6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION made this __ day of ________, 1998 by
and between SoGen Funds, Inc. (the "SoGen Trust"), a Maryland corporation, on
behalf of [name of SoGen fund,] a series of the SoGen Trust (the "SoGen Fund"),
and Colonial Trust - (the "Colonial Trust"), a Massachusetts business trust, on
behalf of [name of new SoGen fund,] a series of the Colonial Trust (the "New
SoGen Fund").
WHEREAS, the parties hereto intend to provide for the reorganization of the
SoGen Fund through the acquisition by the New SoGen Fund of all of the assets,
subject to all of the liabilities, of the SoGen Fund in exchange for shares of
beneficial interest, without par value, of the New SoGen Fund (the "New SoGen
Fund Shares"), the distribution to shareholders of the SoGen Fund of such New
SoGen Fund Shares, and the liquidation of the SoGen Fund, all pursuant to the
provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code").
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:
1. Plan of Reorganization and Liquidation. (a) The SoGen Trust, on
behalf of the SoGen Fund, shall assign, sell, convey, transfer and
deliver to the New SoGen Fund at the closing provided for in Section 2
(hereinafter called the "Closing")all of the then existing assets of
the SoGen Fund of every kind and nature. In consideration therefor,
the Colonial Trust, on behalf of the New SoGen Fund, shall at the
Closing (i) assume all of the SoGen Fund's liabilities and obligations
of any kind whatsoever, whether absolute, accrued, contingent or
otherwise, including any liability arising out of indemnification and
related payment or reimbursement of expenses obligations pursuant to
the By-Laws or Articles of Incorporation of the SoGen Trust (the
"Obligations"), each as in effect on the date hereof
(collectively, the "SoGen Charter") with respect to events occurring
at any time up to and including the Closing Date (as defined in
Section 2 hereof), including events contemplated by this Agreement
and (ii) deliver to the SoGen Fund (A) a number of full and
fractional Class A New SoGen Fund Shares (as described in Section
4(g) below) equal to the number of full and fractional Class A shares
of the SoGen Fund ("Retail SoGen Fund Shares") then outstanding which
are held by holders of Retail SoGen Fund Shares ("Retail SoGen Fund
Shareholders"), and (B) a number of full and fractional Class Z New
SoGen Fund Shares (as described in Section 4(g) below) equal to the
number of full and fractional Class A shares of the SoGen Fund
("Institutional SoGen Fund Shares") then outstanding which are held by
holders of Institutional SoGen Fund Shares ("Institutional SoGen Fund
Shareholders") other than the Retail SoGen Fund Shareholders. The
respective numbers of Retail SoGen Fund Shares and Institutional
SoGen Fund Shares issued and outstanding and the respective numbers of
Class A and Class Z New SoGen Fund Shares to be issued to the SoGen
Fund shall be determined by the transfer agent of the SoGen Fund (the
"Transfer Agent"), as of the close of business on the New York Stock
Exchange on the Closing Date. The determination of the Transfer Agent
shall be conclusive and binding on the SoGen Fund, the New SoGen
Fund and their respective shareholders. Notwithstanding any other
provisions hereof, the Obligations shall be binding for five years
after the Closing Date upon the New SoGen Fund. In the event that the
New SoGen Fund shall be reorganized or merged into another registered
investment company at any time prior to the expiration of five years
from the Closing Date, proper provision shall be made so that the
successor registered investment company of the New SoGen Fund shall
continue to honor the Obligations. Further, the Obligations shall not
be terminated or modified in such a manner as to adversely affect any
director to whom the Obligations apply without the consent of such
affected director (it being expressly agreed that the directors to whom
the Obligations apply shall be third party beneficiaries of this
Section 1 with respect to the Obligations).
(b) Upon consummation of the transactions described in paragraph (a) of
this Section 1, the SoGen Trust, on behalf of the SoGen Fund, shall
distribute, in complete liquidation of the SoGen Fund, (A) pro rata to
the Retail SoGen Fund Shareholders of record as of the Closing Date the
Class A New SoGen Fund Shares received by the SoGen Fund, and (B) pro
rata to the Institutional SoGen Fund Shareholders of record as of the
Closing Date the Class Z New SoGen Fund Shares received by the SoGen
Fund. Such distribution shall be accomplished by the establishment, at
the expense of the New SoGen Fund, (A) of an open account on the
records of the New SoGen Fund in the name of each Retail SoGen Fund
Shareholder representing a number of Class A New SoGen Fund Shares
equal to the number of shares of the SoGen Fund owned of record by such
shareholder at the Closing Date, and (B) of an open account on the
records of the New SoGen Fund in the name of each Institutional SoGen
Fund Shareholder representing a number of Class Z New SoGen Fund Shares
equal to the number of shares of the SoGen Fund owned of record by such
shareholder at the Closing Date. Certificates, if any, for shares of
the SoGen Fund issued prior to the reorganization and held by Retail
SoGen Fund Shareholders and Institutional SoGen Fund Shareholders shall
represent the same number of outstanding Class A or Class Z New SoGen
Fund Shares, respectively, following the reorganization. In the
interest of economy and convenience, certificates representing the New
SoGen Fund Shares will not be physically issued.
(c) As promptly as practicable after the Closing Date, the SoGen Fund
shall be terminated pursuant to the provisions of the laws of the State
of Maryland, and, after the Closing Date, the SoGen Fund shall not
conduct any business except in connection with its dissolution and
liquidation.
2. Closing and Closing Date. The Closing shall occur at the offices of the
Colonial Trust, One Financial Center, 00xx xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 at 9:00 a.m. Boston time on _________ __, 199_ or such other date
agreed to between the parties and after the required approval by the
shareholders of the SoGen Fund specified in Section 4(c) hereof and the
fulfillment (to the extent not waived) of the other conditions
precedent set forth in Section 4, or at such later time and date as the
parties may mutually agree (the "Closing Date"). All acts taking place
at the Closing shall be deemed to take place simultaneously as of the
close of business on the Closing Date unless otherwise provided.
3. Covenants. The Colonial Trust, on behalf of the New SoGen Fund, and the
SoGen Trust, on behalf of the SoGen Fund, each hereby covenants and
agrees with the other as follows:
3.1 The SoGen Fund will call a meeting of its shareholders to be held prior
to the Closing Date to consider and act upon this Agreement and take
all other reasonable action necessary to obtain the required
shareholder approval of the transactions contemplated hereby.
3.2 In connection with the SoGen Fund shareholders' meeting referred to in
Section 3.1, the SoGen Fund will prepare a proxy statement (the "Proxy
Statement") for such meeting, to be distributed to the SoGen Fund
shareholders pursuant hereto, all in compliance with the Securities
Exchange Act of 1934 (the "1934 Act") and the Investment Company Act of
1940 (the "1940 Act").
3.3 The information to be furnished by the Colonial Trust and SoGen Trust
for use in the Proxy Statement referred to in Section 3.2 shall be
accurate and complete in all material respects and shall comply with
federal securities and other laws and regulations applicable thereto.
4. Conditions Precedent. The obligation of the SoGen Trust and the
Colonial Trust to effect the transactions contemplated hereunder shall
be subject to the satisfaction of each of the following conditions:
(a) The SoGen Trust and the Colonial Trust shall have received an
opinion of Ropes & Xxxx substantially to the effect that for federal
income tax purposes: (i) no gain or loss will be recognized by the
SoGen Fund upon the occurrence of each of the following events (a) the
exchange of any of its assets solely for New SoGen Fund Shares and the
assumption by the New SoGen Fund of any of the liabilities of the SoGen
Fund and (b) upon the distribution to the SoGen Fund Shareholders of
the New SoGen Fund Shares; (ii) the tax basis of all of the assets of
the SoGen Fund received by the New SoGen Fund will be, in each
instance, the same as the tax basis of such assets in the hands of the
SoGen Fund immediately prior to the transfer; (iii) the New SoGen
Fund's holding period in all of the assets acquired from the SoGen Fund
will include, in each instance, the periods during which such assets
were held by the SoGen Fund; (iv) no gain or loss will be recognized by
the New SoGen Fund upon the receipt of any of the assets of the SoGen
Fund solely in exchange for New SoGen Fund Shares and the assumption by
the New SoGen Fund of any of the liabilities of the SoGen Fund; (v) no
gain or loss will be recognized by the shareholders of the SoGen Fund
upon the receipt of the New SoGen Fund Shares solely in exchange for
their shares in the SoGen Fund as part of the transaction; (vi) the
basis of the New SoGen Fund Shares received by the shareholders of the
SoGen Fund will be, in each instance, the same as the basis of the
shares of the SoGen Fund exchanged therefor; and (vii) the holding
period of the New SoGen Fund Shares received by the shareholders of the
SoGen Fund will include, in each instance, the holding period of the
shares of the SoGen Fund exchanged therefor, provided that at the time
of the exchange the shares of the SoGen Fund were held as capital
assets; and as to such other matters as the SoGen Trust and the
Colonial Trust may reasonably request;
(b) This Agreement and Plan of Reorganization and the reorganization
contemplated hereby shall have been approved by the Board of Directors
of the SoGen Trust and by the Board of Trustees of the Colonial Trust,
and shall have been recommended for approval to the shareholders of the
SoGen Fund by the Board of Directors of the SoGen Trust;
(c) This Agreement and Plan of Reorganization and the reorganization
contemplated hereby shall have been adopted and approved by the
affirmative vote of the holders of a majority of the outstanding shares
of the SoGen Fund;
(d) The Colonial Trust on behalf of the New SoGen Fund shall have
entered into an Investment Management Agreement with [New SGAM Corp.],
and such Agreement shall have been approved by the Board of Trustees of
the Colonial Trust and, to the extent required by law, by the Board of
Trustees of the Colonial Trust who are not "interested persons" of the
Colonial Trust as defined in the 1940 Act (the "Independent Trustees"),
as well as by the shareholders of the New SoGen Fund (it being
understood that the SoGen Fund, as sole shareholder of the New SoGen
Fund prior to the consummation of the reorganization, hereby agrees and
is authorized to vote for such approval);
(e) The Colonial Trust, on behalf of the New SoGen Fund, shall have
entered into a Distributor's Contract, including distribution plans
(the "Rule 12b-1 Plans") adopted for Class A, B and C shares of the New
SoGen Fund pursuant to Rule 12b-1 of the rules and regulations under
the 1940 Act, with Liberty Funds Distributor, Inc., and such Contract
(including the Plans) shall have been approved by the Board of Trustees
of the Colonial Trust and, to the extent required by law, by the
Independent Trustees of the Colonial Trust;
(f) The Colonial Trust, on behalf of the New SoGen Fund, shall have
entered into a Transfer Agency Agreement with Liberty Funds Services,
Inc., and such Agreement shall have been approved by the Board of
Trustees of the Colonial Trust and, to the extent required by law, by
the Independent Trustees of the Colonial Trust;
(g) The Class A New SoGen Fund Shares shall have been designated by the
Board of Trustees of the Colonial Trust as a separate class of shares
of beneficial interest in the New SoGen Fund which shall be subject to
an asset-based service charge and distribution fee under the Rule 12b-1
Plan for such Class A shares of up to 0.35% per annum and shall not be
subject to any deferred sales charge on redemption, and additional
Class A shares may be purchased by Retail SoGen Fund Shareholders at
the then-current sales charge; the Class Z New SoGen Fund Shares shall
have been designated by the Board of Trustees of the Colonial Trust as
a separate class of shares of beneficial interest in the New SoGen Fund
which shall not be subject to any asset-based service charge or
distribution fee under Rule 12b-1 of the rules and regulations under
the 1940 Act and shall not be subject to any deferred sales charge on
redemption, and additional Class Z shares may be purchased by the
Institutional New SoGen Fund Shareholders without a sales charge; and
(h) The representations and warranties set forth in Section 5 of this
Agreement shall be accurate and complete in all material respects on
the Closing Date.
(i) On the Closing Date no action, suit or proceeding shall be pending
before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated hereby.
(j) The transactions contemplated by the Stock Purchase Agreement dated
as of August 13, 1998 among Societe Generale Asset Management S.A.,
Xxxx-Xxxxx Xxxxxxxxx and Liberty Financial Companies, Inc. shall have
been consummated.
At any time prior to the Closing, any of the foregoing conditions other than
that set forth in (j) above may be waived jointly by the Board of Directors of
the SoGen Trust and the Board of Trustees of the Colonial Trust if, in their
judgment, such waiver will not have a material adverse effect on the interests
of the shareholders of the SoGen Fund and the New SoGen Fund.
5. Representations and Warranties.
5.1 SoGen Trust, on behalf of SoGen Fund, represents and warrants as
follows to the Colonial Trust and the New SoGen Fund as of the date
hereof and agrees to confirm the continuing accuracy and completeness
in all material respects of the following on the Closing Date:
(a) SoGen Trust is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland;
(b) SoGen Trust is a duly registered investment company classified as a
management company of the open-end type and its registration with the
Securities and Exchange Commission as an investment company under the
1940 Act, is in full force and effect, and SoGen Fund is a separate
series thereof duly designated in accordance with the applicable
provisions of the Articles of Incorporation of SoGen Trust and the 1940
Act;
(c) SoGen Trust or any person whom the SoGen Trust may be obligated to
indemnify is not in violation in any material respect of any provision
of its Articles of Incorporation or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which
SoGen Trust is a party or by which SoGen Fund is bound, and the
execution, delivery and performance of this Agreement will not result
in any such violation;
(d) SoGen Trust has no material contracts or other commitments (other
than this Agreement, two Agency Agreements dated November 25, 1996 by
and between Sogen International Fund, Inc. and DST Systems, Inc. and
SoGen Funds, Inc. and DST Systems, Inc. and such other contracts as may
be entered into in the ordinary course of its investment business)
which if terminated, may result in material liability to SoGen Fund or
under which (whether or not terminated) any material payments for
periods subsequent to the Closing Date will be due from SoGen Fund;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or
threatened against SoGen Fund, any of its properties or assets, or any
person whom the SoGen Trust may be obligated to indemnify except as
previously disclosed in writing to New SoGen Fund. SoGen Fund knows of
no facts which might form the basis for the institution of such
proceedings, 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 contemplated hereby;
(f) The statement of assets and liabilities, the statement of
operations, the statement of changes in net assets, and the schedule of
investments as at and for the two years ended March 31, 1998 of SoGen
Fund, audited by KPMG Peat Marwick LLP, copies of which have been
furnished to New SoGen Fund, fairly reflect the financial condition and
results of operations of SoGen Fund as of such dates and for the
periods then ended in accordance with generally accepted accounting
principles consistently applied, and SoGen Fund has no known
liabilities of a material amount, contingent or otherwise, other than
those shown on the statements of assets referred to above or those
incurred in the ordinary course of its business since March 31, 1998;
(g) Since March 31, 1998, there has not been any material adverse
change in SoGen Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of
business, or any incurrence by SoGen Fund of indebtedness, except as
disclosed in writing to New SoGen Fund. For the purposes of this
subparagraph (g), distributions of net investment income and net
realized capital gains, changes in portfolio securities, changes in the
market value of portfolio securities or net redemptions shall be deemed
to be in the ordinary course of business;
(h) By the Closing Date, all federal and other tax returns and reports
of SoGen Fund required by law to have been filed by such date (giving
effect to extensions) shall have been filed, and all federal and other
taxes shown to be due on said returns and reports shall have been paid
so far as due, or provision shall have been made for the payment
thereof, and to the best of SoGen Fund's knowledge no such return is
currently under audit and no assessment has been asserted with respect
to such returns;
(i) For all taxable years and all applicable quarters of such years
from the date of its inception, SoGen Fund has met the requirements of
subchapter M of the Code, for treatment as a "regulated investment
company" within the meaning of Section 851(a) of the Code. Neither
SoGen Trust nor SoGen Fund has at any time since its inception been
liable for and is now liable for any material excise tax pursuant to
Section 4982 of the Code. SoGen Fund has duly filed all federal, state,
local and foreign tax returns which are required to have been filed,
and all taxes of SoGen Fund which are due and payable have been paid
except for amounts that alone or in the aggregate would not reasonably
be expected to have a material adverse effect. SoGen Fund is in
compliance in all material respects with applicable regulations of the
Internal Revenue Service pertaining to the reporting of dividends and
other distributions on and redemptions of its capital stock and to
withholding in respect of dividends and other distributions to
shareholders, and is not liable for any material penalties which could
be imposed thereunder.
(j) The authorized capital of SoGen Trust consists of 3,000,000,000
shares of authorized stock with a par value of one tenth of one cent
(0.001) per share of such number of different series or classes as
designated in SoGen Trust's Articles of Incorporation, four series of
which (including SoGen Fund) are currently authorized and outstanding.
All issued and outstanding shares of SoGen Fund are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
(except as set forth in SoGen Fund's Prospectus) non-assessable by
SoGen Fund and will have been issued in compliance with all applicable
registration or qualification requirements of federal and state
securities laws. No options, warrants or other rights to subscribe for
or purchase, or securities convertible into or exchangeable for, any
shares of beneficial interest of SoGen Fund are outstanding and none
will be outstanding on the Closing Date;
(k) At the Closing Date, SoGen Fund will have good and marketable title
to its assets to be transferred to New SoGen Fund pursuant to paragraph
1, and full right, power, and authority to sell, assign, transfer and
deliver such assets as contemplated hereby, and upon delivery and
payment for such assets New SoGen Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the Securities Act of
1933, as amended (the "1933 Act");
(l) The SoGen Fund's investment operations from inception to the date
hereof have been in compliance with the investment policies and
investment restrictions set forth in its prospectus and statement of
additional information as in effect from time to time, except as
previously disclosed in writing to New SoGen Fund;
(m) The execution, delivery and performance of this Agreement has been
duly authorized by the Directors of SoGen Trust, and, upon approval
thereof by the required majority of the shareholders of SoGen Fund,
this Agreement will constitute the valid and binding obligation of
SoGen Fund enforceable in accordance with its terms; and
(n) The New SoGen Shares to be issued to SoGen Fund pursuant to
paragraph 1 will not be acquired for the purpose of making any
distribution thereof other than to the SoGen Fund Shareholders as
provided in paragraph 1.
5.2 Colonial Trust, on behalf of New SoGen Fund, represents and warrants
the following to the SoGen Trust and the SoGen Fund and agrees to
confirm the accuracy and completeness in all material respects of the
following on the Closing Date:
(a) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of Colonial Trust,
and this Agreement constitutes the valid and binding obligation of
Colonial Trust and New SoGen Fund enforceable in accordance with its
terms;
(b) The New SoGen Shares to be issued and delivered to SoGen Fund
pursuant to the terms of this Agreement will at the Closing Date have
been duly authorized and, when so issued and delivered, will be duly
and validly issued Class A shares [and Class Z shares] of beneficial
interest in New SoGen Fund, and will be fully paid and non-assessable
(except as set forth in New SoGen Fund's Statement of Additional
Information) by Colonial Trust, and no shareholder of Colonial Trust
will have any preemptive right of subscription or purchase in respect
thereof; and
(c) New SoGen Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
6. Amendment. This Agreement may be amended at any time by the joint
action of the Board of Directors of the SoGen Trust and the Board of
Trustees of the Colonial Trust, notwithstanding approval thereof by the
shareholders of the SoGen Fund, provided that no amendment shall have a
material adverse effect on the interests of the shareholders of the
SoGen Fund or the New SoGen Fund.
7. Termination. The Board of Directors of the SoGen Trust and the Board
of Trustees of the Colonial Trust may jointly terminate this Agreement
and abandon the reorganization contemplated hereby, notwithstanding
approval thereof by the shareholders of the SoGen Fund, at any time
prior to the Closing, if circumstances should develop that, in their
judgment, make proceeding with the Agreement inadvisable. If the
transactions contemplated by this Agreement and Plan of Reorganization
have not been substantially completed by March 31, 1999, this Agreement
and Plan of Reorganization shall automatically terminate on that date
unless a later date is agreed to by both the SoGen Trust and the
Colonial Trust acting by their respective Boards.
8. No Broker's or Finder's Fee. The SoGen Trust and the Colonial Trust
each represent that there is no person who has dealt with it who by
reason of such dealings is entitled to any broker's, finder's or other
similar fee or commission from the SoGen Trust or the Colonial Trust
arising out of the transactions contemplated by this Agreement and Plan
of Reorganization.
9. No Survival of Covenants and Agreements. The covenants and agreements
of the parties contained herein shall not survive the Closing Date,
except for the provisions of Sections 1, 3.3, 9, 11, 12 and 13.
10. Reliance. All covenants and agreements made under this Agreement and
Plan of Reorganization shall be deemed to have been material and relied
upon by each of the parties notwithstanding any investigation made by
such party or on its behalf.
11. Notices. All notices required or permitted under this Agreement and
Plan of Reorganization shall be given in writing (i) to the SoGen Trust
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as well as to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Esq. and (ii) to the
Colonial Trust at Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or
at such other place as shall be specified in a written notice given by
either party to the other party to this Agreement and Plan of
Reorganization, and shall be validly given if mailed by first class
mail, postage prepaid.
12. Expenses. The SoGen Fund and the New SoGen Fund shall each bear their
own expenses relating to the reorganization contemplated hereby to the
extent such expenses are not paid by others, provided, however, that if
the reorganization is consummated such expenses of the SoGen Fund, to
the extent not paid by others, shall be assumed and borne by the New
SoGen Fund.
13. Miscellaneous Provisions. This Agreement and Plan of Reorganization
shall bind and inure to the benefit of the parties and their respective
successors and assigns. It shall be governed by and carried out in
accordance with the laws of The Commonwealth of Massachusetts. It is
executed in several counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one
agreement. A copy of the document establishing the Colonial Trust is
filed with the Secretary of The Commonwealth of Massachusetts. This
Agreement is executed by officers not as individuals and is not binding
upon (i) any of the Trustees, officers or shareholders of the Colonial
Trust individually, but only upon the assets of the New SoGen Fund and
(ii) any of the directors, officers or shareholders of the SoGen Trust
individually, but only upon the assets of the SoGen Fund.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement and Plan of
Reorganization to be executed and delivered by their duly authorized officers as
of the day and year first written above.
SOGEN FUNDS, INC.
(on behalf of [name of SoGen])
By: _____________________________________________
Name:
Title:
COLONIAL TRUST XX
(On behalf name of New SoGen Fund])
By: _____________________________________________
Name:
Title:
s:\funds\sogen\clonreor.doc
