AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION dated as of September 17, 2002
(the "Agreement"), is between and among Advisors Series Trust ("AST Trust"), a
Delaware business trust, with its principal place of business at 0000 X.
Xxxxxxxxx Xxxx, Xxxxx 000X, Xxxxxxx, XX 00000, with regard to its Chartwell
Large Cap Value Fund series and its Chartwell Small Cap Value Fund series (each
an "Acquired Fund" and together, the "Acquired Funds"), The Advisors' Inner
Circle Fund ("AIC Trust"), a Massachusetts business trust, with its principal
place of business at Xxx Xxxxxxx Xxxxxx Xxxx, Xxxx, XX 00000 with regard to its
Chartwell Large Cap Value Fund series and its Chartwell Small Cap Value Fund
series (each a "Successor Fund" and together, the "Successor Funds"), and with
respect to Section 17(b), Chartwell Investment Partners ("Chartwell").
WHEREAS, AST Trust was organized on October 3, 1996 under Delaware law as a
business trust under an Agreement and Declaration of Trust, AST Trust is an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), AST Trust has authorized capital
consisting of an unlimited number of shares of beneficial interest with $0.01
par value of separate series of AST Trust, and the Acquired Funds are duly
organized and validly existing series of AST Trust;
WHEREAS, AIC Trust was organized on July 18, 1991 under Massachusetts law
as a business trust under a Declaration of Trust, AIC Trust is an open-end
management investment company registered under the 1940 Act, AIC Trust has
authorized capital consisting of an unlimited number of shares of beneficial
interest with no par value of separate series of AIC Trust, and the Successor
Funds are duly organized and validly existing series of AIC Trust;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto hereby agree to
effect the transfer of all of the assets of each Acquired Fund solely in
exchange for the assumption by its corresponding Successor Fund, as designated
on Schedule A to this Agreement, of all of the liabilities of the Acquired Fund
and shares of beneficial interest of the Successor Fund ("Successor Fund
Shares") followed by the distribution, at the Effective Time (as defined in
Section 12 of this Agreement), of such Successor Fund Shares to the holders of
shares of the Acquired Fund ("Acquired Fund Shares") on the terms and conditions
hereinafter set forth in liquidation of the Acquired Fund. The parties hereto
hereby covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, each Acquired Fund shall
assign, deliver and otherwise transfer all of its assets and good and marketable
title thereto, and assign all of the liabilities as are set forth in a statement
of assets and liabilities, to be prepared as of the Valuation Time (as defined
in Section 5 of this Agreement) (the "Statement of Assets and Liabilities"), to
its corresponding Successor Fund, free and clear of all liens, encumbrances and
adverse claims except as provided in this Agreement, and the Successor Fund
shall acquire all assets, and shall assume all liabilities of the Acquired Fund,
and the Successor Fund shall deliver to the Acquired Fund a number of Successor
Fund Shares (both full and fractional) equivalent in number and value to the
Acquired Fund Shares outstanding immediately prior to the Effective Time.
Shareholders of record of Institutional Class Shares of each Acquired Fund at
the Effective Time shall be credited with full and fractional Institutional
Class Shares of the
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corresponding Successor Fund. Shareholders of record of Advisor Class Shares of
each Acquired Fund at the Effective Time shall be credited with full and
fractional Advisor Class Shares of the corresponding Successor Fund. The assets
and liabilities of each Acquired Fund shall be exclusively assigned to and
assumed by the corresponding Successor Fund. All debts, liabilities, obligations
and duties of each Acquired Fund, to the extent that they exist at or after the
Effective Time, shall after the Effective Time attach to the corresponding
Successor Fund and may be enforced against such Successor Fund to the same
extent as if the same had been incurred by the Successor Fund. The events
outlined in this Section 1 are the "Reorganization."
2. TRANSFER OF ASSETS.
(a) The assets of each Acquired Fund to be acquired by the
corresponding Successor Fund and allocated thereto shall include, without
limitation, all cash, cash equivalents, securities, receivables (including
interest and dividends receivable) as set forth in the Statement of Assets and
Liabilities, as well as any claims or rights of action or rights to register
shares under applicable securities laws, any books or records of the Acquired
Fund and other property owned by the Acquired Fund at the Effective Time.
(b) Each Acquired Fund shall direct U.S. Bank N.A., as custodian for
the Acquired Funds (the "Custodian"), to deliver, at or prior to the Effective
Time, a certificate of an authorized officer stating that: (i) assets have been
delivered in proper form to the corresponding Successor Fund within two business
days prior to or at the Effective Time, and (ii) all necessary taxes in
connection with the delivery of the assets, including all applicable federal and
state stock transfer stamps, if any, have been paid or provision for payment has
been made. Each Acquired Fund's portfolio securities represented by a
certificate or other written instrument shall be presented for examination by
the Custodian to the custodian for the Successor Funds no later than five
business days preceding the Effective Time, and shall be transferred and
delivered by the Acquired Fund prior to or as of the Effective Time for the
account of the corresponding Successor Fund duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof. The Custodian
shall deliver prior to or as of the Effective Time by book entry, in accordance
with the customary practices of any securities depository, as defined in Rule
17f-4 under the 1940 Act, in which each Acquired Fund's assets are deposited,
each Acquired Fund's assets deposited with such depositories. The cash to be
transferred by the Acquired Funds shall be delivered by wire transfer of federal
funds prior to or as of the Effective Time.
(c) Each Acquired Fund shall direct U.S. Bancorp Fund Services, LLC
(the "Transfer Agent"), on behalf of the Acquired Fund, to deliver prior to or
as of the Effective Time a certificate of an authorized officer stating that its
records contain the names and addresses of the holders of the Acquired Fund
Shares and the number and percentage ownership of outstanding Institutional
Class Shares and Advisor Class Shares owned by each shareholder immediately
prior to the Effective Time. Each Successor Fund shall issue and deliver a
confirmation evidencing the corresponding Successor Fund Shares to be credited
at the Effective Time to the Secretary of each Acquired Fund, or provide
evidence satisfactory to the Acquired Funds that such Successor Fund Shares have
been credited to each Acquired Fund's account on the books of the Successor
Fund. No later than the Effective Time each party shall deliver to the other
such xxxx of sale, checks, assignments, share certificates, if any, receipts or
other documents as such other party or its counsel may reasonably request.
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3. CALCULATIONS.
(a) The number of each class of Successor Fund Shares issued to each
Acquired Fund pursuant to Section 1 hereof will be the number of issued and
outstanding Acquired Fund Shares of each such class at the Valuation Time.
(b) The net asset value of each class of the Successor Fund Shares
shall be the respective net asset value of each corresponding Acquired Fund's
shares of each such class at the Valuation Time. The net asset value of Acquired
Fund Shares shall be computed at the Valuation Time in the manner set forth in
the Acquired Fund's then current prospectus under the Securities Act of 1933
(the "1933 Act").
4. VALUATION OF ASSETS. The value of the assets of each Acquired Fund shall
be the value of such assets computed as of the time at which the Acquired Fund's
net asset value is calculated at the Valuation Time (as hereinafter defined).
The net asset value of the assets of the Acquired Funds to be transferred to the
corresponding Successor Funds shall be computed by AST Trust (and shall be
subject to adjustment by the amount, if any, agreed to by AST Trust and the
Acquired Funds and AIC Trust and the Successor Funds). In determining the value
of the securities transferred by the Acquired Fund to the Successor Fund, each
security shall be priced in accordance with the pricing policies and procedures
of the Acquired Fund as described in the then current prospectus and statement
of additional information. For such purposes, price quotations and the security
characteristics relating to establishing such quotations shall be determined by
AST Trust, provided that such determination shall be subject to the approval of
AIC Trust. AST Trust and AIC Trust agree to use all commercially reasonable
efforts to resolve, prior to the Valuation Time, any material pricing
differences between the prices of portfolio securities determined in accordance
with the pricing policies and procedures of the Successor Fund and those
determined in accordance with the pricing policies and procedures of the
Acquired Fund.
5. VALUATION TIME. The valuation time shall be 4:00 p.m., Eastern Time, on
December 6, 2002, or such earlier or later date and time as may be mutually
agreed in writing by an authorized officer of each of the parties (the
"Valuation Time"). Notwithstanding anything herein to the contrary, in the event
that at the Valuation Time, (a) the New York Stock Exchange shall be closed to
trading or trading thereon shall be restricted, or (b) trading or the reporting
of trading on such exchange or elsewhere shall be disrupted so that, in the
judgment of AIC Trust or AST Trust, accurate appraisal of the value of the net
assets of the Acquired Funds is impracticable, the Valuation Time shall be
postponed until the first business day after the day when trading shall have
been fully resumed without restriction or disruption, reporting shall have been
restored and accurate appraisal of the value of the net assets of the Acquired
Funds is practicable.
6. LIQUIDATION OF THE ACQUIRED FUNDS AND CANCELLATION OF SHARES. At the
Effective Time, each Acquired Fund will liquidate and the respective Successor
Fund Shares (both full and fractional) received by the Acquired Fund will be
distributed to the shareholders of record of the Acquired Fund as of the
Effective Time in exchange for the Acquired Fund Shares and in complete
liquidation of each Acquired Fund. Each shareholder of an Acquired Fund will
receive a number of Institutional Class and Advisor Class Successor Fund Shares
equal in number and
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value to the Institutional Class and Advisor Class Acquired Fund Shares held by
that shareholder, and each Successor Fund Share and each Acquired Fund Share
will be of equivalent net asset value per share. Such liquidation and
distribution will be accompanied by the establishment of an open account on the
share records of the corresponding Successor Fund in the name of each
shareholder of the Acquired Fund that represents the respective number and class
of Successor Fund Shares due such shareholder. All of the issued and outstanding
shares of each Acquired Fund shall be cancelled on the books of AST Trust at the
Effective Time and shall thereafter represent only the right to receive
Successor Fund Shares. Each Acquired Fund's transfer books shall be closed
permanently. AST Trust also shall take any and all other steps as shall be
necessary and proper to effect a complete termination of the Acquired Funds.
7. REPRESENTATIONS AND WARRANTIES OF THE SUCCESSOR FUNDS. The Successor
Funds represent and warrant to the Acquired Funds as follows:
(a) ORGANIZATION, EXISTENCE, ETC. AIC Trust is a business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and has the power to carry on its business as it is now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. AIC Trust is registered under
the 1940 Act as an open-end management investment company; such registration has
not been revoked or rescinded and is in full force and effect.
(c) SHARES TO BE ISSUED UPON REORGANIZATION. The Successor Fund Shares
to be issued by each Successor Fund in connection with the Reorganization have
been duly authorized and upon consummation of the Reorganization will be validly
issued, fully paid and non-assessable by the Trust. Prior to the Effective Time,
there shall be no issued and outstanding Successor Fund Shares or any other
securities issued by the Successor Funds.
(d) AUTHORITY RELATIVE TO THIS AGREEMENT. AIC Trust, on behalf of each
Successor Fund, has the power to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by AIC Trust's Board of Trustees, and no other proceedings
by the Successor Fund are necessary to authorize AIC Trust's officers to
effectuate this Agreement and the transactions contemplated hereby. Neither
Successor Fund is a party to or obligated under any charter, by-law, indenture
or contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by its executing and carrying out this
Agreement.
(e) LIABILITIES. There are no liabilities of either Successor Fund,
whether or not determined or determinable, other than liabilities incurred in
the ordinary course of business subsequent to the Effective Time or otherwise
disclosed to the Acquired Funds, none of which has been materially adverse to
the business, assets or results of operations of the Successor Funds. AIC
Trust's Registration Statement, which is on file with the Securities and
Exchange Commission (the "SEC"), does not contain an untrue statement of
material fact or omit a material fact that is required to be stated therein or
that is necessary to make the statements therein not misleading.
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(f) LITIGATION. Except as disclosed to the Acquired Funds, there are
no claims, actions, suits or proceedings pending or, to the actual knowledge of
the Successor Funds, threatened which would materially adversely affect the
Successor Funds or their respective assets or business or which would prevent or
hinder in any material respect consummation of the transactions contemplated
hereby.
(g) CONTRACTS. Except for contracts and agreements disclosed to the
Acquired Funds, under which no default exists, neither Successor Fund is a party
to or subject to any material contract, debt instrument, plan, lease, franchise,
license or permit of any kind or nature whatsoever with respect to the Successor
Fund.
(h) TAXES. As of the Effective Time, all Federal and other tax
returns, information returns, and other tax-related reports of the Successor
Funds required by law to have been filed by such date (including extensions)
shall have been filed, and all other taxes shall have been paid so far as due,
or provision shall have been made for the payment thereof, and to the best of
the Successor Funds' knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns.
(i) SUBCHAPTER M. For each taxable year of its operation, each
Successor Fund has met (or will meet) the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") for qualification as a
regulated investment company, has been eligible to (or will be eligible to) and
has computed (or will compute) its federal income tax under Section 852 of the
Code.
8. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUNDS. The Acquired Funds
represent and warrant to the Successor Funds as follows:
(a) ORGANIZATION, EXISTENCE, ETC. AST Trust is a business trust duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the power to carry on its business as it is now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. AST Trust is registered under
the 1940 Act as an open-end management investment company; such registration has
not been revoked or rescinded and is in full force and effect.
(c) FINANCIAL STATEMENTS. The audited financial statements of AST
Trust relating to the Acquired Funds for the fiscal year ended August 31, 2002
(the "Acquired Fund's Financial Statements"), as delivered to the Successor
Funds, fairly present the financial position of each Acquired Fund as of the
dates thereof, and the results of its operations and changes in its net assets
for the periods indicated. There are no known contingent liabilities of either
Acquired Fund required to be reflected on a balance sheet (including notes
thereto) in accordance with generally accepted accounting principles as of such
date not disclosed therein.
(d) MARKETABLE TITLE TO ASSETS. Each Acquired Fund respectively will
have, at the Effective Time, good and marketable title to, and full right, power
and authority to sell, assign, transfer and deliver, the assets to be
transferred to the corresponding Successor Fund. Upon delivery and payment for
such assets, the corresponding Successor Fund will have good and marketable
title to such assets without restriction on the transfer thereof free and clear
of all liens, encumbrances and adverse claims.
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(e) AUTHORITY RELATIVE TO THIS AGREEMENT. AST Trust, on behalf of each
Acquired Fund, has the power to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by AST Trust's Board of Trustees, and, except for approval
by the shareholders of each Acquired Fund, no other proceedings by that Acquired
Fund are necessary to authorize AST Trust's officers to effectuate this
Agreement and the transactions contemplated hereby. Neither Acquired Fund is a
party to or obligated under any charter, by-law, indenture or contract provision
or any other commitment or obligation, or subject to any order or decree, which
would be violated by its executing and carrying out this Agreement.
(f) LIABILITIES. There are no liabilities of either Acquired Fund,
whether or not determined or determinable, other than liabilities disclosed or
provided for in the Acquired Fund's Financial Statements and liabilities
incurred in the ordinary course of business prior to the Effective Time, or
otherwise disclosed to the Successor Funds, none of which has been materially
adverse to the business, assets or results of operations of the Acquired Fund.
AST Trust's Registration Statement, which is on file with the SEC, does not
contain an untrue statement of a material fact or omit a material fact that is
required to be stated therein or that is necessary to make the statements
therein not misleading.
(g) LITIGATION. Except as disclosed to the Successor Funds, there are
no claims, actions, suits or proceedings pending or, to the knowledge of the
Acquired Funds, threatened which would materially adversely affect the Acquired
Funds or their respective assets or business or which would prevent or hinder in
any material respect consummation of the transactions contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the
Successor Funds, under which no default exists, neither Acquired Fund, at the
Effective Time, is a party to or subject to any material contract, debt
instrument, plan, lease, franchise, license or permit of any kind or nature
whatsoever.
(i) TAXES. As of the Effective Time, all Federal and other tax
returns, information returns, and other tax-related reports of the Acquired
Funds required by law to have been filed shall have been filed by such date
(including extensions), and all other taxes shall have been paid so far as due,
or provision shall have been made for the payment thereof, and to the best of
the Acquired Funds' knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns.
(j) SUBCHAPTER M. For each taxable year of its operation, each
Acquired Fund has met (or will meet) the requirements of Subchapter M of the
Code for qualification as a regulated investment company, has been (or will be)
eligible to and has computed (or will compute) its federal income tax under
Section 852 of the Code.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR FUNDS.
(a) All representations and warranties of the Acquired Funds contained
in this
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Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Effective Time, with the same force and effect as if
made on and as of the Effective Time. At the Effective Time, AIC Trust shall
have received a certificate from the President or Vice President of AST Trust,
dated as of such date, certifying on behalf of AST Trust that as of such date
that the conditions set forth in this clause (a) have been met.
(b) The Successor Funds shall have received an opinion of counsel on
behalf of the Acquired Funds, dated as of the Effective Time, addressed and in
form and substance satisfactory to counsel for the Successor Fund, to the effect
that: (i) AST Trust is duly organized and in good standing under the laws of the
State of Delaware and the Acquired Funds are validly existing series of AST
Trust; (ii) AST Trust is an open-end management investment company registered
under the 1940 Act and such registration has not been revoked or rescinded and
is in full force and effect; (iii) AST Trust, on behalf of the Acquired Funds,
has power to sell, assign, convey, transfer and deliver the Acquired Funds'
assets contemplated hereby and, upon consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement, each
Acquired Fund will have duly sold, assigned, conveyed, transferred and delivered
such assets to AIC Trust; (iv) the execution and delivery of this Agreement will
not, and the consummation of the transactions contemplated hereby will not,
violate AST Trust's Declaration of Trust or Bylaws or any provision of an
agreement known to such counsel (without any independent inquiry or
investigation) to which AST Trust, with respect to the Acquired Funds, is a
party or by which it is bound; (v) this Agreement and the Reorganization
provided for herein and the execution of this Agreement have been duly
authorized and approved by all requisite corporate action on behalf of AST Trust
and this Agreement has been duly executed and delivered by AST Trust on behalf
of the Acquired Funds and is a valid and binding obligation of AST Trust on
behalf of the Acquired Funds, subject to applicable bankruptcy, insolvency,
fraudulent conveyance and similar laws or court decisions regarding enforcement
of creditors' rights generally; and (vi) to the best of counsel's knowledge, no
consent, approval, order or authorization of any court, governmental authority
or agency is required for AIC Trust to enter into this Agreement on behalf of
the Acquired Fund or carry out its terms, except such as has been obtained under
the 1933 Act, the Securities Exchange Act of 1934 (the "1934 Act"), the 1940 Act
(together with the 1933 Act and the 1934 Act, the "Federal Securities Laws"),
and Delaware state law as it relates to the treatment of business trusts
(including, in the case of each of the foregoing, the rules and regulations
thereunder) or where the failure to obtain any such consent, approval, order or
authorization would not have a material adverse effect on the operations of the
Acquired Funds or the consummation of the transactions contemplated by this
Agreement. Such opinion may rely on a certificate of the President or Vice
President of AST Trust as to factual matters.
(c) Each Acquired Fund shall have delivered to the corresponding
Successor Fund at the Effective Time the Acquired Fund's Statement of Assets and
Liabilities, prepared in accordance with generally accepted accounting
principles consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of AST Trust as to the aggregate asset value of each
Acquired Fund's portfolio securities.
(d) At the Effective Time, AST Trust shall have performed and complied
in all material respects with each of its agreements and covenants required by
this Agreement to be
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performed or complied with by AST Trust prior to or at the Effective Time and
AIC Trust shall have received a certificate from the President or Vice President
of AST Trust, dated as of such date, certifying on behalf of AST Trust that the
conditions set forth in this clause (d) have been and continue to be, satisfied.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS.
(a) All representations and warranties of the Successor Funds
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same force
and effect as if made on and as of the Effective Time. At the Effective Time,
AST Trust shall have received a certificate from the President or Vice President
of AIC Trust, dated as of such date, certifying on behalf of AIC Trust that as
of such date that the conditions set forth in this clause (a) have been met.
(b) The Acquired Funds shall have received an opinion of counsel on
behalf of the Successor Funds, dated as of the Effective Time, addressed and in
form and substance satisfactory to counsel for the Acquired Fund, to the effect
that: (i) AIC Trust is duly organized under the laws of the Commonwealth of
Massachusetts and the Successor Funds are validly existing series of the AIC
Trust; (ii) AIC Trust is an open-end management investment company registered
under the 1940 Act and such registration has not been revoked or rescinded and
such registration is in full force and effect; (iii) the execution and delivery
of this Agreement will not, and the consummation of the transactions
contemplated hereby will not, violate AIC Trust's Declaration of Trust or Bylaws
or any provision of an agreement known to such counsel (without any independent
inquiry or investigation) to which AIC Trust, with respect to the Successor
Funds, is a party or by which it is bound; (iv) this Agreement and the
Reorganization provided for herein and the execution of this Agreement have been
duly authorized and approved by all requisite corporate action on behalf of AIC
Trust and this Agreement has been duly executed and delivered by AIC Trust on
behalf of the Successor Funds and is a valid and binding obligation of AST Trust
on behalf of the Successor Funds, subject to applicable bankruptcy, insolvency,
fraudulent conveyance and similar laws or court decisions regarding enforcement
of creditors' rights generally; (v) to the best of counsel's knowledge, no
consent, approval, order or authorization of any court, governmental authority
or agency is required for AIC Trust to enter into this Agreement on behalf of
the Acquired Fund or carry out its terms, except such as has been obtained under
the Federal Securities Laws and Massachusetts state law as it relates to
treatment of business trusts (including, in the case of each of the foregoing,
the rules and regulations thereunder) or where the failure to obtain any such
consent, approval, order or authorization would not have a material adverse
effect on the operations of the Acquired Funds or the consummation of the
transactions contemplated by this Agreement; and (vi) the Successor Fund Shares
to be issued in the Reorganization have been duly authorized and upon issuance
thereof in accordance with this Agreement will be validly issued, fully paid and
non-assessable by the AIC Trust. Such opinion may rely on a certificate of the
President or Vice President of AIC Trust as to factual matters.
(c) At the Effective Time, AIC Trust shall have performed and complied
in all material respects with each of its agreements and covenants required by
this Agreement to be performed or complied with by AIC Trust prior to or at the
Effective Time and AST Trust shall
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have received a certificate from the President or Vice President of AIC Trust,
dated as of such date, certifying on behalf of AIC Trust that the conditions set
forth in this clause (c) have been, and continue to be, satisfied.
11. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUNDS AND
THE SUCCESSOR FUNDS. The obligations of the Acquired Funds and the Successor
Funds to effectuate this Agreement shall be subject to the satisfaction of each
of the following conditions:
(a) With respect to the Acquired Funds, AST Trust will call a meeting of
shareholders to consider and act upon this Agreement and to take all other
actions reasonably necessary to obtain the approval by shareholders of the
Acquired Funds of this Agreement and the transactions contemplated herein,
including the Reorganization and the termination of the Acquired Funds if the
Reorganization is consummated. AIC Trust has prepared or will prepare a notice
of meeting, form of proxy, and a combined prospectus/proxy statement on Form
N-14 (collectively, the "Proxy Materials") to be used in connection with such
meeting; provided that the Acquired Funds have furnished or will furnish
information relating to them as is reasonably necessary for the preparation of
the Proxy Materials.
(b) The Registration Statement on Form N-14 of the Successor Funds shall be
effective under the 1933 Act and, to the best knowledge of the Successor Fund,
no investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 1933 Act.
(c) The shares of the Successor Funds shall have been duly qualified for
offering to the public in all states of the United States, the Commonwealth of
Puerto Rico and the District of Columbia (except where such qualifications are
not required) so as to permit the transfer contemplated by this Agreement to be
consummated.
(d) The Acquired Funds and the Successor Funds shall have received on or
before the Effective Time an opinion of counsel satisfactory to the Acquired
Funds and the Successor Funds, based on customary officers' certificates
provided by each, substantially to the effect that with respect to each of the
Acquired Funds and the Successor Funds for Federal income tax purposes:
(i) No gain or loss will be recognized by the Acquired Fund upon
the transfer of its assets in exchange solely for Successor Fund Shares and the
assumption by the Successor Fund of the Acquired Fund's stated liabilities.
(ii) No gain or loss will be recognized by the Successor Fund on
its receipt of Acquired Fund assets in exchange for Successor Fund Shares and
the assumption by the Successor Fund of the Acquired Fund's liabilities;
(iii) The adjusted tax basis of the Acquired Fund's assets in the
Successor Fund's hands will be the same as the adjusted tax basis of those
assets in the Acquired Fund's hands immediately before the Effective Time;
(iv) The Successor Fund's holding period for the assets received
from the Acquired Fund will include the holding period of those assets in the
Acquired Fund's hands immediately before the Effective Time;
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(v) No gain or loss will be recognized by the Acquired Fund on
the distribution of Successor Fund Shares to the Acquired Fund's shareholders in
exchange for their Acquired Fund Shares;
(vi) No gain or loss will be recognized by any Acquired Fund
shareholder as a result of the Acquired Fund's distribution of Successor Fund
Shares to such shareholder in exchange for such shareholder's Acquired Fund
Shares;
(vii) The adjusted tax basis of the Successor Fund Shares
received by each Acquired Fund shareholder will be the same as the adjusted tax
basis of that Acquired Fund shareholder's Acquired Fund Shares surrendered in
exchange therefor; and
(viii) The holding period of the Successor Fund Shares received
by each Acquired Fund shareholder will include such shareholder's holding period
for the Acquired Fund Shares surrendered in exchange therefor, provided that
said Acquired Fund Shares were held as capital assets as of the Effective Time.
(e) With respect to each Acquired Fund, this Agreement and the
Reorganization contemplated hereby shall have been approved by at least a
majority of the outstanding shares of the Acquired Fund entitled to vote on the
matter.
(f) The Board of Trustees of AIC Trust shall have approved this
Agreement and authorized the issuance by each Successor Fund of Successor Fund
Shares at the Effective Time in exchange for the assets of each corresponding
Acquired Fund pursuant to the terms and provisions of this Agreement.
12. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Acquired
Funds' assets for the Successor Fund Shares shall be effective as of opening of
business on December 9, 2002, or at such other time and date as fixed by the
mutual consent of the parties (the "Effective Time").
13. TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated and abandoned without penalty by resolution of the Board of
Trustees of AIC Trust and/or by resolution of the Board of Trustees of AST
Trust, at any time prior to the Effective Time, if circumstances should develop
that, in the opinion of both or either Board, make proceeding with the Agreement
inadvisable.
14. AMENDMENT. This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the parties; provided,
however, no such amendment may have the effect of changing the provisions for
determining the number or value of Successor Fund Shares to be paid to each
Acquired Fund's shareholders under this Agreement to the detriment of such
Acquired Fund's shareholders.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
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16. 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, certified mail or overnight express courier
addressed as follows:
if to the Acquired Funds: if to the Successor Funds:
[_______________] Xxxxxxx X. Xxxxxxx, Esq.
Advisors Series Trust SEI Investments Company
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000X Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000 Xxxx, XX 00000
with a copy to: with a copy to:
Xxxxxxx Xxxxxx, Esq. Xxxx X. Xxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxx Xxxxxx Xxxxxx 0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxx Xxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
17. FEES AND EXPENSES.
(a) Each of the Successor Funds and the Acquired Funds represents and
warrants to the other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for herein.
(b) Except as otherwise provided for herein, all expenses of the
reorganization contemplated by this Agreement will be borne by Chartwell. Such
expenses include, without limitation: (i) expenses incurred in connection with
the entering into and the carrying out of the provisions of this Agreement; (ii)
expenses associated with the preparation and filing of the Proxy Materials under
the 1934 Act; (iii) registration or qualification fees and expenses of preparing
and filing such forms as are necessary under applicable state securities laws to
qualify the Successor Fund Shares to be issued in connection herewith in each
state in which the Acquired Fund's shareholders are resident as of the date of
the mailing of the Proxy Materials to such shareholders; (iv) postage; (v)
printing; (vi) accounting fees; (vii) legal fees; and (viii) solicitation costs
related to obtaining shareholder approval of the transactions contemplated by
this Agreement.
18. INDEMNIFICATION.
(a) AIC Trust, on behalf of the Successor Funds, shall indemnify,
defend and hold harmless the Acquired Funds, AST Trust, its Board of Trustees,
officers, employees and agents (collectively "Acquired Fund Indemnified
Parties") against all losses, claims, demands, liabilities and expenses,
including reasonable legal and other expenses incurred in defending third-party
claims, actions, suits or proceedings, whether or not resulting in any liability
to such Acquired Fund Indemnified Parties, including amounts paid by any one or
more of the Acquired Fund Indemnified Parties in a compromise or settlement of
any such claim, action, suit or proceeding, or threatened third party claim,
suit, action or proceeding made with the consent of AIC Trust, on behalf of the
Successor Funds, arising from any untrue statement or alleged untrue
11
statement of a material fact contained in the Proxy Materials, as filed and in
effect with the SEC, or any application prepared by AIC Trust, on behalf of the
Successor Funds with any state regulatory agency in connection with the
transactions contemplated by this Agreement under the securities laws thereof
("Application"); or which arises out of or is based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
AIC Trust and the Successor Funds shall only be liable in such case to the
extent that any such loss, claim, demand, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission about AIC Trust and/or the Successor Funds or the transactions
contemplated by this Agreement made in the Proxy Materials or any Application.
(b) AST Trust, on behalf of the Acquired Funds, shall indemnify,
defend, and hold harmless the Successor Funds, AIC Trust, its Board of Trustees,
officers, employees and agents ("Successor Fund Indemnified Parties") against
all losses, claims, demands, liabilities, and expenses, including reasonable
legal and other expenses incurred in defending third-party claims, actions,
suits or proceedings, whether or not resulting in any liability to such
Successor Fund Indemnified Parties, including amounts paid by any one or more of
the Successor Fund Indemnified Parties in a compromise or settlement of any such
claim, suit, action or proceeding, or threatened third-party claim, suit, action
or proceeding made with the consent of AST Trust, on behalf of the Acquired
Funds, arising from any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Materials, as filed and in effect with the
SEC or any Application; or which arises out of or is based upon any omission or
alleged omission to state therein a material fact required to be stated therein
and necessary to make the statements therein not misleading; provided, however,
that AST Trust and the Acquired Funds shall only be liable in such case to the
extent that any such loss, claim, demand, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission about AST Trust and/or the Acquired Funds or about the
transactions contemplated by this Agreement made in the Proxy Materials or any
Application.
(c) A party seeking indemnification hereunder is hereinafter called
the "indemnified party" and the party from whom the indemnified party is seeking
indemnification hereunder is hereinafter called the "indemnifying party." Each
indemnified party shall notify the indemnifying party in writing within ten (10)
days of the receipt by one or more of the indemnified parties of any notice of
legal process of any suit brought against or claim made against such indemnified
party as to any matters covered by this Section 18, but the failure to notify
the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under this
Section 18. The indemnifying party shall be entitled to participate at its own
expense in the defense of any claim, action, suit, or proceeding covered by this
Section 18, or, if it so elects, to assume at its own expense the defense
thereof with counsel satisfactory to the indemnified parties; provided, however,
if the defendants in any such action include both the indemnifying party and any
indemnified party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it which are different from or
additional to those available to the indemnifying party, the indemnified party
shall have the right to select separate counsel to assume such legal defense and
to otherwise participate in the defense of such action on behalf of such
indemnified party.
(d) Upon receipt of notice from the indemnifying party to the
indemnified parties
12
of the election by the indemnifying party to assume the defense of such action,
the indemnifying party shall not be liable to such indemnified parties under
this Section 18 for any legal or other expenses subsequently incurred by such
indemnified parties in connection with the defense thereof unless (i) the
indemnified parties shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the provision of the immediately
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel); (ii)
the indemnifying party does not employ counsel reasonably satisfactory to the
indemnified parties to represent the indemnified parties within a reasonable
time after notice of commencement of the action; or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified parties at its
expense.
(e) This Section 18 shall survive the termination of this Agreement
and for a period of three years following the Effective Date.
19. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
(d) ENTIRE AGREEMENT. Each of the Successor Funds and the Acquired
Funds agree that neither party has made any representation, warranty or covenant
not set forth herein and that this Agreement constitutes the entire agreement
between the parties. The representations, warranties and covenants contained
herein or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
(e) FURTHER ASSURANCES. Each of the Successor Funds and the Acquired
Funds shall take such further action as may be necessary or desirable and proper
to consummate the transactions contemplated hereby.
(f) BINDING NATURE OF AGREEMENT; LIMITATION OF TRUSTEE, OFFICER AND
SHAREHOLDER LIABILITY. As provided in AIC Trust's Declaration of Trust on file
with the Secretary of the Commonwealth of Massachusetts, this Agreement was
executed by the undersigned officers and trustees of AIC Trust, on behalf of the
Acquired Fund, as officers and trustees and not individually, and the
obligations of this Agreement are not binding upon the undersigned officers,
trustees or shareholders individually, but are binding only upon the assets and
property of AIC Trust. Moreover, no series of AIC Trust shall be liable for the
obligations of any other series of AIC Trust.
13
THE ADVISORS' INNER CIRCLE FUND, on behalf of its series, the Chartwell Large
Cap Value Fund and its Chartwell Small Cap Value Fund
By:___________________________
Title:________________________
ADVISORS SERIES TRUST, on behalf of its series, the Chartwell Large Cap Value
Fund and its Chartwell Small Cap Value Fund
By:___________________________
Title:________________________
With respect to Section 17(b), Chartwell Investment Partners
By:___________________________
Title:________________________
14
SCHEDULE A
ACQUIRED FUNDS OF CORRESPONDING SUCCESSOR FUNDS OF
ADVISORS SERIES TRUST THE ADVISORS' INNER CIRCLE FUND
--------------------- --------------------------------
Chartwell Large Cap Value Fund Chartwell Large Cap Value Fund
Chartwell Small Cap Value Fund Chartwell Small Cap Value Fund
15
