AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this 24th
day of May, 1999, between Kobren Conservative Allocation Fund (the "Acquired
Fund") and Kobren Moderate Growth Fund (the "Acquiring Fund"), each of which is
a series of Kobren Insight Funds, a Massachusetts business trust (the "Trust").
1. Plan of Reorganization and Liquidation
(a) The Acquired Fund shall assign, sell, convey, transfer and deliver to the
Acquiring Fund at the Closing provided for in Section 2 (the "Closing") all
of its then existing assets of every kind and nature. In consideration
therefor, the Acquiring Fund agrees that at the Closing (i) the Acquiring
Fund shall assume all of the Acquired Fund's obligations and liabilities
then existing, whether absolute, accrued, contingent or otherwise,
including all unpaid fees and expenses of the Acquired Fund in connection
with the transactions contemplated hereby and (ii) the Acquiring Fund shall
issue and deliver to the Acquired full and fractional shares of beneficial
interest of the Acquiring Fund (the "Acquiring Fund Shares") that have an
aggregate net asset value equal to the value of the assets transferred to
the Acquiring Fund by the Acquired Fund, less the liabilities of Acquired
Fund assumed by Acquiring Fund.
(b) Upon consummation of the transactions described in paragraph (a) of this
Section 1, the Acquired Fund shall distribute in complete liquidation pro
rata to its shareholders of record as of the Closing Date the Acquiring
Fund Shares received by the Acquired Fund. This distribution shall be
accomplished by establishing an account on the share record books of the
Acquiring Fund in the name of each shareholder an amount of full and
fractional Acquiring Fund Shares equal to the amount of shares of the
Acquired Fund owned of record by the shareholder at the Closing Date.
(c) As promptly as practicable after the above liquidation of the Acquired
Fund, the legal existence of the Acquired Fund shall be terminated.
2. Closing and Closing Date. The Closing shall occur as of the close of business
on May 28, 1999 or at such other time and date as the parties may mutually agree
(the "Closing Date").
3. Conditions Precedent. The obligations of the Acquired Fund and the Acquiring
Fund to effect the transactions contemplated hereunder (the "Reorganization")
shall be subject to the satisfaction of each of the following conditions:
(a) All such filings shall have been made with, and all such authorizations and
orders shall have been received from, the Securities and Exchange
Commission (the "SEC") and state securities commissions as may be necessary
to permit the parties to carry out the transactions contemplated by this
Agreement.
(b) Each party shall have received an opinion of counsel substantially to the
effect that for federal income tax purposes: (1) the acquisition of the
assets of the Acquired Fund by the Acquiring Fund in exchange for Acquiring
Fund's assumption of Acquired Fund's liabilities and Acquiring Fund's
issuance of Acquiring Fund Shares to the Acquired Fund, the distribution of
such Acquiring Fund Shares to the shareholders of the Acquired Fund in
complete liquidation of the Acquired Fund, and the termination of the
Acquired Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Acquiring Fund and the Acquired Fund will each be "a party
to a reorganization" within the meaning of Section 368(b) of the Code; (2)
no gain or loss will be recognized by the Acquired Fund upon the transfer
of all of its assets to the Acquiring Fund solely in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund and the distribution by the Acquired Fund
of such Acquiring Fund Shares to the shareholders of the Acquired Fund; (3)
no gain or loss will be recognized by the Acquiring Fund upon the receipt
of all of the assets of the Acquired Fund in exchange solely for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the liabilities of
the Acquired Fund; (4) the tax basis of the Acquiring Fund in the assets
received from the Acquired Fund will be the same as the tax basis of such
assets in the hands of the Acquired Fund immediately prior to the transfer
of such assets to the Acquiring Fund; (5) the Acquiring Fund's tax holding
period for the assets acquired from the Acquired Fund will include, in each
instance, the Acquired Fund's tax holding period for those assets; (6) no
gain or loss will be recognized by the Acquired Fund's shareholders upon
the exchange of their shares of the Acquired Fund solely for Acquiring Fund
Shares as part of the reorganization; (7) the tax basis of the Acquiring
Fund Shares received by the Acquired Fund's shareholders in the transaction
will be, for each shareholder, the same as the tax basis of the shares of
the Acquired Fund exchanged therefor; and (8) the tax holding period of the
Acquiring Fund Shares received by the Acquired Fund's shareholders will
include, for each shareholder, the shareholder's tax holding period for the
shares of the Acquired Fund surrendered in exchange therefor, provided that
the surrendered shares were held as capital assets in the hands of the
Acquired Fund's shareholders on the date of the exchange. The opinion may
cover any additional matters deemed material by such counsel.
(c) At any time prior to the Closing, any of the foregoing conditions may be
waived by the Trustees of the Trust if in their judgment, the waiver will
not have a material adverse effect on the interests of the shareholders of
the Acquired Fund or Acquiring Fund.
4. Amendment. This Agreement may be amended at any time by action of the
Trustees of the Trust, provided that no amendment shall have a material adverse
effect on the interests of the shareholders of the Acquired Fund or Acquiring
Fund.
5. Termination. The Trustees of the Trust may terminate this Agreement and
abandon the Reorganization at any time prior to the Closing, if circumstances
should develop that, in their judgment, make proceeding with the Reorganization
inadvisable.
This Agreement shall be executed in any number of counterparts each of which
shall be deemed to be an original, but all counterparts together shall
constitute only one instrument.
IN WITNESS WHEREOF the parties have hereunto caused this Agreement to
be executed and delivered by their duly authorized officers as of the day and
year first above written.
KOBREN INSIGHT FUNDS on behalf of
Kobren Conservative Allocation Fund
Attest: /s/ XXXX X. XXXXX By: /s/ XXXX X. XXXXXX
By: Xxxx X. Xxxxx Name: Xxxx X. Xxxxxx
Its: Secretary Its: Chairman of the Board
KOBREN INSIGHT FUNDS on behalf of
Kobren Growth Fund
Attest: /s/ XXXX X. XXXXX By: /s/ XXXX X. XXXXXX
By: Xxxx X. Xxxxx Name: Xxxx X. Xxxxxx
Its: Secretary Its: Chairman of the Board
