Sub-Item 77Q1(g): Copies of any merger or consolidation agreement, and other
documents relative to the information sought in Sub-Item 77M
AGREEMENT AND PLAN OF REORGANIZAION
This AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as of the
27th day of February, 2012, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust, a Delaware
statutory trust (the Acquiring Trust), on behalf of its series ▇▇▇▇▇▇▇
Sachs Rising Dividend Growth Fund (the Acquiring Fund), with its principal
place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
Dividend Growth Trust, a Delaware statutory trust (the Acquired Trust), on
behalf of its sole series Rising Dividend Growth Fund (the Acquired Fund),
with its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and, solely for purposes of
paragraph 9.2 hereof, ▇▇▇▇▇▇▇ Sachs Asset Management, L.P (GSAM or the
Acquiring Fund Adviser ). The Acquiring Fund and the Acquired Fund are
sometimes referred to collectively herein as the Funds and individually as
a Fund.
The (1) transfer of all of the assets of the Acquired Fund to the Acquiring
Fund in exchange solely for (A) the issuance of Class A and Institutional
Class shares of beneficial interest of the Acquiring Fund (collectively, the
Acquiring Fund Shares and each, an Acquiring Fund Share) to the Acquired
Fund, and (B) the assumption by the Acquiring Fund of all of the liabilities
of the Acquired Fund on the closing date of the Reorganization (the Closing
Date), and (2) distribution by the Acquired Fund, on or promptly after the
Closing Date as provided herein, of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in liquidation and dissolution of the
Acquired Fund, all upon the terms and conditions hereinafter set forth in
this Agreement (collectively, the Reorganization), are intended to
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the Code). This Agreement is
intended to be and is adopted as a plan of reorganization within the
meaning of Treasury Regulations Section 1.368-2(g).
WHEREAS, immediately prior to the Reorganization, Class C Shares of the
Acquired Fund will be converted to Class A Shares of the Acquired Fund.
WHEREAS, each of the Acquired Fund and the Acquiring Fund is a series of an
open-end management investment company registered pursuant to the Investment
Company Act of 1940, as amended (the Investment Company Act).
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the Acquired Trust and the Board of
Trustees of the Acquiring Trust have determined that the Reorganization is in
the best interests of the Acquired Fund shareholders and the Acquiring Fund
shareholders, respectively, and is not dilutive of the interests of those
shareholders.
Now, THEREFORE, in consideration of the premises of the covenants and
Agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions set forth herein and on the basis of
the representations and warranties contained herein, the Acquired Fund will
transfer all of its assets as set forth in Paragraph 1.2 hereof (the
Acquired Assets) to the Acquiring Fund, free and clear of all liens and
encumbrances and subject to no restrictions on the full transfer thereof
(other than those arising under the Securities Act of 1933, as amended (the
Securities Act)), and the Acquiring Fund agrees in exchange therefore: (i)
to issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, of each class with an aggregate net asset
value (NAV) equal to the NAV of the Acquired Fund attributable to the
corresponding class of the Acquired Funds shares, as determined in the
manner set forth in Paragraphs 2.1 and 2.2 hereof; and (ii) to assume all of
the liabilities and obligations of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Closing Date (collectively, the
Assumed Liabilities). Such transactions shall take place at the Closing (as
defined in Paragraph 3.1 below). For purposes of this Agreement, the Class A
shares of the Acquired Fund correspond to the Class A shares of the Acquiring
Fund, and the Class I shares of the Acquired Fund correspond to the
Institutional Class shares of the Acquiring Fund, and the term Acquiring
Fund Shares should be read to include each such class of shares of the
Acquiring Fund.
1.2 (a) The Acquired Assets shall consist of all of the Acquired Funds
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the Acquired Trust in
respect of the Acquired Fund, all other intangible property owned by the
Acquired Fund, originals or copies of or access to all books and records of
the Acquired Fund, and all other assets of the Acquired Fund on the Closing
Date. The Acquiring Fund shall also be entitled to receive copies of or
access to all records that the Acquired Trust is required to maintain under
the Investment Company Act, and the rules of the Securities and Exchange
Commission (the Commission) promulgated thereunder, or other applicable
laws, to the extent such records pertain to the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all of
the Acquired Funds securities and other assets at least fifteen business
days prior to the Closing Date. The Acquired Fund reserves the right to
sell any of such securities or other assets beforethe Closing Date (except to
the extent sales may be limited by representations of the Acquired Fund made
in connection with the issuance of the tax opinion provided for in Paragraph
8.5 hereof) and agrees not to acquire any portfolio security that is not an
eligible investment for, or that would violate an investment policy or
restriction of, the Acquiring Fund. At least ten business days prior to the
Closing Date, the Acquiring Fund will advise the Acquired Fund of any
investments shown on the list of the Acquired Funds securities provided
pursuant to this paragraph which the Acquiring Fund would not be permitted to
hold (i) because such investments are not eligible investments for, or that
would violate an investment policy or restriction of, the Acquiring Fund;
(ii) under applicable law; or (iii) because the transfer of such investments
would result in material operational or administrative difficulties to the
Acquiring Fund or GSAM in connection with facilitating the orderly transition
of the Funds assets. Under such circumstances, to the extent practicable,
the Acquired Fund will, if requested by the Acquiring Fund and, to the extent
permissible and consistent with its own investment objectives and policies
and the fiduciary duties of the Acquired Funds investment adviser, sell such
securities or other assets before the Closing Date.
1.3 The Acquired Fund will use its best efforts to discharge all of its known
Liabilities and obligations that are or will become due prior to the Closing.
If prior to the Effective Time either party identifies a liability that the
parties mutually agree should not be assumed by the Acquiring Fund, such
liability shall be excluded from the Assumed Liabilities and shall be listed
on a Schedule of Excluded Liabilities to be signed by the parties at Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
Liquidation Date), the Acquired Trust shall liquidate the Acquired Fund and
distribute pro rata to the Acquired Funds shareholders of record, determined
as of the Valuation Time (the Acquired Fund Shareholders), the Acquiring
Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof.
Each Acquired Fund Shareholder shall receive the number of full and
fractional Acquiring Fund Shares of the class corresponding to the class of
shares of beneficial interest in the Acquired Fund (the Acquired Fund
Shares) held by such Acquired Fund Shareholder that have an aggregate NAV
equal to the aggregate NA V of the Acquired Fund Shares held of record by
such Acquired Fund Shareholder on the Closing Date. Such liquidation and
distribution will be accomplished by the Acquired Trust instructing the
Acquiring Trust to transfer the 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 established and
maintained by the Acquiring Funds transfer agent in the names of the
Acquired Fund Shareholders and representing the respective pro rata number of
the Acquiring Fund Shares due the Acquired Fund Shareholders. The Acquired
Trust shall promptly provide the Acquiring Trust with evidence of such
liquidation and distribution. All issued and outstanding Acquired Fund Shares
will simultaneously be cancelled on the books of the Acquired Fund, and the
Acquired Fund will be terminated as soon as reasonably practicable after such
distribution, but in all events within six months after the Closing Date. The
Acquiring Fund shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Funds transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be
deemed to be cancelled and shall no longer evidence ownership of Acquired
Fund Shares.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund Shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
1. 7 Any reporting responsibility of the Acquired Trust with respect to the
Acquired Fund, including, but not limited to, the responsibility for filing
of regulatory reports, Tax Returns (as defined in Paragraph 4. 1 (h)(M)
hereof), or other documents with the Commission, any state securities
commissions, and any federal, state or local tax authorities or any other
relevant regulatory authority, is and shall remain the responsibility of the
Acquired Trust. The Acquired Trust agrees to file such regulatory reports,
Tax Returns, and other documents on a timely basis, The Acquiring Trust shall
fully cooperate with the Acquired Trust to the extent necessary for such
reporting responsibilities to be discharged.
1.8 No sales load, contingent deferred sales charge, commission, redemption
fee or other transactional fee will be charged as a result of the
Reorganization. With respect to shares of the Acquired Fund, for purposes of
determining any contingent deferred sales charge applicable to corresponding
Acquiring Fund shares received as a result of the Reorganization, the same
Sales charge and schedule that applied to such Acquired Fund shares prior to
the Reorganization will apply after the Reorganization and the holding period
will be calculated from the date such Acquired Fund shares were initially
issued by the Acquired Fund.
2. VALUATION
2.1 The NAV per share of each class of Acquiring Fund Shares and the NAV per
share of each class of the Acquired Fund shall, in each case, be determined
as of the close of regular trading on the New York Stock Exchange (generally,
4:00 p.m., Eastern time) on the business day preceding the Effective Time, or
such earlier or later date and time as may be mutually agreed in writing by
an authorized officer of each of the parties (the Valuation Time). The NAV
of the Acquired Fund Shares and of the Acquiring Fund Shares shall be
computed in the manner set forth in the Acquiring Trusts Declaration of
Trust or By-Laws and in the Acquiring Funds then-current prospectus and
statement of additional information.
2.2 The number of shares of each class of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Acquired Assets and
the assumption of the Assumed Liabilities shall be determined by the
Acquiring Fund Adviser by dividing the NA V of the Acquired Fund attributable
to each class of Acquired Fund shares, as determined in accordance with
Paragraph 2.1 hereof, by the NAV of each Acquiring Fund Share of the
Corresponding class, as determined in accordance with Paragraph 2.1 hereof.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund
Adviser and Huntington Asset Services, Inc. (the Acquired Fund
Administrator), respectively, to deliver a copy of its valuation report to
the other party at the Closing. All computations of value shall be made by
the Acquiring Fund Adviser and the Acquired Fund Administrator, in each case
in accordance with its regular practice as pricing agent for the Acquiring
Fund and the Acquired Fund, as applicable.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be February 27,2012, or such earlier or later date
as the parties may agree to in writing. All acts necessary to consummate the
Reorganization (the Closing) shall be deemed to take place simultaneously
immediately prior to the opening of business on February 27,2012, or on such
other date as may be mutually agreed in writing by an authorized officer of
each party (the Effective Time). The Closing shall be held at the offices
of [.], or at such other place as the parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the
name of Huntington National Bank (the Acquired Fund Custodian) as record
holder for the Acquired Fund shall be presented by the Acquired Fund to State
Street Bank and Trust Company (the Acquiring Fund Custodian) for
examination no later than three business days preceding the Closing Date. The
Acquired Trust, on behalf of the Acquired Fund, shall instruct the Acquired
Fund Custodian to deliver any such portfolio securities that the Acquired
Fund Custodian so holds at the Valuation Time to the Acquiring Fund Custodian
for the account of the Acquiring Fund as of the Effective Time, duly endorsed
in proper form for transfer, in such condition as to constitute good delivery
thereof in accordance with the custom of brokers, and accompanied by all
necessary federal and state stock transfer stamps or a check for the
appropriate purchase price thereof. Portfolio securities held of record by
the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund
shall be delivered at the Effective Time by the Acquired Fund Custodian
through the Depository Trust Company to the Acquiring Fund Custodian and by
the Acquiring Fund Custodian recording the beneficial ownership thereof by
the Acquiring Fund on the Acquiring Fund Custodians records. Any cash
balances maintained by the Acquired Fund Custodian shall be delivered at the
Effective Time by the Acquired Fund Custodian transmitting immediately
available funds by wire transfer to the Acquiring Fund Custodian and the
Acquiring Fund Custodian crediting such funds to the account of the Acquiring
Fund.
3.3 The Acquired Fund Custodian shall deliver at the Closing a certificate of
an authorized officer stating that: (a) the Acquired Assets have been
delivered in proper form to the Acquiring Fund as of the Effective Time, and
(b) all necessary transfer taxes including all applicable federal and state
stock transfer stamps, if any, have been paid, or provision for payment has
been made in conjunction with the delivery of portfolio securities as part of
the Acquired Assets.
3.4 If immediately prior to the Valuation Time (a) the New York Stock
Exchange is closed to trading or trading thereon shall be restricted or (b)
trading or the reporting of trading on such exchange or elsewhere is
disrupted so that accurate appraisal of the N A V of the Acquiring Fund
Shares or the Acquired Fund pursuant to Paragraph 2.1 hereof is
impracticable, the Closing Date, Valuation Time and Effective Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed and reporting shall have been restored or such later date
as may be mutually agreed in writing by an authorized officer of each party.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time,
certified by the President or Vice President or a Secretary or Assistant
Secretary of the Acquired Trust and its Treasurer, Assistant Treasurer or
other authorized officer (the Shareholder List) as being an accurate record
of the information (a) provided by the Acquired Fund Shareholders, (b)
provided by the Acquired Fund Custodian, or (c) derived from the Acquired
Trusts records by such officers or one of the Acquired Trusts service
providers.
The Acquiring Fund shall issue and deliver to the Acquired Fund a
confirmation evidencing the Acquiring Fund Shares to be credited at the
Effective Time, or provide evidence satisfactory to the Acquired Fund that
such Acquiring Fund Shares have been credited to the Acquired Funds account
on the books of the Acquiring Fund. At the Closing, each party shall deliver
to the other such bills of sale, checks, assignments, stock certificates,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on Schedule 4.1 of this Agreement, the Acquired
Trust, on behalf of the Acquired Fund, represents, warrants and covenants to
the Acquiring Trust, on behalf of the Acquiring Fund, which representations,
warranties and covenants will be true and correct on the date hereof and on
the Closing Date as though made on and as of the Closing Date, as follows:
(a) The Acquired Fund is a series of the Acquired Trust. The Acquired Trust
is a statutory trust validly existing and in good standing under the laws of
the State of Delaware and has the power to own all of its properties and
assets and, subject to approval by the Acquired Funds shareholders, to
perform its obligations under this Agreement. The Acquired Fund is not
required to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would subject it to any material
liability or disability. The Acquired Fund has all necessary federal, state
and local authorizations to own all of its properties and assets and to
carryon its business as now being conducted;
(b) The Acquired Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The Acquired Trust is not in violation of, and the execution and delivery
of this Agreement and the performance of its obligations under this Agreement
on behalf of the Acquired Fund will not result in a violation of, any
provision of the Acquired Trusts Trust Instrument or By-Laws or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Fund to which the Acquired Trust, on behalf of the
Acquired Fund, is a party or by which the Acquired Fund or any of its assets
are bound;
(d) No litigation or administrative proceeding or investigation of or before
any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Funds properties
or assets. The Acquired Trust knows of no facts which could reasonably be
expected to form the basis for the institution of such proceedings.
Neither the Acquired Trust nor the Acquired Fund is a party to or subject to
the provisions of any order, decree or judgment of any court or governmental
body which materially adversely affects the Acquired Funds business or its
ability to consummate the transactions contemplated herein or would be
binding upon the Acquiring Fund as the successor to the Acquired Fund;
(e) Neither the Acquired Trust, on behalf of the Acquired Fund, nor the
Acquired Fund has any material contracts or other commitments (other than
this Agreement, agreements for the purchase and sale of securities or other
permitted investments, and those contracts listed in Schedule 4.1 (e") which
will not be terminated at or prior to the Closing Date and no such
termination will result in liability to the Acquired Fund (or the Acquiring
Fund);
(f) The statement of assets and liabilities of the Acquired Fund, the related
statements of operations and changes in net assets, and the schedule of
investments, and the notes thereto, as of and for the fiscal year ended
September 30, 2011, have been audited by an independent registered public
accounting firm retained by the Acquired Fund, are in accordance with
generally accepted accounting principles (GAAP) consistently applied, and
fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the
period then ended, and the Acquired Fund had no known liabilities of a
material amount as of the date thereof, whether actual or contingent, other
than those disclosed therein. The statement of assets and liabilities will be
in accordance with GAAP consistently applied and will fairly reflect, in all
material respects, the financial condition of the Acquired Fund as of such
date and the results of its operations for the period then ended. No
significant deficiency, material weakness, fraud, significant change or other
factor that could significantly affect the internal controls of the Acquired
Fund has been disclosed or is required to be disclosed in the Acquired Funds
reports on Form N-CSR to enable the chief executive officer and chief
financial officer or other officers of the Acquired Trust to make the
certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and no deficiency,
weakness, fraud, change, event or other factor exists with respect to the
Acquired Fund that will be required to be disclosed in the Acquiring Funds
Form N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically disclosed
in the Acquired Funds prospectus or its statement of additional information
as in effect on the date of this Agreement, there has not been any material
adverse change in the Acquired Funds financial condition, assets,
liabilities, business or prospects, or any incurrence by the Acquired Fund of
indebtedness, except for normal contractual obligations incurred in the
ordinary course of business or in connection with the settlement of purchases
and sales of portfolio securities. For the purposes of this subparagraph (g)
(but not for any other purpose of this Agreement), a decline in NAV per
Acquired Fund Share arising out of its normal investment operations or a
decline in market values of securities in the Acquired Funds portfolio or a
decline in net assets of the Acquired Fund as a result of redemptions shall
not constitute a material adverse change;
(h) (A) The Acquired Fund is the sole series of the Acquired Trust. For each
period for which the Acquired Trust had more than one series, the Acquired
Fund was a separate series of the Acquired Trust treated as a separate
corporation from each other series of the Acquired Trust under Section 851(g)
of the Code. For purposes of the remainder of this Paragraph 4.1(h) (but
not for any other purpose of this Agreement), references to the Acquired Fund
include the Acquired Trust, for periods during which the Acquired Fund is or
has been the sole series of the Acquired Trust, and the Acquired Fund, for
periods during which the Acquired Trust has had more than one series;
(B) For each taxable year of its existence, the Acquired Fund has had in
effect an election to be a regulated investment company under Subchapter M of
the Code, has satisfied, and, for the current taxable year, expects to
satisfy, all of the requirements of Subchapter M of the Code for treatment as
a regulated investment company, and for each such taxable year, the Acquired
Fund has been eligible to compute its federal income tax under Section 852 of
the Code. The Acquired Fund will qualify as such as of the Closing Date and
will satisfy the diversification requirements of Section 851 (b)(3) of the
Code without regard to the last sentence of Section 851 (d)( 1) of the Code.
The Acquired Fund has not taken any action, caused any action to be taken,
failed to take any action, or caused any failure to take any action which
action or failure could cause the Acquired Fund to fail to qualify as a
regulated investment company under the Code. The Acquired Fund does not and
will not have any tax liability under Section 4982 of the Code for any period
ending on or before the Closing Date. The Acquired Fund has no earnings or
profits accumulated with respect to any taxable year in which the provisions
of Subchapter M of the Code did not apply to the Acquired Fund. All dividends
paid by the Acquired Fund at any time prior to the Closing Date have
qualified or will qualify for the dividends-paid deduction as defined in
Section 561 of the Code;
(C) Within the times and in the manner prescribed by law, the Acquired Fund
has properly filed on a timely basis all Tax Returns (as defined below) that
it was required to file, and all such Tax Returns were complete and accurate
in all material respects. The Acquired Fund has not been informed by any
jurisdiction that the jurisdiction believes that the Acquired Fund was
required to file any Tax Return that was not filed and the Acquired Fund does
not know of any basis upon which a jurisdiction could assert such a position;
(D) The Acquired Fund has timely paid, in the manner prescribed by law, all
Taxes (as defined below) that were due and payable or that were claimed to be
due;
(E) The Acquired Fund has not waived or extended any applicable statute of
Limitations relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any examinations of the Tax
Returns of the Acquired Fund are currently in progress or threatened, and no
deficiencies have been asserted or assessed against the Acquired Fund as a
result of any audit by the Internal Revenue Service or any state, local or
foreign taxing authority, and, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquired Fund is not and
has never been a member of a group of corporations with which it has filed
(or been required to file) consolidated, combined or unitary Tax Returns. The
Acquired Fund is not a party to any Tax allocation, sharing, or
indemnification agreement;
(H) The unpaid Taxes of the Acquired Fund for Tax periods through the Closing
Date do not exceed the accruals and reserves for Taxes (excluding accruals
and reserves for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the Statement of Assets and
Liabilities, as defined in Paragraph 5.7 hereof, rather than in any notes
thereto. All Taxes that the Acquired Fund is or was required by law to
withhold or collect have been duly withheld or collected and, to the extent
required, have been timely paid to the proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or made available
to the Acquiring Fund complete and accurate copies of all Tax Returns of the
Acquired Fund, together with all related examination reports and statements
of deficiency for all periods not closed under the applicable statutes of
limitations and complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests and any similar documents
submitted by, received by or agreed to by or on behalf of the Acquired Fund.
The Acquired Fund has disclosed on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement
of federal income Tax within the meaning of Section 6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to undergo, and is
not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its
method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481 of the Code. The Acquired Fund (including the
Acquiring Fund as its successor) will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result
of any (i) change in method of accounting for a taxable period ending on or
prior to the Closing Date; (ii) closing agreement as described in Section
7121 of the Code (or any corresponding or similar provision of state, local
or foreign income Tax law) executed on or prior to the Closing Date; (iii)
installment sale or open transaction disposition made on or prior to the
Closing Date; or (iv) prepaid amount received on or prior to the Closing
Date;
(K) There are (and as of immediately following the Closing there will be) no
liens on the assets of the Acquired Fund relating to or attributable to
Taxes, except for Taxes not yet due and payable;
(L) The Tax bases of the assets of the Acquired Fund are accurately reflected
on the Acquired Funds Tax books and records; and
(M) For purposes of this Agreement, Taxes or Tax shall mean all taxes,
charges, fees, duties, deficiencies, customs, levies or other similar
assessments or liabilities, including without limitation income, gross
receipts, ad valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, unemployment,
insurance, social security, business license, business organization,
environmental, workers compensation, payroll, profits, license, lease,
service, service use, severance, stamp, occupation, windfall profits,
customs, duties, franchise and other taxes imposed by the United States of
America or any state, local or foreign government, or any agency thereof, or
other political subdivision of the United States or any such government, and
any interest, fines, penalties, assessments or additions to tax resulting
from, attributable to or incurred in connection with any tax or any contest
or dispute thereof; and Tax Returns shall mean all reports, returns,
declarations, statements or other information required to be supplied to a
governmental or regulatory authority or agency, in connection with Taxes and
any associated schedules, attachments, work papers, or other information,
including any attachments, produced in connection with such items, as well as
any information returns required by any governmental or regulatory authority
to be provided to any other person in connection with Taxes;
(i) All issued and outstanding Acquired Fund Shares are, and on the Closing
Date will be, validly issued and outstanding, fully paid and non-assessable
by the Acquired Trust. All of the issued and outstanding Acquired Fund Shares
will, at the time of Closing, be held of record by the persons and in the
amounts set forth in the Shareholder List delivered at the Closing pursuant
to Paragraph 3.5 hereof. There are not outstanding any options, warrants or
other rights to subscribe for or purchase any Acquired Fund Shares, nor is
there outstanding any security convertible into any Acquired Fund Shares;
G) At the Closing Date, the Acquired Fund will have good and marketable title
to the Acquired Assets, and full right, power and authority to sell, assign,
transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon
delivery and payment for the Acquired Assets, the Acquiring Fund will acquire
good and marketable title thereto, free of any liens or other encumbrances
and subject to no restrictions on the full transfer thereof, except such
restrictions as might arise under the Securities Act and, as previously
disclosed to the Acquiring Fund, such restrictions generally applicable to
the Acquired Assets of the type being transferred in the ordinary course;
(k) The Acquired Trust has the trust power and authority, on behalf of the
Acquired Fund, to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquired
Trusts Board of Trustees, and, subject to the approval of the Acquired
Funds shareholders, assuming due authorization, execution and delivery by
the Acquiring Trust, on behalf of the Acquiring Fund, this Agreement will
constitute a valid and binding obligation of the Acquired Trust, 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;
(1) The information to be furnished in writing by the Acquired Fund to the
Acquiring Fund for use in applications for orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby and any information necessary to compute
the total return of the Acquired Fund shall be accurate and complete and
shall comply in all material respects with federal securities and other laws
and regulations applicable thereto or the requirements of any form for which
its use is intended, and shall not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the information
provided not misleading;
(m) The information included in the proxy statement (the Proxy Statement)
Forming part of the Acquiring Trusts Registration Statement on Form N-14
filed in connection with this Agreement (the Registration Statement) that
has been furnished by the Acquired Fund to the Acquiring Fund for inclusion
in the Registration Statement or information included in the Registration
Statement concerning the Acquired Trust or the Acquired Fund that has been
reviewed by the Acquired Fund, on the effective date of that Registration
Statement and on the Closing Date, will conform in all material respects to
the applicable requirements of the Securities Act, the Securities Exchange
Act of 1934, as amended (the Exchange Act), and the Investment Company Act
and the rules and regulations of the Commission promulgated thereunder, and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(n) Upon the effectiveness of the Registration Statement, no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the Acquired Fund of the transactions
contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares have been offered
for sale and sold in compliance in all material respects with all applicable
federal and state securities laws;
(p) The current prospectus and statement of additional information of the
Acquired Fund and each prospectus and statement of additional information of
the Acquired Fund used during the five-year period ending on the date of this
Agreement, and any amendments or supplements thereto, conform or conformed at
the time of their distribution to the public in all material respects to the
applicable requirements of the Securities Act and the Investment Company Act
and the rules and regulations of the Commission thereunder and do not or did
not as of their dates or the dates of their distribution to the public
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which such statements were made,
not materially misleading;
(q) The Acquired Fund currently complies in all material respects with, and
for the five year period ending on the date of this Agreement, has complied
in all material respects with, the requirements of, and the rules and
regulations under, the Investment Company Act, the Securities Act, the
Exchange Act, state Blue Sky laws and all other applicable federal and
state laws or regulations. The Acquired Fund currently complies in all
material respects with, and for the five-year period ending on the date of
this Agreement has complied in all material respects with, all investment
objectives, policies, guidelines and restrictions and any compliance
procedures established by the Acquired Trust with respect to the Acquired
Fund. All advertising and sales material used by the Acquired Fund complies
in all material respects with, and for the five-year period ending on the
date of this Agreement has complied in all material respects with, the
applicable requirements of the Securities Act, the Investment Company Act,
the rules and regulations of the Commission promulgated thereunder, and, to
the extent applicable, the Conduct Rules of the Financial Industry Regulatory
Authority (FINRA) and any applicable state regulatory authority. All
registration statements, prospectuses, reports, proxy materials or other
filings required to be made or filed with the Commission, FINRA or any state
securities authorities by the Acquired Fund during the five-year period
ending on the date of this Agreement have been duly filed and have been
approved or declared effective, if such approval or declaration of
effectiveness is required by law. Such registration statements, prospectuses,
reports, proxy materials and other filings under the Securities Act, the
Exchange Act and the Investment Company Act (i) are or were in compliance in
all material respects with the requirements of all applicable statutes and
the rules and regulations promulgated thereunder and (ii) do not or did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not false or
misleading;
(r) Neither the Acquired Fund nor, to the knowledge of the Acquired Trust,
any affiliated person of the Acquired Fund has been convicted of any felony
or misdemeanor, described in Section 9( a) (1 ) of the Investment Company
Act, nor, to the knowledge of the Acquired Trust, has any affiliated person
of the Acquired Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an
investment adviser under Section 203( e) of the Investment Advisers Act of
1940, as amended (the Investment Advisers Act), or Rule 206(4 )-4(b)
thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for
disqualification as an investment adviser, employee, officer or director of
an investment company under Section 9 of the Investment Company Act; and
(s) The tax representation certificate to be delivered by the Acquired Trust
on behalf of the Acquired Fund to the Acquiring Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LLP at the Closing pursuant to Paragraph 7.4 hereof (the Acquired Trust Tax
Representation Certificate) will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading; and
4.2 Except as set forth on
Schedule 4.2 of this Agreement, the Acquiring Trust, on behalf of the
Acquiring Fund, represents, warrants and covenants to the Acquired Trust, on
behalf of the Acquired Fund, which representations, warranties and covenants
will be true and correct on the date hereof and on the Closing Date as though
made on and as of the Closing Date, as follows:
(a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring Fund
has not commenced operations and will not do so until the Closing. The
Acquiring Trust is a statutory trust duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Acquiring Trust
has the power to own all of its properties and assets and to perform its
obligations under this Agreement. The Acquiring Fund is not required to
qualify to do business in any jurisdiction in which it is not so qualified or
where failure to qualify would subject it to any material liability or
disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carryon its
business as now being conducted;
(b) The Acquiring Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The Acquiring Trusts registration statement on Form N-IA with respect to
the Acquiring Fund that will be in effect on the Closing Date, and the
prospectus and statement of additional information of the Acquiring Fund
included therein, will conform in all material respects with the applicable
requirements of the Securities Act and the Investment Company Act and the
rules and regulations of the Commission thereunder, and will not as of the
effective date thereof and will not as of the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading;
(d) The Registration Statement with respect to the Acquiring Fund, and any
Amendments or supplements thereto in effect on or prior to the Closing Date
included in the Registration Statement (other than information furnished by
the Acquired Fund for inclusion therein or information included therein
concerning the Acquired Trust or the Acquired Fund that has been reviewed by
the Acquired Fund, as covered by the Acquired Funds representation, warranty
and covenant in Paragraph 4.1 (m) hereof) will conform in all material
respects to the applicable requirements of the Securities Act and the
Investment Company Act and the rules and regulations of the Commission
thereunder. Neither the Registration Statement nor the Proxy Statement (other
than information furnished by the Acquired Fund for inclusion therein or
information included therein concerning the Acquired Trust or the Acquired
Fund that has been reviewed by the Acquired Fund, as covered by the Acquired
Funds representation, warranty and covenant in Paragraph 4.1 (m) hereof)
will contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(e) The Acquiring Trust is not in violation of, and the execution and
delivery of this Agreement and performance of its obligations under this
Agreement on behalf of the Acquiring Fund will not result in a violation of,
any provision of the Acquiring Trusts Declaration of Trust or By-Laws or any
material agreement, indenture, instrument, contract, lease or other
undertaking with respect to the Acquiring Fund to which the Acquiring Trust
is a party or by which the Acquiring Fund or any of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or before
any court or governmental body is currently pending or threatened against the
Acquiring Fund or any of the Acquiring Funds properties or assets. The
Acquiring Trust knows of no facts which could reasonably be expected to form
the basis for the institution of such proceedings. Neither the Acquiring
Trust nor the Acquiring Fund is a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body which
materially adversely affects the Acquiring Funds business or its ability to
consummate the transactions contemplated herein;
(g) The Acquiring Fund is a newly-formed separate series of Acquiring Trust
that, immediately after the Reorganization, will be treated as a separate
corporation from each other series of the Acquiring Trust under Section 851
(g) of the Code. Prior to the Closing Date, the Acquiring Fund will have no
assets, liabilities or operations of any kind;
(h) The authorized capital of the Acquiring Fund consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share. The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the
account of the Acquired Fund Shareholders pursuant to the terms of this
Agreement will have been duly authorized on the Closing Date and, when so
issued and delivered, will be validly issued and outstanding, fully paid and
non-assessable. 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;
(i) Upon consummation of the Reorganization, all issued and outstanding
Acquiring Fund Shares, including those Acquiring Fund Shares to be delivered
by the Acquiring Fund in accordance with paragraph 1.4, will be validly
issued and outstanding, fully paid and nonassessable and will have been
offered for sale and sold in every state and the District of Columbia in
compliance in all material respects with all applicable federal and state
securities laws;
(j) The Acquiring Trust has the trust power and authority, on behalf of the
Acquiring Fund, to enter into and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquiring
Trusts Board of Trustees, and, assuming due authorization, execution and
delivery by the Acquired Trust, on behalf of the Acquired Fund, this
Agreement will constitute a valid and binding obligation of the Acquiring
Trust, on behalf 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;
(k) The information to be furnished in writing by the Acquiring Fund or the
Acquiring Fund Adviser for use in applications for orders, registration
statements, proxy materials and other documents 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 or
the requirements of any form for which its use is intended, and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the information provided not misleading;
(1) No consent, approval, authorization or order of or filing with any court
or governmental authority is required for the execution of this Agreement or
the consummation of the transactions contemplated by the Agreement by the
Acquiring Fund, except for the registration of the Acquiring Fund Shares
under the Securities Act and the Investment Company Act;
(m) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Trust,
any affiliated person of the Acquiring Fund has been convicted of any
felony or misdemeanor, described in Section 9(a)(1) of the Investment Company
Act, nor, to the knowledge of the Acquiring Trust, has any affiliated person
of the Acquiring Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an
investment adviser under Section 203 (e) of the Investment Advisers Act or
Rule 206(4 )-4(b) thereunder or of a brokerdealer under Section 15 of the
Exchange Act, or for disqualification as an investment adviser, employee,
officer or director of an investment company under Section 9 of the
Investment Company Act; and
(n) The tax representation certificate to be delivered by the Acquiring Trust
on behalf of the Acquiring Fund to the Acquired Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LLP at the Closing pursuant to Paragraph 6.3 hereof (the Acquiring Trust Tax
Representation Certificate) will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading.
5. COVENANTS
5.1 The Acquired Fund will operate its business in the ordinary course of
business between the date hereof and the Closing Date. It is understood that
such ordinary course of business will include the declaration and payment of
customary dividends and other distributions and any other dividends and other
distributions necessary or advisable (except to the extent dividends or other
distributions that are not customary may be limited by representations made
in connection with the issuance of the tax opinion described in Paragraph 8.5
hereof), in each case payable either in cash or in additional shares.
5.2 The Acquired Trust will call and hold a special meeting of the Acquired
Funds shareholders to consider approval of this Agreement and act upon the
matters set forth in the Proxy Statement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and
Proxy Statement (collectively, Proxy Materials) to be used in connection
with such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The Acquired Trust will provide the Acquiring Fund
with information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of
making any distribution thereof other than in accordance with the terms of
this Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the
beneficial ownership of the Acquired Fund Shares.
5.6 Subject to the provisions of this Agreement, each Fund will take, or
cause to be taken, all actions, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund as of the Closing
Date a statement of assets and liabilities of the Acquired Fund as of the
Closing Date (Statement of Assets and Liabilities) setting forth the NAV
(as computed pursuant to Paragraph 2.1 hereof) of the Acquired Fund as of the
Valuation Time, which statement shall be prepared in accordance with GAAP
consistently applied and will fairly reflect, in all material respects, the
financial condition of the Acquired Fund as of such date and shall be
certified by the Acquired Trusts Treasurer or Assistant Treasurer. As
promptly as practicable, but in any case within 30 days after the Closing
Date, the Acquired Trust shall furnish to the Acquiring Fund, in such form as
is reasonably satisfactory to the Acquiring Fund, a statement of the earnings
and profits of the Acquired Fund for federal income tax purposes, and of any
capital loss carryovers and other items that will be carried over to the
Acquiring Fund under the Code, which statement will be certified by the
Treasurer or Assistant Treasurer of the Acquired Trust.
5.8 Neither Fund shall take any action that is inconsistent with the
representations set forth herein or, with respect to the Acquired Fund, in
the Acquired Trust Tax Representation Certificate and, with respect to the
Acquiring Fund, the Acquiring Trust Tax Representation Certificate.
5.9 Unless otherwise required pursuant to a determination within the
meaning of Section 1313(a) of the Code, the parties hereto shall treat and
report the transactions contemplated hereby as a reorganization within the
meaning of Section 368(a) of the Code, and shall not take any position
inconsistent with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, neither Fund will knowingly take any action, cause any action to be
taken, fail to take any action or cause any failure to take any action, which
action or failure to act could prevent either Fund from qualifying for
treatment as a regulated investment company under the provisions of
Subchapter M of the Code, except for any action specifically contemplated by
this Agreement.
From and after the date of this Agreement and through the time of the
Closing, the Acquired Fund shall use its reasonable best efforts to qualify
for treatment as a regulated investment company under the provisions of
Subchapter M of the Code.
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns
for any taxable periods that end on or before the Closing Date and shall
timely file, or cause to be timely filed, all such Tax Returns. Each Fund
shall make any payments of Taxes required to be made by it with respect to
any such Tax Returns.
6. CONDITIONS PRECEDENT To OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
6.1 All representations and warranties by the Acquiring Trust on behalf 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 Trust shall have delivered to the Acquired Trust on the
Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring
Fund executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquired Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust made in this Agreement
on behalf of the Acquiring Fund are true and correct in all material respects
at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, that each of the conditions to
Closing in this Article 6 has been met, and as to such other matters as the
Acquired Trust shall reasonably request;
6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered
to the Acquired Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP an Acquiring Trust Tax
Representation Certificate, satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, in a form
mutually acceptable to the Acquiring Trust and the Acquired Trust, concerning
certain tax-related matters;
6.4 The Acquired Trust shall have received at the Closing a favorable opinion
as to the due authorization of this Agreement by the Acquiring Trust, on
behalf of the Acquiring Fund, and related matters of Dechert LLP, dated as of
the Closing Date, in a form satisfactory to the Acquired Trust, substantially
to the effect that, based upon certain facts and certifications made
by the Acquiring Trust, on behalf of the Acquiring Fund and its authorized
officers: (a) the Acquiring Trust is validly existing and in good standing
under the laws of the State of Delaware and has the power to carryon its
business as described in the Acquiring Trusts Declaration of Trust; (b) the
Acquiring Trust, with respect to the Acquiring Fund, has the requisite power
and authority to execute, deliver and perform its obligations under the
Agreement; (c) the execution, delivery and performance of the Agreement by
the Acquiring Trust, on behalf of the Acquiring Fund, have been duly
authorized by all necessary action of the Acquiring Trust; (d) the execution,
delivery and performance of the Agreement by the Acquiring Trust, on behalf
of the Acquiring Fund, do not conflict with or result in a violation of (i)
Acquiring Trusts Declaration of Trust or By-Laws, or (ii) any statutory law,
rule or regulation of the State of Delaware
applicable to the Acquiring Trust; (e) the Agreement constitutes a legal,
valid and binding agreement of the Acquiring Trust, on behalf of the
Acquiring Fund, enforceable against the Acquiring Trust, on behalf of the
Acquiring Fund, in accordance with its terms; 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; (f) to the knowledge
of such counsel, no authorization, approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body of the State
of Delaware having jurisdiction over the Acquiring Trust is required for the
execution, delivery and performance of the Agreement by the Acquiring Trust,
on behalf of the Acquiring Fund; (g) 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 Trust, on behalf of the
Acquiring Fund, under the federal laws of the United States with respect to
the issuance of Acquiring Fund Shares by the Acquiring Fund in exchange
solely for the transfer of the Acquired Assets and the assumption of the
Assumed Liabilities pursuant to the Agreement, have been obtained or made;
and (h) to the knowledge of such counsel, and without any independent
investigation, other than as disclosed on the schedule provided by the
Acquiring Trust 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 Trust and the Acquired Trust Board. Such
opinion may contain such assumptions and limitations as shall be in the
opinion of Dechert LLP appropriate to render the opinions expressed therein;
and
6.5 With respect to the Acquiring Fund, the Board of Trustees of the
Acquiring Trust shall have determined that the Reorganization is in the best
interests of the Acquiring Fund and, based upon such determination, shall
have approved this Agreement and the transactions contemplated hereby.
7. CONDITIONS PRECEDENT To OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquiring Fund in writing:
7.1 All representations and warranties of the Acquired Trust 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 Trust shall have delivered to the Acquiring Fund a Statement
of Assets and Liabilities of the Acquired Fund as of the Closing Date
pursuant to Paragraph 5.7 hereof, together with a list of its portfolio
securities showing the federal income tax bases and holding periods of such
securities, as of the Closing Date, certified by the Acquired Trusts
Treasurer or Assistant Treasurer;
7.3 The Acquired Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the Acquired Trust on behalf of the Acquired
Fund executed in its name by its President or Vice President and a Treasurer
or Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Trust made in this Agreement
on behalf of the Acquired Fund are true and correct in all material respects
at and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, that each of the conditions to
Closing in this Article 7 has been met, and as to such other matters as the
Acquiring Trust shall reasonably request;
7.4 The Acquired Trust on behalf of the Acquired Fund shall have delivered to
the Acquiring Trust and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP an Acquired Trust Tax
Representation Certificate, satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, in a form
mutually acceptable to the Acquired Trust and the Acquiring Trust, concerning
certain tax-related matters;
7.5 The Acquiring Trust shall have received at the Closing a favorable
opinion as to the due authorization of this Agreement by the Acquired Trust,
on behalf of the Acquired Fund, and related matters of The Law Offices of
▇▇▇▇ ▇. ▇▇▇▇▇▇ and Associates, Inc., dated as of the Closing Date, in a form
satisfactory to the Acquiring Trust, substantially to the effect that, based
upon certain facts and certifications made by the Acquired Trust, on behalf
of the Acquired Fund, and its authorized officers: (a) the Acquired Trust is
validly existing and in good standing under the laws of the State of Delaware
and has the power to carryon its business as described in the Acquired
Trusts Trust Instrument; (b) the Acquired Trust, with respect to the
Acquired Fund, has the requisite power and authority to execute, deliver and
perform its obligations under the Agreement; (c) the execution, delivery and
performance of the Agreement by the Acquired Trust, on behalf of the Acquired
Fund, have been duly authorized by all necessary action of the Acquired
Trust; (d) the execution, delivery and performance of the Agreement by the
Acquired Trust, on behalf of the Acquired Fund, do not conflict with or
result in a violation of (i) Acquired Trusts Trust Instrument or By-Laws, or
(ii) any statutory law, rule or regulation of the State of Delaware
applicable to the Acquired Trust; (e) the Agreement constitutes a legal,
valid and binding agreement of the Acquired Trust, on behalf of the Acquired
Fund, enforceable against the Acquired Trust, on behalf of the Acquired Fund,
in accordance with its terms; 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; (f) to the knowledge of such counsel,
no authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body of the State of Delaware
having jurisdiction over the Acquired Trust is required for the execution,
delivery and performance of the Agreement by the Acquired Trust, on behalf of
the Acquired Fund; (g) 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 Trust, on behalf of the Acquired Fund, under
the federal laws of the United States with respect to the transfer of the
Acquired Assets for Acquiring Fund Shares and the assumption by the Acquiring
Fund of the Assumed Liabilities pursuant to this Agreement have been obtained
or made; and (h) to the knowledge of such counsel, and without any
independent investigation, other than as disclosed on the schedule provided
by the Acquired Trust 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 Acquired Trust and the Acquired Trust Board. Such opinion
may contain such assumptions and limitations as shall be in the opinion of
The Law Offices of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and Associates, Inc. appropriate to render
the opinions expressed therein;
7.6 With respect to the Acquired Fund, the Board of Trustees of the Acquired
Trust shall have determined that the Reorganization is in the best interests
of the Acquired Fund and, based upon such determination, shall have approved
this Agreement and the transactions contemplated hereby; and
7.7 For six (6) years after the Closing Date, GSAM shall maintain in effect
the current level and scope of officers and trustees, as applicable,
liability insurance or a tail insurance policy of the same level or scope for
the six (6) year period, in each case covering those persons who are covered
by the Acquired Trusts, officers and trustees, as applicable, liability
insurance policy as of the Closing Date; provided, that in no event shall
GSAM be required to expend in anyone year an amount in excess of 150% of the
annual premium currently paid by the Acquired Trust for such insurance, and
provided, further, that if the annual premiums of such insurance coverage
exceed such amount, GSAM shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required 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 Acquired Funds shareholders in
accordance with the provisions of the Acquired Trusts Trust Instrument and
By-Laws, and certified copies of the resolutions evidencing such approval by
the Acquired Funds shareholders shall have been delivered by the Acquired
Fund to the Acquiring Fund. Notwithstanding anything herein to the contrary,
neither party hereto may waive the conditions set forth in this Paragraph
8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits
of federal, state and local regulatory authorities (including those of the
Commission and of state Blue Sky and securities authorities) deemed necessary
by either party hereto to permit consummation, in all material respects, of
the transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a risk
of a material
adverse effect on the assets or properties of either party hereto, provided
that either party may waive any such conditions for itself;
8.4 The Registration Statement shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and, to the knowledge of the
parties hereto, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated under the
Securities Act;
8.5 The parties shall have received an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP,
dated the Closing Date, satisfactory to the Acquired Trust and the Acquiring
Trust, substantially to the effect that, based upon certain facts,
assumptions and representations, and upon certifications contained in the
Acquiring Trust Tax Representation Certificate and the Acquired Trust Tax
Representation Certificate, for federal income tax purposes, (i) the
Reorganization will constitute a reorganization within the meaning of
Section 368(a) of the Code, and each of the Acquired Trust and the Acquiring
Fund will be a party to a reorganization within the meaning of Section
368(b) of the Code; (ii) no gain or loss will be recognized by the Acquired
Trust on the transfer of the Acquired Assets to the Acquiring Fund solely in
exchange for the Acquiring Fund Shares and the assumption by the Acquiring
Fund of the Assumed Liabilities, or upon the distribution of the Acquiring
Fund Shares to the shareholders of the Acquired Fund, except for (A) gain or
loss that may be recognized on the transfer of section 1256 contracts as
defined in Section 1256(b) of the Code, (B) gain that may be recognized on
the transfer of stock in a passive foreign investment company as defined in
Section 1297(a) of the Code, and (C) any other gain or loss that may be
required to be recognized upon the transfer of an Acquired Asset regardless
of whether such transfer would otherwise be a non-recognition transaction
under the Code; (iii) the tax basis in the hands of the Acquiring Fund of
each Acquired Asset will be the same as the tax basis of such Acquired Asset
in the hands of the Acquired Trust immediately prior to the transfer thereof,
increased by the amount of gain (or decreased by the amount of loss), if any,
recognized by the Acquired Trust on the transfer; (iv) the holding period of
each Acquired Asset in the hands of the Acquiring Fund, other than assets
with respect to which gain or loss is required to be recognized, will include
in each instance the period during which such Acquired Asset was 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 Acquiring Fund upon its
receipt of the Acquired Assets solely in exchange for Acquiring Fund Shares
and the assumption of the Assumed Liabilities; (vi) no gain or loss will be
recognized by the Acquired Fund Shareholders upon the exchange of their
Acquired Fund Shares for Acquiring Fund Shares as part of the Reorganization;
(vii) the aggregate tax basis of the Acquiring Fund Shares that each Acquired
Fund Shareholder receives in the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund Shares exchanged therefor; (viii)
each Acquired Fund Shareholders holding period for the Acquiring Fund Shares
received in the Reorganization will include the period for which such
shareholder held the Acquired Fund Shares exchanged therefor, provided that
the Acquired Fund Shareholder held such Acquired Fund Shares as capital
assets on the date of the exchange. Notwithstanding anything in this
Agreement to the contrary, neither Fund may waive the condition set forth in
this Paragraph 8.5.
9. BROKERAGE FEES
9.1 Each party hereto represents and warrants to the other party hereto that
there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 GSAM will pay the proxy solicitation, mailing, printing costs and costs
and expenses relating to the meeting of shareholders of the Acquired Fund
attributable to the Reorganization. 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.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES; UNDERTAKING
10.1 The Acquiring Trust and the Acquired Trust each agrees that neither
party has made any representation, warranty or covenant not set forth herein
or referred to in Paragraphs 4.1 or 4.2 or Section 5 hereof and that this
Agreement constitutes the entire agreement between the parties with respect
to the matters covered by this Agreement.
10.2 The covenants to be performed after the Closing by both the Acquiring
Trust and the Acquired Trust shall survive the Closing. The representations,
warranties and all other 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.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Acquired Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or prior
to the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which
reasonably appears will not or cannot be met;
(c) by resolution of the Acquiring Trusts Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquiring Funds
shareholders;
(d) by resolution of the Acquired Trusts Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquired Funds
shareholders; or
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to June 30, 2012 or such other date as the parties may
mutually agree upon in writing.
(f) if the Sub-Advisory Agreement between GSAM and Dividend Growth Advisors,
LLC has not been approved in accordance with Section 15 of the Investment
Company Act and executed or is otherwise not in full force and effect on the
Closing Date.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund, the Acquiring Trust, the Acquired
Trust or the Acquired Fund, or the trustees or officers of the Acquired
Trust, or the Acquiring Trust, but, subject to Paragraph 9.2 hereof, each
party shall bear the expenses incurred by it incidental to the preparation
and carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may
be mutually agreed upon in writing by the authorized officers of the Acquired
Trust and the Acquiring Trust; provided, however, that following the meeting
of the Acquired Funds shareholders called by the Acquired Trust pursuant to
Paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions regarding the method for determining the number of
Acquiring Fund Shares to be received by the Acquired Fund Shareholders under
this Agreement to their detriment without their further approval; provided
that nothing contained in this Paragraph 12 shall be construed to prohibit
the parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to the Acquired
Trust, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary, with copies to The Law Offices of ▇▇▇▇
▇. ▇▇▇▇▇▇ and Associates, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and to the Acquiring Trust, c/o
Goldman Sachs Asset Management, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., with copies to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than 6 Delaware Code 2708); provided that, in the
case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by either
party without the prior written consent of the other party hereto. Nothing
herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Trust and
the Acquired Trust shall not be binding upon any of their respective
trustees, shareholders, nominees, officers, agents or employees personally,
but bind only to the property of the Acquiring Fund or the Acquired Fund, as
the case may be, as provided in the Acquiring Trusts Declaration of Trust
and the Trust Instrument of the Acquired Trust, respectively. The execution
and delivery of this Agreement have been authorized by the trustees of the
Acquiring Trust and of the Acquired Trust and this Agreement has been
executed by authorized officers of the Acquiring Trust and the Acquired
Trust, acting as such, and neither such authorization by such trustees nor
such execution and delivery by such officers shall be deemed to have been
made by any of them individually or to imposed any liability on any of them
personally, but shall bind only the property of the Acquiring Fund and the
Acquired Fund, as the case may be, as provided in the Acquiring Trusts
Declaration of Trust and the Trust Instrument of the Acquired Trust,
respectively.
{Signature page follows.}
IN WJTNESS WHEHEOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its duly authorized
officer.
DIVIDEND GROWTH TRUST
on behalf of RISING DIVIDEND GROWTH FUND
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Name: C, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST
on behalf of ▇▇▇▇▇▇▇ SACHS RISING
DIVIDEND GROWTH FUND
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
[Signature Page to Agreement and Plan of Reorganization}
Schedule 4.1
None
Schedule 4.2
None