AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this 21st
day of January, 2004, by and between Pioneer Series Trust II, a Delaware
statutory trust (the "Acquiring Trust"), on behalf of its series Pioneer Xxxx
Small and Mid Cap Growth Fund (the "Acquiring Fund"), with its principal place
of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Xxxx Small &
Mid-Cap Growth Fund, Inc., a Maryland corporation (the "Acquired Fund"), with
its executive offices at 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx
00000. The Acquiring Fund and the Acquired Fund are sometimes referred to
collectively herein as the "Funds" and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of "reorganization" as
such term is used in Section 368(a) of the United States Internal Revenue Code
of 1986, as amended (the "Code"). The reorganization (the "Reorganization") will
consist of (1) the transfer of all of the assets of the Acquired Fund to the
Acquiring Fund in exchange solely for (A) the issuance of Class A shares of
beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund
Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the
assumption by the Acquiring Fund of (i) the liabilities of the Acquired Fund
that are included in the calculation of net asset value ("NAV") on the Closing
Date set forth below (the "Closing Date") and (ii) the liabilities of the
Acquired Fund on the Closing Date with respect to its investment operations (but
not administrative or other non-investment affairs) that are both (a) not
required by generally accepted accounting principles ("GAAP") to be included in
the calculation of NAV and (b) are consistent with liabilities incurred by
registered management investment companies in the ordinary course of their
investment operations (i.e., not including any extraordinary obligations,
including, but not limited to legal proceedings, stockholder claims and
distribution payments) (collectively, the "Assumed Liabilities"), and (2) the
distribution by the Acquired Fund, on the Closing Date or as soon thereafter as
practicable, of the Acquiring Fund Shares to the stockholders of the Acquired
Fund in liquidation and termination of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, Acquiring Fund and the Acquired Fund are each registered investment
companies classified as management companies of the open-end type, and the
Acquired Fund owns securities that are generally assets of the character in
which the Acquiring Fund is permitted to invest.
WHEREAS, the Acquiring Trust is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Directors of the Acquired Fund has determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares,
and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquired Fund stockholders.
NOW, THEREFORE, in consideration of the premises of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND
SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND DISSOLUTION OF
THE ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired Fund will transfer
all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the
Acquiring Fund free and clear of all liens and encumbrances (other than those
arising under the Securities Act of 1933, as amended (the "Securities Act"),
liens for taxes not yet due and contractual restrictions on the transfer of the
Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to
issue to the Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, determined in the manner set forth in
Paragraph 2.2; and (ii) to assume the Assumed Liabilities, as set forth in
Paragraph 1.3. Such transactions shall take place at the Closing (as defined in
Paragraph 3.1 below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights of the Acquired Fund, all other intangible property owned by the Acquired
Fund, originals or copies of all books and records of the Acquired Fund, and all
other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall
also be entitled to receive (or to the extent agreed upon between the Acquired
Fund and the Acquiring Fund, be provided access to) copies of all records that
the Acquired Fund is required to maintain under the Investment Company Act of
1940, as amended (the "Investment Company Act") and the rules of the Securities
and Exchange Commission (the "Commission") thereunder to the extent such records
pertain to the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all of the
Acquired Fund's securities and other assets as of the date of execution of this
Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of
the current fundamental investment policies and restrictions and fair value
procedures applicable to the Acquiring Fund. The Acquired Fund reserves the
right to sell any of such securities or other assets before the Closing Date
(except to the extent sales may be limited by representations of the Acquired
Fund contained herein and made in connection with the issuance of the tax
opinion provided for in Paragraph 8.5 hereof), but will not, without the prior
approval of the Acquiring Fund, acquire any additional securities of the type in
which the Acquiring Fund is not permitted to invest in accordance with its
fundamental investment policies and restrictions. The Acquired Fund will notify
the Acquiring Fund on the fifth day prior to the Closing Date if the Acquired
Fund has purchased since the date of this Agreement any securities that are
valued at "fair value" under the valuation procedures of the Acquired Fund and
will promptly notify the Acquiring Fund if between said fifth day prior to the
Closing Date and the Closing Date if the Acquired Fund purchases any securities
that are valued at "fair value".
1.3 The Acquired Fund will use commercially reasonable efforts to discharge all
the Acquired Fund's known liabilities and obligations that are or will become
due prior to the Closing. The Acquiring Fund shall assume all of the Assumed
Liabilities at Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Acquired Fund shall liquidate and distribute pro rata
to its stockholders of record (the "Acquired Fund Stockholders"), determined as
of the close of regular trading on the New York Stock Exchange on the Closing
Date, the Acquiring Fund Shares received by the Acquired Fund pursuant to
Paragraph 1.1 hereof. Such liquidation and distribution will be accomplished by
the Acquired Fund transferring the Acquiring Fund Shares then credited to the
account of the Acquired Fund on the books of the Acquiring Fund to open accounts
on the share records of the Acquiring Fund established and maintained by the
Acquiring Fund's transfer agent in the names of the Acquired Fund Stockholders
and representing the respective pro rata number of the Acquiring Fund Shares due
such Acquired Fund Stockholders. The Acquired Fund shall promptly provide the
Acquiring Fund with evidence of such liquidation and distribution. All issued
and outstanding shares of the Acquired Fund will simultaneously be cancelled on
the books of the Acquired Fund. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent for its Class A shares. The Acquired Fund
Stockholders holding certificates representing their ownership of common shares
of the Acquired Fund shall surrender such certificates or deliver an affidavit
with respect to lost certificates in such form and accompanied by such surety
bonds as the Acquired Fund may reasonably require (collectively, an
"Affidavit"), to Pioneer Investment Management Stockholder Services, Inc. prior
to the Closing Date. Any Acquired Fund share certificate which remains
outstanding on the Closing Date shall be deemed to be cancelled, shall no longer
evidence ownership of stock of the Acquired Fund, but shall evidence ownership
of Acquiring Fund Shares as determined in accordance with Paragraph 1.1. Unless
and until any such certificate shall be so surrendered or an Affidavit relating
thereto shall be delivered by an Acquired Fund Stockholder, dividends and other
distributions payable by the Acquiring Fund subsequent to the Liquidation Date
with respect to Acquiring Fund Shares shall be paid to such Acquired Fund
Stockholder, but such Acquired Fund Stockholder may not redeem or transfer
Acquiring Fund Shares received in the Reorganization. The Acquiring Fund will
not issue share certificates in the Reorganization.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name
other than the registered holder of the Acquired Fund Shares on the books of the
Acquired Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
1.7 The Acquired Fund shall effect, following the Closing Date, the transfer of
the Acquired Assets by the Acquired Fund to the Acquiring Fund, the assumption
of the Assumed Liabilities by the Acquiring Fund, and the distribution of the
Acquiring Fund Shares by the Acquired Fund to the Acquired Fund Stockholders
pursuant to Paragraph 1.4, and, as soon as reasonably possible thereafter, the
Acquired Fund shall be dissolved under the laws of the State of Maryland and in
accordance with the Acquired Fund's Charter and By-Laws.
1.8 Any reporting responsibility of the Acquired Fund for taxable periods ending
on or before the dissolution of the Acquired Fund, including, but not limited
to, the responsibility for filing of regulatory reports, Tax Returns (as defined
in Paragraph 4.1), or other documents with the Commission, any state securities
commissions, and any federal, state or local tax authorities or any other
relevant regulatory authority, is and shall remain the responsibility of the
Acquired Fund.
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2. VALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Assets
shall, in each case, be determined as of the close of business (4:00 p.m.,
Boston time) on the Closing Date (the "Valuation Time"). The NAV of each
Acquiring Fund Share shall be computed by Pioneer Investment Management, Inc.
(the "Acquiring Fund Adviser") in the manner set forth in the Acquiring Fund's
Declaration of Trust (the "Declaration"), or By-Laws, and the Acquiring Fund's
then-current prospectus and statement of additional information; provided,
however, if the Acquiring Fund has no assets as of the Closing Date (other than
a nominal amount of assets represented by shares issued to the Acquiring Fund
Adviser, or its affiliate, as the initial stockholder of the Acquiring Fund),
the NAV of each Acquiring Fund Share shall be the same as the NAV of each share
of common stock of the Acquired Fund. The NAV of the Acquired Assets shall be
computed by Compass Bank (the "Acquired Fund Custodian") by calculating the
value of the Acquired Assets and by subtracting therefrom the amount of the
liabilities of the Acquired Fund on the Closing Date included on the face of the
Statement of Assets and Liabilities of the Acquired Fund delivered pursuant to
Section 5.7 (the "Statement of Assets and Liabilities"), said assets and
liabilities to be valued in the manner set forth in the Acquired Fund's then
current prospectus and statement of additional information. The Acquiring Fund
Adviser shall confirm the NAV of the Acquired Assets.
2.2 The number of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Assets and the assumption of the
Assumed Liabilities shall be determined by the Acquiring Fund Adviser by
dividing the NAV of the Acquired Assets, as determined in accordance with
Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund
Adviser and the Acquired Fund, respectively, to deliver a copy of its valuation
report, reviewed by its independent accountants, to the other party at Closing.
All computations of value shall be made by the Acquiring Fund Adviser and the
Acquired Fund Custodian in accordance with its regular practice as custodian and
pricing agent for the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be February 20, 2004 or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the
Closing Date unless otherwise provided (the "Closing"). The Closing shall be
held at the offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, or at such other place as the parties may agree.
3.2 Portfolio securities that are not held in book-entry form in the name of the
Acquired Fund Custodian as record holder for the Acquired Fund shall be
presented by the Acquired Fund to Xxxxx Brothers Xxxxxxxx & Co. (the "Acquiring
Fund Custodian") for examination no later than three business days preceding the
Closing Date. Portfolio securities which are not held in book-entry form shall
be delivered by the Acquired Fund to the Acquiring Fund Custodian for the
account of the Acquiring Fund on the Closing Date, duly endorsed in proper form
for transfer, in such condition as to constitute good delivery thereof in
accordance with the custom of brokers, and shall be accompanied by all necessary
federal and state stock transfer stamps or a check for the appropriate purchase
price thereof. Portfolio securities held of record by the Acquired Fund
Custodian in book-entry form on behalf of the Acquired Fund shall be delivered
to the Acquiring Fund by the Acquired Fund Custodian by recording the transfer
of beneficial ownership thereof on the Acquired Fund Custodian's records.
3.3 The Acquiring Fund Custodian shall deliver within one business day after the
Closing a certificate of an authorized officer stating that: (a) the Acquired
Assets have been delivered in proper form to the Acquiring Fund on the Closing
Date, and (b) all necessary transfer taxes including all applicable federal and
state stock transfer stamps, if any, have been paid, or provision for payment
shall have been made in conjunction with the delivery of portfolio securities as
part of the Acquired Assets. Any cash delivered shall be in the form of currency
or by the Acquired Fund Custodian crediting the Acquiring Fund's account
maintained with the Acquiring Fund Custodian with immediately available funds by
wire transfer pursuant to instruction delivered prior to Closing.
3.4 In the event that on the Closing Date (a) the New York Stock Exchange is
closed to trading or trading thereon shall be restricted, or (b) trading or the
reporting of trading on such exchange or elsewhere is disrupted so that accurate
appraisal of the NAV of the Acquiring Fund Shares or the Acquired Assets
pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been fully
resumed and reporting shall have been restored.
3.5 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Fund
Stockholders and the number and percentage ownership of outstanding shares of
beneficial interest of the Acquired Fund owned by each such Acquired Fund
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Stockholder as of the Valuation Time, certified by the President or a Secretary
of the Acquired Fund and its Treasurer, Secretary or other authorized officer
(the "Stockholder List") as being an accurate record of the information (a)
provided by the Acquired Fund Stockholders, (b) provided by the Acquired Fund
Custodian, or (c) derived from the Acquired Fund's records by such officers or
one of the Acquired Fund's service providers. The Acquiring Fund shall issue and
deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares
to be credited on the Closing Date, or provide evidence satisfactory to the
Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired
Fund's account on the books of the Acquiring Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, stock
certificates, receipts or other documents as such other party or its counsel may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on Schedule 4.1 hereto, the Acquired Fund represents,
warrants and covenants to the Acquiring Fund, which representations, warranties
and covenants will be true and correct on the date hereof and on the Closing
Date as though made on and as of the Closing Date, as follows:
(a) The Acquired Fund is a corporation validly existing and in good standing
under the laws of the State of Maryland and has the power to own all of its
properties and assets and, subject to approval by the Acquired Fund
Stockholders, to perform its obligations under this Agreement. The Acquired
Fund is not required to qualify to do business in any jurisdiction in which
it is not so qualified or where failure to qualify would subject it to any
material liability or disability. The Acquired Fund has all necessary
federal, state and local authorizations to own all of its properties and
assets and to carry on its business as now being conducted;
(b) The Acquired Fund is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect. The Acquired Fund is a diversified investment
company under the Investment Company Act;
(c) The Acquired Fund is not in violation of, and the execution, delivery and
performance of its obligations under this Agreement in respect of the
Acquired Fund will not result in a violation of, any provision of its
Charter or By-Laws or any material agreement, indenture, instrument,
contract, lease or other undertaking with respect to the Acquired Fund to
which the Acquired Fund is a party or by which the Acquired Fund or its
assets are bound;
(d) No litigation or administrative proceeding or investigation of or before
any court or governmental body is currently pending or to its knowledge
threatened against the Acquired Fund or any of the Acquired Fund's
properties or assets. The Acquired Fund knows of no facts which might form
a reasonable basis for the institution of such proceedings. The Acquired
Fund is not a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially adversely
affects the Acquired Fund's business or its ability to consummate the
transactions herein contemplated. Schedule 4.1 lists any order, decree or
judgment of any court or governmental body which will be binding upon the
Acquiring Fund as the successor to the Acquired Fund and which can be
reasonably expected to have an adverse effect on the Acquired Fund;
(e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated at or prior
to the Closing Date and no such termination will result in liability to the
Acquired Fund (or the Acquiring Fund);
(f) The statement of assets and liabilities of the Acquired Fund, and the
related statements of income and changes in net asset value as of and for
the period ended December 31, 2002 has been audited by Deloitte & Touche
LLP, independent certified public accountants, and are in accordance with
GAAP consistently applied and fairly reflect, in all material respects, the
financial condition of the Acquired Fund as of such dates and the results
of its operations for the periods then ended, and all known liabilities,
whether actual or contingent, of the Acquired Fund as of the respective
dates thereof are disclosed therein. The Statement of Assets and
Liabilities of the Acquired Fund to be delivered as of the Closing Date
pursuant to Paragraph 5.7 will be in accordance with GAAP consistently
applied and will fairly reflect, in all material respects, the financial
condition of the Acquired Fund as of such date and the results of its
operations for the period then ended. Except for the Assumed Liabilities,
the Acquired Fund will not have any known or contingent liabilities on the
Closing Date. No significant deficiency, material weakness, fraud,
significant change or other factor that could significantly affect the
internal controls of the Acquired Fund has been disclosed or is required to
be disclosed in the Acquired Fund's reports on Form N-SAR or Form N-CSR to
enable the chief executive officer and chief financial officer or other
officers of the Acquired Fund to make the certifications required by the
Xxxxxxxx-Xxxxx Act, and no deficiency, weakness, fraud, change, event or
other factor exists that is required to be disclosed in the Acquiring
Fund's Form N-CSR after the Closing Date;
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(g) Since December 31, 2002, except as specifically disclosed in the Acquired
Fund's prospectus, statement of additional information as in effect on the
date of this Agreement, or in the Acquired Fund's semi-annual report for
the period ended June 30, 2003, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities,
business or prospects, or any incurrence by the Acquired Fund of
indebtedness, except for normal contractual obligations incurred in the
ordinary course of business or in connection with the settlement of
purchases and sales of portfolio securities. For the purposes of this
subparagraph (g) (but not for any other purpose of this Agreement), a
change in NAV per share of the Acquired Fund arising out of its normal
investment operations or a change in market values of securities in the
Acquired Fund's portfolio or a change in net assets of the Acquired Fund as
a result of stock issuances or redemptions shall not constitute a material
adverse change;
(h) (A) For each taxable year of its operation since its inception (including
the current taxable year), the Acquired Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company and has elected to be treated as such and will qualify
as such as of the Closing Date and will satisfy the diversification
requirements of Section 851(b)(3) of the Code without regard to the last
sentence of Section 851(d) of the Code. The Acquired Fund has not taken any
action, caused any action to be taken or caused any action to fail to be
taken which action or failure could cause the Acquired Fund to fail to
qualify as a regulated investment company under the Code;
(B) Within the times and in the manner prescribed by law, the Acquired
Fund has properly filed on a timely basis all Tax Returns that it was
required to file, and all such Tax Returns were complete and accurate in
all respects. The Acquired Fund has not been informed by any jurisdiction
that the jurisdiction believes that the Acquired Fund was required to file
any Tax Return that was not filed; and the Acquired Fund does not know of
any basis upon which a jurisdiction could assert such a position;
(C) The Acquired Fund has timely paid, in the manner prescribed by law,
all Taxes (as defined below), which were due and payable or which were
claimed to be due;
(D) All Tax Returns filed by the Acquired Fund constitute complete and
accurate reports of the respective Tax liabilities and all attributes of
the Acquired Fund or, in the case of information returns and payee
statements, the amounts required to be reported, and accurately set forth
all items required to be included or reflected in such returns;
(E) Except as set forth on a Disclosure Schedule to this Agreement, the
Acquired Fund has not waived or extended any applicable statute of
limitations relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any examinations of
the Tax Returns of the Acquired Fund are currently in progress or
threatened, and no deficiencies have been asserted or assessed against the
Acquired Fund as a result of any audit by the Internal Revenue Service or
any state, local or foreign taxing authority, and no such deficiency has
been proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. Acquired Fund is not and has
never been a member of a group of corporations with which it has filed (or
been required to file) consolidated, combined or unitary Tax Returns. The
Acquired Fund is not a party to any Tax allocation, sharing, or
indemnification agreement;
(H) The unpaid Taxes of the Acquired Fund for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the Statement of
Assets and Liabilities, other than as described in any notes thereto (the
"Tax Reserves"). All Taxes that the Acquired Fund is or was required by law
to withhold or collect have been duly withheld or collected and, to the
extent required, have been timely paid to the proper governmental agency;
(I) The Acquired Fund has delivered to the Acquiring Fund or made
available to the Acquiring Fund complete and accurate copies of all Tax
Returns of the Acquired Fund, together with all related examination reports
and statements of deficiency for all periods not closed under the
applicable statutes of limitations and complete and correct copies of all
private letter rulings, revenue agent reports, information document
requests, notices of proposed deficiencies, deficiency notices, protests,
petitions, closing agreements, settlement agreements, pending ruling
requests and any similar documents submitted by, received by or agreed to
by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on
its federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the
meaning of Section 6662 of the Code;
(J) The Acquired Fund has not undergone, has not agreed to undergo, and
is not required to undergo (nor will it be required as a result of the
transactions contemplated in this Agreement to undergo) a change in its
method of accounting
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resulting in an adjustment to its taxable income pursuant to Section 481 of
the Code. The Acquired Fund will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period
ending on or prior to the Closing Date under Section 481(c) of the Code (or
any corresponding or similar provision of state, local or foreign income
Tax law); (ii) "closing agreement" as described in Section 7121 of the Code
(or any corresponding or similar provision of state, local or foreign
income Tax law) executed on or prior to the Closing Date; (iii) installment
sale or open transaction disposition made on or prior to the Closing Date;
or (iv) prepaid amount received on or prior to the Closing Date;
(K) The Acquired Fund has not taken or agreed to take any action that
would prevent the Reorganization from constituting a reorganization
qualifying under Section 368(a)(1)(F) of the Code. The Acquired Fund is not
aware of any agreement, plan or other circumstance that would prevent the
Reorganization from qualifying as a reorganization under Section
368(a)(1)(F) of the Code;
(L) There are (and as of immediately following the Closing there will
be) no liens on the assets of the Acquired Fund relating to or attributable
to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Fund are accurately
reflected on the Acquired Fund's Tax books and records;
(N) The Acquired Fund has not incurred (or been allocated) an "overall
foreign loss" as defined in Section 904(f)(2) of the Code which has not
been previously recaptured in full as provided in Sections 904(f)(2) and/or
904(f)(3) of the Code;
(O) The Acquired Fund is not a party to a gain recognition agreement
under Section 367 of the Code;
(P) The Acquired Fund does not own any interest in an entity that is
characterized as a partnership for income tax purposes;
(Q) The Acquired Fund's Tax attributes are not limited, and will not be
limited as a result of the Reorganization, under the Code (including but
not limited to any capital loss carry forward limitations under Sections
382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law; and
(R) For purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, unemployment, insurance, social
security, business license, business organization, environmental, workers
compensation, payroll, profits, license, lease, service, service use,
severance, stamp, occupation, windfall profits, customs, duties, franchise
and other taxes imposed by the United States of America or any state, local
or foreign government, or any agency thereof, or other political
subdivision of the United States or any such government, and any interest,
fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or
dispute thereof; and "Tax Returns" shall mean all reports, returns,
declarations, statements or other information required to be supplied to a
governmental or regulatory authority or agency, or to any other person, in
connection with Taxes and any associated schedules or work papers produced
in connection with such items.
(i) The authorized capital of the Acquired Fund consists of 25,000,000 shares
of common stock, $0.01 par value per share. All issued and outstanding
shares of common stock of the Acquired Fund are, and at the Closing Date
will be, duly and validly issued and outstanding, fully paid and
nonassessable by the Acquired Fund. All of the issued and outstanding
shares of common stock of the Acquired Fund will, at the time of Closing,
be held of record by the persons and in the amounts set forth in the
Stockholder List submitted to the Acquiring Fund pursuant to Paragraph 3.5
hereof. The Acquired Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any of its shares of common
stock, nor is there outstanding any security convertible into any of its
shares of common stock of the Acquired Fund;
(j) At the Closing Date, the Acquired Fund will have good and marketable title
to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Fund,
and, upon delivery and payment for the Acquired Assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions
on the full transfer thereof, except such restrictions as might arise under
the Securities Act;
(k) The Acquired Fund has the power and authority to enter into and perform its
obligations under this Agreement. The execution, delivery and performance
of this Agreement has been duly authorized by all necessary action on the
part of the Acquired Fund's Board of Directors, and, subject to the
approval of the Acquired Fund Stockholders, assuming due authorization,
execution and delivery by the Acquiring Fund, this Agreement will
constitute a valid and binding obligation of
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the Acquired Fund, enforceable in accordance with its terms, subject as to
enforcement, bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(l) The information to be furnished by the Acquired Fund to the Acquiring Fund
for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby and any information necessary to compute
the total return of the Acquired Fund shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable thereto;
(m) The information included in the proxy statement (the "Proxy Statement")
forming part of the Acquiring Trust's Registration Statement on Form N-14
filed in connection with this Agreement (the "Registration Statement") that
has been furnished by the Acquired Fund to the Acquiring Trust for
inclusion in the Registration Statement, on the effective date of that
Registration Statement and on the Closing Date, will conform in all
material respects to the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934 as amended (the "Exchange Act"), and the
Investment Company Act and the rules and regulations of the Commission
thereunder and 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 misleading;
(n) Upon the effectiveness of the Registration Statement, 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;
(o) To the Acquired Fund's knowledge, all of the issued and outstanding shares
of common stock of the Acquired Fund have been offered for sale and sold in
conformity with all applicable federal and state securities laws, except as
may have been previously disclosed in writing to the Acquiring Fund;
(p) The prospectus and statement of additional information of the Acquired
Fund, each dated May 1, 2003 (collectively, the "Acquired Fund
Prospectus"), and any amendments or supplements thereto, furnished to the
Acquiring Fund, did not as of their dates or the dates of their
distribution to the public 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, in light of the circumstances in which such
statements were made, not misleading;
(q) The Acquired Fund currently complies in all material respects with and
since its organization has complied in all material respects with the
requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws
and all other applicable federal and state laws or regulations. The
Acquired Fund currently complies in all material respects with, and since
its organization has complied in all material respects with, all investment
objectives, policies, guidelines and restrictions and any compliance
procedures established by the Acquired Fund. All advertising and sales
material used by the Acquired Fund complies in all material respects with
and has complied in all material respects with the applicable requirements
of the Securities Act, the Investment Company Act, the rules and
regulations of the Commission, and, to the extent applicable, the Conduct
Rules of the National Association of Securities Dealers, Inc. (the "NASD")
and any applicable state regulatory authority. All registration statements,
prospectuses, reports, proxy materials or other filings required to be made
or filed with the Commission, the NASD or any state securities authorities
by the Acquired Fund have been duly filed and have been approved or
declared effective, if such approval or declaration of effectiveness is
required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and
the Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did 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, in light of
the circumstances in which they were made, not false or misleading;
(r) The Acquired Fund has previously provided to the Acquiring Fund (and at the
Closing will provide an update through the Closing Date of such
information) data which supports a calculation of the Acquired Fund's total
return for all periods since the organization of the Acquired Fund. Such
data has been prepared in accordance in all material respects with the
requirements of the Investment Company Act and the regulation thereunder
and the rules of the NASD;
(s) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any
"affiliated person" of the Acquired Fund has been convicted of any felony
or misdemeanor, described in Section 9(a)(1) of the Investment Company Act,
nor, to the knowledge of the Acquired Fund, has any affiliated person of
the Acquired Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an
investment adviser under Section 203(e) of the Investment Advisers Act of
1940, as amended (the "Investment Advisers Act") or Rule 206(4)-4(b)
thereunder or of a broker-dealer under Section 15 of the Exchange
7
Act, or for disqualification as an investment adviser, employee, officer or
director of an investment company under Section 9 of the Investment Company
Act; and
(t) The Acquired Fund Tax Representation Certificate to be delivered by the
Acquired Fund to the Acquiring Fund and Xxxx and Xxxx LLP at the Closing
pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation
Certificate") will not on the Closing Date contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading.
4.2 Except as set forth on Schedule 4.2 hereto, the Acquiring Trust on behalf
of the Acquiring Fund represents, warrants and covenants to the Acquired
Fund, which representations, warranties and covenants will be true and
correct on the date hereof and on the Closing Date as though made on and as
of the Closing Date, as follows:
(a) The Acquiring Trust is a statutory trust duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Acquiring
Fund is a duly established and designated series of the Acquiring Trust and
has the power to own all of its properties and assets and to perform the
obligations under this Agreement. The Acquiring Fund is not required to
qualify to do business in any jurisdiction in which it is not so qualified
or where failure to qualify would subject it to any material liability or
disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted. The Acquiring Fund will have no issued or
outstanding shares prior to the Closing Date other than those issued to
Pioneer Investment Management, Inc. (or one of its affiliates) and will
have had no investment operations prior to the Closing Date;
(b) The Acquiring Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The Acquiring Trust's registration statement on Form N-1A that will be in
effect on the Closing Date, and the prospectus and statement of additional
information of the Acquiring Fund included therein, will conform in all
material respects with the applicable requirements of the Securities Act
and the Investment Company Act and the rules and regulations of the
Commission thereunder, and did not as of its date and will not as of the
Closing Date contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were
made, not misleading;
(d) The Registration Statement, the Proxy Statement and statement of additional
information with respect to the Acquiring Fund, each dated January 16,
2004, and any amendments or supplements thereto on or prior to the Closing
Date included in the Registration Statement (other than written information
furnished by the Acquired Fund for inclusion therein, as covered by the
Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform in all
material respects to the applicable requirements of the Securities Act and
the Investment Company Act and the rules and regulations of the Commission
thereunder. Neither the Registration Statement nor the Proxy Statement
(other than written information furnished by the Acquired Fund for
inclusion therein, as covered by the Acquired Fund's warranty in Paragraph
4.1(m) hereof) includes any untrue statement of a material fact or omits to
state any 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 misleading;
(e) The Acquiring Fund is not in violation of, and the execution and delivery
of this Agreement and performance of its obligations under this Agreement
will not result in a violation of, any provisions of the Declaration of
Trust or by-laws of the Acquiring Fund or any material agreement,
indenture, instrument, contract, lease or other undertaking with respect to
which the Acquiring Fund is a party or by which the Acquiring Fund or any
of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or before
any court or governmental body is currently pending or threatened against
the Acquiring Fund or any of the Acquiring Fund's properties or assets. The
Acquiring Fund knows of no facts which might form a reasonable basis for
the institution of such proceedings. The Acquiring Fund is not a party to
or subject to the provisions of any order, decree or judgment of any court
or governmental body which materially adversely affects the Acquiring
Fund's business or its ability to consummate the transactions contemplated
herein;
(g) The Acquiring Fund intends to elect to qualify as a regulated investment
company under Section 851 of the Code and will meet on the Closing Date the
requirements of subchapter M of the Code for qualification and treatment as
a regulated investment company. The Acquiring Fund currently complies in
all material respects with and since its organization has complied in all
material respects with the requirements of, and the rules and regulations
under, the Investment Company Act, the Securities Act, the Exchange Act,
state "Blue Sky" laws and all other applicable federal and state laws or
regulations. The Acquiring Fund currently complies in all material respects
with, and since its organization has complied in all material respects
with, all investment objectives, policies, guidelines and restrictions and
any compliance procedures established by the Acquiring Fund with respect to
the Acquiring Fund. All advertising and sales material used by the Acquired
Fund
8
complies in all material respects with and has complied in all material
respects with the applicable requirements of the Securities Act, the
Investment Company Act, the rules and regulations of the Commission, and,
to the extent applicable, the Conduct Rules of the NASD and any applicable
state regulatory authority. All registration statements, prospectuses,
reports, proxy materials or other filings required to be made or filed with
the Commission, the NASD or any state securities authorities by the
Acquiring Fund have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by
law. Such registration statements, prospectuses, reports, proxy materials
and other filings under the Securities Act, the Exchange Act and the
Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did 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, in light of
the circumstances in which they were made, not false or misleading;
(h) The authorized capital of the Acquiring Fund consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share, the shares
of which will be divided into Class A, B, C, Y and R shares, each having
the characteristics described in the Acquiring Fund prospectuses. The
Acquiring Fund Shares to be issued and delivered to the Acquired Fund for
the account of the Acquired Fund Stockholders pursuant to the terms of this
Agreement, will have been duly authorized on the Closing Date and, when so
issued and delivered, will be duly and validly issued, fully paid and
non-assessable. 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 of the
Acquiring Fund Shares;
(i) The Acquiring Fund has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Acquiring Fund has been duly
authorized by all necessary action on the part of the Acquiring Fund and
its Board of Trustees and the sole initial shareholder, and, assuming due
authorization, execution and delivery by the Acquired Fund, this Agreement
will constitute a valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general equity principles;
(j) The information to be furnished by the Acquiring Fund or the Acquiring Fund
Adviser for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the
requirements of any form for which its use is intended, and shall not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the information provided not misleading;
(k) No consent, approval, authorization or order of or filing with any court or
governmental authority is required for the execution of this Agreement or
the consummation of the transactions contemplated by the Agreement by the
Acquiring Fund, except for the registration of the Acquiring Fund Shares
under the Securities Act and the Investment Company Act;
(l) The Acquiring Fund has not taken or agreed to take any action that would
prevent the Reorganization from constituting a reorganization qualifying
under Section 368(a)(1)(F) of the Code. The Acquiring Fund is not aware of
any agreement, plan or other circumstance that would prevent the
Reorganization from qualifying as a reorganization under Section
368(a)(1)(F) of the Code.
(m) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any
"affiliated person" of the Acquiring Fund has been convicted of any felony
or misdemeanor, described in Section 9(a)(1) of the Investment Company Act,
nor, to the knowledge of the Acquiring Fund, has any affiliated person of
the Acquiring Fund been the subject, or presently is the subject, of any
proceeding or investigation with respect to any disqualification that would
be a basis for denial, suspension or revocation of registration as an
investment adviser under Section 203(e) of the Investment Advisers Act of
1940 or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15
of the Exchange Act, or for disqualification as an investment adviser,
employee, officer or director of an investment company under Section 9 of
the Investment Company Act; and
(n) The Acquiring Fund Tax Representation Certificate to be delivered by the
Acquiring Fund to the Acquired Fund and Xxxx and Xxxx LLP at Closing
pursuant to Section 6.3 (the "Acquiring Fund Tax Representation
Certificate") will not on the Closing Date contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading.
9
5. COVENANTS OF EACH OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary
course between the date hereof and the Closing Date. It is understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions and any other dividends and distributions
necessary or advisable (except to the extent dividends or distributions that are
not customary may be limited by representations made in connection with the
issuance of the tax opinion described in Paragraph 8.5 hereof), in each case
payable either in cash or in additional shares.
5.2 The Acquired Fund will call a special meeting of Acquired Fund Stockholders
to consider approval of this Agreement and act upon the matters set forth in the
Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and
Proxy Statement (collectively, "Proxy Materials") to be used in connection with
such meeting, and will promptly prepare and file with the Commission the
Registration Statement on Form N-14 relating to the Reorganization. The Acquired
Fund will provide the Acquiring Fund with information reasonably necessary for
the preparation of the Registration Statement in compliance with the Securities
Act, the Exchange Act, and the Investment Company Act.
5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of making
any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund's shares of common stock.
5.6 Subject to the provisions of this Agreement, each of the Acquired Fund and
the Acquiring Fund will take, or cause to be taken, all actions, and do or cause
to be done, all things reasonably necessary, proper or advisable to consummate
the transactions contemplated by this Agreement.
5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date
the Statement of Assets and Liabilities of the Acquired Fund as of the Closing
Date setting forth the NAV of the Acquired Assets as of the Valuation Time,
which statement shall be prepared in accordance with GAAP consistently applied
and certified by the Acquired Fund's Treasurer or Assistant Treasurer. As
promptly as practicable, but in any case within 30 days after the Closing Date,
the Acquired Fund shall furnish to the Acquiring Fund, in such form as is
reasonably satisfactory to the Acquiring Fund, a statement of the earnings and
profits of the Acquired Fund for federal income tax purposes, and of any capital
loss carryovers and other items that will be carried over to the Acquiring Fund
under the Code, and which statement will be certified by the Treasurer of the
Acquired Fund.
5.8 Neither the Acquired Fund nor the Acquiring Fund shall take any action that
is inconsistent with the representations set forth in, with respect to the
Acquired Fund, the Acquired Fund Tax Representation Certificate, and with
respect to the Acquiring Fund, the Acquiring Fund Tax Representation
Certificate.
5.9 The Acquired Fund shall maintain errors and omissions insurance covering
management to the Acquired Fund prior to and including the Closing Date.
5.10 From and after the date of this Agreement and until the Closing Date, each
of the Funds shall use its commercially reasonable efforts to cause the
Reorganization to qualify, and will not knowingly take any action, cause any
action to be taken, fail to take any action or cause any action to fail to be
taken which action or failure to act could prevent the Reorganization from
qualifying as a reorganization under the provisions of Section 368(a) of the
Code. The parties hereby adopt this Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the income tax
regulations promulgated under the Code. Unless otherwise required pursuant to a
"determination" within the meaning of Section 1313(a) of the Code, the parties
hereto shall treat and report the transactions contemplated hereby as a
reorganization within the meaning of Section 368(a)(1)(F) of the Code, and shall
not take any position inconsistent with such treatment.
5.11 From and after the date of this Agreement and through the time of the
Closing on the Closing Date, the Acquired Fund shall use its commercially
reasonable efforts to cause the Acquired Fund to qualify, and will not knowingly
take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken which action or failure to act could prevent the
Acquired Fund from qualifying as a regulated investment company under the
provisions of Subchapter M of the Code.
5.12 From and after the Closing Date, the Acquiring Fund shall use its
commercially reasonable efforts to cause the Acquiring Fund to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken which action or failure to act
could prevent the Acquiring Fund from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
10
5.13 The Acquired Fund shall prepare, or cause to be prepared all Tax Returns of
the Acquired Fund for taxable periods that end before the Closing Date and shall
timely file, or cause to be timely filed, all such Tax Returns. Acquired Fund
shall make any payments of Taxes required to be made with respect to any such
Tax Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided for
herein shall be, at its election, subject to the performance by the Acquiring
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date, and, in addition thereto, the following further conditions, unless
waived by the Acquired Fund in writing:
6.1 All representations and warranties by the Acquiring Trust on behalf of the
Acquiring Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
6.2 The Acquiring Fund shall have delivered to the Acquired Fund a certificate
executed in its name by the Acquiring Trust's President or Vice President and
its Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust on behalf of the Acquiring
Fund contained in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement, that each of the conditions to closing in this Paragraph 6 have been
met, and as to such other matters as the Acquired Fund shall reasonably request;
6.3 The Acquiring Fund shall have delivered to the Acquired Fund and Xxxx and
Xxxx LLP an Acquiring Fund Tax Representation Certificate, satisfactory to the
Acquired Fund and Xxxx and Xxxx LLP, substantially in the form attached to this
Agreement as Annex A, concerning certain tax-related matters with respect to the
Acquiring Fund; and
6.4 The Acquired Fund shall have received at the Closing a favorable opinion of
counsel, who may be an employee or officer of Pioneer Investment Management,
Inc. (based upon or subject to such representations, assumptions and limitations
as such counsel may deem appropriate or necessary), dated as of the Closing
Date, in a form reasonably satisfactory to Acquired Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided for
herein shall be, at its election, subject to the performance by the Acquired
Fund of all the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following further conditions, unless
waived by the Acquiring Fund in writing:
7.1 All representations and warranties of the Acquired Fund contained in this
Agreement by the Acquired Fund shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 The Acquired Fund shall have delivered to the Acquiring Fund the Statement
of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.7,
together with a list of its portfolio securities showing the federal income tax
bases and holding periods of such securities, as of the Closing Date, certified
by the Acquired Fund's Treasurer or Assistant Treasurer;
7.3 The Acquired Fund, shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in the name of Acquired Fund by its President or
Secretary and a Treasurer or Assistant Treasurer, in form and substance
reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date,
to the effect that the representations and warranties of the Acquired Fund
contained in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement, that each of the conditions to closing in this Section 7 have been
met, and as to such other matters as the Acquiring Fund shall reasonably
request;
7.4 The Acquired Fund shall have delivered to the Acquiring Fund and Xxxx and
Xxxx LLP an Acquired Fund Tax Representation Certificate, satisfactory to the
Acquiring Fund and Xxxx and Xxxx LLP, substantially in the form attached to this
Agreement as Annex B, concerning certain tax-related matters with respect to the
Acquired Fund;
7.5 The Acquiring Fund shall have received at the Closing a favorable opinion of
counsel, dated as of the Closing Date, in a form reasonably satisfactory to
Acquiring Fund; and
11
7.6 With respect to the Acquired Fund, the Board of Directors of the Acquired
Fund shall have determined that the Reorganization is in the best interests of
the Acquired Fund and that the interests of the existing the Acquired Fund
Stockholders would not be diluted as a result of the Reorganization.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below do not exist on or before the Closing
Date with respect to either party hereto, the other party to this Agreement
shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Fund Stockholders in accordance
with the provisions of the Acquired Fund's Charter and By-Laws, and certified
copies of the resolutions evidencing such approval by the Acquired Fund's
stockholders shall have been delivered by the Acquired Fund to the Acquiring
Fund. Notwithstanding anything herein to the contrary, neither party hereto may
waive the conditions set forth in this Paragraph 8.1;
8.2 On the Closing Date, no action, suit or other 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 herein;
8.3 All consents of other parties and all other consents, orders and permits of
federal, state and local regulatory authorities (including those of the
Commission and of state Blue Sky and securities authorities) deemed necessary by
either party hereto to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of either party hereto,
provided that either party may waive any such conditions for itself;
8.4 Each of the Acquiring Trust's Registration Statement on Form N-14 and the
Registration Statement on Form N-1A (and reflecting the Acquiring Fund as the
accounting successor of the Acquired Fund and including the performance of the
Acquired Fund's sole existing class of stock as the historical performance of
the Acquiring Fund's Class A, Class B, Class C, Class R and Class Y shares)
shall have become effective under the Securities Act and no stop orders
suspending the effectiveness of either of such Registration Statements shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the Securities Act;
8.5 The parties shall have received an opinion of Xxxx and Xxxx LLP,
satisfactory to the Acquiring Fund and the Acquiring Fund and subject to
customary assumptions and qualifications, substantially to the effect that for
federal income tax purposes the acquisition by the Acquiring Fund of the
Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to
the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring
Fund, followed by the distribution by the Acquired Fund, in liquidation of the
Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Stockholders in
exchange for their shares of beneficial interest of the Acquired Fund and the
termination of the Acquired Fund, will constitute a "reorganization" within the
meaning of Section 368(a) of the Code.
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2 The parties have been informed by Pioneer Investment Management, Inc. that
it will pay certain expenses of the Acquired Fund incurred in connection with
the Reorganization (including, but not limited to, the preparation, printing and
mailing of any and all shareholder notices, communications, proxy statements,
and necessary filings with the SEC or any other governmental authority in
connection with the Reorganization). Except for the foregoing, the Acquiring
Fund and the Acquired Fund shall each bear its own expenses in connection with
the transactions contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund each agree that neither party has
made any representation, warranty or covenant not set forth herein or referred
to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the
entire agreement between the parties.
12
10.2 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 under Sections 1.1,
1.3, 1.4, 1.7, 9, 10, 13 and 14.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Acquiring
Fund and the Acquired Fund. In addition, either party may at its option
terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation, warranty,
covenant or agreement contained herein to be performed at or prior to the
Closing Date;
(b) because of a condition herein expressed to be precedent to the obligations
of the terminating party which has not been met and which reasonably
appears will not or cannot be met;
(c) by resolution of the Acquiring Fund's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquiring
Fund's stockholders;
(d) by resolution of the Acquired Fund's Board of Directors if circumstances
should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the Acquired
Fund Stockholders;
(e) if the transactions contemplated by this Agreement shall not have occurred
on or prior to May 30, 2004 or such other date as the parties may mutually
agree upon in writing; or
(f) if the Subadvisory Agreement by and between Pioneer Investment Management,
Inc., and L. Xxx Xxxx & Associates, LLP, has not been approved in
accordance with Section 15 of the Investment Company Act or has not been
otherwise executed at the Closing Date.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund or the Acquired Fund, or the
Directors, Trustees or officers of the Acquiring Trust or the Acquired Fund,
but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it
incidental to the preparation and carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may be
mutually agreed upon in writing by the authorized officers of the Acquired Fund
and the Acquiring Trust; provided, however, that following the meeting of the
Acquired Fund Stockholders called pursuant to Paragraph 5.2 of this Agreement,
no such amendment may have the effect of changing the provisions regarding the
method for determining the number of Acquiring Fund Shares to be received by the
Acquired Fund Stockholders under this Agreement to the detriment of the Acquired
Fund Stockholders without their further approval; provided that nothing
contained in this Section 12 shall be construed to prohibit the parties from
amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be in writing and shall be given by prepaid telegraph,
telecopy or certified mail addressed to the Acquired Fund, c/o L. Xxx Xxxx &
Associates, LLP, 0000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000,
Attention: Xxxxx X. Xxxx, with copies to Xxxx, Xxxx & Xxxxx LLC, 0000 X Xxxxxx,
X.X. Xxxxxxxxxx, D. C. 20036, Attention: Xxxxx X. Xxxxxx, Esq., and the
Acquiring Fund c/o Pioneer Investment Management, Inc., 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq., with copies to Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxx, Esq.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
13
14.4 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by either party
without the prior written consent of the other party hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation, or other entity, other than the parties hereto
and their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Fund and the
Acquired Trust shall not be binding upon any of their respective Directors,
Trustees, stockholders, nominees, officers, agents or employees personally, but
bind only to the trust property of the Acquiring Fund or the Acquired Fund, as
the case may be, as provided in the trust instruments of the Acquiring Fund and
Articles of Organization of the Acquired Fund, respectively. The execution and
delivery of this Agreement have been authorized by the Trustees of the Acquiring
Trust and the Board of Directors of the Acquired Fund and this Agreement has
been executed by authorized officers of the Acquiring Trust and the Acquired
Fund, acting as such, and neither such authorization by such Trustees or
Directors nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually or to imposed any liability on any of
them personally, but shall bind only the trust property of the Acquiring Fund
and the Acquired Fund, as the case may be, as provided in the trust instruments
of the Acquiring Trust or the Charter of the Acquired Fund, respectively.
14.6 The Acquired Fund shall indemnify and hold harmless the Acquiring Fund and
all its respective affiliates, directors, trustees, officers, employees and
agents (collectively, the "Acquiring Group") from and against any and all
claims, losses, judgments, liabilities, settlements, fines, penalties, interest
costs and expenses (including all reasonable attorneys' fees and disbursements
whether incurred in resolving indemnification issues between or among parties to
this Agreement or in defending third-party claims, and collectively with such
claims, etc., "Losses") that result from, arise out of or are connected with any
breach or alleged breach of any representation, warranty or covenant of the
Acquired Fund contained in this Agreement. Any member of the Acquiring Group
with an indemnification claim for Losses hereunder shall notify the Acquired
Fund in writing of those Losses, together with a reasonably detailed
description, within 30 calendar days after having formed a reasonable basis for
those Losses, provided that the failure to so notify shall not affect the right
to indemnification hereunder except to the extent such failure resulted in a
greater Loss.
14.7 The Acquiring Fund shall indemnify and hold harmless the Acquired Fund and
all of the Acquired Fund's respective affiliates, directors, trustees, officers,
employees and agents (collectively, the "Acquired Group") from and against any
and all Losses that result from, arise out of or are connected with any breach
or alleged breach of any representation, warranty or covenant of the Acquiring
Fund contained in this Agreement. Any member of the Acquired Group with an
indemnification claim for Losses hereunder shall notify the Acquiring Fund in
writing of those Losses, together with a reasonably detailed description, within
30 calendar days after having formed a reasonable basis for those Losses,
provided that the failure to so notify shall not affect the right to
indemnification hereunder except to the extent such failure resulted in a
greater Loss.
14
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first set forth above by its President or Vice President
and attested by its Secretary or Assistant Secretary.
Attest: XXXX SMALL & MID-CAP GROWTH FUND, INC.
By:_/s/ Xxxxx X. Xxxx By:__/s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Secretary Title: President
Attest: PIONEER SERIES TRUST II ON BEHALF OF ITS SERIES
PIONEER XXXX SMALL AND MID CAP GROWTH FUND
By:___/s/ Xxxxxxx X. Xxxxxxxx By:___/s/ Xxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxx
Title: Secretary Title: Executive Vice President
15
Annex A
TAX REPRESENTATION CERTIFICATE OF
PIONEER XXXX SMALL AND MID CAP GROWTH FUND
This certificate is being delivered in connection with the transaction to be
effected pursuant to the Agreement and Plan of Reorganization made as of January
21, 2004 between Pioneer Series Trust II, a Delaware statutory trust, on behalf
of its series, Pioneer Xxxx Small and Mid Cap Growth Fund ("Acquiring Fund") and
Xxxx Small & Mid-Cap Growth Fund, Inc. (the "Acquired Fund") (the "Agreement").
Pursuant to the Agreement, Acquiring Fund will acquire all of the assets of
Acquired Fund in exchange solely for (i) the assumption by Acquiring Fund of the
liabilities of Acquired Fund (the "Acquired Fund Liabilities") and (ii) the
issuance of shares of beneficial interest of Acquiring Fund (the "Acquiring Fund
Shares") to Acquired Fund, followed by the distribution by Acquired Fund, in
liquidation of Acquired Fund, of the Acquiring Fund Shares to the stockholders
of Acquired Fund and the termination of Acquired Fund (the foregoing together
constituting the "transaction").
The undersigned officer of Acquiring Trust, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations on behalf of Acquiring Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meaning ascribed to them in the Agreement.
1. Acquiring Trust is a statutory trust established under the laws of
the State of Delaware, and Acquiring Fund is, and has been at all times, treated
as a separate corporation for federal income tax purposes. Acquiring Fund was
newly organized solely for the purpose of effecting the transaction and
continuing thereafter to operate as a regulated investment company. Prior to the
transaction, Acquiring Fund did not and will not engage in any business
activities. There shall be no issued and outstanding shares of Acquiring Fund
prior to the Closing Date other than those issued to Pioneer Investment
Management, Inc. or one of its affiliates in connection with the creation of
Acquiring Fund.
2. Neither Acquiring Fund nor any person treated as related to
Acquiring Fund under Treasury Regulation Section 1.368-1(e)(3) nor any
partnership of which Acquiring Fund or any such related person is a partner has
any plan or intention to redeem or otherwise acquire any of the Acquiring Fund
Shares received by stockholders of Acquired Fund in the transaction except in
the ordinary course of Acquiring Fund's business in connection with its legal
obligation under Section 22(e) of the Investment Company Act of 1940, as amended
(the "1940 Act"), as a registered open-end investment company to redeem its own
shares.
3. After the transaction, Acquiring Fund will continue the historic
business of Acquired Fund or will use a significant portion of the historic
business assets acquired from Acquired Fund in the ordinary course of a
business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose
of any assets of Acquired Fund acquired in the transaction, except for
dispositions made in the ordinary course of its business or to maintain its
qualification as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended ("the "Code").
5. Any expenses of Acquired Fund incurred in connection with the
transaction which are paid or assumed by Acquiring Fund will be expenses of
Acquired Fund solely and directly related to the transaction in accordance with
Rev. Rul. 73-54, 1973-1 C.B. 187. Acquiring Fund will not pay or assume
expenses, if any, incurred by any Acquired Fund stockholders in connection with
the transaction.
6. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
7. Acquiring Fund will properly elect to be treated as a regulated
investment company under Subchapter M of the Code and will qualify for the
special tax treatment afforded regulated investment companies under Subchapter M
of the Code for all taxable years ending after the date of the transaction.
8. Acquiring Fund meets the requirements of an investment company as
defined in Section 368(a)(2)(F) of the Code.
9. Acquiring Fund 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 Code.
10. Acquiring Fund does not now own and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of such Acquired Fund Liabilities and the issuance of such Acquiring
Fund Shares.
12. Immediately following the transaction, Acquired Fund stockholders
will own all of the outstanding Acquiring Fund Shares and will own such shares
solely by reason of their ownership of the Acquired Fund Shares immediately
prior to the transaction. Acquiring Fund has no plan or intention to issue as
part of the transaction any shares of Acquiring Fund other than the Acquiring
Fund Shares issued in exchange for Acquired Fund assets.
13. The transaction is being undertaken for valid and substantive
business purposes, including facilitating the Acquired Fund becoming a member of
the Pioneer family of mutual funds, which, in the long term, is intended to
result in lower expenses and increased assets.
14. No Acquired Fund stockholder is acting as agent for Acquiring Fund
in connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund stockholder for Acquired Fund shares such
stockholder may have purchased or for other obligations such stockholder may
have incurred.
15. Acquiring Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in the Acquiring Fund.
* * * * *
A-2
The undersigned officer of the Acquiring Trust is authorized to make
all of the representations set forth herein, and the undersigned is authorized
to execute this certificate on behalf of Acquiring Fund. The undersigned
recognizes that Xxxx and Xxxx LLP will rely upon the foregoing representations
in evaluating the United States federal income tax consequences of the
transaction and rendering its opinion pursuant to Section 8.5 of the Agreement.
If, prior to the date of the transaction, any of the representations set forth
herein ceases to be accurate, the undersigned agrees to deliver to Xxxx and Xxxx
LLP immediately a written notice to that effect.
PIONEER SERIES TRUST II ON BEHALF OF ITS SERIES, PIONEER XXXX SMALL
AND MID CAP GROWTH FUND
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
Dated: February 20, 2004
A-3
Annex B
TAX REPRESENTATION CERTIFICATE OF
XXXX SMALL & MID-CAP GROWTH FUND, INC.
This certificate is being delivered in connection with the transaction
to be effected pursuant to the Agreement and Plan of Reorganization made as of
January 21, 2004 between Pioneer Series Trust II, a Delaware statutory trust, on
behalf of its series, Pioneer Xxxx Small and Mid Cap Growth Fund ("Acquiring
Fund") and Xxxx Small & Mid-Cap Growth Fund, Inc. (the "Acquired Fund") (the
"Agreement"). Pursuant to the Agreement, Acquiring Fund will acquire all of the
assets of Acquired Fund in exchange solely for (i) the assumption by Acquiring
Fund of the liabilities of Acquired Fund (the "Acquired Fund Liabilities") and
(ii) the issuance of shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares") to Acquired Fund, followed by the distribution by
Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to
the stockholders of Acquired Fund and the dissolution of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of Acquired Fund, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations, on behalf of Acquired Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meaning ascribed to them in the Agreement.
1. Acquired Fund is corporation organized under the laws of the State
of Maryland, and Acquired Fund is, and has been at all times, treated as a
separate corporation for federal income tax purposes.
2. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares received by each stockholder that holds shares of Acquired
Fund (the "Acquired Fund Shares") will be approximately equal to the fair market
value of the Acquired Fund Shares with respect to which such Acquiring Fund
Shares are received, and the aggregate consideration received by Acquired Fund
stockholders in exchange for their Acquired Fund Shares will be approximately
equal to the fair market value of all of the outstanding Acquired Fund Shares
immediately prior to the transaction. No property other than Acquiring Fund
Shares will be distributed to stockholders of Acquired Fund in exchange for
their Acquired Fund Shares, nor will any such stockholder receive cash or other
property as part of the transaction.
3. Neither Acquired Fund nor any person "related" to Acquired Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)) nor any partnership in
which the Acquired Fund or any such related person is a partner has redeemed,
acquired or otherwise made any distributions with respect to any shares of the
Acquired Fund as part of the transaction, or otherwise pursuant to a plan of
which the transaction is a part, other than redemptions and distributions made
in the ordinary course of Acquired Fund's business as an open-end investment
company. There is no plan or intention on the part of any stockholder of
Acquired Fund that owns beneficially 5% or more of the Acquired Fund Shares and,
to the best knowledge of management of Acquired Fund, there is no plan or
intention on the part of the remaining stockholders of Acquired Fund, in
connection with the transaction, to engage in any transaction with the Acquired
Fund, the Acquiring Fund, or any person treated as related to Acquired Fund or
Acquiring Fund under Treasury Regulation Section 1.368-1(e)(3) or any
partnership in which Acquired Fund, Acquiring Fund, or any person treated as
related to Acquired Fund or Acquiring Fund under Treasury Regulation Section
1.368-1(e)(3) is a partner involving the sale, redemption or exchange of any of
the Acquired Fund Shares or any of the Acquiring Fund Shares to be received in
the transaction, as the case may be.
4. In the transaction, Acquired Fund will transfer its assets and
liabilities to Acquiring Fund such that immediately following the transfer,
Acquiring Fund will possess all of the same assets and liabilities as were
possessed by Acquired Fund immediately prior to the transaction, except for
assets used to pay expenses incurred in connection with the transaction, assets
distributed to stockholders in redemption of their shares immediately preceding,
or in contemplation of, the transaction (other than redemptions and
distributions made in the ordinary course of Acquired Fund's business as an
open-end investment company) which, together with transaction expenses,
constitute less than 1% of the assets of Acquired Fund, and any liabilities not
assumed pursuant to the Agreement.
5. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquired Fund will not receive
any consideration from Acquiring Fund in connection with the acquisition of
Acquired Fund's assets other than the assumption of such Acquired Fund
Liabilities and the issuance of such Acquiring Fund Shares.
6. The Acquired Fund Liabilities assumed by Acquiring Fund plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business. Acquired Fund does not
have any liabilities of any kind other than the Acquired Fund Liabilities
assumed by the Acquiring Fund.
7. As of the Closing Date, the adjusted basis and the fair market value
of the Acquired Fund assets transferred to Acquiring Fund will equal or exceed
the sum of the Acquired Fund Liabilities assumed by Acquiring Fund within the
meaning of Section 357(d) of the Internal Revenue Code of 1986, as amended (the
"Code").
8. Acquired Fund currently conducts its historic business within the
meaning of Treasury Regulation section 1.368-1(d), which provides that, in
general, a corporation's historic business is the business it has conducted most
recently, but does not include a business that the corporation enters into as
part of a plan of reorganization. The Acquired Fund assets transferred to
Acquiring Fund will be a significant portion of Acquired Fund's historic
business assets within the meaning of Treasury Regulation section 1.368-1(d),
which provides that a corporation's historic business assets are the assets used
in its historic business.
9. Acquired Fund will distribute to its stockholders the Acquiring Fund
Shares it receives, and its other properties, if any, pursuant to the
transaction and will be liquidated promptly thereafter.
10. The expenses of Acquired Fund incurred by it in connection with the
transaction which are to be assumed by Acquiring Fund, if any, will be only such
expenses that are solely and directly related to the transaction in accordance
with Rev. Rul. 73-54, 1973-1 C.B. 187. Acquired Fund will not pay any expenses
incurred by its stockholders in connection with the transaction.
11. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
12. Acquired Fund has properly elected to be treated as a regulated
investment company under Subchapter M of the Code, has qualified for the special
tax treatment afforded regulated investment companies under Subchapter M of the
Code for each taxable year since inception, and qualifies as such as of the time
of the Closing on the Closing Date.
13. Acquired Fund meets the requirements of an investment company as
defined in Section 368(a)(2)(F) of the Code.
14. Acquired Fund 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 Code.
15. Acquired Fund does not pay compensation to any
stockholder-employee.
16. Immediately following the transaction, Acquired Fund stockholders
will own all of the outstanding Acquiring Fund Shares issued to Acquired Fund
pursuant to the transaction and will own such shares solely by reason of their
ownership of the Acquired Fund Shares immediately prior to the transaction.
17. Acquired Fund stockholders will not have dissenters' or appraisal
rights in the transaction.
18. The transaction is being undertaken for valid and substantial
business purposes, including facilitating the Acquired Fund becoming a member of
the Pioneer family of mutual funds, which, in the long term, is intended to
result in lower expenses and increased assets.
19. Acquired Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in the Acquired Fund.
* * * * *
B-2
The undersigned officer of Acquired Fund is authorized to make all of
the representations set forth herein, and the undersigned is authorized to
execute this certificate on behalf of Acquired Fund. The undersigned recognizes
that Xxxx and Xxxx LLP will rely upon the foregoing representations in
evaluating the United States federal income tax consequences of the transaction
and rendering its opinion pursuant to Section 8.5 of the Agreement. If, prior to
the date of the transaction, any of the representations set forth herein ceases
to be accurate, the undersigned agrees to deliver to Xxxx and Xxxx LLP
immediately a written notice to that effect.
XXXX SMALL & MID-CAP GROWTH FUND, INC.
By:
-------/s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: President
Dated: February 20, 2004
B-3
