INVESTMENT COMPANIES & REAL ESTATE INVESTMENT TRUSTS (REIT) §11.109
September 199311-207A
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
THIS AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION (“Agreement”)
is made as of the 11th day of May, 1992, between NIAGARA SHARE CORPORATION, a corporation
organized under the laws of the State of Maryland, having its principal place of business at 344 Delaware
Avenue, Buffalo, New York 14202 (“Niagara”), and SCUDDER INVESTMENT TRUST (“Trust”), a
business trust organized under the laws of the Commonwealth of Massachusetts (“Trust”), on behal f of
Scudder Growth and Income Fund, a series of Trust (“G&I”), having its principal place of business a t 175
Federal Street, Boston, Massachusetts 02110-2267. Niagara and G&I are sometimes referred to herein
collectively as the “Funds” and each individually as a “Fund.”
This Agreement is intended to be, and is adopted as, a plan of a reorganization de scribed in section
368(a)(1)(c) of the Internal Revenue Code of 1986, as amended (“Code”). Pursuant to the terms and
conditions hereinafter set forth, the reorganization will comprise the transfer of substanti ally all the assets
of Niagara in exchange solely for voting shares of beneficial interest of G&I (“G&I shares”) and G&I’s
assumption of certain of Niagara’s liabilities, followed by the distribution of such G&I sha res to
Niagara’s shareholders in liquidation of Niagara as provided herein. In connection with the
reorganization, on the Closing Date Scudder, Stevens & Clark, Inc., G&I’s investment adviser,
(“Adviser”) will purchase certain assets from Niagara pursuant to an agreement between Advi ser and
Niagara dated as of the date hereof (“Asset Purchase Agreement”).
Trust, on behalf of G&I, and Niagara covenant and agree as follows:
1. TRANSFER OF NIAGARA’S ASSETS IN EXCHANGE FOR G&I SHARES AND G&I’S ASSUMPTION OF CERTAIN LIABILITIES AND LIQUIDATION OF NIAGARA
1.1 Subject to the terms and conditions herein set forth and on the basis of the representat ions
and warranties contained herein, Niagara agrees to sell, assign, transfer, and deliver it s
assets as set forth in paragraph 1.2, to G&I, and G&I agrees (a) to issue and deliver to
Niagara in exchange therefor the number of G&I shares determined in accordance with
paragraph 2.3 and (b) to assume certain of Niagara’s liabilities as set forth in paragraph 1.3.
Such transactions shall take place at the closing provided for in paragraph 3 (“Closing”).
1.2 The assets of Niagara to be acquired by G&I (collectively “Assets”) shall include without
limitation all cash, cash equivalents, securities, receivables (including int erest and
dividends receivable), and any other property owned by Niagara on the closing date
provided in paragraph 3.1 (“Closing Date”), except for (a) tangible assets, (b) rights to the
assets to be sold to Adviser pursuant to the Asset Purchase Agreement, and (c) cash and
cash equivalents retained by Niagara (“Expense Reserve”) in an amount estimated by it to
be sufficient to discharge in full all its liabilities not assumed by G&I hereunder (including
amounts owed to shareholders, such as declared but unpaid dividends and/or other
distributions) and the expenses of its liquidation, dissolution, and deregistration. The Assets
shall be invested at all times through the Closing Date in a manner that ensures compliance
with paragraph 4.1.9. The Assets shall constitute at least 90% of the fair market value of the
net assets, and at least 70% of the fair market value of the gross assets, held by Niagara
immediately before the Closing (excluding, for these purposes, assets used to pay the
dividends and/or other distributions paid pursuant to paragraph 1.4).
1.3 On the Closing Date G&I will assume $1.3 million of Niagara’s liabilities and obli gations
for payments—including therein (a) any employment taxes that are required to be deducted
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
under section 3102 of the Code and applicable state law and (b) any income tax required to
be withheld from such payments under section 3402 of the Code and applicable state law—
under Niagara’s
Severance Plan of Deferred Compensation effective as of May 11, 1992 (“Assumed
Liabilities”). A copy of such Plan, certified by Niagara’s Secretary, has been furnished to
G&I, and Niagara agrees not to amend such Plan without G&I’s prior written consent, which
consent shall not be unreasonably withheld. All liabilities under such Plan in excess of the
Assumed Liabilities shall remain Niagara’s liabilities, and shall be discharge d in whole or in
pan by Niagara’s payments to Mr. Paul A. Schoellkopf pursuant to such Plan.
1.4 On or as soon as practicable prior to the Closing Date, Niagara will declare and pay to its
shareholders of record one or more dividends and/or other distributions so that it will have
distributed substantially all (and in any event not less than 98%) of its investment com pany
taxable income (computed without regard to any deduction for dividends paid) and realized
net capital gain, if any, for the current taxable year through the Closing Date.
1.5 On a date (“Liquidation Date”) as soon after the Closing Date as is conveniently practicable,
Niagara will liquidate and distribute pro rata to its shareholders of record, determined as of
the close of business on the Closing Date, the G&I shares received pursuant to paragraph 1.1
in exchange for their interest in Niagara evidenced by their shares of common stock of
Niagara (“Niagara shares”). Such liquidation and distribution will be accomplished by
opening accounts on the books of G&I in the names of Niagara shareholders of record and
transferring thereto the G&I shares credited to Niagara’s account on G&I’s books. Each
such opened account shall be credited with the respective pro rata number of G&I shares due
each Niagara shareholder. Fractional G&I shares shall be rounded to the third decimal pla ce.
G&I will cause a confirmation statement to be mailed or delivered to each Niagara
shareholder of record setting forth the number of G&I shares registered in such
shareholder’s name.
As soon as is reasonably practicable after the Liquidation Date, but not until the earlier of (a)
payment by G&I of all Assumed Liabilities or (b) 90 days after the Closing Date, Niagara
shall be dissolved under Maryland law and deregistered under the Investment Company Act
of 1940 (“1940 Act”). Niagara shall not conduct any business on and after the Closing Date
except in connection with its liquidation, dissolution, and deregistration. Niagara shall
timely file all required tax returns for all periods ending before, on, or after the Closing
Date.
1.6 G&I shall not issue certificates representing its shares issued, delivered, or distribut ed
pursuant to paragraphs 1.1 or 1.5. After the Closing Date, any outstanding certificates
representing Niagara shares will be canceled on the books of Niagara.
1.7 Ownership of G&I shares will be shown on its books, as maintained by Scudder Service Corporation, its transfer agent.
1.8 Any transfer taxes payable upon issuance of G&I shares in a name other than the registere d
holder of the shares on Niagara’s books as of that time shah be paid by the person to whom
such shares are to be issued as a condition of such transfer.
1.9 Any reporting responsibility of Niagara under federal and state securities laws, or any other
law, is and shall remain the responsibility of Niagara up to and including the date of its
dissolution.
1.10 All books and records of Niagara, including all books and records required to be maintained under the 1940 Act and the rules and regulations thereunder, shall be available to G&I from
and after the Closing Date and shall be turned over to G&I on or prior to the Liquidat ion
Date. All such books and records shall be available to Niagara thereafter until Nia gara is
INVESTMENT COMPANIES & REAL ESTATE INVESTMENT TRUSTS (REIT) §11.109
September 199311-207C
dissolved and deregistered.
2. VALUATION 2.1 The value of the Assets and of the Expense Reserve shall be computed as of the cl ose of
regular trading on the New York Stock Exchange, Inc. (“NYSE”) on the business day
preceding the Closing Date (such time and date being hereinafter called the “ Valuation
Time”), after the declaration and payment of any dividends and/or other distributions made
on that date, using
the valuation procedures set forth in G&I’s then-current statement of additional
information, subject to adjustments agreed to by the Funds.
2.2 The net asset value of a G&I share shall be the net asset value per such share c omputed as
of the Valuation Time, using the valuation procedures referred to in paragraph 2.1.
2.3 The number of G&I shares to be issued (including fractional shares, if any) in exchange for the Assets shall be calculated by dividing the value of the Assets determined in ac cordance
with paragraph 2.1 by the net asset value of a G&I share determined in accordance with
paragraph 2.2.
2.4 All computations of net asset value shall be made by or under the direction of t he
respective Fund’s accounting agent, if applicable, in accordance with its regular pract ice
and the requirements of the 1940 Act and shall be subject to confirmation by Coopers &
Lybrand for the benefit of G&I and by Price Waterhouse for Niagara’s benefit.
3. CLOSING 3.1 The Closing Date shall be July 27, 1992 or such later date as the parties may agree in
writing. All acts taking place at the Closing shall be deemed to take plac e simultaneously as
of 9:00 a.m. on the Closing Date unless otherwise provided. The Closing shall be at the
office of Dechert Price & Rhoads, Ten Post Office Square, Boston, MA 02109, or such
other place as the parties may agree.
3.2 In the event that immediately prior to the Valuation Time (a) the NYSE i s closed to trading
or trading thereon is restricted or (b) trading or the reporting of trading on the NYSE or
elsewhere is disrupted, so that accurate appraisal of the value of the Assets and of the net
asset value per share of G&I 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.
3.3 Niagara shall deliver to G&I on or prior to the Closing Date a schedule of the Asset s and a
schedule of the assets in the Expense Reserve.
3.4 Marine Midland Bank, N.A. (“Marine”), custodian for Niagara, shall deliver to G&I at the Closing a certificate of an authorized officer stating that (a) the Assets held by Marine have
been delivered as of the Closing Date in proper form to State Street Bank and Trust
Company (“State Street Bank”), custodian for G&I, within five days before the Closing
Date and (b) all necessary taxes in conjunction with the delivery of the Assets, includi ng all
applicable federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. Niagara’s portfolio securities represented by a certificate or other
written instrument shall be presented by Marine to State Street Bank for examination no
later than five business days preceding the Closing Date and transferred and delivered by
Niagara as of the Closing Date to State Street Bank for the account of G&I duly e ndorsed
in proper form for transfer in such condition as to constitute a good delivery thereof.
Niagara’s portfolio securities and instruments deposited with a securities depository, as
defined in Rule 17f-4 under the 1940 Act, shall be delivered as of the Closing Date by book
entry in accordance with the customary practices of such depositories and State Street
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
Bank. The cash to be transferred by Niagara shall be delivered by wire transfer of federal
funds as of the Closing Date.
3.5 At the Closing each party shall deliver to the other such bills of sale, c hecks, assignments,
share certificates, receipts, assumption agreements, releases, and other documents as the
other party or its counsel may reasonably request to effect the transactions contemplat ed by
this Agreement.
3.6 Niagara’s stock transfer books shall be permanently closed as of the Closing.
Niagara shall deliver to G&I at the Closing, or as soon as practicable thereafter, a list,
certified by Niagara’s transfer agent, of the names, addresses, and taxpayer identification
numbers of the Niagara shareholders and the number of outstanding Niagara shares owned
by each such shareholder, all as of theClosing Date, and all original documentation
(including Internal Revenue Service forms, certificates, certifications, and correspondence )
relating to the Niagara shareholders’ taxpayer identification numbers and their liabil ity for or
exemption from back-up withholding. G&I shall issue and deliver to Niagara at the Closing
a confirmation or other evidence satisfactory to Niagara that G&I shares have been or will
be credited to Niagara’s account on G&I’s books.
4. REPRESENTATIONS AND WARRANTIES 4.1 Niagara represents and warrants as follows: 4.1.1 Niagara is a corporation duly organized, validly existing, and in good standing under the laws of the State of Maryland, with power under its Articles of Incorporation to
own all of its properties and assets and to carry on its business as it is now conducted;
4.1.2 Niagara is a closed-end, diversified management investment company duly registered under the 1940 Act, and such registration is in full force and effect;
4.1.3 Niagara is not, and the execution, delivery, and performance of this Agreement will not result, in violation of Maryland law or of any provision of Niagara’s Articles of
Incorporation or By-Laws or of any material agreement, indenture, instrument,
contract, lease, or other undertaking to which it is a party or by which it is bound,
except as previously disclosed in writing to G&I;
4.1.4 To the best of its knowledge, the Expense Reserve will be adequate to discharge all
its liabilities other than the Assumed Liabilities;
4.1.5 Except as previously disclosed in writing to G&I, (a) no material litigation, administrative proceeding, or investigation of or before any court or governmental
body is presently pending or threatened against Niagara or any of its properties or
assets, (b) Niagara knows of no facts that might form the basis for the institution of
such litigation, proceedings, or investigations, and (c) Niagara is not a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects its business or its ability t o
consummate the transactions herein contemplated;
4.1.6 The Statements of Assets and Liabilities, Operations, and Changes in Net Assets, the Selected Per Share Data and Ratios, and the schedule of Portfolio Investments of
Niagara at and for the fiscal year ended December 31, 1991 (copies of which have
been furnished to G&I) have been audited by Price Waterhouse, independent
accountants, in accordance with generally accepted auditing standards. Such financial
statements are prepared in accordance with generally accepted accounting principl es
consistently applied and fairly present, in all material respects, the financial condition
of Niagara at and for the fiscal year ended on such date, and there are no materi al
known liabilities of Niagara (contingent or otherwise) not disclosed therein;
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September 199311-207E
4.1.7 Since December 31, 1991, there has not been any material adverse change in
Niagara’s financial condition, assets, liabilities, or business other than changes
occurring in the ordinary course of business, or any incurring by Niagara of
indebtedness maturing more than one year from the date such indebtedness was
incurred, except as otherwise disclosed to and accepted in writing by G&I. For the
purposes of this paragraph, a decline in net asset value or market price per share shall
not constitute a material adverse change;
4.1.8 At the date hereof and at the Closing Date, all federal and other tax
returns and reports of Niagara required by law to have been filed by such dates,
other than tax returns and reports with respect to which the failure to file will not
have a material adverse effect on Niagara’s financial statements, shall have be en
filed (or valid extensions of filing dates shall have been obtained), and all federal
and other taxes shown as due on such returns and reports shall have been paid
insofar as due, or provision shall have been made for thepayment thereof, and to
the best of Niagara’s knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns;
4.1.9 The provisions of Part I of Subchapter M of the Code (“Part I”) have applied to Niagara for all its taxable years ended on or after November 8, 1983, and Niagara
will meet the requirements of Part I for qualification and treatment as a regul ated
investment company (“RIC”) for the current taxable year;
4.1.10 All issued and outstanding Niagara shares (a) have been offered and sold in every state and the District of Columbia in compliance in all material respec ts with
applicable registration requirements of the Securities Act of 1933 (“1933 Act”)
and state securities laws, (b) are, and at the Closing Date will be, duly and validl y
issued and outstanding, fully paid and non-assessable, and (c) will be held at the
time of the Closing by the persons and in the amounts set forth in the list of
shareholders delivered to G&I in accordance with paragraph 3.6. Niagara does
not have outstanding any options, warrants, or other rights to subscribe for or
purchase any of its shares, nor is there outstanding any security convertible into
any of its shares;
4.1.11 At the Closing Date, Niagara will have good and marketable title to the Asset s
and full right, power, and authority to sell, assign, transfer, and deliver the Assets
hereunder free of any liens or other encumbrances, and upon delivery and
payment for the Assets, G&I will acquire good and marketable title thereto;
4.1.12 The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action, other than shareholder approval, on
the part of Niagara, and this Agreement constitutes a valid and binding obligation
of Niagara, subject to shareholder approval;
4.1.13 The information to be furnished by Niagara for use in applications for orders, registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations thereunder
applicable thereto;
4.1.14 On the effective date of the registration statement to be filed with the Securities
and Exchange Commission (“SEC”) by the Trust on Form N-14 relating to the
G&I shares issuable hereunder, and any supplement or amendment thereto
(“Registration Statement”), and at the time of the meeting of Niagara’s
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
shareholders and on the Closing Date, each of G&I’s prospectus to be included in
the Registration Statement and Niagara’s proxy statement (collectively, “Proxy
Statement/Prospectus”) and the Registration Statement (a) will comply in all
material respects with the provisions of the Securities Exchange Act of 1934
(“1934 Act”) and the 1940 Act and the rules and regulations thereunder and (b)
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 there in not
misleading; provided, however, that the representations and warranties in this
paragraph shall not apply to statements in or omissions from the Proxy
Statement/Prospectus and the Registration Statement made in reliance upon and
in conformity with information that was furnished or should have been furnished
by G&I for use therein; and
4.1.15 Niagara is not aware of any plan or intention on the part of Niagara shareholders owning more than 50% of the Niagara shares to redeem, immediately after the
Closing, the G&I shares issued to them pursuant to this Agreement.
4.1.16 No portion of any payments to be made by G&I in discharging the Assumed Liabilities will constitute “excess parachute payments” for which a deduction i s
disallowed pursuant to section 280G of the Code.
4.2 G&I represents and warrants as follows:
4.2.1 G&I is a series of Trust, a business trust duly organized, validly existing, and in good standing under the laws of the Commonwealth of Massachusetts, with power
under its Declaration of Trust to own all of its properties and assets and to carry on
its business as it is now conducted;
4.2.2 Trust is an open-end management investment company duly registered under the 1940 Act, and such registration is in full force and effect;
4.2.3 Trust is not, and the execution, delivery, and performance of this Agreement will not result, in violation of Massachusetts law or of any provision of its Declaration of
Trust or By-Laws or of any material agreement, indenture, instrument, contract,
lease, or other undertaking to which it is a party or by which it is bound, except as
previously disclosed in writing to Niagara;
4.2.4 No material litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or threatened against G&I or any
of its properties or assets, except as previously disclosed in writing to Niagara. G&I
knows of no facts that might form the basis for the institution of such litigation,
proceedings, or investigations, and G&I is not a party to or subject to the provisions
of any order, decree, or judgment of any court or governmental body that materially
and adversely affects its business or its ability to consummate the transactions herei n
contemplated;
4.2.5 The Statements of Assets and Liabilities, Operations, and Changes in Net Assets, the Supplementary Information, and the Investment Portfolio of G&I at and for the
fiscal year ended December 31, 1991 (copies of which have been furnished to
Niagara) have been audited by Coopers & Lybrand, independent accountants, in
accordance with generally accepted auditing standards. Such financial statements
are prepared in accordance with generally accepted accounting principles
consistently applied and fairly present, in all material respects, the financial
condition of G&I at and for the fiscal year ended on such date, and there are no
material known liabilities of G&I (contingent or otherwise) not disclosed therein;
4.2.6 Since December 31, 1991, there has not been any material adverse change in G&I’s
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September 199311-207G
financial condition, assets, liabilities, or business other than changes occurring in the
ordinary course of business, or any incurring by G&I of indebtedness maturing more
than one year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted in writing by Niagara. For the purposes of this paragraph,
a decline in net asset value per share or an increase or decrease in the number of
shares outstanding shall not constitute a material adverse change;
4.2.7 At the date hereof and at the Closing Date, all federal and other tax returns and
reports of G&I required by law to have been filed by such dates, other than tax
returns and reports with respect to which the failure to file will not have a mate rial
adverse effect on G&I’s financial statements, shall have been filed (or valid
extensions of filing dates shall have been obtained), and all federal and other taxes
shown as due on such returns and reports shall have been paid insofar as due, or
provision shall have been made for the payment thereof, and to the best of G&I’s
knowledge no such return is currently under audit and no assessment has been
asserted with respect to such returns;
4.2.8 For each past taxable year, G&I (and any predecessor) has met the requirements of Part I for qualification and treatment as a RIC and will meet those requireme nts for
the current taxable year;
4.2.9 All issued and outstanding G&I shares (a) have been offered and sold in
every state and the District of Columbia in compliance, in all material re spects,
with applicable registration requirements of the 1933 Act and state securities
laws, and (b) are, and at theClosing Date will be, duly and validly issued and
outstanding, fully paid, and non-assessable by G&I. Except as contemplated by
this Agreement, G&I does not have outstanding any options, warrants, or other
rights to subscribe for or purchase any of its shares, nor is there outstanding any
security convertible into any of its shares;
4.2.10 The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Trust, and this
Agreement constitutes a valid and binding obligation of G&I;
4.2.11 The G&I shares to be issued and delivered to Niagara pursuant to this Agreement will, at the Closing Date, have been duly authorized and, when issued and
delivered as provided in this Agreement, will have been offered and sold in every
state and the District of Columbia in compliance in all material respec ts with
applicable registration requirements of the 1933 Act and state securities laws and
will be duly and validly issued and outstanding G&I shares, fully paid, and non-
assessable by G&I;
4.2.12 The information to be furnished by G&I for use in applications for orders, registration statements, proxy materials, and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations thereunder
applicable thereto;
4.2.13 On the effective date of the Registration Statement and at the time of t he meeting
of Niagara’s shareholders and on the Closing Date, each of the Proxy
Statement/Prospectus and the Registration Statement (a) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act, and the 1940
Act and the rules and regulations thereunder and (b) will not contain any untrue
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
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; provided,
however, that the representations and warranties in this paragraph shall not apply
to statements in or omissions from the Proxy Statement/Prospectus and the
Registration Statement made in reliance upon and in conformity with information
that was furnished or should have been furnished by Niagara for use therein; and
4.2.14 G&I has no plan or intention to dispose of any material portion of the Assets after the Closing Date except short-term debt obligations and other than (a) in the
ordinary course of business, (b) to the extent necessary to maintain its status as a
RIC, or (c) in response to unforeseen investment or other conditions. From and
after the Closing, G&I will continue Niagara’s historic business (within the
meaning of section 1.368-1(d)(2)(i) of the Income Tax Regulations under the
Code).
5. COVENANTS OF THE FUNDS 5.1 Each Fund covenants to operate its respective business in the ordinary course between the
date hereof and the Closing Date, it being understood that (a) such ordinary course of
business will include (i) declaring and paying customary dividends and other distributions,
(ii) such changes as are contemplated by the Funds’ normal operations, and (iii) in
Niagara’s case, preparing for its liquidation, dissolution, and deregistration and (b) each
Fund shall retain exclusive control of the composition of its portfolio until the Closing
Date. Niagara shall have no obligation to dispose of any securities owned by it, but it
agrees to inform G&I orally or in writing, at least 24 hours in advance, if it deems it
prudent to acquire or dispose of securities, other than short-term debt securities.
5.2 Upon reasonable notice, G&I’s officers and agents shall have reasonable access to Niagara’s books and records necessary to maintain current knowledge of Niagara and to
ensure that the representations and warranties made by Niagara are accurate.
5.3 Niagara covenants to call a shareholders’ meeting to consider and act upon this Agreement
and to take all other reasonable action necessary to obtain approval of the transac tions
contemplated hereby. Such meeting shall be scheduled for no later than August 17, 1992.
5.4 Niagara covenants that the G&I shares to be received by Niagara in accordance herewi th are
not being acquired for the purpose of making any distribution thereof other than in
accordance with the terms of this Agreement.
5.5 Niagara covenants that it will assist G&I in obtaining such information as G&I reasonabl y
requests concerning the beneficial ownership of Niagara’s shares.
5.6 Subject to the provisions of this Agreement, each Fund will take or cause to be taken a ll
action, and will do or cause to be done all things, reasonably necessary, proper, and/or
advisable to consummate and effectuate the transactions contemplated by this Agreement.
5.7 Each Fund covenants to prepare the Proxy Statement/Prospectus in compliance with the 1933 Act, the 1934 Act, and the 1940 Act. G&I will file the Registration Statement,
including the Proxy Statement/Prospectus, with the SEC. To the extent necessary, each party
agrees to provide the other with information regarding such party required for inclusion in
the Proxy Statement/Prospectus.
5.8 Niagara covenants that it will, from time to time, as and when reasonably reque sted by G&I,
execute and deliver or cause to be executed and delivered all such assignments a nd other
instruments, and will take or cause to be taken such further action, as G&I may reasona bly
deem necessary or desirable in order to vest in and confirm to G&I title to and posse ssion of
all the Assets and otherwise to carry out the intent and purpose of this Agreement.
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September 199311-207I
5.9 G&I covenants to use all reasonable efforts to obtain the approvals and authorizations
required by the 1933 Act, the 1940 Act, and such of the state securities laws as it may deem
appropriate in order to continue its operations after the Closing Date; provided, however,
that G&I may take such actions it reasonably deems advisable after the Cl osing Date as
circumstances change.
5.10 G&I covenants that it will, from time to time, as and when reasonably requested by Niagara,
execute and deliver or cause to be executed and delivered all such assignments, assum ption
agreements, releases, and other instruments, and will take or cause to be taken such furt her
action, as Niagara may reasonably deem necessary or desirable in order to (a) vest in and
confirm to Niagara title to and possession of all the G&I shares to be transferred to Ni agara
pursuant to this Agreement and (b) assume the Assumed Liabilities from Niagara.
5.11 G&I has no objection to the Asset Purchase Agreement and agrees not to transfer the information contained in Niagara’s shareholder database and any rights to such database to
any third person, except to G&I’s agents or service providers (such as G&I’s transfer agent)
solely for use in their capacities as such agents or service providers, and except as ma y be
required by applicable law, regulation, or order of any court or government agency.
5.12 Niagara covenants that it will prepare and file, or furnish to G&I on the basis G&I reasonably specifies, all returns, statements, or other documents required to be filed by
Niagara or G&I under federal, state, or local law in connection with any payments made by
G&I in discharge of the Assumed Liabilities (collectively, “Returns”). Any Returns that
Niagara files or furnishes on its own behalf shall be consistent with those filed by G&I.
Niagara will make no claims for refunds or credits of any taxes or related amounts pa id by
G&I to any federal, state, or local tax or other governmental authority in connecti on with
any payments made by G&I in discharge of the Assumed Liabilities. With respect to a ny
such payments made by G&I, (a) G&I shall pay all employment taxes that are required t o be
deducted under section 3102 of the Code and applicable state law and any income tax
required to be withheld from such payments under section 3402 of the Code and applicable
state law, and (b) the Returns shall treat G&I as a third party paying or providing for wa ges
within the meaning of section 3505 of the Code and section 678 of the New York Tax Law.
Niagara shall pay all employment and other taxes imposed on the employer that a re not
described in clause (a) above
5.13 The Funds will consult with each other regarding the content and dissemination of all press
releases, announcements, and other public statements with respect to the transactions
contemplated hereby. Neither Fund will issue any such statement without the prior approva l
of the other parties, unless such statement is required by law.
6. CONDITIONS PRECEDENT TO NIAGARA’S OBLIGATIONS Niagara’s obligations to consummate the transactions provided for herein shall be subject t o the
performance by G&I of all the obligations to be performed by it hereunder on or before the Closing
Date and the following further conditions:
6.1 All representations and warranties of G&I contained in this Agreement shall be true a nd
correct in all material respects as of the date hereof and, except as they m ay be affected by
the transactions contemplated by this Agreement, as of the Closing Date with the sa me
force and effect as if made on and as of the Closing Date; and there shall be (a) no pending
or threatened litigation brought by any person (other than G&I, Adviser, or any of their
affiliates) against Niagara, G&I or Adviser or their directors, trustees or officers arising out
of this Agreement or the Asset Purchase Agreement and (b) no facts known to Niagara
which Niagara reasonably believes might result in such litigation;
6.2 G&I shall have delivered to Niagara on the Closing Date a certificate exe cuted in G&I’s
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
name by its President or a Vice President, in form and substance satisfactory to Niagara and
dated as of the Closing Date, to the effect that (a) the representations and warranti es of G&I
made in this Agreement are true and correct at and as of the Closing Date exc ept as they
may be affected by the transactions contemplated by this Agreement, (b) the provisions of
Part I will apply to G&I for the taxable year including the Closing Date, and (c ) as to such
other matters as Niagara shall reasonably request; and
6.3 Niagara shall have received on the Closing Date a favorable opinion from Dechert Pric e &
Rhoads, counsel to G&I, dated as of the Closing Date, to the effect that:
6.3.1 G&I is a series of Trust, a business trust duly organized, validly existing, and in good standing under the laws of the Commonwealth of Massachusetts, with
power under its Declaration of Trust to own all of its properties and assets and, to
the knowledge of such counsel, to carry on its business as it is now conducted;
6.3.2 This Agreement has been duly authorized, executed, and delivered by G&I and, assuming due authorization, execution, and delivery of this Agreement by
Niagara, is a valid and binding obligation of G&I;
6.3.3 The G&I shares to be distributed to Niagara shareholders under this Agreement, assuming their due authorization and delivery as contemplated by this
Agreement, will be validly issued and outstanding, fully paid, and non-assessable
by G&I, and no shareholder of G&I has any pre-emptive right to subscribe
thereto or purchase such shares;
6.3.4 The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, result in the violation of
Massachusetts law, Trust’s Declaration of Trust or By-Laws, or any provision of
any agreement (known to such counsel) to which G&I is a party or by which it is
bound or, to the knowledge of such counsel, result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement, judgment, or
decree to which G&I is a party or by which it is bound;
6.3.5 To the knowledge of such counsel, no consent, approval, authorization, or order of any court or governmental authority is required for the consummation by G&I
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act, and the 1940 Act and such as may be required under
state Blue Sky or securities laws;
6.3.6 Trust has been registered with the SEC as an investment company under the 1940 Act, and, to the knowledge of such counsel, no order has been issued or
proceeding instituted to suspend such registration; and
6.3.7 To the knowledge of such counsel, (a) no litigation or administrative proceeding or investigation of or before any court or governmental body is pending or threatened
as to G&I or any of its properties or assets, (b) G&I is not a party to or subject to
the provisions of any order, decree, or judgment of any court or governmental body
that materially and adversely affects its business, except as otherwise disclosed,
and (c) only insofar as they relate to G&I, the descriptions in the Proxy
Statement/Prospectus of statutes, legal and governmental proceedings, contracts,
and operations of G&I, if any, are accurate and fairly present the information
required to be shown.
6.4 G&I shall have duly authorized, and shall have available for sale to the public and for
issuance and delivery to Niagara pursuant to an effective registration statement fi led with the
SEC, G&I shares that may be purchased at a price equal to the next determined net asset
INVESTMENT COMPANIES & REAL ESTATE INVESTMENT TRUSTS (REIT) §11.109
September 199311-207K
value per share.
6.5 Adviser shall have executed and delivered to Niagara the Asset Purchase Agreement a nd on
the Closing Date, subject to Niagara’s performance thereof, shall have paid to Niagara a ll
amounts due to Niagara pursuant thereto.
6.6 Adviser shall have delivered to Niagara a letter signed by Adviser and addressed to Niagara
in the form attached hereto as Attachment 1.
7. CONDITIONS PRECEDENT TO G&I’S OBLIGATIONS G&I’s obligations to complete the transactions provided for herein shall be subject to the
performance by Niagara of all the obligations to be performed by it hereunder on or before the
Closing Date and the following further conditions:
7.1 All representations and warranties of Niagara contained in this Agreement shall be t rue and
correct in all material respects as of the date hereof and, except as they ma y 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; and there shall be (a) no pending or
threatened litigation brought by any person (other than Niagara or any of its affiliates)
against G&I, Adviser, or Niagara, or their directors, trustees or officers arising out of this
Agreement or the Asset Purchase Agreement and (b) no facts known to G&I which G&I
reasonably believes might result in such litigation;
7.2 Niagara shall have delivered to G&I on the Closing Date a statement of the Assets—
including (a) a list of portfolio securities showing the adjusted tax bases and holding periods
of such securities by lot and (b) a list of all foreign corporations whose shares Niagara owns
and that have been identified as passive foreign investment companies by Niagara, toget her
with a description of the tax treatment given thereto pursuant to section 1291 et. se q. of the
Code—as of the Closing Date, certified by its Treasurer, which statement shall be prepared
in accordance with generally accepted accounting principles consistently applied;
7.3 Niagara shall have delivered to G&I on the Closing Date a certificate exec uted in Niagara’s
name by its President or a Senior Vice President, in form and substance satisfactory to G&I
and dated as of the Closing Date, to the effect that (a) the representations and wa rranties of
Niagara made in this Agreement are true and correct at and as of the Closing Dat e except as
they may be affected by the transactions contemplated by this Agreement, (b) the provisi ons
of Part I apply to Niagara for the taxable year ending on the Closing Date, and (c) as to such
other matters as G&I shall reasonably request;
7.4 G&I shall have received on the Closing Date a favorable opinion from Kirkpatrick & Lockhart, special counsel to Niagara, dated as of the Closing Date, to the effect that:
7.4.1 Niagara is a corporation duly organized, validly existing, and in good standing under the laws of the State of Maryland, with power under its Articles of Incorporation to own all of
its properties and assets and, to the knowledge of such counsel, to carry on its business as it
is now conducted;
7.4.2 This Agreement has been duly authorized, executed, and delivered by Niagara and, assuming due authorization, execution, and delivery of this Agreement by
G&I, is a valid and binding obligation of Niagara;
7.4.3 The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, result in the violation of Maryland
law, Niagara’s Articles of Incorporation or By-Laws, or any provision of any
agreement (known to such counsel) to which Niagara is a party or by which it is
bound or, to the knowledge of such counsel, result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement, judgment, or
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
decree to which Niagara is a party or by which it is bound;
7.4.4 To the knowledge of such counsel, no consent, approval, authorization, or order of any court or governmental authority is required for the consummation by
Niagara of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act and such as may be
required under state Blue Sky or securities laws;
7.4.5 Niagara has been registered with the SEC as an investment company under the 1940 Act, and, to the knowledge of such counsel, no order has been issued or
proceeding instituted to suspend such registration; and
7.4.6 To the knowledge of such counsel, (a) no litigation or administrative proceeding or investigation of or before any court or governmental body is pending or
threatened as to Niagara or any of its properties or assets, (b) Niagara is not a
party to or subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially and adversely affects its business,
except as otherwise disclosed, and (c) only insofar as they relate to Niagara, the
descriptions in the Proxy Statement/Prospectus of statutes, legal and
governmental proceedings, contracts, and operations of Niagara, if any, are
accurate and fairly present the information required to be shown.
7.5 G&I shall have received on the Closing Date a comfort letter from Price Waterhouse , independent
accountants, dated as of the Closing Date, as to certain financial and account ing matters, in form
and substance mutually agreed upon by the Funds. Such letter shall include statements t hat (a) Price
Waterhouse has reviewed and signed as preparer the federal and New York State income t ax
returns of Niagara for each of its last three taxable years and, based upon such review, nothi ng
came to their attention that caused them to believe that such returns di d not properly reflect, in all
material aspects, the federal and New York State income tax liabilities of Ni agara for the periods
covered thereby, (b) Price Waterhouse has reviewed the determination of Niagara’s federal a nd
New York State income tax liabilities for the period beginning January 1, 1992, and ending on t he
Closing Date based upon unaudited financial data for the period then ended and has dete rmined that
the federal and New York State income tax liabilities have been paid or a ppropriate reserves have
been established for such payment of taxes, and based upon such review nothing came to their
attention that caused them to believe that the taxes paid or reserves set a side for payment of such
taxes were not adequate in all material respects for the satisfaction of the federal and New York
State income tax liabilities for the period January 1, 1992, through the Closing Date, and (c)
nothing came to the attention of Price Waterhouse that caused them to believe that the provisions of
Part I would not apply to Niagara for any year or period referred to in (a) or (b) above. 8.
FURTHER CONDITIONS PRECEDENT TO THE PARTIES’ OBLIGATIONS
The obligations of each party hereunder are subject to the further conditions that on or be fore the
Closing Date:
8.1 This Agreement and the transactions contemplated hereby shall have been approved by the
requisite vote of the holders of the outstanding Niagara shares in accordance with the 1940
Act, Maryland law, and the provisions of Niagara’s Articles of Incorporation, and copies of
the resolutions evidencing such approval, certified by the Secretary of Niagara, shall have
been delivered to G&I;
8.2 On the Closing Date no action, suit, or other proceeding shall be pending or, to any party’s knowledge, threatened 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;
INVESTMENT COMPANIES & REAL ESTATE INVESTMENT TRUSTS (REIT) §11.109
September 199311-207M
8.3 All consents of other parties and all consents, orders, and permits of federal, state, and local
regulatory authorities (including those of the SEC and of state Blue Sky or securities
authorities, including “no-action” positions of such authorities) deemed necessary by any
party to permit consummation, in all material respects, of the transactions contem plated
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 either Fund’s assets or
properties, provided that any party may for itself waive any part of this condition;
8.4 The Registration Statement shall have become effective under the 1933 Act, no st op orders
suspending its effectiveness shall have been issued, and, to the best knowledge of the
parties, no investigation or proceeding under the 1933 Act for that purpose shall have been
instituted or be pending, threatened, or contemplated. The SEC shall not have issued an
unfavorable report under section 25(b) of the 1940 Act nor instituted any proceedings
seeking to enjoin under section 25(c) of the 1940 Act the consummation of the transactions
contemplated hereby;
8.5 The Funds shall have received on or before the Closing Date an opinion of Kirkpatrick & Lockhart, substantially to the effect that for federal income tax purposes:
8.5.1 The acquisition by G&I of the Assets in exchange solely for G&I shares and G&I’s assumption of the Assumed Liabilities, followed by the distribution of those shares
by Niagara pro rata to its shareholders pursuant to its liquidation and constructively
in exchange for their Niagara shares, will constitute a reorganization within the
meaning of section 368(a)(1)(c) of the Code, and each Fund will be “a party to a
reorganization” within the meaning of section 368(b) of the Code;
8.5.2 The Niagara shareholders will recognize no gain or loss upon the constructive exchange of all their Niagara shares solely for G&I shares;
8.5.3 No gain or loss will be recognized to Niagara upon the transfer of the Assets to G&I in exchange solely for G&I shares and G&I’s assumption of the Assumed Liabilities
and the subsequent distribution of those shares to Niagara shareholders in
liquidation of Niagara;
8.5.4 No gain or loss will be recognized to G&I upon the receipt of the Assets in exchange solely for G&I shares and G&I’s assumption of the Assumed Liabilities;
8.5.5 G&I’s basis for the Assets will be, in each instance, the same as the basis thereof i n
Niagara’s hands immediately before the transfer, and G&I’s holding period for the
Assets will include, in each instance, Niagara’s holding period therefor;
8.5.6 The Niagara shareholders’ basis for the G&I shares to be received by them will be the same as their basis for the Niagara shares to be constructively surrendered in
exchange therefor; and
8.5.7 The holding period of the G&I shares to be received by the Niagara shareholders will include the period during which the Niagara shares to be constructively
surrendered in exchange therefor were held, provided those Niagara shares were
held as capital assets by those shareholders on the date of the exchange.
9. FINDER’S FEES AND EXPENSES 9.1 Each Fund represents and warrants to the other that there are no investment banking,
finder’s, or other fees payable in connection with the transactions provided for herein,
except for fees payable solely by Niagara to Putnam Lovell Inc. in the amount of $250,000.
9.2 Each Fund shall be responsible for its own expenses incurred in connection with entering into and carrying out the provisions of this Agreement.
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES10.1 Neither Fund has made any representation, warranty, or covenant not set forth herein, and this Agreement constitutes the entire agreement between the Funds.
10.2 The representations, warranties, and covenants contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereunder until Niagara is dissolved.
11. TERMINATION This Agreement may be terminated at any time before the Closing Date (a) by mutual agreement of
the parties, or (b) by either Fund if the Closing shall not have occurred on or before September 30,
1992, unless such date is extended by mutual agreement of the Funds, or (c) by either Fund if the
other Fund shall have materially breached its obligations under this Agreement or made a material
and intentional misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability here under on the part
of any party or their respective directors/trustees or officers, except for any such material breach or
intentional misrepresentation, as to each of which all remedies at law or i n equity of the party
adversely affected shall survive.
12. CONFIDENTIALITY Prior to the Closing and after any termination of this Agreement, Trust will keep confi dential, and
will take reasonable steps to cause its employees, representatives, and affiliat ed persons to keep
confidential, and will not disclose to any person or use in any way without the prior wri tten consent
of Niagara, except in connection with the transactions contemplated hereby, all c onfidential or
proprietary information of Niagara, whether obtained through a due diligence investigation, the
provisions of this Agreement, or otherwise, except that such information may be disclosed (a) i f
required by court order or decree or applicable law, (b) if it is publicly available t hrough no act or
failure to act of Trust, (c) during the course of any litigation, governmental investigation, or
proceeding based upon or in connection with the subject matter of this Agreement, or (d) if
disclosure is expressly provided for herein.
13. AMENDMENT This Agreement may be amended, modified, or supplemented only in writing by the parties;
provided, however, that following the shareholders’ meeting called by Niagara pursuant to paragraph
5.3, no such amendment may have the effect of changing the provisions for determining the number
of G&I shares to be distributed to Niagara shareholders under this Agreement to the detriment of
such shareholders without their further approval. Each party, after consultation with its respec tive
counsel and by consent of its respective board, or an officer authorized by such board, may waive i n
writing any condition to its obligations hereunder.
14. NOTICES
Any notice, report, demand, or other communication required or permitted by any provision of this
Agreement shall be in writing and shall be given by hand delivery, or prepaid certified ma il or
overnight delivery service, addressed as follows:
In the case of Niagara, to Niagara Share Corporation, 344 Delaware Avenue, Buffalo, New
York 14202, Attention: Paul K. Wustrack, Jr., Senior Vice President; and
INVESTMENT COMPANIES & REAL ESTATE INVESTMENT TRUSTS (REIT) §11.109
September 199311-207O
In the case of G&I, to Scudder Growth and Income Fund, 175 Federal Street, Boston,
Massachusetts 02110-2267, Attention: Daniel Pierce, President.
15. MISCELLANEOUS 15.1 All agreements, covenants, representations, and warranties made herein by G&I, and all obligations, duties, responsibilities, rights, and privileges created hereunder in the name of
G&I, and all actions herein that are to be taken by G&I, shall be treated as if made, created,
or to be taken by Trust on behalf of G&I. The name “Scudder Investment Trust” is the
designation of the Trustees for the time being under an Amended and Restated Decla ration
of Trust, dated September 20, 1984, as amended. G&I’s obligations hereunder shall not be
binding upon any of Trust’s trustees, shareholders, nominees, officers, agents, or employees
personally, but shall bind only the trust property of Trust. Any persons dealing with Trust
must look solely to Trust property for the enforcement of any claims against Trust. No serie s
of Trust other than G&I is responsible for G&I’s obligations.
15.2 The 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.
15.3 This Agreement may be executed in any number of counterparts, each of which will be deemed an original.
15.4 This Agreement shall be governed by and construed in accordance with the laws of the Sta te
of Maryland, except with respect to issues concerning Massachusetts business trusts which
shall be governed by Massachusetts law, and except to the extent that the federal sec urities
laws pre-empt both such states’ laws.
15.5 This Agreement shall bind and inure to the benefit of the parties and their respec tive
successors and assigns, and no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by either party without the other party’s written consent. 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 and their respective successors and assigns
any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed by its President.
Attest: NIAGARA SHARE CORPORATION
PAUL K. WUSTRACK, JR. By: ROBERT J.A. IRWIN
Paul K. Wustrack, Jr., Secretary Robert J.A. Irwin, President
Attest: SCUDDER INVESTMENT TRUST , on behalf of
Scudder Growth and Income Fund
THOMAS F. MCDONOUGH By: DANIEL PIERCE
Thomas F. McDonough, Secretary Daniel Pierce, President
§11.109 PROXY STATEMENTS: STRATEGY & FORMS
ATTACHMENT 1
To: Niagara Share Corporation 344 Delaware Avenue
Buffalo, New York 14202
We hereby represent and warrant to you that we have no present intention to seek an inc rease, at
any time during the two years following the Closing Date of the reorganization of Niagara Share
Corporation and Scudder Growth and Income Fund (“Fund”), in the current rates charged by us or our
affiliates to the Fund for management, advisory, transfer agent, and other fees. S CUDDER , STEVENS & CLARK , INC .
By: D ANIEL PIERCE
Daniel Pierce, Chairman
