VANGUARD MUNICIPAL BOND FUNDS
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 2nd day of December, 2008, by and between Vanguard Municipal Bond Funds
(the "Trust"), a Delaware statutory trust with its principal place of business
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of its
Vanguard Long-Term Tax-Exempt Fund (the "Acquiring Fund") and the Trust, on
behalf of its Vanguard Insured Long-Term Tax-Exempt Fund (the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of (i) the transfer of all or
substantially all of the assets of the Acquired Fund to the Acquiring Fund, in
exchange solely for shares of beneficial interest of the Acquiring Fund (the
"Acquiring Fund Shares"); (ii) the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund; and (iii) the distribution of the Acquiring
Fund Shares to the shareholders of the Acquired Fund in complete liquidation of
the Acquired Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Trust is an open-end, registered investment company of the
management type and the Acquired Fund owns securities which are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Board of Trustees of the Trust has determined that the
exchange of all or substantially all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of the liabilities of the Acquired Fund
by the Acquiring Fund is in the best interest of the Acquiring Fund and the
Acquired Fund and their shareholders and that the interest of the existing
shareholders of the Acquiring Fund and the Acquired Fund would not be diluted as
a result of this transaction;
WHEREAS, the purpose of the Reorganization is to combine the assets of
the Acquiring Fund with those of the Acquired Fund;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF THE
ACQUIRED FUND'S LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED
FUND
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired
Fund agrees to
transfer all of its assets as set forth in paragraph 1.2 to the Acquiring
Fund and the Acquiring Fund agrees in exchange therefore (i) to
deliver to the Acquired Fund the number of Acquiring Fund Shares of
its Admiral Class and Investor Class (the "Acquiring Fund Classes"),
including fractional Acquiring Fund Shares (rounded to the third
decimal place), determined by dividing the value of the Acquired
Fund's net assets computed in the manner and as of the time and date
set forth in paragraph 2.1 by the net asset value of one Acquiring
Fund Share computed in the manner and as of the time and date set
forth in paragraph 2.2; and (ii) to assume the liabilities of the
Acquired Fund, as set forth in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3.1 (the
"Closing").
1.2. The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all property, including without
limitation, all cash, securities, commodities and futures
interests, accrued amortization and accretion, receivables
(including interest and dividend receivables), claims and rights
of action, rights to register shares under applicable securities
laws, which are owned by the Acquired Fund and any deferred or
prepaid expenses shown as an asset on the books of the Acquired
Fund on the closing date provided in paragraph 3.1 (the "Closing
Date").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume all liabilities, expenses, costs,
charges and reserves (expected to include expenses incurred in
the ordinary course of the Acquired Fund's operations, such as
accounts payable relating to custodian and transfer agency fees,
legal and audit fees, and expenses of state securities
registration of the Acquired Fund's shares) of the Acquired
Fund.
1.4. Immediately after the transfer of assets provided for in paragraph
1.1, the Acquired Fund will distribute pro rata to the Acquired Fund's
shareholders of record, determined as of immediately after the close
of business on the Closing Date (the "Acquired Fund Shareholders"),
the Acquiring Fund Shares of the Acquiring Fund Classes received by
the Acquired Fund pursuant to paragraph 1.1 and will completely
liquidate. Such distribution and liquidation will be accomplished by
the transfer of the Acquiring Fund Shares of the Acquiring Fund
Classes then credited to the account of the Acquired Fund on the books
of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders. The
aggregate net asset value of Acquiring Fund Shares to be so credited
to Acquired Fund Shareholders shall be equal to the aggregate net
asset value of the Acquired Fund shares owned by such shareholders as
of immediately after the close of business on the Closing Date
Exchange (and after the declaration and payment of any dividends). The
outstanding shares of the Acquired Fund will simultaneously be
canceled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as
determined in accordance with paragraph 2.3. The Acquiring Fund will
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 Fund. Shares of the Acquiring Fund will be issued
in the manner described in the Acquiring Fund's then-current
prospectus and statement of additional information.
1.6. Any reporting responsibility of the Acquired Fund including (but
not limited to) the responsibility for any periods ending on or
before the Closing Date for filing of regulatory reports, tax
returns, or other documents with the Securities and Exchange
Commission (the "Commission"), any state securities or any other
relevant regulatory authority, is and shall remain the
responsibility of the Acquired Fund.
2. VALUATION
2.1. The value of the Acquired Fund's assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets
computed as of the close of regular trading on the New York
Stock Exchange (and after the declaration and payment of any
dividends) on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Trust's Declaration of Trust and
then-current prospectus or statement of additional information
for the Acquiring Fund.
2.2. The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of immediately after the close
of regular trading on the New York Stock Exchange on the
Valuation Date, using the valuation procedures set forth in the
Trust's Declaration of Trust and then-current prospectus or
statement of additional information for the Acquiring Fund.
2.3. The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's
assets shall be determined by dividing the value of the net
assets of the Acquired Fund determined using the same valuation
procedures referred to in paragraph 2.1 by the net asset value
of an Acquiring Fund Share determined in accordance with
paragraph 2.2.
2.4. All computations of value with respect to the Acquiring Fund
shall be made by The Vanguard Group, Inc. ("VGI").
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be December 12, 2008, or such other date
as the parties may agree in writing. All acts taking place at
the Closing shall be deemed to take place simultaneously as of
immediately after the close of business on the Closing Date
unless otherwise agreed to by the parties. The close of business
on the Closing Date shall be as of 4:00 p.m. Eastern time. The
Closing shall be held at the offices of Trust, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place
and time as the parties shall mutually agree.
3.2. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund (each, an
"Exchange") shall be closed to trading or trading thereupon
shall be restricted, or (b) trading or the reporting of trading
on such Exchange or elsewhere shall be disrupted so that, in the
judgment of the Trust's officers, accurate appraisal of the net
assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been
fully resumed and reporting shall have been restored.
3.3. The Trust shall direct the Custodian for the Acquired Fund
("Custodian") to deliver, at the Closing, a certificate of an
authorized officer stating that (a) the assets shall have been
delivered in proper form to the Acquiring Fund within two business
days prior to or on the Closing Date, and (b) all necessary taxes in
connection with the delivery of the assets, including all applicable
Federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made. The Acquired Fund's portfolio
securities represented by a certificate or other written instrument
shall be transferred and delivered by the Acquired Fund as of the
Closing Date for the account of the Acquiring Fund duly endorsed in
proper form for transfer in such condition as to constitute good
delivery thereof. The Acquired Fund shall direct the Custodian to
deliver portfolio securities and instruments deposited with a
securities depository, as defined in Rule 17f-4 under the Investment
Company Act of 1940, as amended (the "1940 Act"), as of the Closing
Date by book entry in accordance with the customary practices of such
depositories and the custodian for the Acquiring Fund.
3.4. The Trust, on behalf of the Acquired Fund shall deliver to the Trust,
on behalf of the Acquiring Fund at the Closing a list of the names and
addresses of each shareholder of the Acquired Fund and the number of
outstanding Investor Class and Admiral Class Acquired Fund shares
owned by each shareholder, all as of the Closing Date, certified by
Trust's Secretary or Assistant Secretary. The Trust, on behalf of the
Acquiring Fund, shall cause VGI to deliver at the Closing a
certificate as to the opening of accounts in the shareholders' names
on the Acquiring Fund's share transfer books. The Trust, on behalf of
the Acquiring Fund, shall issue and deliver a confirmation to the
Trust, on behalf of the Acquired Fund, evidencing the Acquiring Fund
Shares to be credited to the Acquired Fund on the Closing Date or
provide evidence satisfactory to the Trust, on behalf of the Acquired
Fund, that such shares have been credited to the Acquired Fund's
account on such books. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates,
receipts, or other documents as the other party or its counsel may
reasonably request.
3.5. The Trust on behalf of the Acquired Fund and the Trust on behalf
of the Acquiring Fund shall each deliver to the other at the
Closing a certificate executed in its name by an authorized
officer and in form and substance satisfactory to the recipient
and dated the Closing Date to the effect that the
representations and warranties it made
in this Agreement are true and correct as of the Closing Date
except that they may be affected by the transactions
contemplated by this Agreement.
4.REPRESENTATIONS AND WARRANTIES
4.1. The Trust on behalf of the Acquired Fund represents and warrants to
the Trust on behalf of the Acquiring Fund that for each taxable year
of operation since inception (including the taxable year including the
Closing Date) the Acquired Fund has met the requirements of Subchapter
M of the Code for qualification as a regulated investment company and
has elected to be treated as such and has computed its federal income
tax in a manner consistent with that election. The Trust on behalf of
the Acquired Fund represents and warrants to the Trust on behalf of
the Acquiring Fund that on or before the Closing Date, the Acquired
Fund will have distributed to its shareholders an amount intended to
equal all of its current and accumulated investment company taxable
income and net realized capital gain, including any such income or
gain accruing through the Closing Date.
4.2. The Trust on behalf of the Acquired Fund represents and warrants
to the Trust on behalf of the Acquiring Fund that 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 at all times prior to the
date of this Agreement conforms or conformed at the time of its
use in all material respects to the applicable requirements of
the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and does not or did not at the time of
its use include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not materially
misleading.
4.3. The Trust on behalf of the Acquired Fund represents and warrants to
the Trust on behalf of the Acquiring Fund that the financial
statements of the Acquired Fund as of and for the year ended October
31, 2007, have been audited by PricewaterhouseCoopers, an independent
registered public accounting firm. Such statements are in accordance
with accounting principles generally accepted in the United States of
America ("GAAP") consistently applied, and such statements (copies of
which are available to the Acquiring Fund) present fairly, in all
material respects, the financial condition of the Acquired Fund as of
such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance
sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein.
4.4. The Trust on behalf of the Acquired Fund represents and warrants to
the Trust on behalf of the Acquiring Fund that since October 31, 2007,
there has not been any material adverse change in the Acquired Fund's
financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of
this paragraph 4.4, a decline in net asset value per share of Acquired
Fund Shares due to declines in market values of securities held by the
Acquired Fund, the discharge of the Acquired Fund's liabilities, or
the redemption of the Acquired Fund's shares by shareholders of the
Acquired Fund shall not constitute a material adverse change.
4.5. The Trust on behalf of the Acquired Fund represents and warrants
to the Trust on behalf of the Acquiring Fund that on the Closing
Date, all Federal and other tax returns, dividend reporting
forms, and other tax-related reports of the Acquired Fund
required by law to have been filed by such date (including any
extensions) shall have been filed and are or will be correct in
all material respects, and all Federal and other taxes shown as
due or required to be shown as due on said returns and reports
shall have been paid or provision shall have been made for the
payment thereof, and to the best of the Acquired Fund's
knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns.
4.6. The Trust on behalf of the Acquired Fund represents and warrants
to the Trust on behalf of the Acquiring Fund that: (a) the Trust
has been duly formed and is in good standing under the laws of
the State of Delaware; (b) the Agreement has been duly
authorized, executed and delivered by the Trust on behalf of the
Acquired Fund and constitutes a valid and legally binding
obligation of the Trust on behalf of the Acquired Fund; and (c)
the Agreement is enforceable against the Trust on behalf of the
Acquired Fund in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
4.7. The Trust on behalf of the Acquiring Fund represents and
warrants to the Trust on behalf of the Acquired Fund that for
each taxable year of the Acquiring Fund's operation since
inception (including the taxable year including the Closing
Date), the Acquiring Fund has met the requirements of Subchapter
M of the Code for qualification as a regulated investment
company and has elected to be treated as such, has computed its
federal income taxes in a manner consistent with that election,
and intends to so qualify and elect each taxable year following
the Reorganization.
4.8. The Trust on behalf of the Acquiring Fund represents and
warrants to the Trust on behalf of the Acquired Fund that the
current prospectus and statement of additional information of
the Acquiring Fund and each prospectus and statement of
additional information of the Acquiring Fund used at all times
prior to the date of this Agreement conforms or conformed at the
time of its use in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and does not or did not
at the time of its use include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
materially misleading.
4.9. The Trust on behalf of the Acquiring Fund represents and
warrants to the Trust on behalf of the Acquired Fund that the
financial statements of the Acquiring Fund as of and for the
year ended October 31, 2007, have been audited by
PricewaterhouseCoopers, an independent registered public
accounting firm. Such statements are in accordance with GAAP
consistently applied, and such statements (copies of which are
available to the Acquired Fund) present fairly, in all material
respects, the financial condition of the Acquiring Fund as of
such date in accordance with GAAP, and there are no known
contingent liabilities of the Acquiring Fund required to be
reflected on a balance sheet (including the notes thereto) in
accordance with GAAP as of such date not disclosed therein.
4.10. The Trust on behalf of the Acquiring Fund represents and warrants to
the Trust on behalf of the Acquired Fund that since October 31, 2007,
there has not been any material adverse change in the Acquiring Fund's
financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than
one year from the date such indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquired Fund. For purposes
of this paragraph 4.10, a decline in net asset value per share of the
Acquiring Fund's shares due to declines in market values of securities
held by the Acquiring Fund, the discharge of the Acquiring Fund's
liabilities, or the redemption of the Acquiring Fund's shares by
shareholders of the Acquiring Fund, shall not constitute a material
adverse change.
4.11. The Trust on behalf of the Acquiring Fund represents and
warrants to the Trust on behalf of the Acquired Fund that on the
Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquiring
Fund required by law to have been filed by such date (including
any extensions) shall have been filed and are or will be correct
in all material respects, and all Federal and other taxes shown
as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made
for the payment thereof, and to the best of the Acquiring Fund's
knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
4.12. The Trust on behalf of the Acquiring Fund represents and
warrants to the Trust on behalf of the Acquired Fund that: (a)
the Trust has been duly formed and is validly existing and in
good standing under the laws of the State of Delaware; (b) the
Agreement has been duly authorized, executed and delivered by
the Trust on behalf of the Acquiring Fund and constitutes a
valid and legally binding obligation of the Trust on behalf of
the Acquiring Fund; and (c) the Agreement is enforceable against
the Trust on behalf of the Acquiring Fund in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 The Acquiring Fund and the Acquired Fund will each operate its
business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include the declaration and payment of customary
dividends and distributions, and any other distributions that
may be advisable.
5.2 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of
making any distribution thereof other than in accordance with
the terms of this Agreement.
5.3 The Acquired Fund will distribute to its shareholders on or
before the Closing Date an amount intended to equal all of its
current or accumulated investment company taxable income and
realized net capital gain, including any such income or gain
accruing through the Closing Date.
5.4 As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its
respective shareholders consisting of the Acquiring Fund Shares
received at the Closing.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE ACQUIRED
FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund,
the other party to this Agreement shall, at its option, not be required
to consummate the transactions contemplated by this Agreement:
6.1 The Board of Trustees of the Trust shall have determined in good
faith that (a) participating in the transaction is in the best
interest of the Acquiring Fund and the Acquired Fund,
respectively, and (b) the interests of existing shareholders of
the Acquiring Fund and the Acquired Fund, respectively, will not
be diluted as a result of its effecting the transaction.
6.2 On the Closing Date, no action, suit or other proceeding shall
be threatened or 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;
6.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities
deemed necessary by the Acquiring Fund or the Acquired Fund to
permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit
would not involve a risk of a material
adverse effect on the assets or properties of the Acquiring
Fund or the Acquired Fund, provided that either party hereto
may for itself waive any of such conditions;
6.4 The Acquiring Fund's registration statement relating to the
shares to be issued in connection with the transactions
contemplated by this Agreement shall have become effective under
the 1933 Act and no stop orders suspending the effectiveness
thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose
shall have been instituted or be pending, threatened or
contemplated under the 1933 Act; and
6.5 The parties shall have received the opinion of counsel addressed
to the Trust on behalf of the Acquiring Fund and the Trust on
behalf of the Acquired Fund substantially to the effect that,
based upon certain facts, assumptions, and representations:
6.5.1 The acquisition by Acquiring Fund of substantially
all of the properties of Acquired Fund in exchange
solely for Acquiring Fund Shares and the assumption
of all liabilities of Acquired Fund by Acquiring Fund
followed by the distribution of Acquiring Fund Shares
to the Acquired Fund Shareholders in exchange for
their Acquired Fund shares in complete liquidation
and termination of Acquired Fund will constitute a
tax-free reorganization under Section 368(a) of the
Code.
6.5.2 Acquired Fund will not recognize gain or loss upon
the transfer of substantially all of its assets to
Acquiring Fund in exchange solely for Acquiring Fund
Shares and the assumption of all liabilities of
Acquired Fund except that Acquired Fund may be
required to recognize gain or loss with respect to
contracts described in Section 1256(b) of the Code or
stock in a passive foreign investment company, as
defined in Section 1297(a) of the Code.
6.5.3 Acquired Fund will not recognize gain or loss upon
the distribution to its shareholders of the Acquiring
Fund Shares received by Acquired Fund in the
Reorganization.
6.5.4 Acquiring Fund will recognize no gain or loss upon
receiving the properties of Acquired Fund in exchange
solely for Acquiring Fund Shares.
6.5.5 The adjusted basis to Acquiring Fund of the
properties of Acquired Fund received by Acquiring
Fund in the reorganization will be the same as the
adjusted basis of those properties in the hands of
Acquired Fund immediately before the exchange.
6.5.6 Acquiring Fund's holding periods with respect to the
properties of Acquired Fund that Acquiring Fund
acquires in the transaction will include the
respective periods for which those properties were
held by Acquired Fund (except where investment
activities of Acquiring Fund
have the effect of reducing or eliminating a holding
period with respect to an asset).
6.5.7 The Acquired Fund Shareholders will recognize no gain
or loss upon receiving Acquiring Fund Shares solely
in exchange for Acquired Fund Shares.
6.5.8 The basis of the Acquiring Fund Shares received by an
Acquired Fund Shareholder in the transaction will be
the same as the basis of Acquired Fund Shares
surrendered by the Acquired Fund Shareholder in
exchange therefor.
6.5.9 An Acquired Fund Shareholder's holding period for the
Acquiring Fund Shares received by the Acquired Fund
Shareholder in the transaction will include the
holding period during which the Acquired Fund
Shareholder held Acquired Fund Shares surrendered in
exchange therefore, provided that the Acquired Fund
Shareholder held such shares as a capital asset on
the date of Reorganization.
6.5.10 Pursuant to Section 381 of the Code and Section
1.381(a)-1 of the United States Treasury regulations,
the Acquiring Fund will succeed to and take into
account the items of the Acquired Fund described in
Section 381(c) of the Code, subject to the provisions
and limitations specified in Sections 381, 382, 383
and 384 of the Code and the United States Treasury
regulations promulgated thereunder.
6.6 All representations and warranties of the Trust on behalf of the
Acquiring Fund and the 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.
6.7 The Trust on behalf of the Acquiring Fund and the Trust on
behalf of the Acquired Fund shall have performed all of the
covenants and complied with all of the provisions required by
this Agreement to be performed or complied with by the Trust and
the Acquiring Fund, on or before the Closing Date.
7. BROKERAGE FEES AND EXPENSES
7.1 The Acquiring Fund and the Acquired Fund each represent and
warrant to the other that it has no obligations to pay any
brokers or finders fees in connection with the transactions
provided for herein.
7.2 Each party to this Agreement shall bear its own expenses in connection
with carrying out the terms of this Agreement.
8. TERMINATION
This Agreement may be terminated by the mutual agreement of the Trust
on behalf of the Acquiring Fund and the Trust on behalf of the Acquired
Fund. In addition, this Agreement may be terminated as follows at or
prior to the Closing Date:
(a) the Trust on behalf of the Acquired Fund may terminate this
Agreement as it pertains to the Acquired Fund by resolution of the
Board of Trustees of the Trust if, in the good faith opinion of
such Board, proceeding with the Agreement is not in the best
interests of the Acquired Fund or the shareholders of the Acquired
Fund.
(b) the Trust on behalf of the Acquiring Fund may terminate this
Agreement as it pertains to the Acquiring Fund by resolution of
the Board of Trustees of the Trust if, in the good faith opinion
of such Board, proceeding with the Agreement is not in the best
interests of the Acquiring Fund or the shareholders of the
Acquiring Fund.
[Agreement Continues on Next Page]
9. 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
Trust on behalf of the Acquired Fund and the Trust on behalf of the
Acquiring Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by a duly authorized officer and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
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ATTEST VANGUARD MUNICIPAL BOND FUNDS
ACTING ON BEHALF OF ITS SERIES
VANGUARD INSURED LONG-TERM TAX-EXEMPT FUND
/s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III
/s/ ▇▇▇▇▇ ▇▇▇▇ _________________________________________
_________________________________ Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III
Name: ▇▇▇▇▇ ▇▇▇▇ Title: President and Chief Executive Officer
Title: Secretary
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ATTEST VANGUARD MUNICIPAL BOND FUNDS
ACTING ON BEHALF OF ITS SERIES
VANGUARD LONG-TERM TAX-EXEMPT FUND
/s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III
/s/ ▇▇▇▇▇ ▇▇▇▇ _________________________________________
_______________________________________ Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III
Name: ▇▇▇▇▇ ▇▇▇▇ Title: President and Chief Executive Officer
Title: Secretary