ITEM 77Q(g) COPIES OF ANY MERGER OR CONSOLIDATION AGREEMENT, AND OTHER
DOCUMENTS RELEVANT TO THE INFORMATION SOUGHT IN SUB-ITEM 77M
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 Pennsylvania Municipal Bond 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 Pennsylvania Municipal Income 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 non-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 non-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
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
(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
& Xxxxx 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
Pennsylvania Municipal Bond Fund
series
/s/ A. Xxxxx Xxxxxx
By: A. Xxxxx Xxxxxx
Title: President
VISION GROUP OF FUNDS, on behalf of
the Vision Pennsylvania Municipal
Income 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 Pennsylvania Municipal Income Fund following the
Reorganization, Manufacturers and Traders Trust Company ("M&T") has agreed
to provide or cause to be provided the following waivers of fees:
Before
Waiver
After Waiver
Waiver of M&T's Investment Advisory Fee
0.70%
0.64%
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%
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