Exhibit (4)
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
December 9, 2002 in Boston, Massachusetts, by and between State Street Research
Financial Trust (the "SSR Trust"), a Massachusetts business trust, on behalf of
its State Street Research International Equity Fund series (the "Acquired
Fund"), and Quantitative Group of Funds (the "Quant Trust"), a Massachusetts
business trust, on behalf of its Quant Foreign Value Fund series (the "Acquiring
Fund").
PLAN OF REORGANIZATION
(a) The Acquired Fund will sell, assign, convey, transfer and deliver to
the Acquiring Fund on the Exchange Date (as defined in Section 6) all of its
properties and assets. In consideration therefor, the Acquiring Fund shall, on
the Exchange Date, assume all of the liabilities of the Acquired Fund existing
at the Valuation Time (as defined in Section 3(c)) and deliver to the Acquired
Fund (i) a number of full and fractional Ordinary shares of beneficial interest
of the Acquiring Fund (the "Ordinary Reorganization Shares") having an aggregate
net asset value equal to the value of the assets of the Acquired Fund
attributable to the Class A, Class B(1), Class B and Class C shares of the
Acquired Fund transferred to the Acquiring Fund on such date less the value of
the liabilities of the Acquired Fund attributable to the Class A, Class B(1),
Class B and Class C shares of the Acquired Fund assumed by the Acquiring Fund on
that date, and (ii) a number of full and fractional Institutional shares of
beneficial interest of the Acquiring Fund (the "Institutional Reorganization
Shares") having an aggregate net asset value equal to the value of the assets of
the Acquired Fund attributable to the Class S shares of the Acquired Fund
transferred to the Acquiring Fund on such date less the value of the liabilities
of the Acquired Fund attributable to the Class S shares of the Acquired Fund
assumed by the Acquiring Fund on that date. (The Ordinary Reorganization Shares
and the Institutional Reorganization Shares shall be referred to collectively as
the "Reorganization Shares"). It is intended that the reorganization described
in this Agreement shall be a reorganization within the meaning of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transaction described in paragraph (a) above,
the Acquired Fund shall distribute in complete liquidation to its Class A, Class
B(1), Class B and Class C shareholders of record as of the Exchange Date the
Ordinary Reorganization Shares, and to Class S shareholders of record as of the
Exchange Date the Institutional Reorganization Shares, each such shareholder
being entitled to receive that proportion of such Ordinary or Institutional
Reorganization Shares which the number of Class A, Class B(1), Class B, Class C
and Class S shares of beneficial interest of the Acquired Fund held by such
shareholder bears to the number of Class A, Class B(1), Class B, Class C and
Class S shares of the Acquired Fund outstanding on the Exchange Date.
Certificates representing the Ordinary and Institutional Reorganization Shares
will not be issued. All issued and outstanding Class A, Class B(1), Class B,
Class C and Class S shares of the Acquired Fund will simultaneously be canceled
on the books of the Acquired Fund.
(c) As promptly as practicable after the liquidation of the Acquired Fund
as aforesaid, but in all events within six months after the Exchange Date, the
SSR Trust shall pay or make provisions for the payment of the remaining debts
and taxes, if any, of the Acquired Fund and distribute all remaining assets, if
any, to shareholders of the Acquired Fund, and the Acquired Fund shall
thereafter be liquidated pursuant to the provisions of the Declaration of Trust
of State Street Research Financial Trust, as amended (the "SSR Trust Declaration
of Trust"), and applicable law, and its legal existence terminated. Any
reporting responsibility of the Acquired Fund is and shall remain the
responsibility of the Acquired Fund up to and including the Exchange Date and,
if applicable, such later date on which the Acquired Fund is liquidated.
AGREEMENT
The Acquiring Fund and the Acquired Fund agree as follows:
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ACQUIRING FUND. The
Quant Trust, on behalf of the Acquiring Fund, represents and warrants to and
agrees with the Acquired Fund that:
a. The Acquiring Fund is a series of the Quant Trust, a Massachusetts
business trust duly established and validly existing under the laws of The
Commonwealth of Massachusetts, and has power to own all of its properties and
assets and to carry out its obligations under this Agreement.
b. The Quant Trust is duly registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended ("1940 Act"), and such registration is in full
force and effect.
c. The statement of assets and liabilities, statement of operations,
statement of changes in net assets and a schedule of investments (indicating
their market values) of the Acquiring Fund as of and for the six months ended
September 30, 2002 have been furnished to the Acquired Fund. Such statement of
assets and liabilities and schedule fairly present in all material respects the
financial position of the Acquiring Fund as of that date and such statements of
operations and changes in net assets fairly reflect in all material respects the
results of its operations and changes in net assets for the periods covered
thereby in conformity with generally accepted accounting principles.
d. The current prospectus and statement of additional information of the
Acquiring Fund, each dated August 1, 2002, and any supplement thereto
(collectively, as from time to time amended, the "Acquiring Fund Prospectus"),
which have previously been furnished to the Acquired Fund, did not as of such
date and does not contain as of the date hereof, with respect to the Acquiring
Fund, any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not materially
misleading.
e. There are no material legal, administrative or other proceedings pending
or, to the knowledge of the Quant Trust or the Acquiring Fund, threatened
against the Quant Trust or the Acquiring Fund, which assert liability on the
part of the Acquiring Fund. The Acquiring Fund knows of no facts which might
form the basis for the institution of such proceedings which would materially
and adversely affect its business and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
f. The Acquiring Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown belonging to it on its statement
of assets and liabilities as of September 30, 2002, those incurred in the
ordinary course of its business as an investment company since September 30,
2002 and those to be assumed pursuant to this Agreement. Prior to the Exchange
Date, the Acquiring Fund will endeavor to quantify and to reflect on its balance
sheet all of its material known liabilities and will advise the Acquired Fund of
all material liabilities, contingent or otherwise, incurred by it subsequent to
September 30, 2002, whether or not incurred in the ordinary course of business.
g. As of the Exchange Date, the Acquiring Fund will have filed (or has
obtained valid extensions of filing dates for) all federal and other tax returns
and reports which, to the knowledge of the Quant Trust's officers, are required
to have been filed by the Acquiring Fund, and will have paid or will pay all
federal and other taxes shown to be due on said returns or on any assessments
received by the Acquiring Fund. All tax liabilities of the Acquiring Fund have
been adequately provided for on its books, and no tax deficiency or liability of
the Acquiring Fund has been asserted, and no question with respect thereto has
been raised or is under audit, by the Internal Revenue Service or by any state
or local tax authority for taxes in excess of those already paid.
h. No consent, approval, authorization or order of any court or governmental
authority is required for the consummation by the Acquiring Fund of the
transactions contemplated by this Agreement, except such as may be required
under the Securities Act of 1933, as amended (the "1933 Act"), the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, and state
insurance, securities or blue sky laws (which term as used herein shall include
the laws of the District of Columbia and of Puerto Rico) ("Blue Sky Laws").
i. The registration statement (the "Registration Statement") filed with the
Commission by the Quant Trust on Form N-14 on behalf of the Acquiring Fund and
relating to the Reorganization Shares issuable hereunder and the proxy statement
of the Acquired Fund filed with the Commission relating to the meeting of the
Acquired Fund shareholders referred to in Section 7(a) and Section 7(b) herein
(together with the documents incorporated therein by reference, the "Proxy
Statement"), on the effective date of the Registration Statement, (i) will
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder and (ii) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
materially misleading; and at the time of the shareholders meetings referred to
in Sections 7(a) and 7(b) and on the Exchange Date, the prospectus which is
contained in the Registration Statement, as amended or supplemented by any
amendments or supplements filed with the Commission by the Quant Trust and the
Proxy Statement will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not materially misleading; provided, however, that none of
the representations and warranties in this subsection shall apply to statements
in or omissions from the Registration Statement or the Proxy Statement made in
reliance upon and in conformity with information furnished in writing by the
Acquired Fund to the Acquiring Fund specifically for use in the Registration
Statement or the Proxy Statement.
j. There are no material contracts outstanding to which the Acquiring Fund
is a party, other than as are or will be disclosed in the Acquiring Fund
Prospectus, the Registration Statement or the Proxy Statement.
k. The Acquiring Fund has elected to be treated as a "regulated investment
company" under Sections 851 and 852 of the Code and has qualified as such for
each taxable year of its operations and will qualify as such at all times
through and including the Exchange Date.
l. The issuance of the Reorganization Shares pursuant to this Agreement will
be in compliance with all applicable federal and state securities laws.
m. The Reorganization Shares to be issued to the Acquired Fund have been
duly authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and non-assessable by the
Acquiring Fund, and no shareholder of the Acquiring Fund will have any
preemptive right of subscription or purchase in respect thereof.
n. All issued and outstanding shares of the Acquiring Fund are, and at the
Exchange Date will be, duly authorized, validly issued, fully paid and
non-assessable by the Acquiring Fund. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Acquiring Fund shares, nor is there outstanding any security convertible
into any Acquiring Fund shares.
o. The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, have been authorized by the Board of Trustees
of Quant Trust by a vote taken at a meeting of such Board called for such
purpose.
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ACQUIRED FUND. The SSR
Trust, on behalf of the Acquired Fund, represents and warrants to and agrees
with the Acquiring Fund that:
a. The Acquired Fund is a series of the State Street Research Financial
Trust, a Massachusetts business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts, and has power to own all of
its properties and assets and to carry out this Agreement.
b. The SSR Trust is duly registered with the Commission as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.
c. A statement of assets and liabilities, statement of operations, statement
of changes in net assets and a schedule of investments (indicating their market
values) of the Acquired Fund as of and for the period ended October 31, 2002
have been furnished to the Acquiring Fund. Such statement of assets and
liabilities and schedule fairly present in all material respects the financial
position of the Acquired Fund as of that date, and such statements of operations
and changes in net assets fairly reflect in all material respects the results of
its operations and changes in net assets for the period covered thereby, in
conformity with generally accepted accounting principles.
d. The current prospectus and statement of additional information of the
Acquired Fund, each dated March 1, 2002, and any supplement thereto
(collectively, as from time to time amended, the "Acquired Fund Prospectus"),
which have been previously furnished to the Acquiring Fund, did not contain as
of such date and does not contain, with respect to the Acquired Fund, any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading.
e. There are no material legal, administrative or other proceedings pending
or, to the knowledge of the SSR Trust or the Acquired Fund, threatened against
the SSR Trust or the Acquired Fund, which assert liability on the part of the
Acquired Fund. The Acquired Fund knows of no facts which might form the basis
for the institution of such proceedings which would materially and adversely
affect its business and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated.
f. There are no material contracts outstanding to which the Acquired Fund is
a party, other than as are disclosed in the SSR Trust's registration statement
on Form N-lA, the Acquired Fund Prospectus or Proxy Statement.
g. The Acquired Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown on the Acquired Fund's statement
of assets and liabilities as of October 31, 2002 referred to above and those
incurred in the ordinary course of its business as an investment company since
such date. Prior to the Exchange Date, the Acquired Fund will endeavor to
quantify and to reflect on its balance sheet all of its material known
liabilities and will advise the Acquiring Fund of all material liabilities,
contingent or otherwise, incurred by it subsequent to October 31, 2002, whether
or not incurred in the ordinary course of business.
h. As of the Exchange Date, the Acquired Fund will have filed (or has
obtained valid extensions of filing dates for) all federal and other tax returns
and reports which, to the knowledge of the SSR Trust's officers, are required to
have been filed by the Acquired Fund by the Exchange Date, and will have paid or
will pay all federal and other taxes shown to be due on said returns or on any
assessments received by the Acquired Fund. All tax liabilities of the Acquired
Fund have been adequately provided for on its books, and no tax deficiency or
liability of the Acquired Fund has been asserted, and no question with respect
thereto has been raised or is under audit, by the Internal Revenue Service or by
any state or local tax authority for taxes in excess of those already paid.
i. At the Exchange Date, the SSR Trust, on behalf of the Acquired Fund, will
have full right, power and authority to sell, assign, transfer and deliver the
Investments (as defined below) and any other assets and liabilities of the
Acquired Fund to be transferred to the Acquiring Fund pursuant to this
Agreement. At the Exchange Date, subject only to the delivery of the Investments
and any such other assets and liabilities as contemplated by this Agreement, the
Acquiring Fund will acquire the Investments and any such other assets and
liabilities of Acquired Fund subject to no encumbrances, liens or security
interests whatsoever and without any restrictions upon the transfer thereof,
except as previously disclosed to the Acquiring Fund. As used in this Agreement,
the term "Investments" shall mean the Acquired Fund's investments shown on the
schedule of its investments as of October 31, 2002, referred to in Section 2(b)
hereof, as supplemented with such changes in the portfolio as the Acquired Fund
shall make, and changes resulting from stock dividends, stock split-ups, mergers
and similar corporate actions through the Exchange Date.
j. No consent, approval, authorization or order of any court or governmental
authority is required for the consummation by the Acquired Fund of the
transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the 1934 Act, the 1940 Act or Blue Sky Laws.
k. The Registration Statement and the Proxy Statement, on the effective date
of the Registration Statement, (i) will comply in all material respects with the
provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and (ii) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not materially misleading; and at the
time of the shareholders meetings referred to in Section 7(a) and Section 7(b)
and on the Exchange Date, the Proxy Statement and the Registration Statement
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not materially misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements in
or omissions from the Registration Statement or the Proxy Statement made by the
Acquiring Fund or made in reliance upon and in conformity with information
furnished in writing by the Acquiring Fund to the Acquired Fund or the SSR Trust
specifically for use in the Registration Statement or the Proxy Statement.
l. The Acquired Fund has elected to be treated as a "regulated investment
company" under Sections 851 and 852 of the Code has qualified as such for each
taxable year of its operations and will qualify as such at all times through and
including the Exchange Date.
m. The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, have been authorized by the Board of Trustees
of SSR Trust by a vote taken at a meeting of such Board called for such purpose.
n. At the Exchange Date, the Acquired Fund will have sold such of its
assets, if any, as are necessary to assure that, after giving effect to the
acquisition of the assets of the Acquired Fund pursuant to this Agreement, the
Acquiring Fund will remain a "diversified company" within the meaning of Section
5(b)(1) of the 1940 Act and in compliance with such other mandatory investment
restrictions as are set forth in the Acquiring Fund Prospectus, as amended
through the Exchange Date. Notwithstanding the foregoing, nothing herein will
require the Acquired Fund to dispose of any assets if, in the reasonable
judgment of the Acquired Fund, such disposition would adversely affect the
tax-free nature of the reorganization or would violate the Acquired Fund's
fiduciary duty to its shareholders.
o. All issued and outstanding shares of the Acquired Fund are, and at the
Exchange Date will be, duly authorized, validly issued, fully paid and
non-assessable by the Acquired Fund. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any of the
Acquired Fund shares, nor is there outstanding any security convertible into any
of the Acquired Fund shares.
3. REORGANIZATION.
a. Subject to the requisite approval of the shareholders of the Acquired
Fund and, if necessary, the Acquiring Fund, and to the other terms and
conditions contained herein (including the Acquired Fund's obligation to make
the distribution described in Section 8(j)), the Acquired Fund agrees to sell,
assign, convey, transfer and deliver to the Acquiring Fund, and the Acquiring
Fund agrees to acquire from the Acquired Fund on the Exchange Date, all of the
Investments and all of the cash and other properties and assets of the Acquired
Fund, whether accrued or contingent (including cash received by the Acquired
Fund upon the liquidation by the Acquired Fund of any Investments), in exchange
for that number of shares of beneficial interest of the Acquiring Fund provided
for in Section 4 and the assumption by the Acquiring Fund of all of the
liabilities of the Acquired Fund, whether accrued or contingent, existing at the
Valuation Time (as defined below) except for the Acquired Fund's liabilities, if
any, arising in connection with this Agreement. Pursuant to this Agreement, the
Acquired Fund will, as soon as practicable after the Exchange Date, (i)
distribute all of the Ordinary Reorganization Shares received by it to Class A,
Class B(1), Class B and Class C shareholders of the Acquired Fund in exchange
for their Class A, Class B(1), Class B, Class C and Class S shares of the
Acquired Fund and (ii) distribute all of the Institutional Reorganization Shares
received by it to Class S shareholders of the Acquired Fund in exchange for
their Class S shares of the Acquired Fund.
b. The Acquired Fund will pay or cause to be paid to the Acquiring Fund any
interest, cash or such dividends, rights and other payments received by it on or
after the Exchange Date with respect to the Investments and other properties and
assets of the Acquired Fund, whether accrued or contingent, received by it on or
after the Exchange Date. Any such distribution shall be deemed included in the
assets transferred to the Acquiring Fund at the Exchange Date and shall not be
separately valued unless the securities in respect of which such distribution is
made shall have gone "ex" such distribution prior to the Valuation Time, in
which case any such distribution which remains unpaid at the Exchange Date shall
be included in the determination of the value of the assets of the Acquired Fund
acquired by the Acquiring Fund.
c. Pursuant to Section 4 below, the net value of assets of Acquired Fund and
the net asset value per share of Acquiring Fund shall be determined at the close
of regular trading on the New York Stock Exchange (generally 4:00 p.m. Eastern
time) on the business day preceding the Exchange Date or such earlier or later
day as may be mutually agreed upon in writing by the parties hereto (the
"Valuation Time").
d. In the event that trading on the NYSE or on another exchange or market on
which the securities held by Acquired Fund shall be disrupted during the
Valuation Time so that, in the judgment of the SSR Trust, accurate appraisal of
the net assets of the Acquired Fund to be transferred hereunder or the assets of
Acquiring Fund is impracticable, the Valuation Time shall be postponed until the
first business day after the day on which trading on such exchange or in such
market shall, in the judgment of the SSR Trust, have been resumed without
disruption. In such event, the Exchange Date shall be postponed accordingly.
4. TRANSACTION. On the Exchange Date, the Acquiring Fund will deliver to the
Acquired Fund (i) a number of full and fractional Ordinary Reorganization Shares
having an aggregate net asset value equal to the value of the assets of the
Acquired Fund attributable to the Class A, B(1), B and C shares of the Acquired
Fund transferred to the Acquiring Fund on such date less the value of the
liabilities of the Acquired Fund attributable to the Class A, B(1), B and C
shares of the Acquired Fund assumed by the Acquiring Fund on that date, and (ii)
a number of full and fractional Institutional Reorganization Shares having an
aggregate net asset value equal to the value of the assets of the Acquired Fund
attributable to the Class S shares of the Acquired Fund transferred to the
Acquiring Fund on such date less the value of the liabilities of the Acquired
Fund attributable to the Class S shares of the Acquired Fund assumed by the
Acquiring Fund on that date.
a. The net asset value of the Ordinary and Institutional Reorganization
Shares to be delivered to the Acquired Fund, the value of the assets
attributable to the Class A, Class B(1), Class B, Class C and Class S shares of
the Acquired Fund, and the value of the liabilities attributable to the Class A,
Class B(1), Class B, Class C and Class S shares of the Acquired Fund to be
assumed by the Acquiring Fund, shall in each case be determined as of the
Valuation Time.
b. The net asset value of the Ordinary and Institutional Reorganization
Shares shall be computed in the manner set forth in the Acquiring Fund
Prospectus. The value of the assets and liabilities of the Class A, Class B(1),
Class B, Class C and Class S shares of the Acquired Fund shall be determined by
the Acquired Fund, in cooperation with the Acquiring Fund, pursuant to
procedures which the Acquired Fund would use in determining the fair market
value of the Acquired Fund's assets and liabilities.
c. No adjustment shall be made in the net asset value of either the Acquired
Fund or the Acquiring Fund to take into account differences in realized and
unrealized gains and losses.
d. The Acquired Fund shall distribute the Reorganization Shares to the
shareholders of the Acquired Fund by furnishing written instructions to the
Acquiring Fund's transfer agent, which will as soon as practicable set up open
accounts for the Acquired Fund shareholders in accordance with such written
instructions. Such distribution will proceed in the manner set forth in
paragraph (b) of the Plan of Reorganization above.
e. After the close of business on the business day on which the Valuation
Time is determined, the Acquired Fund shall issue instructions providing for the
delivery of all assets of Acquired Fund to the custodian for the Acquiring Fund
to be held for the account of Acquiring Fund, effective as of the Exchange Date.
f. The Acquiring Fund shall assume all liabilities of the Acquired Fund
existing as of the Exchange Date, whether accrued or contingent, in connection
with the acquisition of assets and subsequent dissolution of the Acquired Fund
or otherwise, except for the Acquired Fund's liabilities, if any, pursuant to
this Agreement. The Acquired Fund will discharge all known liabilities of the
Fund, so far as may be possible, prior to the Exchange Date.
5. EXPENSES, FEES, ETC.
a. All fees and expenses, including legal, accounting expenses and the costs
of proxy materials and proxy solicitation with respect to shareholders of the
Acquired Fund that will be incurred in connection with the consummation by the
Acquired Fund and the Acquiring Fund of the transactions contemplated by this
Agreement will be borne by Quantitative Investment Advisors, Inc.
("Quantitative") and State Street Research & Management Company ("State Street
Research"), provided, however, that portfolio transfer taxes (if any) or other
similar expenses will be allocated ratably between the Acquiring Fund and the
Acquired Fund in proportion to their net assets as of the Valuation Time, and
provided further, however, that such expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
the other party of such expenses would result in the disqualification of the
Acquiring Fund or the Acquired Fund, as the case may be, as a "regulated
investment company" within the meaning of Section 851 of the Code.
b. In the event the transactions contemplated by this Agreement are not
consummated for any reason, then Quantitative and State Street Research shall be
responsible for all expenses.
c. Notwithstanding any other provisions of this Agreement, if for any reason
the transactions contemplated by this Agreement are not consummated, no party
shall be liable to the other party for any damages resulting therefrom,
including without limitation consequential damages, except as specifically set
forth above.
6. EXCHANGE DATE. Delivery of the assets of the Acquired Fund to be
transferred, assumption of the liabilities of the Acquired Fund to be assumed,
and the delivery of the Reorganization Shares to be issued shall be made at
Boston, Massachusetts, on such date and time as the Acquiring Fund and the
Acquired Fund shall agree upon after shareholder approval of the reorganization,
the date and time upon which such delivery is to take place being referred to
herein as the "Exchange Date."
7. MEETINGS OF SHAREHOLDERS; DISSOLUTION.
a. The SSR Trust, on behalf of the Acquired Fund, agrees to call a meeting
of the Acquired Fund's shareholders as soon as is practicable after the
effective date of the Registration Statement for the purpose of considering the
sale of all of its assets to and the assumption of all of its liabilities by the
Acquiring Fund as herein provided and adopting this Agreement. The parties
hereto understand and agree that the approval of this Agreement and Plan of
Reorganization by the shareholders of the Acquired Fund has the effect of, and
constitutes, not only the approval by such shareholders of the transactions
described herein, but also (i) their approval of the present Quant advisory
agreement, (ii) their ratification of the payment of investment advisory fees to
Quantitative pursuant to the Interim Contract and (iii) their ratification of
the payment of investment subadvisory fees to Polaris pursuant to the Interim
Subadvisory Contract.
b. The Acquired Fund agrees that the liquidation and dissolution of the
Acquired Fund will be effected in the manner provided in the SSR Trust
Declaration of Trust in accordance with applicable law and that on and after the
Exchange Date, the Acquired Fund shall not conduct any business except in
connection with its liquidation and dissolution.
c. The Acquiring Fund, in consultation with the Acquired Fund and based in
part on information furnished by the Acquired Fund, will file the Registration
Statement with the Commission. Each of the Acquired Fund and the Acquiring Fund
will cooperate with the other, and each will furnish to the other the
information relating to itself required by the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder to be set forth in the
Registration Statement.
8. CONDITIONS TO THE ACQUIRING FUND'S OBLIGATIONS. The obligations of the
Acquiring Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite votes of the
holders of the outstanding shares of beneficial interest of the Acquired Fund
entitled to vote.
b. That there shall not be any material litigation pending with respect to
the matters contemplated by this Agreement.
c. That the Acquiring Fund shall have received an opinion of Ropes & Xxxx,
counsel to the Acquired Fund, dated the Exchange Date and in form satisfactory
to the Acquiring Fund, to the effect that (i) the SSR Trust is a Massachusetts
business trust duly formed and is validly existing under the laws of
Massachusetts and has the power to own all its properties and to carry on its
business as presently conducted; (ii) this Agreement has been duly authorized,
executed and delivered by the SSR Trust on behalf of the Acquired Fund and,
assuming that the Registration Statement, the Acquired Fund Prospectus and the
Proxy Statement comply with the 1933 Act, the 1934 Act and the 1940 Act and
assuming due authorization, execution and delivery of this Agreement by the
Quant Trust on behalf of the Acquiring Fund, is a valid and binding obligation
of the SSR Trust and the Acquired Fund; (iii) the SSR Trust, on behalf of the
Acquired Fund, has power to sell, assign, convey, transfer and deliver the
assets contemplated hereby and, upon consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement, the Acquired
Fund will have duly sold, assigned, conveyed, transferred and delivered such
assets to the Acquiring Fund; (iv) the execution and delivery of this Agreement
did not, and the consummation of the transactions contemplated hereby will not,
violate the SSR Trust Declaration of Trust or By-Laws of the SSR Trust or any
provision of any material agreement known to such counsel to which the SSR Trust
or the Acquired Fund is a party or by which it is bound; and (v) to the
knowledge of such counsel, no consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the SSR
Trust on behalf of the Acquired Fund of the transactions contemplated hereby,
except such as have been obtained under the 1933 Act, the 1934 Act and the 1940
Act and such as may be required under state securities or blue sky laws.
d. That the Acquiring Fund shall have received an opinion of Xxxxxxxxxxx &
Xxxxxxxx (which opinion would be based upon certain factual representations and
subject to certain qualifications), dated as of the Exchange Date and in form
satisfactory to the Acquiring Fund, to the effect that, on the basis of the
existing provisions of the Code, current administrative rules, and the court
decisions, for federal income tax purposes (i) no gain or loss will be
recognized by the Acquiring Fund upon receipt of the Investments transferred to
the Acquiring Fund and assumption of liabilities pursuant to this Agreement in
exchange for the Reorganization Shares; (ii) the basis to the Acquiring Fund of
the Investments will be the same as the basis of the Investments in the hands of
the Acquired Fund immediately prior to such exchange; and (iii) the Acquiring
Fund's holding periods with respect to the Investments will include the
respective periods for which the Investments were held by the Acquired Fund.
e. That from the date of this Agreement, through the Exchange Date, there
shall not have been: (i) any change in the business, results of operations,
assets or financial condition or the manner of conducting the business of
Acquired Fund (other than changes in the ordinary course of its business,
including, without limitation, dividends and distributions in the ordinary
course and changes in the net asset value per share) which has had a material
adverse effect on such business, results of operations, assets or financial
condition, except in all instances as set forth in the financial statements;
(ii) any loss (whether or not covered by insurance) suffered by Acquired Fund
materially and adversely affecting Acquired Fund, other than depreciation of
securities; (iii) any indebtedness incurred by Acquired Fund for borrowed money
or any commitment to borrow money entered into by Acquired Fund except as
permitted in Acquired Fund Prospectus and disclosed in financial statements
required to be provided under this Agreement; (iv) any grant or imposition of
any lien, claim, charge or encumbrance upon any asset of Acquired Fund except as
provided in Acquired Fund Prospectus so long as it will not prevent Acquired
Fund from complying with Section 2(c) herein. In making the representations
described in this Section 8(e), the Acquired Fund shall be entitled to rely upon
a certificate to such effect from Quantitative.
f. That the assets of the Acquired Fund to be acquired by the Acquiring Fund
will include no assets which the Acquiring Fund, by reason of charter
limitations or of investment restrictions disclosed in the Registration
Statement in effect on the Exchange Date, may not properly acquire.
g. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Quant Trust or the Acquiring Fund,
threatened by the Commission.
h. That the SSR Trust shall have received from the Commission, any relevant
state securities administrator and any relevant state insurance regulatory
authority such order or orders as are reasonably necessary or desirable under
the 1933 Act, the 1934 Act, the 1940 Act, and any applicable Blue Sky Laws in
connection with the transactions contemplated hereby, and that all such orders
shall be in full force and effect.
i. That all actions taken by the SSR Trust on behalf of the Acquired Fund in
connection with the transactions contemplated by this Agreement and all
documents incidental thereto shall be satisfactory in form and substance to the
Acquiring Fund and its counsel.
j. That, prior to the Exchange Date, the Acquired Fund shall have declared a
dividend or dividends which, together with all previous such dividends, shall
have the effect of distributing to the shareholders of the Acquired Fund (i) all
of the excess of (x) the Acquired Fund's investment income excludable from gross
income under Section 103(a) of the Code over (y) the Acquired Fund's deductions
disallowed under Sections 265 and 171(a)(2) of the Code, (ii) all of the
Acquired Fund's investment company taxable income (as defined in Section 852 of
the Code) (in each case computed without regard to any deduction for dividends
paid) and (iii) all of the Acquired Fund's net capital gain realized (after
reduction for any capital loss carryover), in each case for its taxable years
ending on or after October 31, 2002 and on or prior to the Exchange Date.
k. That the Acquired Fund shall have furnished to the Acquiring Fund its
records as to the tax cost to the Acquired Fund of the securities delivered to
the Acquiring Fund pursuant to this Agreement, together with any such other
evidence as to such tax cost as the Acquiring Fund may reasonably request.
l. That the Acquired Fund's custodian shall have delivered to the Acquiring
Fund a record identifying all of the assets of the Acquired Fund held or
maintained by such custodian as of the Valuation Time.
m. That the Acquired Fund's transfer agent shall have provided to the
Acquiring Fund (i) the originals or true copies of all of the records of the
Acquired Fund in the possession of such transfer agent as of the Exchange Date,
(ii) its records setting forth the number of shares of the Acquired Fund
outstanding as of the Valuation Time, and (iii) the name and address of each
holder of record of any shares and the number of shares held of record by each
such shareholder.
9. CONDITIONS TO THE ACQUIRED FUND'S OBLIGATIONS. The obligations of the
Acquired Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite votes of the
holders of the outstanding shares of beneficial interest of the Acquired Fund
entitled to vote.
b. That the Quant Trust, on behalf of the Acquiring Fund, shall have
accepted from the Acquired Fund a statement, dated as of the Exchange Date, from
the Acquired Fund of its liabilities which the Acquiring Fund will assume, and
that the Acquiring Fund shall have executed and delivered to the Acquired Fund
an Assumption of Liabilities, dated as of the Exchange Date, pursuant to which
it assumes all of the liabilities of the Acquired Fund existing at the Valuation
Time in connection with the transactions contemplated by this Agreement, other
than liabilities arising pursuant to this Agreement.
c. That there shall not be any material litigation pending or threatened
with respect to the matters contemplated by this Agreement.
d. That the Acquired Fund shall have received an opinion of Xxxxxxxxxxx &
Xxxxxxxx, counsel to the Acquiring Fund, in form satisfactory to counsel to the
Acquired Fund, and dated as of the Exchange Date, to the effect that (i) the
Quant Trust is a Massachusetts business trust duly formed and is validly
existing under the laws of The Commonwealth of Massachusetts and has the power
to own all its properties and to carry on its business as presently conducted;
(ii) the Reorganization Shares to be delivered to the Acquired Fund as provided
for by this Agreement are duly authorized and upon such delivery will be validly
issued and will be fully paid and non-assessable by the Quant Trust and the
Acquiring Fund and no shareholder of the Acquiring Fund has any preemptive right
to subscription or purchase in respect thereof; (iii) this Agreement has been
duly authorized, executed and delivered by the Quant Trust on behalf of the
Acquiring Fund and, assuming that the Acquiring Fund Prospectus, the
Registration Statement and the Proxy Statement comply with the 1933 Act, the
1934 Act and the 1940 Act and assuming due authorization, execution and delivery
of this Agreement by the SSR Trust on behalf of the Acquired Fund, is a valid
and binding obligation of the Quant Trust and the Acquiring Fund; (iv) the
execution and delivery of this Agreement did not, and the consummation of the
transactions contemplated hereby will not, violate the Master Trust Agreement of
Quant Group of Funds, as amended (the "Quant Declaration of Trust") or By-Laws
of the Quant Trust, or any provision of any material agreement known to such
counsel to which the Quant Trust or the Acquiring Fund is a party or by which it
is bound; (v) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by the Quant Trust on behalf of the Acquiring Fund of the
transactions contemplated herein, except such as have been obtained under the
1933 Act, the 1934 Act and the 1940 Act and such as may be required under state
securities or blue sky laws; and (vi) the Registration Statement has become
effective under the 1933 Act, and to best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the 1933 Act.
e. That the Acquired Fund shall have received an opinion of Xxxxxxxxxxx &
Xxxxxxxx, dated the Exchange Date (which opinion would be based upon certain
factual representations and subject to certain customary qualifications), in
form satisfactory to the Acquired Fund and its counsel, to the effect that, on
the basis of the existing provisions of the Code, current administrative rules,
and court decisions, for federal income tax purposes: (i) no gain or loss will
be recognized by the Acquired Fund as a result of the reorganization; (ii) no
gain or loss will be recognized by shareholders of the Acquired Fund on the
distribution of Reorganization Shares to them in exchange for their shares of
the Acquired Fund; (iii) the aggregate tax basis of the Reorganization Shares
that an Acquired Fund's shareholder receives in place of its Acquired Fund
shares will be the same as the aggregate tax basis of its Acquired Fund shares
exchanged therefor; and (iv) an Acquired Fund's shareholder's holding period for
the Reorganization Shares received pursuant to the Agreement will be determined
by including the holding period for the Acquired Fund shares exchanged for the
Reorganization Shares, provided that the shareholder held the Acquired Fund
shares as a capital asset.
f. That all actions taken by the Quant Trust on behalf of the Acquiring Fund
in connection with the transactions contemplated by this Agreement and all
documents incidental thereto shall be satisfactory in form and substance to the
Acquired Fund and its counsel.
g. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Quant Trust or the Acquiring Fund,
threatened by the Commission.
h. That the Quant Trust shall have received from the Commission, any
relevant state securities administrator and any relevant state insurance
regulatory authority such order or orders as are reasonably necessary or
desirable under the 1933 Act, the 1934 Act, the 1940 Act, and any applicable
Blue Sky Laws in connection with the transactions contemplated hereby, and that
all such orders shall be in full force and effect.
10. WAIVER OF CONDITIONS. Each of the Acquired Fund or the Acquiring Fund,
after consultation with counsel, or an officer authorized by the Board of
Trustees of the SSR Trust or the Quant Trust, as the case may be, may waive any
condition to their respective obligations hereunder, except for the conditions
set forth in Sections 8(a) and 9(a); provided, however, that any such waiver
must be in writing and promptly delivered to the non-waiving party.
11. NO BROKER, ETC. Each of the Acquired Fund and the Acquiring Fund
represents that there is no person who has dealt with it or the SSR Trust or
Quant Trust who by reason of such dealings is entitled to any broker's or
finder's or other similar fee or commission arising out of the transactions
contemplated by this Agreement.
12. TERMINATION. The Acquired Fund and the Acquiring Fund may, by written
consent of the respective Board of Trustees of the SSR Trust and the Quant Trust
on behalf of their respective fund, terminate this Agreement. Any written
termination shall be promptly delivered to the non-terminating party.
13. NOTICES. All notices required or permitted to be given under this
Agreement shall be given in writing to Quant Group of Funds, 00 Xxx Xxxxxxx
Xxxx, Xxxxxxx, XX 00000 (Attention: Xxxxxxxx Xxxxxx), or to State Street
Research Financial Trust, Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 (Attention:
Xxxxxxx XxXxxxxx) or at such other place as shall be specified in written notice
given by either party to the other party to this Agreement and shall be validly
given if mailed by first-class mail, postage prepaid.
13. SOLE AGREEMENT; AMENDMENTS. This Agreement supersedes all previous
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may not be changed except by a letter of agreement signed by each party
hereto (which shall not require shareholder approval), and shall be construed in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
14. PUBLICITY. Any announcements or similar publicity with respect to this
Agreement or the transactions contemplated herein will be made at such time and
in such manner as the parties shall mutually determine.
15. DECLARATIONS OF TRUST. A copy of each of the SSR Declaration of Trust is
on file with the Secretary of The Commonwealth of Massachusetts and the Quant
Trust Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed by the undersigned officer or assistant officer of the Acquired Fund
or Acquiring Fund on behalf of the Trustees of the SSR Trust on behalf of the
Acquired Fund and on behalf of the Trustees of the Quant Trust on behalf of the
Acquiring Fund, in each case as officer or assistant officer and not
individually, and that the obligations of this instrument are not binding upon
any of the trustees, officers, assistant officers, agents or shareholders of the
State Street Research Financial Trust or the Quant Group of Funds individually
but are binding only upon the assets and property of the Acquired Fund and the
Acquiring Fund, as provided in the SSR Trust Declaration of Trust or Quant Trust
Declaration of Trust, respectively. No series of SSR Trust or Quant Trust shall
be liable for the obligations of any other series of the respective Trusts.
16. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions contemplated hereunder.
The 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.
This Agreement shall be executed in any number of counterparts, each of which
shall be deemed an original. Whenever used herein, the use of any gender shall
include all genders. In the event that any provision of this Agreement is
unenforceable at law or in equity, the remainder of the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by their officers thereunto duly authorized, as of the day and year
first above written.
STATE STREET RESEARCH FINANCIAL
TRUST,
on behalf of its State Street
ATTEST: Research International Equity
Fund
By:________________________ By:__________________________
QUANT GROUP OF FUNDS
TRUST,
ATTEST: on behalf of its
Quant Foreign Value Fund
By:________________________ By:__________________________
