AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of November
30, 2007, by and between Panorama Series Fund, Inc., a Maryland corporation, on
behalf of its series Panorama Government Securities Portfolio ("Panorama Fund"),
and Xxxxxxxxxxx Variable Account Funds, a Massachusetts business trust, on
behalf of its series Xxxxxxxxxxx Core Bond Fund/VA ("Core Bond Fund/VA").
References to actions, representations, or obligations of Panorama Fund should
be understood to be performed or incurred by Panorama Series Fund, Inc., and
actions, representations or obligations of Core Bond Fund/VA should be
understood to be performed or incurred by Xxxxxxxxxxx Variable Account Funds, as
the context requires, subject, however, to the provisions of this Agreement.
W I T N E S S E T H:
WHEREAS, Panorama Fund and Xxxxxxxxxxx Core Bond Fund/VA are each an
open-end investment company of the management type; and
WHEREAS, the parties hereto desire to provide for the reorganization
pursuant to Section 368(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code"), of Panorama Fund through the acquisition by Core Bond Fund/VA of
substantially all of the assets of Panorama Fund in exchange for the Non-Service
voting shares of beneficial interest ("shares") of Core Bond Fund/VA and the
assumption by Core Bond Fund/VA of certain liabilities of Panorama Fund, which
Non-Service shares of Core Bond Fund/VA are to be distributed by Panorama Fund
pro rata to its shareholders in complete liquidation of Panorama Fund and
complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. The parties hereby adopt this Agreement and Plan of Reorganization (the
"Agreement") pursuant to Section 368(a)(1) of the Code as follows: The
reorganization will be comprised of the acquisition by Core Bond Fund/VA of
substantially all of the assets of Panorama Fund in exchange for Non-Service
shares of Core Bond Fund/VA and the assumption by Core Bond Fund/VA of certain
liabilities of Panorama Fund, followed by the distribution of such Non-Service
shares of Core Bond Fund/VA to the shareholders of Panorama Fund in exchange for
shares of Panorama Fund, all upon and subject to the terms of the Agreement
hereinafter set forth.
Redemption requests received by Panorama Fund after that date shall be
treated as requests for the redemption of the shares of Core Bond Fund/VA to be
distributed to the shareholder in question as provided in Section 5 hereof.
2. On the Closing Date (as hereinafter defined), all of the assets of
Panorama Fund on that date, excluding a cash reserve (the "cash reserve") to be
retained by Panorama Fund sufficient in its discretion for the payment of the
expenses of Panorama Fund's dissolution and its liabilities, but not in excess
of the amount contemplated by Section 10E, shall be delivered as provided in
Section 8 to Core Bond Fund/VA, in exchange for and against delivery to Panorama
Fund on the Closing Date of a number of Non-Service shares of Core Bond Fund/VA,
having an aggregate net asset value equal to the value of the assets of Panorama
Fund so transferred and delivered.
3. The net asset value of Non-Service shares of Core Bond Fund/VA and the
value of the assets of Panorama Fund to be transferred shall in each case be
determined as of the close of business of The New York Stock Exchange on the
Valuation Date. The computation of the net asset value of the Non-Service shares
of Core Bond Fund/VA and the shares of Panorama Fund shall be done in the manner
used by Core Bond Fund/VA and Panorama Fund, respectively, in the computation of
such net asset value per share as set forth in their respective prospectuses.
The methods used by Core Bond Fund/VA in such computation shall be applied to
the valuation of the assets of Panorama Fund to be transferred to Core Bond
Fund/VA.
Panorama Fund will, if required, declare and pay, immediately prior to the
Valuation Date, a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to Panorama Fund's shareholders
all of Panorama Fund's investment company taxable income for taxable years
ending on or prior to the Closing Date (computed without regard to any dividends
paid) and all of its net capital gain, if any, realized in taxable years ending
on or prior to the Closing Date (after reduction for any capital loss
carry-forward).
4. The closing (the "Closing") shall be at the offices of OppenheimerFunds,
Inc. (the "Agent"), 0000 X. Xxxxxx Xxx, Xxxxxxxxxx, XX 00000, on such time or
such other place as the parties may designate or as provided below (the "Closing
Date"). The business day preceding the Closing Date is herein referred to as the
"Valuation Date."
In the event that on the Valuation Date either party has, pursuant to the
Investment Company Act of 1940, as amended (the "Act"), or any rule, regulation
or order thereunder, suspended the redemption of its shares or postponed payment
therefor, the Closing Date shall be postponed until the first business day after
the date when both parties have ceased such suspension or postponement;
provided, however, that if such suspension shall continue for a period of 60
days beyond the Valuation Date, then the other party to the Agreement shall be
permitted to terminate the Agreement without liability to either party for such
termination.
5. In conjunction with the Closing, Panorama Fund shall distribute on a pro
rata basis to the shareholders of Panorama Fund as of the Valuation Date
Non-Service shares of Core Bond Fund/VA received by Panorama Fund on the Closing
Date in exchange for the assets of Panorama Fund in complete liquidation of
Panorama Fund; for the purpose of the distribution by Panorama Fund of
Non-Service shares of Core Bond Fund/VA to Panorama Fund's shareholders, Core
Bond Fund/VA will promptly cause its transfer agent to: (a) credit an
appropriate number of Non-Service shares of Core Bond Fund/VA on the books of
Core Bond Fund/VA to each shareholder of Panorama Fund in accordance with a list
(the "Shareholder List") of Panorama Fund shareholders received from Panorama
Fund; and (b) confirm an appropriate number of Non-Service shares of Core Bond
Fund/VA to each shareholder of Panorama Fund; certificates, if any, for
Non-Service shares of Core Bond Fund/VA will be issued upon written request of a
former shareholder of Panorama Fund but only for whole shares, with fractional
shares credited to the name of the shareholder on the books of Core Bond Fund/VA
and only after any share certificates, if any, for Panorama Fund are returned to
the transfer agent.
The Shareholder List shall indicate, as of the close of business on the
Valuation Date, the name and address of each shareholder of Panorama Fund,
indicating his or her share balance. Panorama Fund agrees to supply the
Shareholder List to Core Bond Fund/VA not later than the Closing Date. Any
shareholders of Panorama Fund holding certificates representing their shares
shall not be required to surrender their certificates to anyone in connection
with the reorganization. After the Closing Date, however, it will be necessary
for such shareholders to surrender their certificates in order to redeem,
transfer or pledge the shares of Core Bond Fund/VA which they received.
6. After the Closing Date, Panorama Fund shall pay or make provision for
payment of all of its liabilities and taxes, and transfer any remaining amount
of the cash reserve to Core Bond Fund/VA.
7. Prior to the Closing Date, there shall be coordination between the
parties as to their respective portfolios so that, after the Closing, Core Bond
Fund/VA will be in compliance with all of its investment policies and
restrictions. At the Closing, Panorama Fund shall deliver to Core Bond Fund/VA
two copies of a list setting forth the securities then owned by Panorama Fund.
Promptly after the Closing, Panorama Fund shall provide Core Bond Fund/VA a list
setting forth the respective federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to Core Bond Fund/VA
of record ownership thereof by The Depository Trust Company or through the
Federal Reserve Book Entry System or any other depository approved by Panorama
Fund pursuant to Rule 17f-4 and Rule 17f-5 under the Act shall be endorsed and
delivered, or transferred by appropriate transfer or assignment documents, by
Panorama Fund on the Closing Date to Core Bond Fund/VA, or at its direction, to
its custodian bank, in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the custom of brokers and
shall be accompanied by all necessary state transfer stamps, if any. The cash
delivered shall be in the form of certified or bank cashiers' checks or by bank
wire or intra-bank transfer payable to the order of Core Bond Fund/VA for the
account of Core Bond Fund/VA. Non-Service shares of Core Bond Fund/VA
representing the number of Non-Service shares of Core Bond Fund/VA being
delivered against the assets of Panorama Fund, registered in the name of
Panorama Fund, shall be transferred to Panorama Fund on the Closing Date. Such
shares shall thereupon be assigned by Panorama Fund to its shareholders so that
the Non-Service shares of Core Bond Fund/VA may be distributed as provided in
Section 5.
If, at the Closing Date, Panorama Fund is unable to make delivery under
this Section 8 to Core Bond Fund/VA of any of its portfolio securities or cash
for the reason that any of such securities purchased by Panorama Fund, or the
cash proceeds of a sale of portfolio securities, prior to the Closing Date have
not yet been delivered to it or Panorama Fund's custodian, then the delivery
requirements of this Section 8 with respect to said undelivered securities or
cash will be waived and Panorama Fund will deliver to Core Bond Fund/VA by or on
the Closing Date with respect to said undelivered securities or cash executed
copies of an agreement or agreements of assignment in a form reasonably
satisfactory to Core Bond Fund/VA, together with such other documents, including
a due xxxx or due bills and brokers' confirmation slips as may reasonably be
required by Core Bond Fund/VA.
9. Core Bond Fund/VA shall not assume the liabilities (except for portfolio
securities purchased which have not settled and for shareholder redemption and
dividend checks outstanding) of Panorama Fund, but Panorama Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so far as
may be possible, prior to the Closing Date. The cost of printing and mailing the
proxies and proxy statements will be borne by Panorama Fund. Panorama Fund and
Core Bond Fund/VA will bear the cost of their respective opinions to be provided
under this Agreement. Any documents such as existing prospectuses or annual
reports that are included in that mailing will be a cost of the Fund issuing the
document. Any other out-of-pocket expenses of Core Bond Fund/VA and Panorama
Fund associated with this reorganization, including legal, accounting and
transfer agent expenses, will be borne by Panorama Fund and Core Bond Fund/VA,
respectively, in the amounts so incurred by each. Agent, the Funds' investment
manager, may bear any of the costs discussed in this Section 9, pursuant to
separate arrangements with one or both Funds.
10. The obligations of Core Bond Fund/VA hereunder shall be subject to the
following conditions:
A. The Board of Directors of Panorama Fund shall have authorized the
execution of the Agreement, and the shareholders of Panorama Fund shall have
approved the Agreement and the transactions contemplated hereby, and Panorama
Fund shall have furnished to Core Bond Fund/VA copies of resolutions or minutes
to that effect certified by the Secretary or the Assistant Secretary of Panorama
Fund; such shareholder approval shall have been by vote of a majority of the
outstanding voting securities of Panorama Fund, as defined in Section 2(a)(42)
of the Act, and as required by Panorama Fund's charter documents at a meeting
for which proxies have been solicited by the Proxy Statement and Prospectus (as
hereinafter defined).
B. Core Bond Fund/VA shall have received an opinion dated as of the Closing
Date from counsel to Panorama Fund, to the effect that (i) Panorama Fund is a
series of Panorama Series Fund, Inc.; (ii) Panorama Series Fund, Inc. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland with full corporate powers to carry on its business as
then being conducted and to enter into and perform the Agreement; and (iii) that
all action necessary to make the Agreement, according to its terms, valid,
binding and enforceable on Panorama Fund and to authorize effectively the
transactions contemplated by the Agreement have been taken by Panorama Fund.
Maryland counsel may be relied upon for this opinion.
C. The representations and warranties of Panorama Fund contained herein
shall be true and correct at and as of the Closing Date, and Core Bond Fund/VA
shall have been furnished with a certificate of the President, or a Vice
President, or the Secretary or the Assistant Secretary or the Treasurer or the
Assistant Treasurer of Panorama Fund, dated as of the Closing Date, to that
effect.
D. On the Closing Date, Panorama Fund shall have furnished to Core Bond
Fund/VA a certificate of the Treasurer or Assistant Treasurer of Panorama Fund
as to the amount of the capital loss carry-over and net unrealized appreciation
or depreciation, if any, with respect to Panorama Fund as of the Closing Date.
E. The cash reserve shall not exceed 10% of the value of the net assets,
nor 30% in value of the gross assets, of Panorama Fund at the close of business
on the Valuation Date.
F. A Registration Statement on Form N-14 filed by Core Bond Fund/VA under
the Securities Act of 1933, as amended (the "1933 Act"), containing a
preliminary form of the Proxy Statement and Prospectus, shall have become
effective under the 1933 Act.
G. On the Closing Date, Core Bond Fund/VA shall have received a letter from
a senior legal officer or other senior executive officer of OppenheimerFunds,
Inc. acceptable to Core Bond Fund/VA, stating that nothing has come to his or
her attention which in his or her judgment would indicate that as of the Closing
Date there were any material, actual or contingent liabilities of Panorama Fund
arising out of litigation brought against Panorama Fund or claims asserted
against it, or pending or to the best of his or her knowledge threatened claims
or litigation not reflected in or apparent from the most recent audited
financial statements and footnotes thereto of Panorama Fund delivered to Core
Bond Fund/VA. Such letter may also include such additional statements relating
to the scope of the review conducted by such person and his or her
responsibilities and liabilities as are not unreasonable under the
circumstances.
H. Core Bond Fund/VA shall have received an opinion, dated as of the
Closing Date, of Xxxx, Xxxx & Xxxxx LLP, to the same effect as the opinion
contemplated by Section 11.E. of the Agreement.
I. Core Bond Fund/VA shall have received at the Closing all of the assets
of Panorama Fund to be conveyed hereunder, which assets shall be free and clear
of all liens, encumbrances, security interests, restrictions and limitations
whatsoever.
11. The obligations of Panorama Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of Core Bond Fund/VA shall have authorized the
execution of the Agreement, and the transactions contemplated thereby, and Core
Bond Fund/VA shall have furnished to Panorama Fund copies of resolutions to that
effect certified by the Secretary or the Assistant Secretary of Core Bond
Fund/VA.
B. Panorama Fund's shareholders shall have approved the Agreement and the
transactions contemplated hereby as provided in Section 10.A of this Agreement,
and Panorama Fund shall have furnished Core Bond Fund/VA copies of resolutions
to that effect certified by the Secretary or an Assistant Secretary of Panorama
Fund.
C. Panorama Fund shall have received an opinion dated as of the Closing
Date from counsel to Core Bond Fund/VA, to the effect that (i) Core Bond Fund/VA
is a series of Xxxxxxxxxxx Variable Account Funds; (ii) Xxxxxxxxxxx Variable
Account Funds is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with full powers to
carry on its business as then being conducted and to enter into and perform the
Agreement; (iii) all actions necessary to make the Agreement, according to its
terms, valid, binding and enforceable upon Core Bond Fund/VA and to authorize
effectively the transactions contemplated by the Agreement have been taken by
Core Bond Fund/VA; and (iv) the shares to be issued hereunder are duly
authorized and when issued will be validly issued, fully-paid and
non-assessable, except as set forth under "Shareholder and Trustee Liability" in
Core Bond Fund/VA's Statement of Additional Information. Massachusetts counsel
may be relied upon for this opinion.
D. The representations and warranties of Core Bond Fund/VA contained herein
shall be true and correct at and as of the Closing Date, and Panorama Fund shall
have been furnished with a certificate of the President, a Vice President or the
Secretary or the Assistant Secretary or the Treasurer or the Assistant Treasurer
of the Trust to that effect dated as of the Closing Date.
E. Panorama Fund shall have received an opinion of Xxxx, Xxxx & Xxxxx LLP
to the effect that the federal tax consequences of the transaction, if carried
out in the manner outlined in the Agreement and in accordance with (i) Panorama
Fund's representation that there is no plan or intention by any Panorama Fund
shareholder who owns 5% or more of Panorama Fund's outstanding shares, and, to
Panorama Fund's best knowledge, there is no plan or intention on the part of the
remaining Panorama Fund shareholders, to redeem, sell, exchange or otherwise
dispose of a number of Core Bond Fund/VA shares received in the transaction that
would reduce Panorama Fund shareholders' ownership of Core Bond Fund/VA shares
to a number of shares having a value, as of the Closing Date, of less than 50%
of the value of all of the formerly outstanding Panorama Fund shares as of the
same date, and (ii) the representation by each of Panorama Fund and Core Bond
Fund/VA that, as of the Closing Date, Panorama Fund and Core Bond Fund/VA will
each qualify as regulated investment companies or will meet the diversification
test of Section 368(a)(2)(F)(ii) of the Code, will be as follows:
a. The transactions contemplated by the Agreement will qualify as a
tax-free "reorganization" within the meaning of Section 368(a)(1) of the Code,
and under the regulations promulgated thereunder.
b. Panorama Fund and Core Bond Fund/VA will each qualify as a "party to a
reorganization" within the meaning of Section 368(b)(2) of the Code.
c. No gain or loss will be recognized by the shareholders of Panorama Fund
upon the distribution of Non-Service shares of beneficial interest in Core Bond
Fund/VA to the shareholders of Panorama Fund pursuant to Section 354 of the
Code.
d. Under Section 361(a) of the Code no gain or loss will be recognized by
Panorama Fund by reason of the transfer of substantially all its assets in
exchange for Non-Service shares of Core Bond Fund/VA.
e. Under Section 1032 of the Code no gain or loss will be recognized by
Core Bond Fund/VA by reason of the transfer of substantially all of Panorama
Fund's assets in exchange for Non-Service shares of Core Bond Fund/VA and Core
Bond Fund/VA's assumption of certain liabilities of Panorama Fund.
f. The shareholders of Panorama Fund will have the same tax basis and
holding period for the Non-Service shares of beneficial interest in Core Bond
Fund/VA that they receive as they had for Panorama Fund shares that they
previously held, pursuant to Section 358(a) and 1223(1), respectively, of the
Code.
g. The securities transferred by Panorama Fund to Core Bond Fund/VA will
have the same tax basis and holding period in the hands of Core Bond Fund/VA as
they had for Panorama Fund, pursuant to Section 362(b) and 1223(1),
respectively, of the Code.
F. The cash reserve shall not exceed 10% of the value of the net assets,
nor 30% in value of the gross assets, of Panorama Fund at the close of business
on the Valuation Date.
G. A Registration Statement on Form N-14 filed by Core Bond Fund/VA under
the 1933 Act, containing a preliminary form of the Proxy Statement and
Prospectus, shall have become effective under the 1933 Act.
H. On the Closing Date, Panorama Fund shall have received a letter from a
senior legal officer or other senior executive officer of OppenheimerFunds, Inc.
acceptable to Panorama Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that as of the Closing
Date there were any material, actual or contingent liabilities of Core Bond
Fund/VA arising out of litigation brought against Core Bond Fund/VA or claims
asserted against it, or pending or, to the best of his or her knowledge,
threatened claims or litigation not reflected in or apparent by the most recent
audited financial statements and footnotes thereto of Core Bond Fund/VA
delivered to Panorama Fund. Such letter may also include such additional
statements relating to the scope of the review conducted by such person and his
or her responsibilities and liabilities as are not unreasonable under the
circumstances.
I. Panorama Fund shall acknowledge receipt of the Non-Service shares of
Core Bond Fund/VA.
12. Panorama Fund hereby represents and warrants that:
A. The audited financial statements of Panorama Fund as of December 31,
2006, and unaudited financial statements as of June 30, 2007, heretofore
furnished to Core Bond Fund/VA, present fairly the financial position, results
of operations, and changes in net assets of Panorama Fund as of that date, in
conformity with generally accepted accounting principles applied on a basis
consistent with the preceding year; and that from June 30, 2007, through the
date hereof there have not been, and through the Closing Date there will not be,
any material adverse change in the business or financial condition of Panorama
Fund, it being agreed that a decrease in the size of Panorama Fund due to a
diminution in the value of its portfolio and/or redemption of its shares shall
not be considered a material adverse change;
B. Contingent upon approval of the Agreement and the transactions
contemplated thereby by Panorama Fund's shareholders, Panorama Fund has
authority to transfer all of the assets of Panorama Fund to be conveyed
hereunder free and clear of all liens, encumbrances, security interests,
restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented, contained in Panorama
Series Fund, Inc.'s Registration Statement under the 1933 Act, as amended, is
true, correct and complete, conforms to the requirements of the 1933 Act and
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Registration Statement, as amended, was, as of the
date of the filing of the last Post-Effective Amendment, true, correct and
complete, conformed to the requirements of the 1933 Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
D. There is no material contingent liability of Panorama Fund and no
material claim and no material legal, administrative or other proceedings
pending or, to the knowledge of Panorama Fund, threatened against Panorama Fund,
not reflected in such Prospectus;
E. Except for the Agreement, there are no material contracts outstanding to
which Panorama Fund is a party other than those ordinary in the conduct of its
business;
F. Panorama Fund is a series of Panorama Series Fund, Inc., which is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, has all necessary and material Federal and state
authorizations to own all of its assets and to carry on its business as now
being conducted, and is duly registered under the Act and such registration has
not been rescinded or revoked and is in full force and effect;
G. All Federal and other tax returns and reports of Panorama Fund required
by law to be filed have been filed, and all federal and other taxes shown due on
said returns and reports have been paid or provision shall have been made for
the payment thereof and to the best of the knowledge of Panorama Fund no such
return is currently under audit and no assessment has been asserted with respect
to such returns and to the extent such tax returns with respect to the taxable
year of Panorama Fund ended December 31, 2007, or with respect to the taxable
year from January 1, 2008, through the Closing Date, have not been filed, such
returns will be filed when required and the amount of tax shown as due thereon
shall be paid when due; and
H. Panorama Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Panorama Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and Panorama Fund intends to meet such requirements
with respect to its current taxable year. Panorama Fund currently is, at all
times since its inception has been, and will continue to be up until and at the
Closing Date, in compliance with Section 817(h)(1) of the Internal Revenue Code
of 1986, as amended (the "Code"), and Treas. Reg. Section 1.817-5, as if those
provisions applied directly to the Panorama Fund, relating to the
diversification requirements for variable annuity, endowment and life insurance
contracts. Panorama Fund's shares are (and since its inception have been) held
only by (a) insurance company "segregated asset accounts" within the meaning of
Treas. Reg. Section 1.817-5(e) and (b) other purchasers of the kind specified in
Treas. Reg. Section 1.817-5(f)(3) as from time to time in effect.
13. Core Bond Fund/VA hereby represents and warrants that:
A. The audited financial statements of Core Bond Fund/VA as of December 31,
2006, and unaudited financial statements as of June 30, 2007, heretofore
furnished to Panorama Fund, present fairly the financial position, results of
operations, and changes in net assets of Core Bond Fund/VA, as of that date, in
conformity with generally accepted accounting principles applied on a basis
consistent with the preceding year; and that from June 30, 2007, through the
date hereof there have not been, and through the Closing Date there will not be,
any material adverse changes in the business or financial condition of Core Bond
Fund/VA, it being understood that a decrease in the size of Core Bond Fund/VA
due to a diminution in the value of its portfolio and/or redemption of its
shares shall not be considered a material or adverse change;
B. The Prospectus, as amended and supplemented, contained in Core Bond
Fund/VA's Registration Statement under the 1933 Act, is true, correct and
complete, conforms to the requirements of the 1933 Act and does not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Registration Statement, as amended, was, as of the date of the filing of the
last Post-Effective Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
C. Except for this Agreement, there is no material contingent liability of
Core Bond Fund/VA and no material claim and no material legal, administrative or
other proceedings pending or, to the knowledge of Core Bond Fund/VA, threatened
against Core Bond Fund/VA, not reflected in such Prospectus;
D. There are no material contracts outstanding to which Core Bond Fund/VA
is a party other than those ordinary in the conduct of its business;
E. Core Bond Fund/VA is a series of Xxxxxxxxxxx Variable Account Funds,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts, has all necessary and
material Federal and state authorizations to own all its properties and assets
and to carry on its business as now being conducted, and is duly registered
under the Act and such registration has not been revoked or rescinded and is in
full force and effect; and the Non-Service shares of Core Bond Fund/VA issued to
Panorama Fund pursuant to the Agreement will be duly authorized, validly issued,
fully-paid and non-assessable, except as set forth under "Shareholder & Trustee
Liability" in Core Bond Fund/VA's Statement of Additional Information, will
conform to the description thereof contained in Xxxxxxxxxxx Variable Account
Funds' Registration Statement, and will be duly registered under the 1933 Act
and in the states where registration is required;
F. All federal and other tax returns and reports of Core Bond Fund/VA
required by law to be filed have been filed, and all federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of Core Bond
Fund/VA, no such return is currently under audit and no assessment has been
asserted with respect to such returns and to the extent such tax returns with
respect to the taxable year of Core Bond Fund/VA ended December 31, 2007, or
with respect to the taxable year from January 1, 2008, through the Closing Date,
have not been filed, such returns will be filed when required and the amount of
tax shown as due thereon shall be paid when due;
G. Core Bond Fund/VA has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, Core Bond Fund/VA has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and Core Bond Fund/VA intends to meet such
requirements with respect to its current taxable year. Core Bond Fund/VA
currently is, at all times since its inception has been, and will continue to be
up until and at the Closing Date, in compliance with Section 817(h)(1) of the
Internal Revenue Code of 1986, as amended, and Treas. Reg. Section 1.817-5, as
if those provisions applied directly to the Core Bond Fund/VA, relating to the
diversification requirements for variable annuity, endowment and life insurance
contracts. Core Bond Fund/VA's shares are (and since its inception have been)
held only by (a) insurance company "segregated asset accounts" within the
meaning of Treas. Reg. Section 1.817-5(e) and (b) other purchasers of the kind
specified in Treas. Reg. Section 1.817-5(f)(3) as from time to time in effect;
H. Core Bond Fund/VA has no plan or intention (i) to dispose of any of the
assets transferred by Panorama Fund, other than in the ordinary course of
business, or (ii) to redeem or reacquire any of the Non-Service shares issued by
it in the reorganization other than pursuant to valid requests of shareholders;
and
I. After consummation of the transactions contemplated by the Agreement,
Core Bond Fund/VA intends to operate its business in a substantially unchanged
manner.
14. Each party hereby represents to the other that no broker or finder has
been employed by it with respect to the Agreement or the transactions
contemplated hereby. Each party also represents and warrants to the other that
the information concerning it in the Proxy Statement and Prospectus will not as
of its date 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
concerning it therein not misleading and that the financial statements
concerning it will present the information shown fairly in accordance with
generally accepted accounting principles applied on a basis consistent with the
preceding year. Each party also represents and warrants to the other that the
Agreement is valid, binding and enforceable in accordance with its terms and
that the execution, delivery and performance of the Agreement will not result in
any violation of, or be in conflict with, any provision of any charter, by-laws,
contract, agreement, judgment, decree or order to which it is subject or to
which it is a party. Core Bond Fund/VA hereby represents to and covenants with
Panorama Fund that, if the reorganization becomes effective, Core Bond Fund/VA
will treat each shareholder of Panorama Fund who received any of Core Bond
Fund/VA's shares as a result of the reorganization as having made the minimum
initial purchase of shares of Core Bond Fund/VA received by such shareholder for
the purpose of making additional investments in shares of Core Bond Fund/VA,
regardless of the value of the shares of Core Bond Fund/VA received.
15. Core Bond Fund/VA agrees that it will prepare and file a Registration
Statement on Form N-14 under the 1933 Act which shall contain a preliminary form
of proxy statement and prospectus contemplated by Rule 145 under the 1933 Act.
The final form of such proxy statement and prospectus is referred to in the
Agreement as the "Proxy Statement and Prospectus." Each party agrees that it
will use its best efforts to have such Registration Statement declared effective
and to supply such information concerning itself for inclusion in the Proxy
Statement and Prospectus as may be necessary or desirable in this connection.
Panorama Fund covenants and agrees to liquidate and dissolve under the laws of
the State of Maryland, following the Closing, and, upon Closing, to cause the
cancellation of its outstanding shares.
16. The obligations of the parties shall be subject to the right of either
party to abandon and terminate the Agreement for any reason and there shall be
no liability for damages or other recourse available to a party not so
terminating this Agreement; provided, however, that in the event that a party
shall terminate this Agreement without reasonable cause, the party so
terminating shall, upon demand, reimburse the party not so terminating for all
expenses, including reasonable out-of-pocket expenses and fees incurred in
connection with this Agreement.
17. The Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all taken together shall constitute one
Agreement. The rights and obligations of each party pursuant to the Agreement
shall not be assignable.
18. All prior or contemporaneous agreements and representations are merged
into the Agreement, which constitutes the entire contract between the parties
hereto. No amendment or modification hereof shall be of any force and effect
unless in writing and signed by the parties and no party shall be deemed to have
waived any provision herein for its benefit unless it executes a written
acknowledgment of such waiver.
19. Core Bond Fund/VA understands that the obligations of Panorama Fund
under the Agreement are not binding upon any other series of Panorama Series
Fund, Inc., or any director or shareholder of Panorama Fund or any other series
of Panorama Series Fund, Inc. personally, but bind only Panorama Fund and
Panorama Fund's property. Core Bond Fund/VA represents that it has notice of the
provisions of the Articles of Incorporation of Panorama Series Fund, Inc.
disclaiming shareholder and director liability for acts or obligations of
Panorama Fund.
20. Panorama Fund understands that the obligations of Core Bond Fund/VA
under the Agreement are not binding upon any other series of Xxxxxxxxxxx
Variable Account Funds, or any trustee or shareholder of Core Bond Fund/VA or
any other series of Xxxxxxxxxxx Variable Account Funds personally, but bind only
Core Bond Fund/VA and Core Bond Fund/VA's property. Panorama Fund represents
that it has notice of the provisions of the Declaration of Trust of Core Bond
Fund/VA disclaiming shareholder and trustee liability for acts or obligations of
Core Bond Fund/VA.
IN WITNESS WHEREOF, each of the parties has caused the Agreement to be
executed and attested by its officers thereunto duly authorized on the date
first set forth above.
PANORAMA SERIES FUND, INC., on behalf of
Government Securities Portfolio
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Secretary
XXXXXXXXXXX VARIABLE ACCOUNT FUNDS, on behalf of
Xxxxxxxxxxx Core Bond Fund/VA
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Secretary
