Exhibit (4)(h) under Form N-14
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, made as of this 10th day of November,
2000, by and between Vision Group of Funds (the "Trust"), a business trust
created under the laws of the State of Delaware, with its principal place of
business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, and
Governor Funds (the "Governor Funds"), a business trust created under the laws
of the State of Delaware, with its principal place of business at 0000 Xxxxxxx
Xxxx, Xxxxxxxx, Xxxx 00000.
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the "Plan of
Reorganization") will consist of (i) the acquisition by the Trust on behalf of
the Vision Portfolio (as hereinafter defined) of all of the property, assets and
goodwill of the Established Growth Fund series (the "Governor Portfolio") of the
Governor Funds in exchange solely for Class A shares of beneficial interest, no
par value ("Class A Shares"), of the Vision Large Cap Core Fund series (the
"Vision Portfolio") of the Trust, and the assumption by the Trust on behalf of
the Vision Portfolio of all of the liabilities of the Governor Portfolio, (ii)
the distribution of such shares of beneficial interest of the Vision Portfolio
to the shareholders of the Governor Portfolio according to their respective
interests, and (iii) the dissolution of the Governor Portfolio as soon as
practicable after the closing (as referenced in Section 3, hereinafter called
the "Closing"), all upon and subject to the terms and conditions of this
Agreement hereinafter set forth.
AGREEMENT
In order to consummate the Plan of Reorganization and in
consideration of the premises and of the covenants and agreements hereinafter
set forth, and intending to be legally bound, the parties hereto covenant and
agree as follows:
1. SALE AND TRANSFER OF ASSETS AND LIABILITIES, LIQUIDATION AND
DISSOLUTION OF THE GOVERNOR PORTFOLIO
(a) Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of the Trust herein contained, and in
consideration of the delivery by the Trust of the number of its Class A Shares
of beneficial interest of the Vision Portfolio hereinafter provided, the
Governor Funds, on behalf of the Governor Portfolio, agrees that it will sell,
convey, transfer and deliver to the Trust on behalf of the Vision Portfolio at
the Closing provided for in Section 3 all of the liabilities, debts, obligations
and duties of any nature, whether accrued, absolute, contingent or otherwise
("Liabilities") and the assets of the Governor Portfolio as of the close of
business on the closing date (as referenced in Section 3, hereinafter called the
"Closing Date"), free and clear of all liens, encumbrances, and claims
whatsoever (other than shareholders' rights of redemption and such restrictions
as might arise under the Securities Act of 1933, as amended (the "1933 Act"),
with respect to privately placed or otherwise restricted securities that the
Governor Portfolio may have acquired in the ordinary course of business), except
for cash, bank deposits, or cash equivalent securities in an estimated amount
necessary (1) to discharge all of the Governor Portfolio's Liabilities on its
books at the close of business on the Closing Date, including, but not limited
to, its income dividends and capital gains distributions, if any, payable for
any period prior to, and through, the close of business on the Closing Date, and
excluding those liabilities and obligations that would otherwise be discharged
at a later date in the ordinary course of business, and (2) to pay such
contingent liabilities as the trustees of the Governor Funds shall reasonably
deem to exist against the Governor Portfolio, if any, at the close of business
on the Closing Date, for which contingent and other appropriate liability
reserves shall be established on the books of the Governor Portfolio
(hereinafter "Net Assets"). The Governor Funds, on behalf of the Governor
Portfolio, shall also retain any and all rights that it may have over and
against any person that may have accrued up to and including the close of
business on the Closing Date. The Governor Funds agree to use commercially
reasonable best efforts to identify all Liabilities prior to the Closing Date
and to discharge all known Liabilities on or prior to the Closing Date.
(b) Subject to the terms and conditions of this Agreement, and in reliance
on the representations and warranties of the Governor Funds herein contained,
and in consideration of such sale, conveyance, transfer, and delivery, the Trust
agrees at the Closing to assume the Liabilities and to deliver to the Governor
Portfolio the number of Class A Shares of beneficial interest of the Vision
Portfolio, no par value, determined by dividing the net asset value per share of
beneficial interest of the Investor shares ("Investor Shares") of the Governor
Portfolio as of the close of business on the Closing Date by the net asset value
per share of beneficial interest of the Class A Shares of the Vision Portfolio
as of the close of business on the Closing Date, which net asset value per share
shall be identical to that determined to be the net asset value per share of the
Investor Shares of the Governor Portfolio as of the close of business on the
Closing Date, and multiplying the result by the number of outstanding shares of
the Investor Shares of the Governor Portfolio as of the close of business on the
Closing Date. All such values shall be determined in the manner and as of the
time set forth in Section 2 hereof.
(c) As soon as practicable following the Closing, the Governor Portfolio
shall dissolve and distribute pro rata to its shareholders of record as of the
close of business on the Closing Date the Class A Shares of beneficial interest
of the Vision Portfolio received by the Governor Portfolio pursuant to this
Section 1. Such dissolution and distribution shall be accomplished by the
establishment of accounts on the share records of the Vision Portfolio of the
type and in the amounts due such shareholders based on their respective holdings
of Investor Shares of the Governor Portfolio as of the close of business on the
Closing Date. Fractional shares of beneficial interest of the Class A Shares of
the Vision Portfolio shall be carried to the third decimal place. No
certificates representing Class A Shares of beneficial interest will be issued
to shareholders of the Investor Shares irrespective of whether such shareholders
hold their Investor Shares in certificated form.
(d) At the Closing, each shareholder of record of the Governor Portfolio as
of the record date (the "Distribution Record Date") with respect to any unpaid
dividends and other distributions that were declared prior to the Closing,
including any dividend or distribution declared pursuant to Section 9(f) hereof,
shall have the right to receive such unpaid dividends and distributions with
respect to the shares of the Governor Portfolio that such person had on such
Distribution Record Date.
2. VALUATION
(a) The value of the Governor Portfolio's Net Assets to be acquired by the
Vision Portfolio hereunder shall be computed as of the close of business (which
shall be deemed to be the close of the New York Stock Exchange, Inc. ("NYSE"))
on the Closing Date using the valuation procedures set forth in the Governor
Portfolio's currently effective prospectus and statement of additional
information.
(b) The net asset value of a share of beneficial interest of the Class A
Shares of the Vision Portfolio shall be identical to the net asset value per
share of the Investor Shares of the Governor Portfolio at the close of business
on the Closing Date, determined as set forth in subsection (c) of this Section
2.
(c) The net asset value of a share of beneficial interest of the Investor
Shares of the Governor Portfolio shall be determined to the nearest full cent as
of the close of business (which shall be deemed to be the close of the NYSE) on
the Closing Date, using the valuation procedures as set forth in the Governor
Portfolio's currently effective prospectus and statement of additional
information.
3. CLOSING AND CLOSING DATE
The Closing Date shall be January 5, 2001, or such later date as the
parties may mutually agree in writing. The Closing shall take place at the
principal office of the Trust, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000 at 9:00 a.m. Eastern Time on the first business day following the
Closing Date. Notwithstanding anything herein to the contrary, in the event that
on the Closing Date, (a) the NYSE 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 the Trust or
Governor Funds, accurate appraisal of the value of the net assets of the
Governor Portfolio or the Vision Portfolio is impracticable, the Closing Date
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
Governor Portfolio and the Vision Portfolio is practicable in the judgment of
the Trust and Governor Funds. The Governor Funds shall have provided for
delivery as of the Closing of those Net Assets of the Governor Portfolio to be
transferred to the Trust's Custodian, State Street Bank and Trust Company, X.X.
Xxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000-0000. Also, the Governor Funds shall
deliver at the Closing a list of names and addresses of the shareholders of
record of the Investor Shares of the Governor Portfolio and the number of
Investor Shares of the Governor Portfolio owned by each such shareholder,
indicating thereon which such shares are represented by outstanding certificates
and which by book-entry accounts, all as of the close of business on the Closing
Date, certified by its transfer agent, or by its President to the best of their
knowledge and belief. The Trust shall issue and deliver a certificate or
certificates evidencing Class A Shares of the Vision Portfolio to be delivered
at the Closing to said transfer agent registered in such manner as the Governor
Funds may request, or provide evidence satisfactory to the Governor Funds that
such shares of beneficial interest of the Class A Shares of the Vision Portfolio
have been registered in an open account on the books of the Vision Portfolio in
such manner as the Governor Funds may request.
4. REPRESENTATIONS AND WARRANTIES BY THE GOVERNOR FUNDS
The Governor Funds represents and warrants to the Trust that:
(a) The Governor Funds is a business trust created under the laws of the
State of Delaware on September 3, 1998, and is validly existing and in good
standing under the laws of that state. The Governor Funds, of which the Governor
Portfolio is a diversified separate series, is duly registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end,
management investment company. Such registration is in full force and effect as
of the date hereof and will be in full force and effect as of the Closing and
all of its shares sold have been sold pursuant to an effective registration
statement filed under the 1933 Act, except for any shares sold pursuant to the
private offering exemption for the purpose of raising initial capital.
(b) The Governor Funds is authorized to issue an unlimited number of shares
of beneficial interest of the Governor Portfolio, par value $0.0001 per share.
Each outstanding Investor Share is duly and validly issued, fully paid,
non-assessable and has full voting rights and, except for any shares sold
pursuant to the private offering exemption for purposes of raising initial
capital, is fully transferable.
(c) The financial statements appearing in the Governor Funds' Annual Report
to Shareholders for the fiscal year ended June 30, 2000, audited by KPMG LLP,
copies of which have been delivered to the Trust, fairly present the financial
position of the Governor Funds and the Governor Portfolio as of the date
indicated, and the results of its operations for the period indicated, in
conformity with generally accepted accounting principles applied on a consistent
basis.
(d) The books and records of the Governor Portfolio made available to the
Trust and/or its counsel are true and correct in all material respects and
contain no material omissions with respect to the business and operations of the
Governor Portfolio.
(e) The Governor Funds has the necessary power and authority to conduct its
business as such business is now being conducted.
(f) The Governor Funds is not a party to or obligated under any provision
of its Agreement and Declaration of Trust, By-Laws, or any material contract or
any other material commitment or obligation, and is not subject to any order or
decree, which would be violated by its execution of or performance under this
Agreement and Plan of Reorganization.
(g) The Governor Funds is not under the jurisdiction of a Court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Internal
Revenue Code of 1986, as amended (the "Code").
(h) The Governor Funds does not have any unamortized or unpaid
organizational fees or expenses.
(i) The Governor Portfolio satisfies, will at the Closing satisfy, and
consummation of the transactions contemplated by this Agreement will not cause
it to fail to satisfy, for any period, the requirements of Subchapter M of the
Code relating to qualification as a regulated investment company.
5. REPRESENTATIONS AND WARRANTIES BY THE TRUST
The Trust represents and warrants to the Governor Funds that:
(a) The Trust is a business trust created under the laws of the State of
Delaware on August 11, 2000, and is validly existing and in good standing under
the laws of that state. The Trust, of which the Vision Portfolio is a
diversified separate series, is duly registered under the 1940 Act, as an
open-end, management investment company, such registration is in full force and
effect as of the date hereof or will be in full force and effect as of the
Closing and all of its shares sold have been sold pursuant to an effective
registration statement filed under the 1933 Act, except for any shares sold
pursuant to the private offering exemption for the purpose of raising initial
capital.
(b) The Trust is authorized to issue an unlimited number of shares of
beneficial interest, without par value. Each outstanding share is fully paid,
non-assessable and has full voting rights and except for any shares sold
pursuant to the private offering exemption for purposes of raising initial
capital, is fully transferable. The Class A Shares of beneficial interest of the
Vision Portfolio to be issued pursuant to this Agreement will be fully paid,
non-assessable, fully transferable and have full voting rights.
(c) At the Closing, the Class A Shares of beneficial interest of the Vision
Portfolio will be eligible for offering to the public in those states of the
United States and jurisdictions in which the Investor Shares of the Governor
Portfolio are presently eligible for offering to the public, and there are a
sufficient number of such shares registered under the 1933 Act, to permit the
transfers contemplated by this Agreement to be consummated.
(d) The Trust has the necessary power and authority to conduct its business
as such business is now being conducted.
(e) The Trust is not a party to or obligated under any provision of its
Agreement and Declaration of Trust, By-laws, or any material contract or any
other material commitment or obligation, and is not subject to any order or
decree, which would be violated by its execution of or performance under this
Agreement.
(f) Neither the Trust nor the Vision Portfolio is under the jurisdiction of
a Court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A)
of the Code.
(g) The Trust does not have any unamortized or unpaid organizational fees
or expenses.
(h) The books and records of the Vision Portfolio made available to the
Governor Funds and/or its counsel are true and correct in all material respects
and contain no material omissions with respect to the business and operations of
the Vision Portfolio.
6. REPRESENTATIONS AND WARRANTIES BY THE GOVERNOR FUNDS AND THE TRUST
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The Governor Funds and the Trust each represents and warrants to the
other that:
(a) The statement of assets and liabilities to be furnished by it as
of the close of business on the Closing Date for the purpose of determining the
number of Class A Shares of beneficial interest of the Vision Portfolio to be
issued pursuant to Section 1 of this Agreement will accurately reflect its Net
Assets in the case of the Governor Portfolio and its net assets in the case of
the Vision Portfolio, and outstanding shares of beneficial interest, as of such
date, in conformity with generally accepted accounting principles applied on a
consistent basis.
(b) At the Closing, it will have good and marketable title to all of
the securities and other assets shown on the statement of assets and liabilities
referred to in subsection (a) above, free and clear of all liens or encumbrances
of any nature whatsoever except such restrictions as might arise under the 1933
Act with respect to privately placed or otherwise restricted securities that it
may have acquired in the ordinary course of business and such imperfections of
title or encumbrances as do not materially detract from the value or use of the
assets subject thereto, or materially affect title thereto.
(c) There are no legal, administrative or other proceedings or
investigations against, or, to its knowledge threatened against, it which would
materially affect its financial condition or its ability to consummate the
transactions contemplated by this Agreement. It is not charged with or, to the
best of its knowledge, threatened with any violation or investigation of any
possible violation of any provisions of any federal, state or local law or
regulation or administrative ruling relating to any aspect of its business.
(d) There are no known actual or proposed deficiency assessments
with respect to any taxes payable by it.
(e) It has duly and timely filed all Tax (as defined below) returns
and reports (including information returns), which are required to be filed by
it, and all such returns and reports accurately state the amount of Tax owed for
the periods covered by the returns, or, in the case of information returns, the
amount and character of income required to be reported by it. It has paid or
made provision and properly accounted for all Taxes due or properly shown to be
due on such returns and reports. The amounts set up as provisions for Taxes in
its books and records as of the close of business on the Closing Date will, to
the extent required by generally accepted accounting principles, be sufficient
for the payment of all Taxes of any kind, whether accrued, due, absolute,
contingent or otherwise, which were or which may be payable by it for any
periods or fiscal years prior to or including the close of business on the
Closing Date, including all Taxes imposed before or after the close of business
on the Closing Date which are attributable to any such period or fiscal year. No
return filed by it is currently being audited by the Internal Revenue Service or
by any state or local taxing authority. As used in this Agreement, "Tax" or
"Taxes" means all federal, state, local and foreign (whether imposed by a
country or political subdivision or authority thereunder) income, gross
receipts, excise, sales, use, value added, employment, franchise, profits,
property, ad valorem or other taxes, stamp taxes and duties, fees, assessments
or charges, whether payable directly or by withholding, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (foreign or domestic) with respect thereto. To its
knowledge, there are no levies, liens or encumbrances relating to Taxes
existing, threatened or pending with respect to its assets.
(f) It has full power and authority to enter into and perform its
obligations under this Agreement, subject with respect to the performance of its
obligations by the Governor Funds and the Governor Portfolio, to approval of its
shareholders. The execution, delivery and performance of this Agreement have
been duly and validly authorized, executed and delivered by it, and this
Agreement constitutes its legal, valid and binding obligation enforceable
against it in accordance with its terms, subject as to enforcement to the effect
of bankruptcy, insolvency, reorganization, arrangements among creditors,
moratorium, fraudulent transfer or conveyance, and other similar laws of general
applicability relating to or affecting creditor's rights and to general equity
principles.
(g) All information provided to the Governor Funds by the Trust and
by the Governor Funds to the Trust for inclusion in, or transmittal with, the
Combined Proxy Statement and Prospectus with respect to this Agreement and Plan
of Reorganization pursuant to which approval of the Governor Portfolio's
shareholders will be sought, shall not contain any untrue statement of a
material fact, or omit to state a material fact required to be stated in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
(h) No consent, approval, authorization or order of any court or
governmental authority, or of any other person or entity, is required for the
consummation of the transactions contemplated by this Agreement, except as may
be required by the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the 1940 Act, or state securities laws or Delaware laws
(including, in the case of each of the foregoing, the rules and regulations
thereunder).
7. COVENANT OF THE TRUST
The Class A Shares to be issued and delivered to the Governor
Portfolio pursuant to the terms hereof shall have been duly authorized as of the
Closing and, when so issued and delivered, shall be registered under the 1933
Act, duly and validly issued, and fully paid and non-assessable, and no
shareholder of the Vision Portfolio shall have any statutory or contractual
preemptive right of subscription or purchase in respect thereof.
8. COVENANTS OF THE GOVERNOR FUNDS AND THE TRUST
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(a) The Governor Funds and the Trust each covenant to operate their
respective businesses as presently conducted between the date hereof and the
Closing.
(b) The Governor Funds undertakes that it will not acquire the Class
A Shares of beneficial interest of the Vision Portfolio for the purpose of
making distributions thereof other than to the Governor Portfolio's
shareholders.
(c) The Governor Funds and the Trust each agree that by the Closing,
all of its federal and other Tax returns and reports required by law to be filed
on or before such date shall have been filed and all federal and other Taxes
shown as due on said returns shall have either been paid or adequate liability
reserves shall have been provided for the payment of such Taxes.
(d) The Governor Funds will at the Closing provide the Trust with:
(1) A statement of the respective tax basis of all investments
to be transferred by the Governor Portfolio to the Vision Portfolio.
(2) A copy of the shareholder ledger accounts for all the
shareholders of record of the Investor Shares of the Governor
Portfolio as of the close of business on the Closing Date, who are
to become holders of the Class A Shares of the Vision Portfolio as a
result of the transfer of assets which is the subject of this
Agreement, certified by its transfer agent or its President to the
best of their knowledge and belief.
(e) The Governor Funds agrees to mail to each shareholder of record
of the Investor Shares of the Governor Portfolio entitled to vote at the meeting
of shareholders at which action on this Agreement is to be considered, in
sufficient time to comply with requirements as to notice thereof, a Combined
Proxy Statement and Prospectus which complies in all material respects with the
applicable provisions of Section 14(a) of the 1934 Act and Section 20(a) of the
1940 Act, and the rules and regulations, respectively, thereunder.
(f) The Trust will file with the United States Securities and
Exchange Commission (the "Commission") a Registration Statement on Form N-14
under the 1933 Act ("Registration Statement"), relating to the Class A Shares of
beneficial interest of the Vision Portfolio issuable hereunder, and will use its
best efforts to provide that such Registration Statement becomes effective as
promptly as practicable. At the time such Registration Statement becomes
effective, it (i) will comply in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act and the 1940 Act, and the rules and
regulations promulgated thereunder; and (ii) will not contain an 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. At
the time the Registration Statement becomes effective, at the time of the
Governor Portfolio's shareholders' meeting, and at the Closing, the prospectus
and statement of additional information included in the Registration Statement
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Governor Funds and the Trust each shall supply to the other,
at the closing, the statement of assets and liabilities described in Section
6(a) of this Agreement in conformity with the requirements described in such
Section.
9. CONDITIONS PRECEDENT TO BE FULFILLED BY THE GOVERNOR FUNDS AND THE
TRUST
The obligations of the Governor Funds and the Trust to effectuate
this Agreement and the Plan of Reorganization hereunder shall be subject to the
following respective conditions:
(a) That (1) all the representations and warranties of the other party
contained herein shall be true and correct in all material respects as of the
Closing with the same effect as though made as of and at such date; (2) the
other party shall have performed all obligations required by this Agreement to
be performed by it at or prior to the Closing; and (3) the other party shall
have delivered to such party a certificate signed by the President or Vice
President and by the Secretary or equivalent officer to the foregoing effect.
(b) That the other party shall have delivered to such party a copy of the
resolutions approving this Agreement adopted by the other party's Board of
Trustees, certified by the Secretary or equivalent officer.
(c) That the Commission shall not have issued an unfavorable advisory
report under Section 25(b) of the 1940 Act, nor instituted nor threatened to
institute any proceeding seeking to enjoin consummation of the reorganization
contemplated hereby under Section 25(c) of the 1940 Act, and no other legal,
administrative or other proceeding shall be instituted or threatened which would
materially affect the financial condition of either party or would prohibit the
transactions contemplated hereby.
(d) The reorganization of the Vision Group of Funds, Inc. with and into the
Trust shall have been completed no later than the Closing.
(e) That this Agreement and the Plan of Reorganization and the transactions
contemplated hereby shall have been approved by holders of at least a majority
of the Investor Shares of the Governor Portfolio voted at a special meeting to
be held no later than February 28, 2001 or other such date as the parties may
agree.
(f) That the Governor Portfolio shall have declared a distribution
or distributions prior to the Closing Date which, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its ordinary income and all of its capital gain net income, if any, for the
period from the close of its last fiscal year to the close of business on the
Closing Date, and (ii) any undistributed ordinary income and capital gain net
income from any prior period. Capital gain net income has the meaning given such
term by Section 1222(9) of the Code.
(g) That prior to or at the Closing, the Governor Funds and the
Trust shall receive an opinion from Stradley, Ronon, Xxxxxxx & Xxxxx LLP,
special counsel to the Trust, to the effect that, provided the acquisition
contemplated hereby is carried out in accordance with this Agreement and in
accordance with customary representations provided by the Governor Funds and the
Trust in certificates delivered to special counsel to the Trust:
(1) The acquisition by the Vision Portfolio of all of the
assets and the assumption of the liabilities of the Governor
Portfolio in exchange for the Vision Portfolio Class A shares will
qualify as a reorganization within the meaning of Section
368(a)(1)(F) of the Code, and the Vision Portfolio and the Governor
Portfolio will each be a "party to the reorganization" within the
meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by the Governor
Portfolio upon the transfer of all of its assets to and the
assumption of its liabilities by the Vision Portfolio in exchange
solely for Class A shares of the Vision Portfolio pursuant to
Section 361(a) and Section 357(a) of the Code;
(3) No gain or loss will be recognized by the Vision Portfolio
upon the receipt by it of all of the assets and the assumption of
the liabilities of the Governor Portfolio in exchange solely for
Class A shares of the Vision Portfolio pursuant to Section 1032(a)
of the Code;
(4) The basis of the assets of the Governor Portfolio received
by the Vision Portfolio will be the same as the basis of such assets
to the Governor Portfolio immediately prior to the exchange pursuant
to Section 362(b) of the Code;
(5) The holding period of the assets of the Governor Portfolio
received by the Vision Portfolio will include the period during
which such assets were held by the Governor Portfolio pursuant to
Section 1223(2) of the Code;
(6) No gain or loss will be recognized by the shareholders of
the Governor Portfolio upon the exchange of their shares in the
Governor Portfolio for Class A shares of the Vision Portfolio
(including fractional shares to which they may be entitled) pursuant
to Section 354(a) of the Code;
(7) The basis of the Vision Portfolio's Class A shares
received by the Governor Portfolio shareholders (including
fractional shares to which they may be entitled) will be the same as
the basis of the shares of the Governor Portfolio exchanged therefor
pursuant to Section 358(a)(1) of the Code;
(8) The holding period of the Vision Portfolio's Class A
shares received by the Governor Portfolio's shareholders (including
fractional shares to which they may be entitled) will include the
holding period of the Governor Portfolio's shares surrendered in
exchange therefor, provided that the Governor Portfolio shares were
held as a capital asset on the date of the Reorganization pursuant
to Section 1223(l) of the Code; and
(9) The Vision Portfolio will succeed to and take into account
as of the date of the transfer (as defined in Section 1.381(b)-1(b)
of the Treasury Regulations) the items of the Governor Portfolio
described in Section 381(c) of the Code, subject to the conditions
and limitations specified in Sections 381(b) and (c), 382, 383 and
384 of the Code, and the Treasury Regulations thereunder.
(h) That the Trust shall have received an opinion in form and
substance reasonably satisfactory to it from Drinker, Xxxxxx & Xxxxx LLP,
counsel to the Governor Funds, to the effect that, subject in all respects to
the effects of bankruptcy, insolvency, arrangement among creditors, moratorium,
fraudulent transfer or conveyance, and other similar laws of general
applicability relating to or affecting creditor's rights and to general equity
principles:
(1) The Governor Funds was created as a business trust under
the laws of the State of Delaware on September 3, 1998, and is
validly existing and in good standing under the laws of the State of
Delaware;
(2) The Governor Funds is authorized to issue an unlimited
number of shares of beneficial interest, par value $0.0001. Assuming
that the initial shares of beneficial interest of the Investor
Shares of the Governor Portfolio were issued in accordance with the
1940 Act, and the Agreement and Declaration of Trust and By-Laws of
the Governor Funds, and that all other such outstanding shares of
the Governor Portfolio were sold, issued and paid for in accordance
with the terms of the Governor Portfolio's prospectus in effect at
the time of such sales, each such outstanding share is fully paid,
non-assessable, and, except for any shares sold pursuant to the
private offering exemption for purposes of raising initial capital,
is fully transferable and has full voting rights;
(3) The Governor Funds is an open-end, investment company of
the management type registered as such under the 1940 Act;
(4) Except as disclosed in the Governor Portfolio's currently
effective prospectus, such counsel does not know of any material
suit, action, or legal or administrative proceeding pending or
threatened against the Governor Funds, the unfavorable outcome of
which would materially and adversely affect the Governor Funds or
the Governor Portfolio;
(5) To such counsel's knowledge, no consent, approval,
authorization or order of any court, governmental authority or
agency is required for the consummation by Governor Funds of the
transactions contemplated by this Agreement, except such as have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
Delaware laws (including, in the case of each of the foregoing, the
rules and regulations thereunder) and such as may be required under
state securities laws;
(6) Neither the execution, delivery nor performance of this
Agreement by the Governor Funds violates any provision of its
Agreement and Declaration of Trust, its By-Laws, or the provisions
of any agreement or other instrument, known to such counsel to which
the Governor Funds is a party or by which the Governor Funds is
otherwise bound; and
(7) This Agreement has been duly and validly authorized,
executed and delivered by the Governor Funds and represents the
legal, valid and binding obligation of the Governor Funds and is
enforceable against Governor Funds in accordance with its terms.
In giving the opinions set forth above, this counsel may state that
it is relying on certificates of the officers of the Governor Funds with regard
to matters of fact and certain certifications and written statements of
governmental officials with respect to the good standing of the Governor Funds.
(i) That the Governor Funds shall have received an opinion in form
and substance reasonably satisfactory to it from Stradley, Ronon, Xxxxxxx &
Young LLP, special counsel to the Trust, to the effect that, subject in all
respects to the effects of bankruptcy, insolvency, arrangement among creditors,
moratorium, fraudulent transfer or conveyance, and other similar laws of general
applicability relating to or affecting creditor's rights and to general equity
principles:
(1) The Trust was created as a business trust under the laws
of the State of Delaware on August 11, 2000, and is validly existing
and in good standing under the laws of the State of Delaware;
(2) The Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value. Assuming that the
initial Class A Shares of beneficial interest of the Vision
Portfolio were issued in accordance with the 1940 Act and the
Trust's Agreement and Declaration of Trust and By-laws, and that all
other such outstanding shares of the Vision Portfolio were sold,
issued and paid for in accordance with the terms of the Vision
Portfolio's prospectus in effect at the time of such sales, each
such outstanding share is fully paid, non-assessable, freely
transferable and has full voting rights;
(3) The Trust is an open-end investment company of the
management type registered as such under the 1940 Act;
(4) Except as disclosed in the Vision Portfolio's currently
effective prospectus, such counsel does not know of any material
suit, action, or legal or administrative proceeding pending or
threatened against the Trust, the unfavorable outcome of which would
materially and adversely affect the Trust or the Vision Portfolio;
(5) The shares of beneficial interest of the Vision Portfolio
to be issued pursuant to the terms of this Agreement have been duly
authorized and, when issued and delivered as provided in this
Agreement, will have been validly issued and fully paid and will be
non-assessable by the Trust or the Vision Portfolio, and to such
counsel's knowledge, no shareholder has any preemptive right to
subscription or purchase in respect thereof;
(6) To such counsel's knowledge, no consent, approval,
authorization or order of any court, governmental authority or
agency is required for the consummation by the Trust of the
transactions contemplated by this Agreement, except such as have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act, and
Delaware laws (including, in the case of each of the foregoing, the
rules and regulations thereunder and such as may be required under
state securities laws);
(7) Neither the execution, delivery nor performance of this
Agreement by the Trust violates any provision of its Agreement and
Declaration of Trust, its By-laws, or the provisions of any
agreement or other instrument, known to such counsel to which the
Trust is a party or by which the Trust is otherwise bound; and
(8) This Agreement has been duly and validly authorized,
executed and delivered by the Trust and represents the legal, valid
and binding obligation of the Trust and is enforceable against the
Trust in accordance with its terms.
In giving the opinions set forth above, this counsel may state that
it is relying on certificates of the officers of the Trust with regard to
matters of fact and certain certifications and written statements of
governmental officials with respect to the good standing of the Trust.
(j) That the Trust's Registration Statement with respect to the
Class A Shares of beneficial interest of the Vision Portfolio to be delivered to
the Governor Portfolio's shareholders in accordance with this Agreement shall
have become effective, and no stop order suspending the effectiveness of the
Registration Statement or any amendment or supplement thereto, shall have been
issued prior to the Closing or shall be in effect at the Closing, and no
proceedings for the issuance of such an order shall be pending or threatened on
that date.
(k) That the Class A Shares of beneficial interest of the Vision
Portfolio to be delivered hereunder shall be eligible for sale by the Trust with
each state commission or agency with which such eligibility is required in order
to permit the shares lawfully to be delivered to each Governor Portfolio
shareholder.
(l) That at the Closing, the Governor Funds transfers to the Vision
Portfolio aggregate Net Assets of the Governor Portfolio comprising at least 90%
in fair market value of the total net assets and 70% in fair market value of the
total gross assets recorded on the books of the Governor Portfolio on the
Closing Date.
(m) The Trust, the Governor Funds and Manufacturers and Traders
Trust Company shall have received an order from the Commission exempting the
transactions contemplated by the Plan of Reorganization from Xxxxxxx 00(x) xx
xxx 0000 Xxx.
(x) The Trust and Governor Portfolio shall have received reasonable
assurance that no claim for damages (liquidated or otherwise) will arise as a
result of the termination of the Governor Portfolio's service contracts at the
Closing.
(o) As of the Closing Date, the Trustees and officers of the
Governor Funds shall be covered by a trustee and officer liability insurance
policy offering coverage substantially comparable to that provided to such
Trustees and officers in such capacities by the Governor Funds as of the date
hereof with respect to errors or omissions for their service as such on or prior
to the Closing Date, such coverage to commence on the Closing Date and to
terminate six years after the Closing Date. In addition, as of the Closing Date,
Manufacturers and Traders Trust Company shall have agreed to provide or cause to
be provided such waivers of fees payable by, and/or reimbursements of expenses
of, the Vision Portfolio as set forth on Exhibit A hereto.
10. BROKERAGE FEES AND EXPENSES; OTHER AGREEMENTS
(a) The Governor Funds and the Trust each represents and warrants to
the other that there are no broker or finders' fees payable by it in connection
with the transactions provided for herein.
(b) The expenses of entering into and carrying out the provisions of
this Agreement, whether or not consummated, shall be borne exclusively by
Manufacturers and Traders Trust Company and not by the Trust or the Governor
Funds.
(c) Any other provision of this Agreement to the contrary
notwithstanding, any liability of the Governor Funds under this Agreement with
respect to any series of the Governor Funds, or in connection with the
transactions contemplated herein with respect to any series of the Governor
Funds, shall be discharged only out of the assets of that series of the Governor
Funds, and no other series of the Governor Funds shall be liable with respect
thereto.
11. TERMINATION; WAIVER; ORDER
(a) Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the Plan of Reorganization
abandoned at any time (whether before or after adoption thereof by the
shareholders of the Governor Portfolio) prior to the Closing as follows:
(1) by mutual consent of the Governor Funds and the Trust in writing;
(2) by the Trust if any condition precedent to its obligations set forth in
Section 9 has not been fulfilled or waived by the Trust in writing; or
(3) by the Governor Funds if any condition precedent to its obligations set
forth in Section 9 has not been fulfilled or waived by the Governor Funds in
writing.
An election by the Governor Funds or the Trust to terminate this
Agreement and to abandon the Plan of Reorganization shall be exercised,
respectively, by the Board of Trustees of the Governor Funds or the Board of
Trustees of the Trust.
(b) If the transactions contemplated by this Agreement have not been
consummated by March 31, 2001, this Agreement shall automatically terminate on
that date, unless a later date is agreed to in writing by both the Governor
Funds and the Trust.
(c) In the event of termination of this Agreement pursuant to the
provisions hereof, the same shall become void and have no further effect, and
there shall not be any liability on the part of either the Governor Funds or the
Trust or persons who are their trustees, officers, agents or shareholders in
respect of this Agreement.
(d) At any time prior to the Closing, any of the terms or conditions
of this Agreement may be waived by either the Governor Funds or the Trust,
respectively (whichever is entitled to the benefit thereof), by action taken by
the Board of Trustees of the Governor Funds or the Board of Trustees of the
Trust, if, in the judgment of the Board of Trustees of the Governor Funds or the
Board of Trustees of the Trust (as the case may be), such action or waiver will
not have a material adverse effect on the benefits intended under this Agreement
to the holders of shares of the Governor Portfolio or the Vision Portfolio, on
behalf of which such action is taken.
(e) The respective representations, warranties and covenants
contained in Sections 4-8 hereof shall expire with, and be terminated by, the
consummation of the Plan of Reorganization.
(f) If any order or orders of the Commission with respect to this
Agreement shall be issued prior to the Closing and shall impose any terms or
conditions which are determined by action of the Board of Trustees of the
Governor Funds or the Board Trustees of the Trust to be acceptable, such terms
and conditions shall be binding as if a part of this Agreement without further
vote or approval of the shareholders of the Governor Portfolio, unless such
further vote is required by applicable law or such terms and conditions shall
result in a change in the method of computing the number of Class A Shares of
beneficial interest of the Vision Portfolio to be issued to the Governor
Portfolio in which event, unless such terms and conditions shall have been
included in the proxy solicitation material furnished to the shareholders of the
Governor Portfolio prior to the meeting at which the transactions contemplated
by this Agreement shall have been approved, this Agreement shall not be
consummated and shall terminate unless the Governor Funds shall promptly call a
special meeting of shareholders of the Governor Portfolio at which such
conditions so imposed shall be submitted for approval.
12. INDEMNIFICATION BY THE TRUST AND THE VISION PORTFOLIO
-----------------------------------------------------
The Trust and the Vision Portfolio hereby agree to indemnify and
hold the Trustees of the Governor Funds (each an "Indemnified Party") harmless
from all loss, liability and expenses (including reasonable counsel fees and
expenses in connection with the contest of any claim) not covered by the
insurance to be provided to the Trustees of the Governor Funds as described in
the first sentence of Section 9(o) hereof, which any Indemnified Party may incur
or sustain by reason of the fact that (i) any representations or warranties made
by the Trust in Sections 5 or 6 hereof should prove false or erroneous in any
material respect, (ii) any covenant has been breached by the Trust or the Vision
Portfolio in any material respect, or (iii) any claim is made alleging that (a)
the Combined Proxy Statement and Prospectus delivered to the shareholders of the
Governor Portfolio in connection with this transaction or (b) the Registration
Statement on Form N-14 of which such Combined Proxy Statement and Prospectus
forms a part, included any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
claim is based on written information furnished to the Trust by the Governor
Funds, its investment adviser or distributor.
13. NOTICE OF CLAIM OF INDEMNIFICATION
In the event that any claim is made against any Indemnified Party in
respect of which indemnity may be sought by an Indemnified Party under Section
12 of this Agreement, the Indemnified Party seeking indemnification shall, with
reasonable promptness and before payment of such claim, give written notice of
such claim to the other party (the "Indemnifying Party"). If no objection as to
the validity of the claim is made in writing to the Indemnified Party by the
Indemnifying Party within thirty (30) days after giving notice hereunder, then,
the Indemnified Party may pay such claim and shall be entitled to reimbursement
therefor, pursuant to this Agreement. If, prior to the termination of such
thirty-day period, objection in writing as to the validity of such claim is made
to the Indemnified Party, the Indemnified Party shall withhold payment thereof
until the validity of the claim is established (i) to the satisfaction of the
Indemnifying Party, or (ii) by a final determination of a court of competent
jurisdiction, whereupon the Indemnified Party may pay such claim and shall be
entitled to reimbursement thereof, pursuant to this Agreement and Plan of
Reorganization, or (iii) with respect to any Tax claims, within seven (7)
calendar days following the earlier of (A) an agreement between the Governor
Funds and the Trust that an indemnity amount is payable, (B) an assessment of a
Tax by a taxing authority, or (C) a "determination" as defined in Section
1313(a) of the Code. For purposes of this Section 13, the term "assessment"
shall have the same meaning as used in Chapter 63 of the Code and Treasury
Regulations thereunder, or any comparable provision under the laws of the
appropriate taxing authority. In the event of any objection by the Indemnifying
Party, the Indemnifying Party shall promptly investigate the claim, and if it is
not satisfied with the validity thereof, the Indemnifying Party shall conduct
the defense against such claim. All costs and expenses incurred by the
Indemnifying Party in connection with such investigation and defense of such
claim shall be borne by it. These indemnification provisions are in addition to,
and not in limitation of, any other rights the parties may have under applicable
law.
14. FINAL TAX RETURNS AND FORMS 1099 OF THE GOVERNOR PORTFOLIO
(a) After the Closing, the Governor Funds shall or shall cause its
agents to prepare any federal, state or local Tax returns, including any Forms
1099, required to be filed by the Governor Funds with respect to the Governor
Portfolio's final taxable year ending with its complete liquidation and for any
prior periods or taxable years and shall further cause such Tax returns and
Forms 1099 to be duly filed with the appropriate taxing authorities.
(b) Notwithstanding the provisions of Section 1 hereof, any expenses
incurred by the Governor Funds or the Governor Portfolio (other than for payment
of Taxes) in connection with the preparation and filing of said Tax returns and
Forms 1099 after the Closing, shall be borne by the Governor Portfolio to the
extent such expenses have been or should have been accrued by the Governor
Portfolio in the ordinary course without regard to the Plan of Reorganization
contemplated by this Agreement; any excess expenses shall be borne by a third
party other than the Trust or the Governor Funds or their respective series at
the time such Tax returns and Forms 1099 are prepared.
15. COOPERATION AND EXCHANGE OF INFORMATION
The Trust and the Governor Funds will provide each other and their
respective representatives with such cooperation and information as either of
them reasonably may request of the other in filing any Tax returns, amended
return or claim for refund, determining a liability for Taxes or a right to a
refund of Taxes or participating in or conducting any audit or other
proceeding in respect of Taxes. Such cooperation and information shall
include providing copies of relevant Tax returns or portions thereof,
together with accompanying schedules and related work papers and documents
relating to rulings or other determinations by taxing authorities. Each party
shall make its employees and officers available on a mutually convenient
basis to provide explanations of any documents or information provided
hereunder to the extent, if any, that such party's employees are familiar
with such documents or information. Each party or their respective agents
will retain for a period of six (6) years following the Closing Date all
returns, schedules and work papers and all material records or other
documents relating to Tax matters of the Governor Portfolio and Vision
Portfolio for its taxable period first ending after the Closing Date and for
all prior taxable periods. Any information obtained under this Section 15
shall be kept confidential except as may be otherwise necessary in connection
with the filing of returns or claims for refund.
16. ENTIRE AGREEMENT AND AMENDMENTS
This Agreement embodies the entire Agreement between the parties and
there are no agreements, understandings, restrictions, or warranties between the
parties other than those set forth herein or herein provided for. This Agreement
may be amended only by mutual consent of the parties in writing. Neither this
Agreement nor any interest herein may be assigned without the prior written
consent of the other party.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts together
shall constitute but one instrument.
18. NOTICES
Any notice, report, or demand required or permitted by any provision
of this Agreement shall be in writing and shall be deemed to have been given if
delivered or mailed, first class postage prepaid, addressed to the Governor
Funds at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: Xxxx Xxxxxxxxx,
with copies to Xxxxxxx X. Xxxxxx, Drinker Xxxxxx & Xxxxx LLP, One Xxxxx Square,
18th and Cherry Streets, Philadelphia, Pennsylvania 19103-6996, or to the Trust,
at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Secretary, as the
case may be.
19. GOVERNING LAW
This Agreement shall be governed by and carried out in accordance
with the internal laws of the State of Delaware.
20. EFFECT OF FACSIMILE SIGNATURE.
-----------------------------
A facsimile signature of an authorized officer of a party hereto on
this Agreement and/or any transfer document shall have the same effect as if
executed in the original by such officer.
IN WITNESS WHEREOF, the Governor Funds and the Trust have each
caused this Agreement and Plan of Reorganization to be executed on its behalf by
its duly authorized officers, all as of the day and year first-above written.
GOVERNOR FUNDS, ON BEHALF OF THE
ESTABLISHED GROWTH FUND SERIES
/S/ A. XXXXX XXXXXX
------------------------------------
By: A. XXXXX XXXXXX
-------------------------------
Title: PRESIDENT
----------------------------
VISION GROUP OF FUNDS, ON BEHALF OF
THE VISION LARGE CAP CORE FUND SERIES
/S/ XXXX X. XXXXXXXXX
------------------------------------
By: XXXX X. XXXXXXXXX
-------------------------------
Title: ASSISTANT TREASURER
----------------------------
MANUFACTURERS AND TRADERS
TRUST COMPANY (ONLY WITH RESPECT
TO THE COMMITMENT SET FORTH IN
SECTION 10(B) AND 14(B))
/S/ XXXXXXX XXXXXXXX
------------------------------------
By: XXXXXXX XXXXXXXX
-------------------------------
Title: VICE PRESIDENT
----------------------------
EXHIBIT A
For the one year period starting on the date of commencement of operations of
the Vision Large Cap Core Fund following the Reorganization, Manufacturers
and Traders Trust Company has agreed to provide or cause to be provided the
following waivers of fees:
BEFORE AFTER
WAIVER WAIVER
Waiver of Shareholder Services Fee on Class A
Shares 0.25% 0.00%
Waiver of Rule 12b-1 Distribution Fee on Class A
Shares 0.25% 0.00%
