AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 22nd day of April, 1996, by and between Emerging Markets Growth Fund,
Inc., a Maryland corporation with its principal place of business at 11100
Santa Monica Boulevard, Los Angeles, California 90025 (the "Acquiring Fund"),
and New World Investment Fund, a Massachusetts business trust with its
principal place of business at 11100 Santa Monica Boulevard, Los Angeles,
California 90025 (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 the transfer of all or
substantially all of the assets of the Acquired Fund to the Acquiring Fund in
exchange solely for shares of common stock, ($0.01 par value per share), of the
Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the Acquiring
Fund of certain identified liabilities of the Acquired Fund, and 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 Acquiring Fund and the Acquired Fund are closed-end,
registered investment companies of the management type, and the Acquired Fund
owns securities which generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Board of Directors of the Acquiring Fund 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 certain identified liabilities of
the Acquired Fund by the Acquiring Fund is in the best interests of the
Acquiring Fund and its shareholders and that the interests of the existing
shareholders of the Acquiring Fund would not be diluted as a result of this
transaction;
WHEREAS, the Board of Trustees of the Acquired Fund 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 certain identified liabilities of
the Acquired Fund by the Acquiring Fund is in the best interests of the
Acquired Fund and its shareholders and that the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of this
transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND'S SHARES, THE ASSUMPTION OF CERTAIN IDENTIFIED
ACQUIRED FUND 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 the Acquired Fund's assets as set forth in paragraph
1.2 to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefor
(i) to deliver to the Acquired Fund the number of Acquiring Fund Shares,
including fractional Acquiring Fund Shares, 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 certain identified 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,
cash equivalents, securities, commodities and futures interests and dividends
or interest receivables, claims and rights of action, rights to register shares
under applicable securities laws, and books and records, which are owned by the
Acquired Fund and any deferred or prepaid expenses shown as assets 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) reflected on an unaudited statement of assets and
liabilities of the Acquired Fund prepared by Capital International, Inc., the
investment adviser of the Acquired Fund and the Acquiring Fund, as of the
Closing Date in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The Acquiring Fund shall
assume only those liabilities of the Acquired Fund reflected on that unaudited
statement of assets and liabilities and shall not assume any other liabilities.
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 received by the Acquired Fund pursuant to paragraph 1.1 and will
completely liquidate. The Acquired Fund shall take any further actions in
connection with its liquidation as required by applicable law. Such
distribution and liquidation will be accomplished by the transfer of 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 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. All issued and 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 except upon request by a shareholder of the Acquired Fund.
1.5 Ownership of Acquiring Fund Shares will be shown on the share
transfer 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.
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
normal close of business of the New York Stock Exchange on the Closing Date,
using the valuation procedures set forth in the Acquiring Fund's then-current
prospectus.
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 business of
the New York Stock Exchange on the Closing Date, using the valuation procedures
set forth in the Acquiring Fund's then-current prospectus
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 Capital International, Inc. in accordance with its regular practice
for the Funds.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be June 28, 1996 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 4:30 p.m., New York time.
The Closing shall be held at the offices of Capital International, Inc. or at
such other place and time as the parties shall mutually agree. If, immediately
before the Closing Date, (a) a primary market for the Acquiring Fund or
Acquired Fund is closed to trading or trading thereon is restricted or (b)
trading or the reporting of trading on a primary market for the Acquiring Fund
or Acquired Fund or elsewhere is disrupted, so that accurate appraisal of the
net asset value of the Acquired Fund and the NAV per Acquiring Fund Share is
impracticable, the Closing Date shall be postponed until the first business day
after the day when such trading shall have been fully resumed and such
reporting shall have been restored.
3.2 The Chase Manhattan Bank, N.A., as custodian for the Acquired Fund
(the "Custodian"), shall deliver at the Closing a certificate of an authorized
officer stating that: (a) the Acquired Fund's portfolio securities, cash, and
any other assets shall have been delivered in proper form to the Acquiring
Fund; and (b) all necessary taxes including without limitation all applicable
federal and state stock transfer stamps, if any, shall have been paid, or
provision for payment shall have been made, in conjunction with the delivery of
portfolio securities.
3.3 American Funds Service Company (the "Transfer Agent"), on behalf
of each of the Acquired Fund and the Acquiring Fund, shall deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Fund Shareholders and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the Acquired Fund or provide evidence satisfactory to the Acquired Fund
that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on the books of the Acquiring Fund. At the Closing each party shall
deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Acquired Fund represents and warrants to the Acquiring Fund as
follows:
(a) The Acquired Fund is a business trust duly organized under the
laws of the Commonwealth of Massachusetts;
(b) The Acquired Fund is a registered closed-end investment company
and its registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the 1940 Act and with respect to
its shares under the 1933 Act are in full force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of its
Declaration of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired Fund is a party or
by which either is bound;
(d) The Acquired Fund has no material contracts or other commitments
(other than this Agreement) which will be terminated with liability to it prior
to the Closing Date;
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Acquired Fund or any properties or
assets held by it. The Acquired Fund knows of no facts which might form the
basis for the institution of such proceedings and is not a party to or subject
to the provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired Fund at
June 30, 1995, has been audited by Price Waterhouse LLP, independent certified
public accountants, and is in accordance with generally accepted accounting
principles consistently applied, and such statement (a copy of which has been
furnished to the Acquiring Fund) presents fairly, in all material respects, the
financial position of the Acquired Fund as of such date, and there are no known
contingent liabilities of the Acquired Fund as of such date not disclosed
therein;
(g) Since June 30, 1995, 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 subparagraph (g),
a decline in net asset value per share of the Acquired Fund, the discharge of
Acquired Fund liabilities, or the redemption of Acquired Fund shares by
Acquired Fund Shareholders shall not constitute a material adverse change;
(h) At the Closing Date, all material Federal and other tax returns
and reports of the Acquired Fund required by law to have been filed by such
date shall have been filed and are or will be correct, 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;
(i) For each taxable year of its operation, 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;
(j) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the Acquired
Fund will, at the time of Closing, be held by the persons and in the amounts
set forth in the records of the Transfer Agent, as provided in paragraph 3.3.
The Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the Acquired Fund shares, nor is
there outstanding any security convertible into any of the Acquired Fund
shares;
(k) At the Closing Date, the Acquired Fund will have good and
marketable title to the Acquired Fund's assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.2, subject to the shareholder approval
referred to in Section 5, and full right, power, and authority to sell, assign,
transfer and deliver such assets hereunder, and upon delivery and payment for
such assets, the Acquiring Fund will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act, other than as disclosed to the
Acquiring Fund;
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action on
the part of the Acquired Fund's Trustees, and, subject to the approval of the
Acquired Fund Shareholders, this Agreement will constitute a valid and binding
obligation 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;
(m) The information to be furnished by the Acquired Fund for use in
registration statements, consent solicitation 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
thereunder applicable thereto; and
(n) The information statement of the Acquired Fund (the "Information
Statement") to be included in the Registration Statement referred to in
paragraph 5.6 (other than information therein that relates to the Acquiring
Fund) will, on the effective date of the Registration Statement and on the
Closing Date, 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 under which such statements
are made, not materially misleading.
4.2 The Acquiring Fund represents and warrants to the Acquired Fund as
follows:
(a) The Acquiring Fund is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland;
(b) The Acquiring Fund is a registered closed-end investment company
and its registration with the Securities and Exchange Commission (the
"Commission") as an investment company under the Investment Company Act of 1940
(the "1940 Act") and with respect to its shares under the Securities Act of
1933 (the "1933 Act") are in full force and effect;
(c) The current prospectus of the Acquiring Fund conforms 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 do not
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;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets;
(e) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result in a material violation of the
Acquiring Fund's Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquiring Fund is a party or by which is bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened against the Acquiring Fund or any of its properties or assets.
The Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to
consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities of the Acquiring Fund at
June 30, 1995, has been audited by Price Waterhouse LLP, independent certified
public accountants, and is in accordance with generally accepted accounting
principles consistently applied, and such statement (a copy of which has been
furnished to the Acquired Fund) presents fairly, in all material respects, the
financial position of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not
disclosed therein;
(h) Since June 30, 1995, 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. For the purposes of this
subparagraph (h), a decline in net asset value per share of the Acquiring Fund,
the discharge of Acquiring Fund liabilities, or the redemption of Acquiring
Fund shares by Acquiring Fund shareholders, shall not constitute a material
adverse change;
(i) At the Closing Date, all material Federal and other tax returns
and reports of the Acquiring Fund required by law to have been filed by such
date shall have been filed and are or will be correct, and all Federal and
other taxes shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made for the payment
thereof, and, to the best of the Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been asserted with respect to such
returns;
(j) All issued and outstanding Acquiring Fund Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable by the Acquiring Fund. 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;
(k) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action, if
any, on the part of the Directors of the Acquiring Fund, and this Agreement
will constitute a valid and binding obligation of the Acquiring Fund
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors' rights and to general equity principles;
(l) 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, at the Closing Date, have been duly
authorized and, when so issued and delivered, will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable by the
Acquiring Fund;
(m) The information to be furnished by the Acquiring Fund for use in
registration statements, consent solicitation 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;
(n) The Information Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing Date, 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 under which such statements were made, not
materially misleading;
(o) The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date; and
(p) For each taxable year of its operation, 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.
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 The Acquiring Fund and the Acquired Fund each will 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 will solicit the written consents of the
Acquired Fund Shareholders to approve this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
5.3 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.
5.4 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund Shares.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all actions, and do
or cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Information Statement, referred to in paragraph 4.1(n),
all to be included in a Registration Statement on Form N-14 of the Acquiring
Fund (the "Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934 (the "1934 Act") and the 1940 Act in connection
with the solicitation of the Acquired Fund Shareholders' written consents to
approve this Agreement and the transactions contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, 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:
6.1 All representations and warranties of the Acquiring Fund contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
6.2 The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in a form reasonably satisfactory to the
Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement and as to such other matters
as the Acquired Fund shall reasonably request; and
6.3 The Acquired Fund shall have received on the Closing Date the
opinion of Dechert Price & Rhoads, counsel to the Acquiring Fund, in a form
reasonably satisfactory to the Acquired Fund, and dated as of the Closing Date,
that:
(a) The Acquiring Fund has been duly formed and is validly existing
and in good standing under the laws of the State of Maryland; (b) the Acquiring
Fund has the power to carry on its business, as presently conducted; (c) the
Agreement has been duly authorized, executed and delivered by the Acquiring
Fund and constitutes a valid and legally binding obligation of Acquiring Fund
enforceable against 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; (d) the execution and delivery of the Agreement did
not and the exchange of the Acquired Fund's assets for shares of the Acquiring
Fund pursuant to the Agreement will not violate the Acquiring Fund's Articles
of Incorporation or Bylaws or result in a default under or breach of any of the
agreements filed as exhibits to (or incorporated by reference in) the Acquiring
Fund's registration statement on Form N-2; and (e) to the knowledge of such
counsel, all regulatory consents, authorizations, approvals or filings required
to be obtained or made by the Acquiring Fund under the Federal laws of the
United States or the State of Maryland for the exchange of the Acquired Fund's
assets for shares of the Acquiring Fund, pursuant to the Agreement have been
obtained or made.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by
the Acquired Fund of all of the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties 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 Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, as of the Closing
Date, certified by the Treasurer of the Acquired Fund;
7.3 The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by its President or Vice
President and its Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Acquiring Fund and dated as of the Closing Date, to the
effect that the representations and warranties of the Acquired Fund made in
this Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement, and as
to such other matters as the Acquiring Fund shall reasonably request; and
7.4 The Acquiring Fund shall have received on the Closing Date the
opinion of Dechert Price & Rhoads, counsel to the Acquired Fund dated as of the
Closing Date, that:
(a) The Acquired Fund has been duly formed under the laws of the
Commonwealth of Massachusetts; (b) the Acquired Fund has the power to carry on
its business, as presently conducted; (c) the Agreement has been duly
authorized, executed and delivered by the Acquired Fund and constitutes a valid
and legally binding obligation of the Acquired Fund enforceable against 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; (d) the execution and delivery of the Agreement did not and the
exchange of the Acquired Fund's assets for shares of the Acquiring Fund
pursuant to the Agreement will not violate the Acquired Fund's Declaration of
Trust or Bylaws or result in a default under or breach of any of the agreements
filed as exhibits to (or incorporated by reference in) the Acquired Fund's
registration statement on Form N-2; (e) to the knowledge of such counsel, all
regulatory consents, authorizations, approvals or filings required to be
obtained or made by the Acquired Fund under the Federal laws of the United
States or the Commonwealth of Massachusetts for the exchange of the Acquired
Fund's assets for shares of the Acquiring Fund, pursuant to the Agreement have
been obtained or made; and (f) the shares of the Acquiring Fund to be
distributed to Acquired Fund shareholders under this Agreement, assuming due
authorization and delivery as contemplated by this Agreement, will be validly
issued and outstanding and fully paid and non-assessable.
8. FURTHER 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:
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Acquired Fund's
Declaration of Trust and By-Laws and certified copies of the resolutions
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor
the Acquired Fund 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
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;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or the Acquired 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;
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act; and
8.5 The parties shall have received the opinion of Dechert Price &
Rhoads, counsel to Acquired Fund and Acquiring Fund substantially to the effect
that the transaction contemplated by this Agreement constitutes a tax-free
reorganization for Federal income tax purposes. The delivery of such opinion
is conditioned upon receipt by Dechert Price & Rhoads of representations it
shall request of the parties. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the condition set
forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1 The Acquiring Fund and the Acquired Fund each represents and
warrants to the other that it has no obligations to pay any brokers or finders
fees in connection with the transactions provided for herein.
9.2 Each party to this Agreement shall pay one half of the expenses
incurred in connection with entering into and consummating the transaction
contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund agree that neither
party has made any representation, warranty or covenant not set forth herein
and that this Agreement constitutes the entire agreement between the parties.
10.2 The representations and warranties 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.
11. TERMINATION
This Agreement and the transaction contemplated hereby may be terminated
and abandoned by either party, by mutual agreement or by resolution of the
party's Board of Directors/Trustees at any time prior to the Closing Date, if
circumstances should develop that, in the opinion of such Board, make
proceeding with the Agreement inadvisable. In the event of termination under
this Section 11, there shall be no liability for damages on the part of either
Fund, its officers, or Directors/Trustees.
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 Fund and the Acquiring Fund; provided, however, that following the
receipt of the written consents of the Acquired Fund Shareholders pursuant to
paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Acquired Fund Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered or mailed by registered mail, postage prepaid, addressed to the
Acquired Fund or the Acquiring Fund at 11100 Santa Monica Boulevard, Los
Angeles, California 90025 Attention: Roberta A. Conroy.
14. HEADINGS; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
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 bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment
or transfer hereof or of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
14.4 It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Acquired Fund personally, but
bind only the property of the Acquired Fund. The execution and delivery of
this Agreement have been authorized by the Trustees of the Acquired Fund and
signed by authorized officers of the Acquired Fund 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
impose any liability on any of them personally, but shall bind only the
property of the Acquired Fund.
14.5 This Agreement shall be governed by and construed in accordance with
the laws of the State of California; provided that, in the case of any conflict
between such laws and the federal securities laws, the latter shall govern.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
Attest: EMERGING MARKETS GROWTH FUND, INC.
/s/Roberta A. Conroy By:/s/ Nancy Englander
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Roberta A. Conroy Nancy Englander
Vice President and Secretary President
Attest: NEW WORLD INVESTMENT FUND
/s/Roberta A. Conroy By:/s/David I. Fisher
- ---------------------------- -------------------------
Roberta A. Conroy David I. Fisher
Vice President and Secretary President