AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
the 1st day of November, 2006, by and between Pioneer Series Trust II, a
Delaware statutory trust (the "Acquiring Trust"), on behalf of its series,
Pioneer AMT-Free Municipal Fund (the "Acquiring Fund"), with its principal place
of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Pioneer Series
Trust IV, a Delaware statutory trust (the "Acquired Trust"), on behalf of its
series, Pioneer Florida Tax Free Income Fund (the "Acquired Fund"), with its
principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. The
Acquiring Fund and the Acquired Fund are sometimes referred to collectively
herein as the "Funds" and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund solely in exchange for (A) the issuance of Class A, Class B, Class C, and
Class Y shares of beneficial interest of the Acquiring Fund (collectively, the
"Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired
Fund, and (B) the assumption by the Acquiring Fund of all of the liabilities of
the Acquired Fund on the closing date of the Reorganization (the "Closing Date")
(collectively, the "Assumed Liabilities"), and (2) the distribution by the
Acquired Fund, on or promptly after the Closing Date as provided herein, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation
and dissolution of the Acquired Fund, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Trust and the Acquired Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the Acquiring Trust and the Acquired
Trust have determined that the Reorganization is in the best interests of the
Acquiring Fund shareholders and the Acquired Fund shareholders, respectively,
and is not dilutive of the interests of those shareholders.
NOW, THEREFORE, in consideration of the premises of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
to the Acquiring Fund free and clear of all liens and encumbrances (other than
those arising under the Securities Act of 1933, as amended (the "Securities
Act"), liens for taxes not yet due and contractual restrictions on the transfer
of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i)
to issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, of each class with an aggregate net asset
value ("NAV") equal to the NAV of the Acquired Fund attributable to the
corresponding class of the Acquired Fund's shares, as
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determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume
the Assumed Liabilities. Such transactions shall take place at the Closing (as
defined in Paragraph 3.1 below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Fund or the Acquired Fund in respect
of the Acquired Fund, all other intangible property owned by the Acquired Fund,
originals or copies of all books and records of the Acquired Fund, and all other
assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also
be entitled to receive copies of all records that the Acquired Fund is required
to maintain under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules of the Securities and Exchange
Commission (the "Commission") thereunder to the extent such records pertain to
the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's securities and other assets as of the date of
execution of this Agreement, and the Acquiring Fund has provided the Acquired
Fund with a copy of the current fundamental investment policies and restrictions
and fair value procedures applicable to the Acquiring Fund. The Acquired Fund
reserves the right to sell any of such securities or other assets before the
Closing Date (except to the extent sales may be limited by representations of
the Acquired Fund contained herein and made in connection with the issuance of
the tax opinion provided for in Paragraph 8.5 hereof) and agrees not to acquire
any portfolio security that is not an eligible investment for, or that would
violate an investment policy or restriction of, the Acquiring Fund.
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Trust shall liquidate the Acquired Fund
and distribute pro rata to its shareholders of record, determined as of the
close of regular trading on the New York Stock Exchange on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder
shall receive the number of Acquiring Fund Shares of the class corresponding to
the class of shares of beneficial interest in the Acquired Fund (the "Acquired
Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV
equal to the aggregate NAV of the Acquired Fund Shares held of record by such
Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution
will be accomplished by the Acquired Trust instructing the Acquiring Trust to
transfer the Acquiring Fund Shares then credited to the account of the Acquired
Fund on the books of the Acquiring Fund to open accounts on the share records of
the Acquiring Fund established and maintained by the Acquiring Fund's transfer
agent in the names of the Acquired Fund Shareholders and representing the
respective pro rata number of the Acquiring Fund Shares due the Acquired Fund
Shareholders. The Acquired Trust shall promptly provide the Acquiring Trust with
evidence of such liquidation and distribution. All issued and outstanding
Acquired Fund Shares will simultaneously be cancelled on the books of the
Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall
not issue certificates representing the Acquiring Fund Shares in connection with
such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed
to be cancelled and shall no longer evidence ownership of Acquired Fund Shares.
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1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in
a name other than the registered holder of the Acquired Fund Shares on the books
of the Acquired Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.7 Any reporting responsibility of the Acquired Trust with respect to
the Acquired Fund for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund.
2. ALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund
shall, in each case, be determined as of the close of regular trading on the New
York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the
"Valuation Time"). Pioneer Investment Management, Inc. (the "Acquiring Fund
Adviser") shall compute the NAV per Acquiring Fund Share in the manner set forth
in the Acquiring Trust's Agreement and Declaration of Trust (the "Declaration"),
or By-Laws, and the Acquiring Fund's then-current prospectus and statement of
additional information. The Acquiring Fund Adviser shall compute the NAV per
share of the Acquired Fund in the manner set forth in the Acquired Trust's
Agreement and Declaration of Trust, or By-laws, and the Acquired Fund's
then-current prospectus and statement of additional information. The Acquiring
Fund Adviser shall confirm to the Acquiring Fund the NAV of the Acquired Fund.
2.2 The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Assets and the
assumption of the Assumed Liabilities shall be determined by the Acquiring Fund
Adviser by dividing the NAV of the Acquired Fund, as determined in accordance
with Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring
Fund Adviser to deliver a copy of its valuation report to the other party at
Closing (as defined in Paragraph 3.1). All computations of value shall be made
by the Acquiring Fund Adviser in accordance with its regular practice as pricing
agent for the Acquiring Fund and the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be November 10, 2006, or such later date as
the parties may agree to in writing. All acts necessary to consummate the
Reorganization (the "Closing") shall be deemed to take place simultaneously as
of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The
Closing shall be held at the offices of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx
LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at such other place as the
parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in
the name of Xxxxx Brothers Xxxxxxxx & Co. (the "Acquired Fund Custodian") as
record holder for the Acquired Fund shall be presented by the Acquired Fund to
Xxxxx Brothers Xxxxxxxx & Co. (the "Acquiring Fund Custodian") for examination
no later than three business days preceding the Closing Date. Such portfolio
securities shall be delivered by the Acquired Fund to the Acquiring Fund
Custodian for the account of the Acquiring Fund on the Closing Date, duly
endorsed 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 federal and state stock transfer stamps or a check
for the appropriate purchase price thereof.
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Portfolio securities held of record by the Acquired Fund Custodian in book-entry
form on behalf of the Acquired Fund shall be delivered by the Acquired Fund
Custodian through the Depository Trust Company to the Acquiring Fund Custodian
and by the Acquiring Fund Custodian recording the beneficial ownership thereof
by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall
be delivered by the Acquired Fund Custodian transmitting immediately available
funds by wire transfer to the Acquiring Fund Custodian the cash balances
maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian
crediting such amount to the account of the Acquiring Fund.
3.3 The Acquiring Fund Custodian shall deliver within one business day
after the Closing a certificate of an authorized officer stating that: (a) the
Acquired Assets have been delivered in proper form to the Acquiring Fund on the
Closing Date, and (b) all necessary transfer taxes including all applicable
federal and state stock transfer stamps, if any, have been paid, or provision
for payment has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate appraisal
of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to
Paragraph 2.1 is impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time,
certified by the President or a Secretary of the Acquired Trust and its
Treasurer, Secretary or other authorized officer (the "Shareholder List") as
being an accurate record of the information (a) provided by the Acquired Fund
Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from
the Acquired Trust's records by such officers or one of the Acquired Trust's
service providers. The Acquiring Fund shall issue and deliver to the Acquired
Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the
Closing Date, or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts or
other documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on a disclosure schedule previously provided by
the Acquired Fund to the Acquiring Fund, the Acquired Trust, on behalf of the
Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which
representations, warranties and covenants will be true and correct on the date
hereof and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquired Fund is a series of the Acquired Trust. The
Acquired Trust is a statutory trust validly existing and in good standing under
the laws of the State of Delaware and has the power to own all of its properties
and assets and, subject to approval by the Acquired Fund's shareholders, to
perform its obligations under this Agreement. The Acquired Fund is not required
to qualify to do business in any jurisdiction in which it is not so qualified or
where failure to qualify would subject it to any material liability or
disability. Each of the Acquired Trust and the Acquired Fund has all necessary
federal, state and local authorizations to own all of its properties and assets
and to carry on its business as now being conducted;
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(b) The Acquired Trust a registered investment company classified as
a management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The Acquired Trust is not in violation of, and the execution and
delivery of this Agreement and the performance of its obligations under this
Agreement in respect of the Acquired Fund will not result in a violation of, any
provision of the Acquired Trust's Declaration or By-Laws or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Trust to which the Acquired Fund is a party or by which
the Acquired Fund or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of
or before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of the Acquired Fund's
properties or assets. Neither the Acquired Trust nor the Acquired Fund knows of
no facts that might form the basis for the institution of such proceedings. The
Acquired Fund is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially adversely
affects the Acquired Fund's business or its ability to consummate the
transactions contemplated herein or would be binding upon the Acquiring Fund as
the successor to the Acquired Fund;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated at or prior to
the Closing Date and no such termination will result in liability to the
Acquired Fund (or the Acquiring Fund);
(f) The statement of assets and liabilities of the Acquired Fund,
and the related statements of operations and changes in net assets, as of and
for the fiscal year ended July 31, 2005, have been audited by an independent
registered public accounting firm retained by the Acquired Fund, and are in
accordance with generally accepted accounting principles ("GAAP") consistently
applied and fairly reflect, in all material respects, the financial condition of
the Acquired Fund as of such date and the results of its operations for the
period then ended, and all known liabilities, whether actual or contingent, of
the Acquired Fund as of the date thereof are disclosed therein. The Statement of
Assets and Liabilities will be in accordance with GAAP consistently applied and
will fairly reflect, in all material respects, the financial condition of the
Acquired Fund as of such date and the results of its operations for the period
then ended. Except for the Assumed Liabilities, the Acquired Fund will not have
any known or contingent liabilities on the Closing Date. No significant
deficiency, material weakness, fraud, significant change or other factor that
could significantly affect the internal controls of the Acquired Fund has been
disclosed or is required to be disclosed in the Acquired Fund's reports on Form
N-CSR to enable the chief executive officer and chief financial officer or other
officers of the Acquired Fund to make the certifications required by the
Xxxxxxxx-Xxxxx Act, and no deficiency, weakness, fraud, change, event or other
factor exists that will be required to be disclosed in the Acquiring Fund's Form
N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Fund's prospectus, its statement of additional
information as in effect on the date of this Agreement, or its semi-annual
report for the six-month period ended January 31, 2006, there has not been any
material adverse change in the Acquired Fund's financial condition, assets,
liabilities, business or prospects, or any incurrence by the Acquired Fund of
indebtedness, except for normal contractual obligations incurred in the ordinary
course of business or in connection with the settlement of purchases and sales
of portfolio securities. For the purposes of this subparagraph (g) (but not for
any other purpose of this Agreement), a decline in NAV per Acquired Fund Share
arising out of its normal investment
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operations or a decline in market values of securities in the Acquired Fund's
portfolio or a decline in net assets of the Acquired Fund as a result of
redemptions shall not constitute a material adverse change;
(h) (A) For each taxable year of its operation since its
inception, the Acquired Fund has satisfied, and for the current taxable year it
will satisfy, the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company. The Acquired Fund will qualify as
such as of the Closing Date and will satisfy the diversification requirements of
Section 851(b)(3) of the Code without regard to the last sentence of Section
851(d) of the Code. The Acquired Fund has not taken any action, caused any
action to be taken or caused any action to fail to be taken which action or
failure could cause the Acquired Fund to fail to qualify as a regulated
investment company under the Code;
(B) Within the times and in the manner prescribed by law, the
Acquired Fund has properly filed on a timely basis all Tax Returns (as defined
below) that it was required to file, and all such Tax Returns were complete and
accurate in all material respects. The Acquired Fund has not been informed by
any jurisdiction that the jurisdiction believes that the Acquired Fund was
required to file any Tax Return that was not filed; and the Acquired Fund does
not know of any basis upon which a jurisdiction could assert such a position;
(C) The Acquired Fund has timely paid, in the manner
prescribed by law, all Taxes (as defined below), which were due and payable or
which were claimed to be due;
(D) All Tax Returns filed by the Acquired Fund constitute
complete and accurate reports of the respective Tax liabilities and all
attributes of the Acquired Fund or, in the case of information returns and payee
statements, the amounts required to be reported, and accurately set forth all
items required to be included or reflected in such returns;
(E) The Acquired Fund has not waived or extended any
applicable statute of limitations relating to the assessment or collection of
Taxes;
(F) The Acquired Fund has not been notified that any
examinations of the Tax Returns of the Acquired Fund are currently in progress
or threatened, and no deficiencies have been asserted or assessed against the
Acquired Fund as a result of any audit by the Internal Revenue Service or any
state, local or foreign taxing authority, and, to its knowledge, no such
deficiency has been proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for
any Tax obligation of any taxpayer other than itself. The Acquired Fund is not
and has never been a member of a group of corporations with which it has filed
(or been required to file) consolidated, combined or unitary Tax Returns. The
Acquired Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The unpaid Taxes of the Acquired Fund for tax periods
through the Closing Date do not exceed the accruals and reserves for Taxes
(excluding accruals and reserves for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the Statement of
Assets and Liabilities, as defined in paragraph 5.7, rather than in any notes
thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is or was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been timely paid to the proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or
made available to the Acquiring Fund complete and accurate copies of all Tax
Returns of the Acquired Fund,
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together with all related examination reports and statements of deficiency for
all periods not closed under the applicable statutes of limitations and complete
and correct copies of all private letter rulings, revenue agent reports,
information document requests, notices of proposed deficiencies, deficiency
notices, protests, petitions, closing agreements, settlement agreements, pending
ruling requests and any similar documents submitted by, received by or agreed to
by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Section
6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to
undergo, and is not required to undergo (nor will it be required as a result of
the transactions contemplated in this Agreement to undergo) a change in its
method of accounting resulting in an adjustment to its taxable income pursuant
to Section 481 of the Code. The Acquired Fund will not be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Closing Date under Section 481(c) of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law);
(ii) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date; (iii) installment sale or open
transaction disposition made on or prior to the Closing Date; or (iv) prepaid
amount received on or prior to the Closing Date;
(K) The Acquired Fund will not have taken or agreed to take
any action, and will not be aware of any agreement, plan or other circumstance,
that is inconsistent with the representations set forth in the Acquired Fund
Representation Certificate to be delivered pursuant to paragraph 7.4;
(L) There are (and as of immediately following the Closing
there will be) no liens on the assets of the Acquired Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Fund are
accurately reflected on the Acquired Fund's Tax books and records; and
(N) For purposes of this Agreement, "Taxes" or "Tax" shall
mean all taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, unemployment, insurance, social security,
business license, business organization, environmental, workers compensation,
payroll, profits, license, lease, service, service use, severance, stamp,
occupation, windfall profits, customs, duties, franchise and other taxes imposed
by the United States of America or any state, local or foreign government, or
any agency thereof, or other political subdivision of the United States or any
such government, and any interest, fines, penalties, assessments or additions to
tax resulting from, attributable to or incurred in connection with any tax or
any contest or dispute thereof; and "Tax Returns" shall mean all reports,
returns, declarations, statements or other information required to be supplied
to a governmental or regulatory authority or agency, or to any other person, in
connection with Taxes and any associated schedules or work papers produced in
connection with such items.
(i) All issued and outstanding Acquired Fund Shares are, and
at the Closing Date will be, legally issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding Acquired
Fund Shares will, at the time of Closing, be held of record by the persons and
in the amounts set forth in the Shareholder List submitted to the Acquiring Fund
pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding
any options, warrants or other rights
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to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding
any security convertible into any Acquired Fund Shares;
(j) At the Closing Date, the Acquired Fund will have good and
marketable title to the Acquired Assets, and full right, power and authority to
sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund,
and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, except such restrictions as might arise under the
Securities Act;
(k) The Acquired Fund has the trust power and authority to
enter into and perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of the Acquired Fund's Board of Trustees, and,
subject to the approval of the Acquired Fund's shareholders, assuming due
authorization, execution and delivery by the Acquiring Fund, this Agreement will
constitute a valid and binding obligation of the Acquired Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(l) The information to be furnished by the Acquired Fund to
the Acquiring Fund for use in applications for orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby and any information necessary to compute
the total return of the Acquired Fund shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(m) The information included in the proxy statement (the
"Proxy Statement") forming part of the Acquiring Fund's Registration Statement
on Form N-14 filed in connection with this Agreement (the "Registration
Statement") that has been furnished in writing by the Acquired Fund to the
Acquiring Fund for inclusion in the Registration Statement, on the effective
date of that Registration Statement and on the Closing Date, will conform in all
material respects to the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Investment Company Act and the rules and regulations of the Commission
thereunder and 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 therein not misleading;
(n) Upon the effectiveness of the Registration Statement, no
consent, approval, authorization or order of any court or governmental authority
is required for the consummation by the Acquired Fund or the Acquired Fund of
the transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares
have been offered for sale and sold in compliance in all material respects with
all applicable federal and state securities laws, except as may have been
previously disclosed in writing to the Acquiring Fund;
(p) The prospectus and statement of additional information of
the Acquired Fund and any amendments or supplements thereto, furnished to the
Acquiring Fund, did not as of their dates or the dates of their distribution to
the public contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which such statements were made, not
materially misleading;
(q) The Acquired Fund currently complies in all material
respects with, and since its organization has complied in all material respects
with, the requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all
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other applicable federal and state laws or regulations. The Acquired Fund
currently complies in all material respects with, and since its organization has
complied in all material respects with, all investment objectives, policies,
guidelines and restrictions and any compliance procedures established by the
Acquired Fund with respect to the Acquired Fund. All advertising and sales
material used by the Acquired Fund complies in all material respects with and
has complied in all material respects with the applicable requirements of the
Securities Act, the Investment Company Act, the rules and regulations of the
Commission, and, to the extent applicable, the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") and any applicable state
regulatory authority. All registration statements, prospectuses, reports, proxy
materials or other filings required to be made or filed with the Commission, the
NASD or any state securities authorities by the Acquired Fund have been duly
filed and have been approved or declared effective, if such approval or
declaration of effectiveness is required by law. Such registration statements,
prospectuses, reports, proxy materials and other filings under the Securities
Act, the Exchange Act and the Investment Company Act (i) are or were in
compliance in all material respects with the requirements of all applicable
statutes and the rules and regulations thereunder and (ii) do not or 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, in
light of the circumstances in which they were made, not false or misleading;
(r) Neither the Acquired Fund nor, to the knowledge of the
Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted
of any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated
person of the Acquired Fund been the subject, or presently is the subject, of
any proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an investment
adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended
(the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for disqualification as
an investment adviser, employee, officer or director of an investment company
under Section 9 of the Investment Company Act; and
(s) The tax representation certificate to be delivered by
Acquired Trust, on behalf of the Acquired Fund, to the Acquiring Fund and Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP at the Closing pursuant to Paragraph 7.4 (the
"Acquired Fund Tax Representation Certificate") will not on the Closing Date
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading.
4.2 Except as set forth on a disclosure schedule previously provided by the
Acquiring Fund to the Acquired Fund, the Acquiring Trust, on behalf of the
Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which
representations, warranties and covenants will be true and correct on the date
hereof and on the Closing Date as though made on and as of the Closing Date, as
follows:
(a) The Acquiring Fund is a series of the Acquiring Trust. The
Acquiring Trust is a statutory trust duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Acquiring Trust has
the power to own all of its properties and assets and to perform the obligations
under this Agreement. The Acquiring Fund is not required to qualify to do
business in any jurisdiction in which it is not so qualified or where failure to
qualify would subject it to any material liability or disability. Each of the
Acquiring Trust and the Acquiring Fund has all necessary federal, state and
local authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquiring Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the Investment Company Act is
in full force and effect;
9
(c) The current prospectus and statement of additional
information of the Acquiring Fund and each prospectus and statement of
additional information for the Acquiring Fund used during the three years
previous to the date of this Agreement, and any amendment or supplement to any
of the foregoing, conform or conformed at the time their distribution to the
public in all material respects to the applicable requirements of the Securities
Act and the Investment Company Act and the rules and regulations of the
Commission thereunder and do not or did not at the time of their distribution to
the public include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading;
(d) The Acquiring Fund's registration statement on Form N-1A
that will be in effect on the Closing Date, and the prospectus and statement of
additional information of the Acquiring Fund included therein, will conform in
all material respects with the applicable requirements of the Securities Act and
the Investment Company Act and the rules and regulations of the Commission
thereunder, and did not as of the effective date thereof and will not as of the
Closing Date contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading;
(e) The Registration Statement, the Proxy Statement and
statement of additional information with respect to the Acquiring Fund, and any
amendments or supplements thereto in effect on or prior to the Closing Date
included in the Registration Statement (other than written information furnished
by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's
warranty in Paragraph 4.1(m) hereof) will conform in all material respects to
the applicable requirements of the Securities Act and the Investment Company Act
and the rules and regulations of the Commission thereunder. Neither the
Registration Statement nor the Proxy Statement (other than written information
furnished by the Acquired Fund for inclusion therein, as covered by the Acquired
Fund's warranty in Paragraph 4.1(m) hereof) includes or will include any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(f) The Acquiring Trust is not in violation of, and the
execution and delivery of this Agreement and performance of its obligations
under this Agreement will not result in a violation of, any provisions of the
Declaration of Trust or by-laws of the Acquiring Trust or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquiring Fund to which the Acquiring Trust is a party or by
which the Acquiring Fund or any of its assets is bound;
(g) No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently pending
or threatened against the Acquiring Fund or any of the Acquiring Fund's
properties or assets. The Acquiring Fund knows of no facts that might form the
basis for the institution of such proceedings. Neither the Acquiring Fund nor
the Acquiring Fund is a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially adversely
affects the Acquiring Fund's business or its ability to consummate the
transactions contemplated herein;
(h) The statement of assets and liabilities of the Acquiring
Fund, and the related statements of operations and changes in net assets, as of
and for the fiscal year ended December 31, 2005 have been audited by Ernst &
Young LLP, independent registered public accounting firm, and are in accordance
with GAAP consistently applied and fairly reflect, in all material respects, the
financial condition of the Acquiring Fund as of such date and the results of its
operations for the period then ended, and all known liabilities, whether actual
or contingent, of the Acquiring Fund as of the date thereof are disclosed
therein;
10
(i) Since the most recent fiscal year end, except as
specifically disclosed in the Acquiring Fund's prospectus, its statement of
additional information as in effect on the date of this Agreement, or its
semi-annual report for the period ended June 30, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities,
business or prospects, or any incurrence by the Acquiring Fund of indebtedness,
except for normal contractual obligations incurred in the ordinary course of
business or in connection with the settlement of purchases and sales of
portfolio securities. For the purposes of this subparagraph (i) (but not for any
other purpose of this Agreement), a decline in NAV per Acquiring Fund Share
arising out of its normal investment operations or a decline in market values of
securities in the Acquiring Fund's portfolio or a decline in net assets of the
Acquiring Fund as a result of redemptions shall not constitute a material
adverse change;
(j) (A) For each taxable year of its operation since its
inception, the Acquiring Fund has satisfied, and for the current taxable year it
will satisfy, the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and will qualify as such as of the
Closing Date and will satisfy the diversification requirements of Section
851(b)(3) of the Code without regard to the last sentence of Section 851(d) of
the Code. The Acquiring Fund has not taken any action, caused any action to be
taken or caused any action to fail to be taken which action or failure could
cause the Acquiring Fund to fail to qualify as a regulated investment company
under the Code;
(B) Within the times and in the manner prescribed by law, the
Acquiring Fund has properly filed on a timely basis all Tax Returns that it was
required to file, and all such Tax Returns were complete and accurate in all
material respects. The Acquiring Fund has not been informed by any jurisdiction
that the jurisdiction believes that the Acquiring Fund was required to file any
Tax Return that was not filed; and the Acquiring Fund does not know of any basis
upon which a jurisdiction could assert such a position;
(C) The Acquiring Fund has timely paid, in the manner
prescribed by law, all Taxes that were due and payable or that were claimed to
be due;
(D) All Tax Returns filed by the Acquiring Fund constitute
complete and accurate reports of the respective liabilities for Taxes and all
attributes of the Acquiring Fund or, in the case of information returns and
payee statements, the amounts required to be reported, and accurately set forth
all items required to be included or reflected in such returns;
(E) The Acquiring Fund has not waived or extended any
applicable statute of limitations relating to the assessment or collection of
Taxes;
(F) The Acquiring Fund has not been notified that any
examinations of the Tax Returns of the Acquiring Fund are currently in progress
or threatened, and no deficiencies have been asserted or assessed against the
Acquiring Fund as a result of any audit by the Internal Revenue Service or any
state, local or foreign taxing authority, and, to its knowledge, no such
deficiency has been proposed or threatened;
(G) The Acquiring Fund has no actual or potential liability
for any Tax obligation of any taxpayer other than itself. The Acquiring Fund is
not and has never been a member of a group of corporations with which it has
filed (or been required to file) consolidated, combined or unitary Tax Returns.
The Acquiring Fund is not a party to any Tax allocation, sharing, or
indemnification agreement;
(H) The unpaid Taxes of the Acquiring Fund for tax periods
through the Closing Date do not exceed the accruals and reserves for Taxes
(excluding accruals and reserves for
11
deferred Taxes established to reflect timing differences between book and Tax
income) set forth in the financial statements referred to in paragraph 4.2(h).
All Taxes that the Acquiring Fund is or was required by law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been timely paid to the proper governmental agency;
(I) The Acquiring Fund has delivered to Acquired Fund or made
available to Acquired Fund complete and accurate copies of all Tax Returns of
the Acquiring Fund, together with all related examination reports and statements
of deficiency for all periods not closed under the applicable statutes of
limitations and complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests and any similar documents
submitted by, received by or agreed to by or on behalf of the Acquiring Fund.
The Acquiring Fund has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Section 6662 of the Code;
(J) The Acquiring Fund has not undergone, has not agreed to
undergo, and is not required to undergo (nor will it be required as a result of
the transactions contemplated in this Agreement to undergo) a change in its
method of accounting resulting in an adjustment to its taxable income pursuant
to Section 481 of the Code. The Acquiring Fund will not be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Closing Date under Section 481(c) of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law);
(ii) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date; (iii) installment sale or open
transaction disposition made on or prior to the Closing Date; or (iv) prepaid
amount received on or prior to the Closing Date;
(K) The Acquiring Fund will not have taken or agreed to take
any action, and will not be aware of any agreement, plan or other circumstance,
that is inconsistent with the representations set forth in the Acquiring Fund
Tax Representation Certificate to be delivered pursuant to paragraph 6.3;
(L) There are (and as of immediately following the Closing
there will be) no liens on the assets of the Acquiring Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable; and
(M) The Tax bases of the assets of the Acquiring Fund are
accurately reflected on the Acquiring Fund's Tax books and records.
(k) The authorized capital of the Acquiring Fund consists of an
unlimited number of shares of beneficial interest, no par value per share. As of
the Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share. The Acquiring
Fund Shares to be issued and delivered to the Acquired Fund for the account of
the Acquired Fund Shareholders pursuant to the terms of this Agreement will have
been duly authorized on the Closing Date and, when so issued and delivered, will
be legally issued and outstanding, fully paid and non-assessable. The Acquiring
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Fund shares, nor is there outstanding
any security convertible into any Acquiring Fund shares;
(l) All issued and outstanding Acquiring Fund Shares are, and on the
Closing Date will be, legally issued, fully paid and non-assessable and have
been offered and sold in every state and the
12
District of Columbia in compliance in all material respects with all applicable
federal and state securities laws;
(m) The Acquiring Trust has the trust power and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by all necessary
action on the part of the Acquiring Trust's Board of Trustees, and, assuming due
authorization, execution and delivery by the Acquired Fund, this Agreement will
constitute a valid and binding obligation of the Acquiring Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(n) The information to be furnished in writing by the Acquiring
Trust, on behalf of the Acquiring Fund, or the Acquiring Fund Adviser for use in
applications for orders, registration statements, proxy materials and other
documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with federal securities and other laws and
regulations applicable thereto or the requirements of any form for which its use
is intended, and shall not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the information provided not
misleading;
(o) No consent, approval, authorization or order of or filing with
any court or governmental authority is required for the execution of this
Agreement or the consummation of the transactions contemplated by the Agreement
by the Acquiring Fund, except for the registration of the Acquiring Fund Shares
under the Securities Act and the Investment Company Act;
(p) The Acquiring Trust currently complies in all material respects
with, and since its organization has complied in all material respects with, the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquiring Trust currently
complies in all material respects with, and since its organization has complied
in all material respects with, all investment objectives, policies, guidelines
and restrictions and any compliance procedures established by the Acquiring
Trust with respect to the Acquiring Fund. All advertising and sales material
used by the Acquiring Trust complies in all material respects with and has
complied in all material respects with the applicable requirements of the
Securities Act, the Investment Company Act, the rules and regulations of the
Commission, and, to the extent applicable, the Conduct Rules of the NASD and any
applicable state regulatory authority. All registration statements,
prospectuses, reports, proxy materials or other filings required to be made or
filed with the Commission, the NASD or any state securities authorities by the
Acquiring Trust have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by law.
Such registration statements, prospectuses, reports, proxy materials and other
filings under the Securities Act, the Exchange Act and the Investment Company
Act (i) are or were in compliance in all material respects with the requirements
of all applicable statutes and the rules and regulations thereunder and (ii) do
not or 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, in light of the circumstances in which they were made, not
false or misleading;
(q) Neither the Acquiring Fund nor, to the knowledge of the
Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted
of any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated
person of the Acquiring Fund been the subject, or presently is the subject, of
any proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an investment
adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b)
thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for
13
disqualification as an investment adviser, employee, officer or director of an
investment company under Section 9 of the Investment Company Act; and
(r) The tax representation certificate to be delivered by the
Acquiring Fund to the Acquired Fund and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx
LLP at Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation
Certificate") will not on the Closing Date contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Fund will operate the Acquired Fund's business in the
ordinary course of business between the date hereof and the Closing Date. It is
understood that such ordinary course of business will include the declaration
and payment of customary dividends and other distributions and any other
dividends and other distributions necessary or advisable (except to the extent
dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The Acquired Trust will call a special meeting of the Acquired Fund's
shareholders to consider approval of this Agreement and act upon the matters set
forth in the Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy
and Proxy Statement (collectively, "Proxy Materials") to be used in connection
with such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The Acquired Fund will provide the Acquiring Fund with
information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired by the Acquired Fund for the purpose of
making any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund Shares.
5.6 Subject to the provisions of this Agreement, each Fund will take, or
cause to be taken, all actions, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing
Date a statement of assets and liabilities of the Acquired Fund ("Statement of
Assets and Liabilities") as of the Closing Date setting forth the NAV (as
computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation
Time, which statement shall be prepared in accordance with GAAP consistently
applied and certified by the Acquired Fund's Treasurer or Assistant Treasurer.
As promptly as practicable, but in any case within 30 days after the Closing
Date, the Acquired Fund shall furnish to the Acquiring Fund, in such form as is
reasonably satisfactory to the Acquiring Fund, a statement of the earnings and
profits of the Acquired Fund for federal income tax purposes, and of any capital
loss carryovers and other items that will be carried over to the Acquiring Fund
under the Code, and which statement will be certified by the Treasurer of the
Acquired Fund.
14
5.8 Neither Fund shall take any action that is inconsistent with the
representations set forth in, with respect to the Acquired Fund, the Acquired
Fund Tax Representation Certificate and, with respect to the Acquiring Fund, the
Acquiring Fund Tax Representation Certificate.
5.9 From and after the date of this Agreement and until the Closing Date,
each of the Funds and the Acquired Fund and the Acquiring Fund shall use its
commercially reasonable efforts to cause the Reorganization to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could prevent the Reorganization from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the meaning
of Section 1313(a) of the Code, the parties hereto shall treat and report the
transactions contemplated hereby as a reorganization within the meaning of
Section 368(a)(1)(C) of the Code and shall not take any position inconsistent
with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could prevent it from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax
Returns for taxable periods that end on or before the Closing Date and shall
timely file, or cause to be timely filed, all such Tax Returns. Each Fund shall
make any payments of Taxes required to be made by it with respect to any such
Tax Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
6.1 All representations and warranties by the Acquiring Trust, on behalf
of the Acquiring Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof (in each case, as such
representations and warranties would read as if all qualifications as to
materiality were deleted therefrom) and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 The Acquiring Trust shall have delivered to the Acquired Trust on the
Closing Date a certificate of the Acquiring Trust, on behalf of the Acquiring
Fund, executed in its name by its President or Vice President and its Treasurer
or Assistant Treasurer, in form and substance satisfactory to the Acquired Trust
and dated as of the Closing Date, to the effect that the representations and
warranties of the Acquiring Trust made in this Agreement are true and correct in
all material respects at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, that each of the
conditions to Closing in this Article 6 have been met, and as to such other
matters as the Acquired Trust shall reasonably request;
6.3 The Acquiring Trust, on behalf of the Acquiring Fund, shall have
delivered to the Acquired Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP an
Acquiring Fund Tax Representation
15
Certificate, satisfactory to the Acquiring Trust and Xxxxxx Xxxxxx Xxxxxxxxx
Xxxx and Xxxx LLP, in a form mutually acceptable to the Acquiring Trust and the
Acquired Trust, concerning certain tax-related matters with respect to the
Acquired Fund;
6.4 The Board of Trustees of the Acquiring Trust shall have determined
that the Reorganization is in the best interests of the Acquiring Fund and,
based upon such determination, shall have approved this Agreement and the
transactions contemplated hereby; and
6.5 The Acquired Trust, on behalf of the Acquired Fund, shall have
received at the Closing a favorable opinion as to the due authorization of this
Agreement by the Acquiring Trust, on behalf of the Acquiring Fund, and related
matters of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the Acquired Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be, at its election, subject to the performance by the Acquired
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following further conditions, unless
waived by the Acquiring Fund in writing:
7.1 All representations and warranties of the Acquired Trust, on behalf
of the Acquired Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof (in each case, as such
representations and warranties would read as if all qualifications as to
materiality were deleted therefrom) and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 The Acquired Trust shall have delivered to the Acquiring Fund the
Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph
5.7, together with a list of its portfolio securities showing the federal income
tax bases and holding periods of such securities, as of the Closing Date,
certified by the Acquired Trust's Treasurer or Assistant Treasurer;
7.3 The Acquired Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the Acquired Trust, on behalf of the Acquired
Fund, executed in its name by its President or Vice President and a Treasurer or
Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Trust contained in this Agreement
are true and correct in all material respects at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, that each of the conditions to Closing in this Article 7 have been
met, and as to such other matters as the Acquiring Trust shall reasonably
request;
7.4 The Acquired Trust, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring
Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, in a form mutually
acceptable to the Acquiring Trust and the Acquired Trust, concerning certain
tax-related matters with respect to the Acquired Fund; and
7.5 The Board of Trustees of the Acquired Trust shall have determined
that the Reorganization is in the best interests of the Acquired Fund and, based
upon such determination, shall have approved this Agreement and the transactions
contemplated hereby.
16
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the Acquired Fund's shareholders in
accordance with the provisions of the Acquired Trust's Declaration and By-Laws,
and certified copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders shall have been delivered by the Acquired Fund to the
Acquiring Fund. Notwithstanding anything herein to the contrary, neither party
hereto may waive the conditions set forth in this Paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may waive any such conditions
for itself;
8.4 The Acquiring Fund's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement shall have been issued and, to the
best knowledge of the parties hereto, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or contemplated
under the Securities Act;
8.5 The parties shall have received an opinion of Xxxxxx Xxxxxx Xxxxxxxxx
Xxxx and Xxxx LLP, satisfactory to the Acquired Trust and the Acquiring Trust
and subject to customary assumptions and qualifications, substantially to the
effect that for federal income tax purposes the acquisition by the Acquiring
Fund of the Acquired Assets solely in exchange for the issuance of Acquiring
Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities
by the Acquiring Fund, followed by the distribution by the Acquired Fund, in
liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund
Shareholders in exchange for their Acquired Fund Shares and the termination of
the Acquired Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code.
8.6 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
17
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 The parties have been informed by Pioneer Investment Management, Inc.
that it will pay 50% of the expenses incurred in connection with the
Reorganization (including, but not limited to, the preparation of the proxy
statement and solicitation expenses). Each of the Acquired Fund and the
Acquiring Fund agrees to pay 25% of the expenses incurred in connection with the
Reorganization (including, but not limited to, the preparation of the proxy
statement and solicitation expenses).
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the Acquired Trust each agrees that neither
party has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Acquired Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or prior to
the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which reasonably
appears will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquiring Fund's
shareholders;
(d) by resolution of the Acquired Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquired Fund's
shareholders; or
(e) if the transactions contemplated by this Agreement shall not
have occurred on or prior to December 31, 2006 or such other date as the parties
may mutually agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Trust, the Acquiring Fund, the Acquired
Trust or the Acquired Fund, or the trustees or officers of the Acquired Trust or
the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the
expenses incurred by it incidental to the preparation and carrying out of this
Agreement.
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12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Trust and the Acquiring Trust; provided, however, that following the
meeting of the Acquired Fund's shareholders called by the Acquired Trust
pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions regarding the method for determining the
number of Acquiring Fund Shares to be received by the Acquired Fund Shareholders
under this Agreement to their detriment without their further approval; provided
that nothing contained in this Section 12 shall be construed to prohibit the
parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund and the
Acquiring Fund at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party hereto.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Trust
and the Acquired Trust shall not be binding upon any of their respective
trustees, shareholders, nominees, officers, agents or employees personally, but
bind only to the property of the Acquiring Fund or the Acquired Fund, as the
case may be, as provided in the Acquiring Trust's Declaration and the Acquired
Fund's Declaration of Trust, respectively. The execution and delivery of this
Agreement have been authorized by the trustees of the Acquiring Trust and of the
Acquired Trust and this Agreement has been executed by authorized officers of
the Acquiring Trust and the Acquired Trust, acting as such, and neither such
authorization by such trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to imposed any
liability on any of them personally, but shall bind only the property of the
Acquiring Fund and the Acquired Fund, as the case may be, as provided in the
Acquiring Trust's Declaration and the Acquired Trust's Declaration of Trust,
respectively.
* * * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: PIONEER SERIES TRUST II,
on behalf of its series,
PIONEER AMT-FREE MUNICIPAL FUND
By: /s/ Xxxxxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Assistant Secretary Title: Executive Vice President
Attest: PIONEER SERIES TRUST IV,
on behalf of its series,
PIONEER FLORIDA TAX FREE INCOME
FUND
By: /s/ Xxxxxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Assistant Secretary Title: Executive Vice President
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