. Definitions.............................................. 2
b. Use of Defined Terms..................................... 5
c. Sections and Exhibits.................................... 5
d. Miscellaneous Terms...................................... 5
2. The Reorganization(s)........................................ 5
a. Transfer of Assets....................................... 5
b. Assumption of Liabilities................................ 5
c. Issuance and Valuation of Corresponding Shares in the
Reorganization........................................... 6
d. Distribution of Corresponding Shares to the Acquired Fund
Shareholders............................................. 6
e. Interest; Proceeds....................................... 6
f. Valuation Time........................................... 6
g. Evidence of Transfer..................................... 7
h. Termination.............................................. 7
3. Representations and Warranties of the Acquired Fund.......... 7
a. Formation and Qualification.............................. 7
b. Licenses................................................. 7
c. Authority................................................ 8
d. Financial Statements..................................... 8
e. Semi-Annual Report to Shareholders....................... 8
f. Prospectus and Statement of Additional Information....... 8
g. Litigation............................................... 8
h. Material Contracts....................................... 9
i. No Conflict.............................................. 9
j. Undisclosed Liabilities.................................. 9
k. Taxes.................................................... 9
l. Assets................................................... 9
m. Consents................................................. 10
n. Capitalization........................................... 10
o. Books and Records........................................ 10
4. Representations and Warranties of the Acquiring Fund......... 10
a. Formation and Qualification.............................. 10
b. Licenses................................................. 11
c. Authority................................................ 11
d. Financial Statements..................................... 11
e. Semi-Annual Report to Stockholders....................... 11
f. Prospectus and Statement of Additional Information....... 12
g. Litigation............................................... 12
h. Material Contracts....................................... 12
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Page No.
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i. No Conflict........................................ 12
j. Undisclosed Liabilities............................ 12
k. Taxes.............................................. 13
l. Consents........................................... 13
m. Capitalization..................................... 13
n. Corresponding Shares............................... 13
5. Covenants of the Acquired Fund and the Acquiring Fund.. 14
a. Special Shareholders' Meeting...................... 14
b. Unaudited Financial Statement...................... 14
c. Share Ledger Records of the Acquiring Fund......... 14
d. Conduct of Business................................ 15
e. Termination of the Acquired Fund................... 15
f. Corresponding Shares............................... 15
g. Tax Returns........................................ 15
h. Proxy Statement Mailing............................ 15
i. Confirmation of Tax Basis.......................... 15
j. Shareholder List................................... 15
k. New Series......................................... 16
6. Closing Date........................................... 16
7. Conditions of the Acquired Fund........................ 16
a. Representations and Warranties..................... 16
b. Performance........................................ 16
c. Shareholder Approval............................... 16
d. Approval of Board of Directors..................... 17
e. Deliveries by the Acquiring Fund................... 17
f. No Material Adverse Change......................... 18
g. Absence of Litigation.............................. 18
h. Proceedings and Documents.......................... 18
i. Compliance with Laws; No Adverse Action or Decision 18
j. Commission Orders or Interpretations............... 19
8. Conditions of the Acquiring Fund....................... 19
a. Representations and Warranties..................... 19
b. Performance........................................ 19
c. Shareholder Approval............................... 19
d. Approval of Board of Directors..................... 19
e. Deliveries by the Acquired Fund.................... 20
f. No Material Adverse Change......................... 20
g. Absence of Litigation.............................. 20
h. Proceedings and Documents.......................... 20
i. Compliance with Laws; No Adverse Action or Decision 20
j. Commission Orders or Interpretations............... 21
k. Dividends.......................................... 21
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Page No.
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9. Termination, Postponement and Waivers...... 21
a. Termination of Agreement............. 21
b. Commission Order..................... 22
c. Effect of Termination................ 22
d. Waivers; Non-Material Changes........ 22
10. Survival of Representations and Warranties. 23
11. Other Matters.............................. 23
a. Obligations under Massachusetts Law.. 23
b. Further Assurances................... 23
c. Notices.............................. 23
d. Entire Agreement..................... 24
e. Amendment............................ 24
f. Governing Law........................ 24
g. Assignment........................... 24
h. Costs of the Reorganization.......... 25
i. Severability......................... 25
j. Headings............................. 25
k. Counterparts......................... 25
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
the 30th day of October 2003, by and between SUNAMERICA EQUITY FUNDS, a
Massachusetts business trust, on behalf of the Acquired Fund (as defined
herein), an investment portfolio of SunAmerica Equity Funds, and SUNAMERICA
STYLE SELECT SERIES, INC., a Maryland corporation, on behalf of the Acquiring
Fund (as defined herein), an investment portfolio of SunAmerica Style Select
Series, Inc.
PLANS OF REORGANIZATION
WHEREAS, this Agreement constitutes an agreement and plan of reorganization
between SunAmerica Equity Funds on behalf of its investment portfolio (the
"Acquired Fund,") and SunAmerica Style Select Series, Inc. on behalf of its
investment portfolio (the "Acquiring Fund") set forth below:
Acquired Fund: Acquiring Fund:
-------------- ---------------
SunAmerica Focused SunAmerica Focused
Dividend Strategy Dividend Strategy
Portfolio Portfolio
WHEREAS, the Acquired Fund owns securities that generally are assets of the
character in which the respective Acquiring Fund is permitted to invest;
WHEREAS, the reorganization will consist of (i) the acquisition of the
Acquired Fund's Assets (as defined herein), and assumption of the Acquired
Fund's Assumed Liabilities (as defined herein), by the Acquiring Fund solely in
exchange for an aggregate value of newly issued shares of beneficial interest,
$.0001 par value per share, of the Acquiring Fund (the "Shares"), equal to the
net asset value of the Acquired Fund's Assets determined in accordance with
Section 2(c) hereof, and (ii) the subsequent distribution by the Acquired Fund
of the Shares to its shareholders in liquidation of the Acquired Fund, all upon
and subject to the terms hereinafter set forth (the "Reorganization");
WHEREAS, in the course of the Reorganization, Shares of the Acquiring Fund
will be issued to the Acquired Fund and distributed to the shareholders thereof
as follows: each holder, if any, of Class A, Class B and Class II shares of the
Acquired Fund will be entitled to receive Class A, Class B and Class II,
respectively (the "Corresponding Shares"), of the Acquiring Fund on the Closing
Date (as defined herein);
WHEREAS, the aggregate net asset value of the Corresponding Shares to be
received by each shareholder of the Acquired Fund will equal the aggregate net
asset value of the Acquired Fund shares owned by such shareholder as of the
Valuation Time (as defined herein);
WHEREAS, it is intended that the Reorganization described herein shall be a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and any successor provision and the
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368(a) of the Code; and
AGREEMENT
NOW, THEREFORE, in order to consummate the Reorganization and in
consideration of the premises and the covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the
Acquired Fund and the Acquiring Fund hereby agree as follows:
1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.
a. Definitions. As used herein the following terms have the following
respective meanings:
"Acquired Fund" has the meaning ascribed thereto under the heading "Plans
of Reorganization." For purposes of this Agreement, the term "Acquired Fund"
shall refer to the SunAmerica Focused Dividend Strategy Portfolio of
SunAmerica Equity Funds.
"Acquiring Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Acquiring Fund" shall refer to the SunAmerica Focused Dividend Strategy
Portfolio of SunAmerica Style Select Series, Inc.
"Acquiring Fund Post-Effective Amendment" has the meaning ascribed
thereto in Section 5(l) hereof.
"Agreement" has the meaning ascribed thereto in the introduction hereof.
"Assets" has the meaning ascribed thereto in Section 2(a) hereof. For
purposes of this Agreement, the term "Assets" shall refer to Assets of the
Acquired Fund.
"Assumed Liabilities" has the meaning ascribed thereto in Section 2(b)
hereof. For purposes of this Agreement, the term "Assumed Liabilities" shall
refer to the Assumed Liabilities of the Acquired Fund.
"Closing Date" has the meaning ascribed thereto in Section 6 hereof.
"Code" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"Commission" shall mean the Securities and Exchange Commission.
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"Corresponding Shares" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Corresponding Shares" shall refer to the Corresponding Shares of the
Acquiring Fund.
"Equity Funds Prospectus" shall mean the prospectus relating to the
Acquired Funds dated January 28, 2003, as amended or supplemented.
"Equity Funds Statement of Additional Information" shall mean the
statement of additional information relating to the Acquired Funds, dated
January 28, 2003, as amended or supplemented.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Governmental Authority" shall mean any governmental or
quasi-governmental authority, including, without limitation, any Federal,
state, territorial, county, municipal or other governmental or
quasi-governmental agency, board, branch, bureau, commission, court,
arbitral body, department or other instrumentality or political unit or
subdivision, whether domestic or foreign.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investments" shall mean, with respect to any Person, (i) the investments
of such Person shown on the schedule of its investments as of the date set
forth therein, with such additions thereto and deletions therefrom as may
have arisen in the course of such Person's business up to such date; and
(ii) all other assets owned by such Person or liabilities incurred as of
such date.
"Licenses" has the meaning ascribed thereto in Section 3(b) hereof.
"Lien" shall mean any security agreement, financing statement (whether or
not filed), mortgage, lien (statutory or otherwise), charge, pledge,
hypothecation, conditional sales agreement, adverse claim, title retention
agreement or other security interest, encumbrance, restriction, deed of
trust, indenture, option, limitation, exception to or other title defect in
or on any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale, lease, consignment or
bailment given for security purposes, trust receipt or other title retention
agreement with respect to any property or asset of such Person, whether
direct, indirect, accrued or contingent.
"Majority Shareholder Vote" shall mean the lesser of the (i) more than
50% of the outstanding shares of the Acquired Fund and (ii) 61% or more of
the shares of the Acquiring Fund represented at the special shareholders'
meeting referenced in Section 5(a) hereof if more than 50% of such shares
are represented.
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"Material Adverse Effect" shall mean, with respect to any Person, any
event, circumstance or condition that, individually or when aggregated with
all other similar events, circumstances or conditions could reasonably be
expected to have, or has had, a material adverse effect on: (i) the
business, property, operations, condition (financial or otherwise), results
of operations or prospects of such Person or (ii) the ability of such Person
to consummate the transactions contemplated hereunder in the manner
contemplated hereby, other than, in each case, any change relating to the
economy or securities markets in general.
"Permitted Liens" shall mean, with respect to any Person, any Lien
arising by reason of (i) taxes, assessments, governmental charges or claims
that are either not yet delinquent, or being contested in good faith for
which adequate reserves have been recorded, (ii) the Federal or state
securities laws, and (iii) imperfections of title or encumbrances as do not
materially detract from the value or use of the Assets or materially affect
title thereto.
"Person" shall mean any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"Reorganization" has the meaning ascribed thereto in the second paragraph
under the heading "Plans of Reorganization" hereof and consists of (i) the
acquisition of the Acquired Fund's Assets, and assumption of the Acquired
Fund's Assumed Liabilities, by the Acquiring Fund solely in exchange for an
aggregate value of Corresponding Shares of the Acquiring Fund, equal to the
net asset value of the Acquired Fund's Assets determined in accordance with
Section 2(c) hereof, and (ii) the subsequent distribution by the Acquired
Fund of such Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the Acquired Fund in liquidation of the Acquired
Fund.
"RICs" has the meaning ascribed thereto in Section 3(b) hereof.
"Rule 17a-8(a)" shall mean Rule 17a-8(a) under the Investment Company Act.
"S&S LLP" shall mean Shearman & Sterling LLP, counsel to the Acquired
Funds and the Acquiring Funds.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"Style Select Funds Prospectus" shall mean the preliminary prospectus
contained in the Acquiring Fund Post-Effective Amendment, as amended or
supplemented.
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"Style Select Funds Statement of Additional Information" shall mean the
preliminary statement of additional information contained in the Acquiring
Fund Post-Effective Amendment, as amended or supplemented.
"SunAmerica Equity Funds Declaration of Trust" shall mean the Declaration
of Trust of SunAmerica Equity Funds dated as of June 18, 1986, as amended or
supplemented from time to time.
"SunAmerica Style Select Series, Inc. Articles of Incorporation" shall
mean the Articles of Incorporation of SunAmerica Style Select Series, Inc.,
dated as of July 3, 1996, as amended or supplemented from time to time.
"Valuation Time" has the meaning ascribed thereto in Section 2(f) hereof.
b. Use of Defined Terms. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
c. Sections and Exhibits. References in this Agreement to Sections,
Exhibits and Schedules are to Sections, Exhibits and Schedules of and to this
Agreement. The Exhibits and Schedules to this Agreement are hereby incorporated
herein by this reference as if fully set forth herein.
d. Miscellaneous Terms. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause where such terms may appear. The term
"including" shall mean "including, but not limited to."
2. The Reorganization(s).
a. Transfer of Assets. Subject to receiving the requisite approval of the
directors of the Acquired Fund, and to the other terms and conditions contained
herein and on the basis of the representations and warranties contained herein,
on the Closing Date, the Acquired Fund shall convey, transfer and deliver to
the Acquiring Fund, and the Acquiring Fund shall purchase, acquire and accept
from the Acquired Fund, free and clear of all Liens (other than Permitted
Liens), all of the property and assets (including cash, securities,
commodities, interests in futures and dividends, any deferred or prepaid
expenses and interest accrued on debt instruments, in each case as of the
Valuation Time) owned by the Acquired Fund (as to each Acquired Fund, such
assets are collectively referred to herein as the "Assets").
b. Assumption of Liabilities. Subject to receiving the requisite approval
of the directors of the Acquired Fund, and to the other terms and conditions
contained
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herein and on the basis of the representations and warranties contained herein,
on the Closing Date, the Acquiring Fund will assume and agree to pay, perform
and discharge when due all of the obligations and liabilities of the Acquired
Fund then existing, whether absolute, accrued, contingent or otherwise (as to
each Acquired Fund, such liabilities are collectively referred to herein as the
"Assumed Liabilities").
c. Issuance and Valuation of Corresponding Shares in the
Reorganization. Full Corresponding Shares, and to the extent necessary, a
fractional Corresponding Share, of an aggregate net asset value equal to the
net asset value of the Assets (after deducting the Assumed Liabilities)
acquired by the Acquiring Fund hereunder, determined as hereinafter provided
shall be issued by the Acquiring Fund to the Acquired Fund in exchange for such
Assets. The net asset value of each of the Acquired Fund's Assets and the
Acquiring Fund's Corresponding Shares shall be determined in accordance with
the procedures described in the Style Select Funds Prospectus and the Style
Select Statement of Additional Information as of the Valuation Time. Such
valuation and determination shall be made by the Acquiring Fund in cooperation
with the Acquired Fund.
d. Distribution of Corresponding Shares to the Acquired Fund
Shareholders. Pursuant to this Agreement, as soon as practicable after the
Valuation Time, the Acquired Fund will distribute all Corresponding Shares
received by it from the Acquiring Fund in connection with the Reorganization to
its shareholders in proportion to such shareholders' interest in the Acquired
Fund. Such distribution shall be accomplished by the opening of shareholder
accounts on the share ledger records of the Acquiring Fund in the amounts due
the shareholders of the Acquired Fund based on their respective holdings in the
Acquired Fund as of the Valuation Time.
e. Interest; Proceeds. The Acquired Fund will pay or cause to be paid to
the Acquiring Fund any interest or proceeds it receives on or after the Closing
Date with respect to its Assets.
f. Valuation Time. (i) The Valuation Time shall be the close of the New
York Stock Exchange (generally 4:00 P.M., New York time) on February 20, 2004,
or such earlier or later day and time as may be mutually agreed upon in writing
between the parties hereto (the "Valuation Time").
(ii) In the event that at the Valuation Time (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted; or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquiring Fund or the Acquired Fund is
6
impracticable, the Valuation Time shall be postponed until the close of the
New York Stock Exchange on the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
g. Evidence of Transfer. The Acquiring Fund and the Acquired Fund will
jointly file any instrument as may be required by the State of Maryland and/or
the Commonwealth of Massachusetts to effect the transfer of the Assets to the
Acquiring Fund.
h. Termination. The Acquired Fund's existence as a separate investment
portfolio of SunAmerica Equity Funds will be terminated as soon as practicable
following the consummation of the applicable Reorganization by making any
required filings with the Commonwealth of Massachusetts, as provided in
Section 5(e) hereof.
3. Representations and Warranties of the Acquired Fund.
The Acquired Fund represents and warrants to the Acquiring Fund as follows:
a. Formation and Qualification. The Acquired Fund is a separate investment
portfolio of SunAmerica Equity Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquired Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. SunAmerica Equity Funds is duly qualified, registered or licensed to
do business and is in good standing in each jurisdiction in which the ownership
of its properties or assets or the character of its present operations makes
such qualification, registration or licensing necessary, except where the
failure to so qualify or be in good standing would not have a Material Adverse
Effect on the Acquired Fund.
b. Licenses. The Acquired Fund (or SunAmerica Equity Funds on behalf of the
Acquired Fund) holds all permits, consents, registrations, certificates,
authorizations and other approvals (collectively, "Licenses") required for the
conduct of its business as now being conducted; all such Licenses are in full
force and effect and no suspension or cancellation of any of them is pending or
threatened; and none of such Licenses will be affected by the consummation of
the transactions contemplated by this Agreement in a manner that would have a
Material Adverse Effect on the Acquired Fund. SunAmerica Equity Funds is duly
registered under the Investment Company Act as an open-end management
investment company (File No. 811-07797), and such registration has not been
suspended, revoked or rescinded and is in full force and effect. The Acquired
Fund has elected and qualified for the special tax treatment afforded regulated
investment companies ("RICs") under Sections 851-855 of the Code at all times
since its inception and intends to continue to so qualify for its current
taxable year.
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c. Authority. SunAmerica Equity Funds, on behalf of the Acquired Fund, has
full power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on the part of
the Acquired Fund and no other proceedings on the part of SunAmerica Equity
Funds or the Acquired Fund are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed by SunAmerica Equity Funds, on behalf of the Acquired
Fund, and assuming due authorization, execution and delivery of this Agreement
by the Acquiring Fund, this Agreement constitutes a legal, valid and binding
obligation of the Acquired Fund enforceable against the Acquired Fund in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto and the
remedy of specific performance and injunctive and other forms of equitable
relief.
d. Financial Statements. The Acquiring Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquired Fund, each as of March 31, 2003 said
financial statements having been audited by Ernst & Young LLP, independent
public accountants. Such audited financial statements fairly present in all
material respects the financial position of the Acquired Fund as of the dates
and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Shareholders. The Acquiring Fund has been
furnished with the Acquired Fund's Semi-Annual Report to Shareholders for the
six months ended March 31, 2003, and the unaudited financial statements
appearing therein fairly present in all material respects the financial
position of the Acquired Fund as of the dates and for the periods referred to
therein and in conformity with generally accepted accounting principles applied
on a consistent basis.
f. Prospectus and Statement of Additional Information. The Acquiring Fund
has been furnished with the Strategic Funds Prospectus and the Strategic Funds
Statement of Additional Information, and insofar as they relate to the Acquired
Fund, said Prospectus and Statement of Additional Information do not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statement therein, in
the light of the circumstances under which they were made, not misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquired Fund,
threatened
8
against the Acquired Fund that could reasonably be expected to have a Material
Adverse Effect on the Acquired Fund. The Acquired Fund is not charged with or,
to its knowledge, threatened with any violation, or investigation of any
possible violation, of any provisions of any Federal, state or local law or
regulation or administrative ruling relating to any aspect of its business that
could reasonably be expected to have a Material Adverse Effect on the Acquired
Fund.
h. Material Contracts. There are no material contracts outstanding to which
SunAmerica Strategic Investment Series, Inc. on behalf of the Acquired Fund is
a party that have not been disclosed in the Equity Funds Prospectus or the
Equity Funds Statement of Additional Information.
i. No Conflict. The execution and delivery of this Agreement by SunAmerica
Equity Funds on behalf of the Acquired Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) SunAmerica Equity Funds Declaration of Trust or
by-laws, each as amended, supplemented and in effect as of the date hereof,
(ii) any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which SunAmerica Equity
Funds on behalf of the Acquired Fund is a party or to which its assets or
properties are subject, or (iii) any judgment, injunction, order or decree, or
other instrument binding upon the Acquired Fund or any of its assets or
properties, except where such contravention, default or violation would not
have a Material Adverse Effect on the Acquired Fund.
j. Undisclosed Liabilities. The Acquired Fund has no material liabilities,
contingent or otherwise, other than those shown on its statement of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business since March 31, 2003, and those incurred in connection with the
Reorganization.
k. Taxes. The Acquired Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquired Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquired Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Assets. The Acquired Fund has good and marketable title to the Assets,
free and clear of all Liens, except for Permitted Liens. The Acquired Fund is
the
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direct sole and exclusive owner of the Assets. At the Closing Date, upon
consummation of the transactions contemplated hereby, the Acquiring Fund will
have good and marketable title to the Assets, free and clear of all Liens,
except for Permitted Liens.
m. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquired Fund of the Reorganization, except as may be required under the
Securities Act, the Exchange Act, the Investment Company Act or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico).
n. Capitalization. Under the Declaration of Trust of SunAmerica Equity
Funds, the Acquired Fund is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $0.01 per share, divided
into three classes designated Class A, Class B and Class II shares. All issued
and outstanding shares of the Acquired Fund are duly authorized, validly
issued, fully paid and non-assessable and free of preemptive rights. Except for
(i) the right of Class B shares of the Acquired Fund to automatically convert
to Class A shares of the Acquired Fund eight years after the purchase thereof,
or (ii) in connection with any automatic dividend reinvestment plan available
to the Acquired Fund shareholders, there are no options warrants,
subscriptions, calls or other rights, agreements or commitments obligating the
Acquired Fund to issue any of its shares or securities convertible into its
shares.
o. Books and Records. The books and records of the Acquired Fund made
available to the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect to the
operations of the Acquired Fund.
4. Representations and Warranties of the Acquiring Fund.
The Acquiring Fund represents and warrants to the Acquired Fund as follows:
a. Formation and Qualification. The Acquiring Fund is a separate investment
portfolio of SunAmerica Style Select Series, Inc., a business trust duly
organized, validly existing and in good standing in conformity with the laws of
the State of Maryland, and the Acquiring Fund has all requisite power and
authority to own all of its properties or assets and carry on its business as
presently conducted. SunAmerica Style Select Series, Inc. is duly qualified,
registered or licensed as a foreign corporation to do business and is in good
standing in each jurisdiction in which the ownership of its properties or
assets or the character of its present operations makes such qualification,
registration or licensing necessary, except where the failure to so qualify or
be in good standing would not have a Material Adverse Effect on the Acquiring
Fund.
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b. Licenses. The Acquiring Fund (or SunAmerica Style Select Series, Inc. on
behalf of the Acquiring Fund) holds all Licenses required for the conduct of
its business as now being conducted; all such Licenses are in full force and
effect and no suspension or cancellation of any of them is pending or
threatened; and none of such Licenses will be affected by the consummation of
the transactions contemplated by this Agreement in a manner that would have a
Material Adverse Effect on the Acquiring Fund. SunAmerica Style Select Series,
Inc. is duly registered under the Investment Company Act as an open-end
management investment company (File No. 811-07797), and such registration has
not been revoked or rescinded and is in full force and effect. The Acquiring
Fund has elected and qualified for the special tax treatment afforded to RICs
under Sections 851-855 of the Code at all times since its inception and intends
to continue to so qualify both until consummation of the Reorganization and
thereafter.
c. Authority. SunAmerica Style Select Series, Inc., on behalf of the
Acquiring Fund, has full power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of the Acquiring Fund and no other proceedings on the part
of the Acquiring Fund are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed by SunAmerica Style Select Series, Inc., on behalf of
the Acquiring Fund, and assuming due authorization, execution and delivery of
this Agreement by the Acquired Fund, this Agreement constitutes a legal, valid
and binding obligation of the Acquiring Fund enforceable against the Acquiring
Fund in accordance with its terms, subject to the effects of bankruptcy,
insolvency, moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with respect thereto
and the remedy of specific performance and injunctive and other forms of
equitable relief.
d. Financial Statements. The Acquired Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquiring Fund, each as of October 31, 2002,
said financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly
present in all material respects the financial position of the Acquiring Fund
as of the dates and for the periods referred to therein and in conformity with
generally accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Stockholders. The Acquired Fund has been furnished
with the Acquiring Fund's Semi-Annual Report to Stockholders for the six months
ended April 30, 2003, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquiring
11
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. Prospectus and Statement of Additional Information. The Acquired Fund
has been furnished with the Style Select Funds Prospectus and the Style Select
Funds Statement of Additional Information, and insofar as they relate to the
Acquiring Fund, said Prospectus and Statement of Additional Information do not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statement therein,
in the light of the circumstances under which they were made, not misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquiring Fund,
threatened against the Acquiring Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquiring Fund.
h. Material Contracts. There are no material contracts outstanding to which
SunAmerica Style Select Series, Inc. on behalf of the Acquiring Fund is a party
that have not been disclosed in the Style Select Funds Prospectus or the Style
Select Funds Statement of Additional Information.
i. No Conflict. The execution and delivery of this Agreement by SunAmerica
Style Select Series, Inc. on behalf of the Acquiring Fund and the consummation
of the transactions contemplated hereby will not contravene or constitute a
default under or violation of (i) the SunAmerica Style Select Series, Inc.
Articles of Incorporation or by-laws, each as amended, supplemented and in
effect as of the date hereof, (ii) any agreement or contract (or require the
consent of any Person under any agreement or contract that has not been
obtained) to which SunAmerica Style Select Series, Inc. on behalf of the
Acquiring Fund is a party or to which its assets or properties are subject, or
(iii) any judgment, injunction, order or decree, or other instrument binding
upon the Acquiring Fund or any of its assets or properties, except where such
contravention, default or violation would not have a Material Adverse Effect on
the Acquiring Fund.
j. Undisclosed Liabilities. The Acquiring Fund has no material liabilities,
contingent or otherwise, other than those shown on its statement of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business as an investment company since March 31, 2003 and those incurred in
connection with the Reorganization.
12
k. Taxes. The Acquiring Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing, and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquiring Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquiring Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquiring Fund of the Reorganization, except for such as may be required under
the Securities Act, the Exchange Act, the Investment Company Act, or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico).
m. Capitalization. Under the Articles of Incorporation of SunAmerica Style
Select Series, Inc., the Acquiring Fund is authorized to issue an unlimited
number of full and fractional shares of beneficial interest, par value $0.0001
per share, divided into three classes, designated Class A, Class B and Class
II. All issued and outstanding shares of the Acquiring Fund are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B shares of the Acquiring
Fund to automatically convert to Class A shares of the Acquiring Fund
approximately eight years after the purchase thereof or (ii) in connection with
any automatic dividend reinvestment plan available to the Acquiring Fund
shareholders, there are no options, warrants, subscriptions, calls or other
rights, agreements or commitments obligating the Acquiring Fund to issue any of
its shares or securities convertible into its shares.
n. Corresponding Shares.
i. The Corresponding Shares to be issued by the Acquiring Fund to the
Acquired Fund and subsequently distributed by the Acquired Fund to its
shareholders as provided in this Agreement have been duly and validly
authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and nonassessable and
will have full voting rights, and no shareholder of the Acquiring Fund will
have any preemptive right of subscription or purchase in respect thereof.
ii. At or prior to the Closing Date, the Corresponding Shares to be
issued by the Acquiring Fund to the Acquired Fund on the Closing Date will
be duly qualified for offering to the public in all states of the United
States in which
13
the sale of shares of the Acquiring Fund presently are qualified, and there
are a sufficient number of such shares registered under the Securities Act,
the Investment Company Act and with each pertinent state securities
commission to permit the Reorganization to be consummated.
5. Covenants of the Acquired Fund and the Acquiring Fund
a. Special Shareholders' Meeting. The Acquired Fund agrees to call a
special meeting of its shareholders to be held as soon as practicable for the
purpose of considering the Reorganization as described in this Agreement and
take all other action necessary to obtain shareholder approval of the
transactions contemplated herein.
b. Unaudited Financial Statement
i. The Acquired Fund hereby agrees to furnish or cause its agents to
furnish to the Acquiring Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and liabilities
of the Acquired Fund with values determined in accordance with Section 2(c)
hereof and an unaudited schedule of Investments of the Acquired Fund
(including the respective dates and costs of acquisition thereof), each as
of the Valuation Time. Such unaudited financial statement will fairly
present in all material respects the financial position of the Acquired Fund
as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
ii. The Acquiring Fund hereby agrees to furnish or cause its agents to
furnish to the Acquired Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and liabilities
of the Acquiring Fund with values determined in accordance with Section 2(c)
hereof and an unaudited schedule of Investments of the Acquiring Fund
(including the respective dates and costs of acquisition thereof), each as
of the Valuation Time. Such unaudited financial statements will fairly
present in all material respects the financial position of the Acquiring
Fund as of the dates and for the periods referred to therein and in
conformity with generally accepted accounting principles applied on a
consistent basis.
c. Share Ledger Records of the Acquiring Fund. The Acquiring Fund agrees,
as soon as practicable after the Valuation Time, to open shareholder accounts
on its share ledger records for the shareholders of the Acquired Fund in
connection with the distribution of Corresponding Shares by the Acquired Fund
to such shareholders in accordance with Section 2(d) hereof.
14
d. Conduct of Business. The Acquired Fund and the Acquiring Fund each
covenants and agrees to operate its respective business in the ordinary course
as presently conducted between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and distributions.
e. Termination of the Acquired Fund. SunAmerica Equity Funds agrees that as
soon as practicable following the consummation of the Reorganization, it will
terminate the existence of the Acquired Fund in accordance with the laws of the
Commonwealth of Massachusetts and any other applicable law.
f. Corresponding Shares. The Acquired Fund will not sell or otherwise
dispose of any of the Corresponding Shares to be received by it from the
Acquiring Fund in connection with the Reorganization, except in distribution to
the shareholders of the Acquired Fund in accordance with the terms hereof.
g. Tax Returns. The Acquired Fund and the Acquiring Fund each agrees that
by the Closing Date all of its Federal and other tax returns and reports
required to be filed on or before such date shall have been filed and all taxes
shown as due on said returns either shall have been paid or adequate liability
reserves shall have been provided for the payment of such taxes. In connection
with this provision, the Acquiring Fund and the Acquired Fund agree to
cooperate with each other in filing any tax return, amended return or claim for
refund, determining a liability for taxes or a right to a refund of taxes or
participating in or conducting any audit or other proceeding in respect of
taxes.
h. Proxy Statement Mailing. The Acquired Fund agrees to mail to its
shareholders of record entitled to vote at the special meeting of shareholders
at which action is to be considered regarding this Agreement, in sufficient
time to comply with requirements as to notice thereof, a proxy statement which
complies in all material respects (except as to information therein relating to
the Acquiring Fund) with the applicable provisions of Section 14(a) of the
Exchange Act, and the rules and regulations promulgated thereunder.
i. Confirmation of Tax Basis. The Acquired Fund will deliver to the
Acquiring Fund on the Closing Date confirmations or other adequate evidence as
to the tax basis of each of the Assets delivered to the Acquiring Fund
hereunder.
j. Shareholder List. As soon as practicable after the close of business on
the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list
of the names and addresses of all of the shareholders of record of the Acquired
Fund on the Closing Date and the number of shares of the Acquired Fund owned by
each such shareholder as of such date, certified to the best of its knowledge
and belief by the transfer agent or by North American Funds on behalf of the
Acquired Fund.
15
k. New Series. SunAmerica Style Select Series, Inc. on behalf of the
Acquiring Fund shall (i) cause a post-effective amendment to its Registration
Statement on Form N1-A (the "Acquiring Fund Post-Effective Amendment") to be
filed with the Commission in a timely fashion to register the Class A, Class B
and Class II Shares of the Acquiring Fund, for sale under the Securities Act
prior to the Closing Date, and (ii) prior to the Closing Date, amend or
establish, as applicable, the Acquiring Fund's plan under Rule 18f-3 under the
Investment Company Act to reflect the addition of such Shares and take such
other steps as may be necessary to establish a new class of shares of the
Acquiring Fund.
6. Closing Date.
The closing of the transactions contemplated by this Agreement shall be at
the offices of Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ after the close of the New York Stock Exchange on February 20, 2004 or at
such other place, time and date agreed to by the Acquired Fund and the
Acquiring Fund. The date and time upon which such closing is to take place
shall be referred to herein as the "Closing Date." To the extent that any
Assets, for any reason, are not transferable on the Closing Date, the Acquired
Fund shall cause such Assets to be transferred to the Acquiring Fund's custody
account with State Street Bank and Trust Company at the earliest practicable
date thereafter.
7. Conditions of the Acquired Fund.
The obligations of the Acquired Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquired Fund only and, other than with respect to the condition set
forth in Section 7(c) hereof, may be waived, in whole or in part, by the
Acquired Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of
the Acquiring Fund made in this Agreement shall be true and correct in all
material respects when made, as of the Valuation Time and as of the Closing
Date all with the same effect as if made at and as of such dates, except that
any representations and warranties that relate to a particular date or period
shall be true and correct in all material respects as of such date or period.
b. Performance. The Acquiring Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted and the
Reorganization shall have been approved by a Majority Shareholder Vote.
16
d. Approval of Board of Directors. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Directors of
SunAmerica Style Select Series, Inc., on behalf of the Acquiring Fund,
including a majority of the Directors or Trustees who are not "interested
persons" of SunAmerica Equity Funds or SunAmerica Style Select Series, Inc. as
defined in Section 2(a)(19) of the Investment Company Act, which shall have
found, as required by Rule 17a-8(a), that (i) participation in the
Reorganization is in the best interests of the Acquiring Fund and (ii) the
interests of the existing shareholders of the Acquiring Fund will not be
diluted as a result of the Reorganization.
e. Deliveries by the Acquiring Fund. At or prior to the Closing Date, the
Acquiring Fund shall deliver to the Acquired Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquired Fund, executed by the President (or a Vice President) of SunAmerica
Style Select Series, Inc. on behalf of the Acquiring Fund, dated as of the
Closing Date, certifying that the conditions specified in Sections 7(a),
(b), (d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquiring Fund required by
Section 5(b)(ii) hereof;
iii. an opinion of S&S LLP, in form and substance reasonably satisfactory
to the Acquired Fund, to the effect that, for Federal income tax purposes,
(i) the transfer of the Assets to the Acquiring Fund in return solely for
the Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
assuming that such transfer, issuance and assumption qualifies as a
reorganization within the meaning of Section 368(a) of the Code, the
Acquired Fund and the Acquiring Fund will each be deemed to be a "party to
the Reorganization" within the meaning of Section 368(b) of the Code; (ii)
in accordance with Sections 357 and 361 of the Code, no gain or loss will be
recognized to the Acquired Fund as a result of the Asset transfer solely in
return for the Corresponding Shares and the assumption by the Acquiring Fund
of the Assumed Liabilities or on the distribution (whether actual or
constructive) of the Corresponding Shares to the Acquired Fund shareholders
as provided for in the Agreement; (iii) under Section 1032 of the Code, no
gain or loss will be recognized to the Acquiring Fund on the receipt of the
Assets in return for the Corresponding Shares and the assumption by the
Acquiring Fund of the Assumed Liabilities as provided for in the Agreement;
(iv) in accordance with Section 354(a)(1) of the Code, no gain or loss will
be recognized to the shareholders of the Acquired Fund on the receipt
(whether actual or constructive) of Corresponding Shares in return for their
shares of the Acquired Fund; (v) in accordance with Section 362(b) of the
Code, the tax
17
basis of the Assets in the hands of the Acquiring Fund will be the same as
the tax basis of such Assets in the hands of the Acquired Fund immediately
prior to the consummation of the Reorganization; (vi) in accordance with
Section 358 of the Code, immediately after the Reorganization, the tax basis
of the Corresponding Shares received (whether actually or constructively) by
the shareholders of the Acquired Fund in the Reorganization will be equal,
in the aggregate, to the tax basis of the shares of the Acquired Fund
surrendered in return therefor; (vii) in accordance with Section 1223 of the
Code, a shareholder's holding period for the Corresponding Shares will be
determined by including the period for which such shareholder held the
shares of the Acquired Fund exchanged therefor, provided, that the Acquired
Fund shares were held as a capital asset; (viii) in accordance with Section
1223 of the Code, the Acquiring Fund's holding period with respect to the
Assets acquired by it will include the period for which such Assets were
held by the Acquired Fund; and (ix) in accordance with Section 381(a) of the
Code and regulations thereunder, the Acquiring Fund will succeed to and take
into account certain tax attributes of the Acquired Fund, subject to
applicable limitations, such as earnings and profits, capital loss
carryovers and method of accounting.
f. No Material Adverse Change. There shall have occurred no material
adverse change in the financial position of the Acquiring Fund since April 30,
2003 other than changes in its portfolio securities since that date, changes in
the market value of its portfolio securities or changes in connection with the
payment of the Acquiring Fund's customary operating expenses, each in the
ordinary course of business.
g. Absence of Litigation. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquired Fund and its counsel, and the
Acquired Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquired Fund
or its counsel may reasonably request.
i. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this
Agreement, the Reorganization or the consummation of any of the transactions
contemplated hereby and thereby; (ii) the Commission shall not have issued an
unfavorable advisory report under Section 25(b) of the Investment Company Act,
nor instituted
18
or threatened to institute any proceeding seeking to enjoin consummation of the
Reorganization under Section 25(c) of the Investment Company Act, and (iii) no
other legal, administrative or other proceeding shall be instituted or
threatened by any Governmental Authority which would materially affect the
financial condition of the Acquiring Fund or that seeks to restrain, enjoin,
prevent, materially delay, prohibit or otherwise make illegal the performance
of this Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby or thereby.
j. Commission Orders or Interpretations. The Acquired Fund shall have
received from the Commission such orders or interpretations as counsel to the
Acquired Fund deems reasonably necessary or desirable under the Securities Act
and the Investment Company Act in connection with the Reorganization; provided
that such counsel shall have requested such orders or interpretations as
promptly as practicable, and all such orders shall be in full force and effect.
8. Conditions of the Acquiring Fund.
The obligations of the Acquiring Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquiring Fund only and, other than with respect to the condition set
forth in Section 8(c) hereof, may be waived, in whole or in part, by the
Acquiring Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of
the Acquired Fund made in this Agreement shall be true and correct in all
material respects when made, as of the Valuation Time and as of the Closing
Date all with the same effect as if made at and as of such dates, except that
any representations and warranties that relate to a particular date or period
shall be true and correct in all material respects as of such date or period.
b. Performance. The Acquired Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted and the
Reorganization shall have been approved by a Majority Shareholder Vote.
d. Approval of Board of Directors. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Trustees of
SunAmerica Equity Funds, on behalf of the Acquired Fund, including a majority
of the Trustees who are not "interested persons" of SunAmerica Equity Funds or
19
SunAmerica Style Select Series, Inc. within the meaning of Section 2(a)(19) of
the Investment Company Act, which shall have found, as required by Rule
17a-8(a), that (i) participation in the Reorganization is in the best interests
of the Acquired Fund and (ii) the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquired Fund. At or prior to the Closing Date, the
Acquired Fund shall deliver to the Acquiring Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquiring Fund, executed by the President (or a Vice President) of
SunAmerica Equity Funds on behalf of the Acquired Fund, dated as of the
Closing Date, certifying that the conditions specified in Sections 8(a),
(b), (c) and (e) have been fulfilled;
ii. the unaudited financial statements of the Acquired Fund required by
Section 5(b)(i) hereof; and
iii. an opinion of S&S LLP, in form and substance reasonably satisfactory
to the Acquiring Fund, with respect to the matters specified in Section
7(e)(iii) hereof.
f. No Material Adverse Change. There shall have occurred no material
adverse change in the financial position of the Acquired Fund since April 30,
2003 other than changes in its portfolio securities since that date, changes in
the market value of its portfolio securities or changes in connection with the
payment of the Acquired Fund's customary operating expenses, each in the
ordinary course of business. The Acquired Fund reserves the right to sell any
of its portfolio securities in the ordinary course of business, but will not,
without the prior written consent of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund is
permitted to invest.
g. Absence of Litigation. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquiring Fund and its counsel, and the
Acquiring Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquiring Fund
or its counsel may reasonably request.
i. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this
Agreement, the
20
Reorganization or the consummation of any of the transactions contemplated
hereby and thereby; (ii) the Commission shall not have issued an unfavorable
advisory report under Section 25(b) of the Investment Company Act, nor
instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment
Company Act, and (iii) no other legal, administrative or other proceeding shall
be instituted or threatened by any Governmental Authority which would
materially affect the financial condition of the Acquired Fund or that seeks to
restrain, enjoin, prevent, materially delay, prohibit or otherwise make illegal
the performance of this Agreement, the Reorganization or the consummation of
any of the transactions contemplated hereby or thereby.
j. Commission Orders or Interpretations. The Acquiring Fund shall have
received from the Commission such orders or interpretations as counsel to the
Acquiring Fund, deems reasonably necessary or desirable under the Securities
Act and the Investment Company Act in connection with the Reorganization;
provided that such counsel shall have requested such orders or interpretations
as promptly as practicable, and all such orders shall be in full force and
effect.
k. Dividends. Prior to the Closing Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its shareholders all of its
investment company taxable income as of the Closing Date, if any (computed
without regard to any deduction for dividends paid), and all of its net capital
gain, if any, realized as of the Closing Date.
9. Termination, Postponement and Waivers.
a. Termination of Agreement. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 10 hereof, this Agreement may be
terminated and the Reorganization abandoned at any time prior to the Closing
Date, or the Closing Date may be postponed, by notice in writing prior to the
Closing Date:
i. by the Acquired Fund or the Acquiring Fund if:
(1) the Board of Trustees of SunAmerica Equity Funds and the Board of
Directors of SunAmerica Style Select Series, Inc. so mutually agree in
writing; or
(2) any Governmental Authority of competent jurisdiction shall have
issued any judgment, injunction, order, ruling or decree or taken any
other action restraining, enjoining or otherwise prohibiting this
Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby or thereby and such judgment,
21
injunction, order, ruling, decree or other action becomes final and
non-appealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 9(a)(i)(3) shall have used its
reasonable best efforts to have such judgment, injunction, order,
ruling, decree or other action lifted, vacated or denied.
ii. by the Acquired Fund if any condition of the Acquired Fund's
obligations set forth in Section 7 of this Agreement has not been fulfilled
or waived by it; or
iii. by the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 8 of this Agreement has not been fulfilled
or waived by it.
b. Commission Order. If any order or orders of the Commission with respect
to this Agreement, the Reorganization or any of the transactions contemplated
hereby or thereby shall be issued prior to the Closing Date and shall impose
any terms or conditions which are determined by action of the Board of Trustees
of SunAmerica Equity Funds and the Board of Directors of SunAmerica Style
Select Series, Inc. to be acceptable, such terms and conditions shall be
binding as if a part of this Agreement without further vote or approval of the
shareholders of the Acquired Fund, unless such terms and conditions shall
result in a change in the method of computing the number of Corresponding
Shares to be issued by the Acquiring Fund to the Acquired Fund, this Agreement
shall not be consummated and shall terminate unless the Acquired Fund promptly
shall call a special meeting of shareholders at which such conditions so
imposed shall be submitted for approval and the requisite approval of such
conditions shall be obtained.
c. Effect of Termination. In the event of termination of this Agreement
pursuant to the provisions hereof, the same shall become null and void and have
no further force or effect, and there shall not be any liability on the part of
either the Acquired Fund or the Acquiring Fund, SunAmerica Equity Funds or
SunAmerica Style Select Series, Inc., or Persons who are their directors,
trustees, officers, agents or shareholders in respect of this Agreement.
d. Waivers; Non-Material Changes. At any time prior to the Closing Date,
any of the terms or conditions of this Agreement may be waived by the party
that is entitled to the benefit thereof if such action or waiver will not have
a material adverse effect on the benefits intended under this Agreement to the
shareholders of such party on behalf of which such action is taken. In
addition, each party has delegated to its investment adviser the ability to
make non-material changes to this Agreement if such investment adviser deems it
to be in the best interests of the Acquired Fund or Acquiring Fund for which it
serves as investment adviser to do so.
22
10. Survival of Representations and Warranties.
The respective representations and warranties contained in Sections 3 and 4
hereof shall expire with, and be terminated by, the consummation of the
Reorganization, and neither the Acquired Fund nor the Acquiring Fund nor any of
their officers, trustees, agents or shareholders shall have any liability with
respect to such representations or warranties after the Closing Date. This
provision shall not protect any officer, trustee or agent of the Acquired Fund
or the Acquiring Fund, or of SunAmerica Equity Funds or SunAmerica Style Select
Series, Inc. against any liability to the entity for which such Person serves
in such capacity, or to its shareholders, to which such Person would be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties in the conduct of such office.
11. Other Matters
a. Obligations under Massachusetts Law. Copies of the Acquired Fund's
Declaration of Trust are on file with the Secretary of State of the
Commonwealth of Massachusetts and notice is hereby given that this instrument
is executed on behalf of the Trustees of the Acquired Fund, as trustees and not
individually, and that the obligations of or arising out of this instrument are
not binding upon any of the trustees, officers, employees, agents or
shareholders of SunAmerica Equity Funds individually, but are binding solely
upon the assets and property of the Acquired Fund.
b. Further Assurances. Each party hereto covenants and agrees to provide
the other party hereto and its agents and counsel with any and all
documentation, information, assistance and cooperation that may become
necessary from time to time with respect to the transactions contemplated by
this Agreement.
c. Notices. Any notice, report or other communication hereunder shall be in
writing and shall be given to the Person entitled thereto by hand delivery,
prepaid certified mail or overnight service, addressed to the Acquired Fund or
the Acquiring Fund, as applicable, at the address set forth below. If the
notice is sent by certified mail, it shall be deemed to have been given to the
Person entitled thereto upon receipt and if the notice is sent by overnight
service, it shall be deemed to have been given to the Person entitled thereto
one (1) business day after it was deposited with the courier service for
delivery to that Person. Notice of any change in any address listed below also
shall be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived by the party entitled to
receive such notice.
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If to the Acquiring Fund SunAmerica Mutual Funds
or the Acquired Fund, to: Harborside Financial
Center ▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
With a copy to: Shearman & Sterling
LLP ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
d. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated herein and
supersedes all previous agreements or understandings between the parties
related to such matters.
e. Amendment. Except as set forth in Section 9(d) hereof, this Agreement
may be amended, modified, superseded, canceled, renewed or extended, and the
terms or covenants hereof may be waived, only by a written instrument executed
by all of the parties hereto or, in the case of a waiver, by the party waiving
compliance; provided that, no such amendment may have the effect of changing
the provisions for determining the number of Corresponding Shares to be issued
to the Acquired Fund shareholders under this Agreement to the detriment of such
shareholders without their approval. Except as otherwise specifically provided
in this Agreement, no waiver by either party hereto of any breach by the other
party hereto of any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar provision
or condition at the same or at any prior or subsequent time.
f. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York applicable to agreements made and to be performed in
said state, without giving effect to the principles of conflict of laws thereof.
g. Assignment. This Agreement shall not be assigned by any of the parties
hereto, in whole or in part, whether by operation of law or otherwise, without
the prior written consent of the other party hereto. Any purported assignment
contrary to the terms hereof shall be null, void and of no effect. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
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h. Costs of the Reorganization. All costs of the Reorganization shall be
borne by AIG SunAmerica Asset Management Corp. or an affiliate thereof,
regardless of whether the reorganizations are consummated.
i. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
j. Headings. Headings to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading of any section.
k. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original but all such counterparts together shall constitute but one
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
ATTEST SUNAMERICA EQUITY FUNDSON BEHALF
OFSUNAMERICA FOCUSED
DIVIDENDSTRATEGY PORTFOLIO
By: By:
---------------------------------- ---------------------------------
Name: Name:
Title: Title:
ATTEST SUNAMERICA STYLE SELECT SERIES,INC.
ON BEHALF OFSUNAMERICA FOCUSED
DIVIDENDSTRATEGY PORTFOLIO
By: By:
---------------------------------- ---------------------------------
Name: Name:
Title: Title:
25
