AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of the 9th day of January, 2006, by and between Pioneer Small Cap Value Fund, a
Delaware statutory trust (the "Acquiring Fund"), with its principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Pioneer Small
Company Fund, a Delaware statutory trust (the "Acquired Fund"), with its
principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 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 a
"reorganization" as defined in Section 368(a)(1)(C) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund solely in exchange for (A) the issuance of Class A, Class B, Class C and
Class R 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 all of the liabilities of
the Acquired Fund on the closing date of the Reorganization (the "Closing Date")
(collectively, the "Assumed Liabilities"), and (2) the distribution by the
Acquired Fund, on or promptly after the Closing Date as provided herein, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation
and dissolution of the Acquired Fund, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Fund and the Acquired Fund are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of the Acquiring Fund and the Acquired
Fund have determined that the Reorganization is in the best interests of the
Acquired Fund shareholders and the Acquiring Fund shareholders, respectively,
and is not dilutive of the interests of those shareholders.
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
TERMINATION 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, of each class with an aggregate net asset
value ("NAV") equal to the NAV of the Acquired Fund attributable to the
corresponding class of the Acquired Fund's shares, as determined in the manner
set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities.
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 and choses in action of the Acquired Fund or the Acquired Fund in respect
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 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) and agrees not to acquire any
portfolio security that is not an eligible investment for, or that would violate
an investment policy or restriction of, the Acquiring Fund.
1.3 The Acquired Fund will endeavor to discharge all of its known liabilities
and obligations that are or will become due prior to the 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 shareholders of record, determined as of the close of regular trading on
the New York Stock Exchange on the Closing Date (the "Acquired Fund
Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant
to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number
of Acquiring Fund Shares of the class corresponding to the class of shares of
beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by
such Acquired Fund Shareholder that have an aggregate NAV equal to the aggregate
NAV of the Acquired Fund Shares held of record by such Acquired Fund Shareholder
on the Closing Date. Such liquidation and distribution will be accomplished by
the Acquired Fund instructing the Acquiring Fund to transfer 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 Shareholders and representing the respective pro rata
number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The
Acquired Fund shall promptly provide the Acquiring Fund with evidence of such
liquidation and distribution. All issued and outstanding Acquired Fund Shares
will simultaneously be cancelled on the books of the Acquired Fund, and the
Acquired Fund will be dissolved. 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. Any certificates representing ownership of
Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed
to be cancelled and shall no longer evidence ownership of Acquired Fund Shares.
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 Any reporting responsibility of the Acquired Fund with respect to the
Acquired Fund for taxable periods ending on or before the Closing Date,
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.
2. VALUATION
2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund shall,
in each case, be determined as of the close of regular trading on the New York
Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the
"Valuation Time"). Pioneer Investment Management, Inc. (the "Acquiring Fund
Adviser") shall compute the NAV per Acquiring Fund Share 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. The Acquiring Fund Adviser shall compute the NAV per share of the
Acquired Fund in the manner set forth in the Acquiring Fund's Declaration of
Trust, or By-laws, and the Acquiring Fund's then-current prospectus and
statement of additional information. The Acquiring Fund Adviser shall confirm to
the Acquiring Fund the NAV of the Acquired Fund.
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 Fund, 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 Administrator, respectively, to deliver a copy of
its valuation report to the other party at Closing. All computations of value
shall be made by the Acquiring Fund Adviser and the Acquired Fund Administrator
in accordance with its regular practice as pricing agent for the Acquiring Fund
and the Acquired Fund, respectively.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be January 20, 2006, or such later date as the
parties may agree to in writing. All acts necessary to consummate the
Reorganization (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 shall be held at the offices of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx
XXX, xxxxxxxXxxxxx00 Xxxxx Xxxxxx, XxxxXxxxxx, XxxxxXxxxxxxxxxxxx, or at such
other place as the parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the name
of Xxxxx Brothers Xxxxxxxx & Co. (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. Such portfolio
securities 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 by the Acquired Fund Custodian through the Depository Trust
Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian
recording the beneficial ownership thereof by the Acquiring Fund on the
Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired
Fund Custodian transmitting immediately available funds by wire transfer to the
Acquiring Fund Custodian the cash balances maintained by the Acquired Fund
Custodian and the Acquiring Fund Custodian crediting such amount to the account
of the Acquiring Fund.
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
has been made in conjunction with the delivery of portfolio securities as part
of the Acquired Assets.
3.4 If 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 Fund 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
Shareholders and the number and percentage ownership of outstanding Acquired
Fund Shares owned by each Acquired Fund Shareholder 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 "Shareholder List") as
being an accurate record of the information (a) provided by the Acquired Fund
Shareholders, (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 a disclosure schedule previously provided by the
Acquired Fund to the Acquiring Fund, 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 business trust validly existing and in good standing
under the laws of the State of Delaware and has the power to own all of its
properties and assets and, subject to approval by the Acquired Fund's
shareholders, 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;
(c) The Acquired Fund is not in violation of, and the execution and delivery of
this Agreement and the performance of its obligations under this Agreement in
respect of the Acquired Fund will not result in a violation of, any provision of
the Acquired Fund's Declaration of Trust 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 any of 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 that might form the 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 contemplated herein or would be binding
upon the Acquiring Fund as the successor to 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 operations and changes in net assets, as of and for the
fiscal year ended October 31, 2005, have been audited by an independent
registered public accounting firm retained by the Acquired Fund, and are in
accordance with generally accepted accounting principles ("GAAP") consistently
applied and 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, and all known liabilities, whether actual or contingent, of
the Acquired Fund as of the date thereof are disclosed therein. The Statement of
Assets and Liabilities 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-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 will be required to be disclosed in the Acquiring Fund's Form
N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically disclosed in
the Acquired Fund's prospectus, its statement of additional information as in
effect on the date of this Agreement, or its annual report for the period ended
October 31, 2005, 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
decline in NAV per Acquired Fund Share arising out of its normal investment
operations or a decline in market values of securities in the Acquired Fund's
portfolio or a decline in net assets of the Acquired Fund as a result of
redemptions shall not constitute a material adverse change;
(h) (A) For each taxable year of its operation since its inception, the Acquired
Fund has satisfied, and for the current taxable year it will satisfy, the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company. The Acquired Fund 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 (as defined below) that it was
required to file, and all such Tax Returns were complete and accurate in all
material 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) 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, to its knowledge, 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. The 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, as
defined in paragraph 5.7, rather than 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
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 will not have taken or agreed to take any action, and will
not be aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in the Acquired Fund Representation
Certificate to be delivered pursuant to paragraph 7.4;
(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's Tax attributes are not limited 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
(O) For purposes of this Agreement, "Taxes" or "Tax" 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) All issued and outstanding Acquired Fund Shares are, and at the Closing Date
will be, legally issued and outstanding, fully paid and nonassessable by the
Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at
the time of Closing, be held of record by the persons and in the amounts set
forth in the Shareholder 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 Acquired Fund Shares,
nor is there outstanding any security convertible into any Acquired Fund Shares;
(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 trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the Acquired Fund's Board of Trustees, and, subject to the
approval of the Acquired Fund's shareholders, assuming due authorization,
execution and delivery by the Acquiring Fund, this Agreement will constitute a
valid and binding obligation of the Acquired 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;
(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 and shall comply in all
material respects with federal securities and other laws and regulations
applicable thereto;
(m) The information included in the proxy statement (the "Proxy Statement")
forming part of the Acquiring Fund's Registration Statement on Form N-14 filed
in connection with this Agreement (the "Registration Statement") that has been
furnished in writing by the Acquired Fund to the Acquiring Fund 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 or the Acquired Fund of the transactions
contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Fund Shares have been offered for
sale and sold in compliance in all material respects 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
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 materially
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
with respect to 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) 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 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
(s) The tax representation certificate to be delivered by Acquired Fund to the
Acquiring Fund and Xxxxxx Xxxxxx Xxxxxxxxx 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 a disclosure schedule previously provided by the
Acquiring Fund to the Acquired Fund, 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 Fund is a statutory trust duly organized, validly existing and
in good standing under the laws of the State of Delaware. The
Acquiring Fund 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. Each of the Acquiring Fund and 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;
(b) The Acquiring 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;
(c) The current prospectus and statement of additional information of the
Acquiring Fund and each prospectus and statement of additional information for
the Acquiring Fund used during the three years previous to the date of this
Agreement, and any amendment or supplement to any of the foregoing, conform or
conformed at the time their distribution to the public 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 and do not or did
not at the time of their distribution to the public include 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 under which they were made, not materially misleading;
(d) The Acquiring Fund'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 the effective date thereof 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;
(e) The Registration Statement, the Proxy Statement and statement of additional
information with respect to the Acquiring Fund, and any amendments or
supplements thereto in effect 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 or will include 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;
(f) 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 the Acquiring Fund to which
the Acquiring Fund is a party or by which the Acquiring Fund or any of its
assets is bound;
(g) 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 that might form the basis for the institution
of such proceedings. Neither the Acquiring Fund nor the Acquiring Fund is 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;
(h) The statement of assets and liabilities of the Acquiring Fund, and the
related statements of operations and changes in net assets, as of and for the
fiscal year ended November 30, 2004 have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with GAAP
consistently applied and fairly reflect, in all material respects, the financial
condition of the Acquiring Fund as of such date and the results of its
operations for the period then ended, and all known liabilities, whether actual
or contingent, of the Acquiring Fund as of the date thereof are disclosed
therein;
(i) Since the most recent fiscal year end, except as specifically disclosed in
the Acquiring Fund's prospectus, its statement of additional information as in
effect on the date of this Agreement, or its semi-annual report for the period
ended May 31, 2005, there has not been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities, business or
prospects, or any incurrence by the Acquiring 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 (i) (but not for any other purpose of this
Agreement), a decline in NAV per Acquiring Fund Share arising out of its normal
investment operations or a decline in market values of securities in the
Acquiring Fund's portfolio or a decline in net assets of the Acquiring Fund as a
result of redemptions shall not constitute a material adverse change;
(j) (A) For each taxable year of its operation since its inception, the
Acquiring Fund has satisfied, and for the current taxable year it will satisfy,
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company 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
Acquiring 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 Acquiring
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 Acquiring 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 material respects.
The Acquiring Fund has not been informed by any jurisdiction that the
jurisdiction believes that the Acquiring Fund was required to file any Tax
Return that was not filed; and the Acquiring Fund does not know of any basis
upon which a jurisdiction could assert such a position;
(C) The Acquiring Fund has timely paid, in the manner prescribed by law, all
Taxes that were due and payable or that were claimed to be due;
(D) All Tax Returns filed by the Acquiring Fund constitute complete and accurate
reports of the respective liabilities for Taxes and all attributes of the
Acquiring 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) The Acquiring Fund has not waived or extended any applicable statute of
limitations relating to the assessment or collection of Taxes;
(F) The Acquiring Fund has not been notified that any examinations of the Tax
Returns of the Acquiring Fund are currently in progress or threatened, and no
deficiencies have been asserted or assessed against the Acquiring Fund as a
result of any audit by the Internal Revenue Service or any state, local or
foreign taxing authority, and, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquiring Fund has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquiring 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 Acquiring
Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The unpaid Taxes of the Acquiring 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 in the financial statements referred to in
paragraph 4.2(h). All Taxes that the Acquiring 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 Acquiring Fund has delivered to Acquired Fund or made available to
Acquired Fund complete and accurate copies of all Tax Returns of the Acquiring
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 Acquiring Fund. The Acquiring
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 Acquiring 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
resulting in an adjustment to its taxable income pursuant to Section 481 of the
Code. The Acquiring 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 Acquiring Fund will not have taken or agreed to take any action, and
will not be aware of any agreement, plan or other circumstance, that is
inconsistent with the representations set forth in the Acquiring Fund Tax
Representation Certificate to be delivered pursuant to paragraph 6.3;
(L) There are (and as of immediately following the Closing there will be) no
liens on the assets of the Acquiring Fund relating to or attributable to Taxes,
except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquiring Fund are accurately reflected
on the Acquiring Fund's Tax books and records;
(N) The Acquiring Fund's Tax attributes are not limited 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;
(k) 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 Acquiring Fund Shares
to be issued and delivered to the Acquired Fund for the account of the Acquired
Fund Shareholders pursuant to the terms of this Agreement will have been duly
authorized on the Closing Date and, when so issued and delivered, will be
legally issued and outstanding, 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 Acquiring Fund shares;
(l) All issued and outstanding Acquiring Fund Shares are, and on the Closing
Date will be, legally issued, fully paid and non-assessable and have been
offered and sold in every state and the District of Columbia in compliance in
all material respects with all applicable federal and state securities laws;
(m) 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 have been duly authorized by all necessary action
on the part of the Acquiring Fund's Board of Trustees, 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;
(n) The information to be furnished in writing 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;
(o) 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;
(p) 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 Acquiring 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 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;
(q) 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 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
(r) The tax representation certificate to be delivered by the Acquiring Fund to
the Acquired Fund and Xxxxxx Xxxxxx Xxxxxxxxx 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.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary
course of business 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 other distributions and any other
dividends and other distributions necessary or advisable (except to the extent
dividends or other 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 the Acquired Fund's
shareholders 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. The Acquired Fund will provide the Acquiring Fund with
information reasonably requested 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 Shares.
5.6 Subject to the provisions of this Agreement, each 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 a
statement of assets and liabilities of the Acquired Fund ("Statement of Assets
and Liabilities") as of the Closing Date setting forth the NAV (as computed
pursuant to Paragraph 2.1) of the Acquired Fund 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 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 From and after the date of this Agreement and until the Closing Date, each
of the Funds and the Acquired Fund and the Acquiring Fund 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)(C) of the Code and shall not take any position inconsistent
with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it 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 it from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns
for taxable periods that end on or before the Closing Date and shall timely
file, or cause to be timely filed, all such Tax Returns. Each Fund shall make
any payments of Taxes required to be made by it 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 Fund contained in this
Agreement shall be true and correct in all material respects as of the date
hereof (in each case, as such representations and warranties would read as if
all qualifications as to materiality were deleted therefrom) 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 on the Closing
Date a certificate of the Acquiring Fund executed in its name by its 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 Fund made in
this Agreement are true and correct in all material respects 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 Article 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 Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP an Acquiring Fund Tax Representation
Certificate, satisfactory to the Acquiring Fund and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx
and Xxxx LLP, in a form mutually acceptable to the Acquiring Fund and the
Acquired Fund, concerning certain tax-related matters with respect to the
Acquired Fund;
6.4 The Board of Trustees of the Acquiring Fund shall have determined that the
Reorganization is in the best interests of the Acquiring Fund and, based upon
such determination, shall have approved this Agreement and the transactions
contemplated hereby; and
6.5 The Acquired Fund shall have received at the Closing a favorable opinion as
to the due authorization of this Agreement by the Acquiring Fund and related
matters of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the 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 shall be true and correct in all material respects as of the date
hereof (in each case, as such representations and warranties would read as if
all qualifications as to materiality were deleted therefrom) 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 of the Acquired Fund executed in its name by its President or
Vice President 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 in all material respects 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
Article 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 Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP an Acquired Fund Tax Representation
Certificate, satisfactory to the Acquiring Fund and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx
and Xxxx LLP, in a form mutually acceptable to the Acquiring Fund and the
Acquired Fund, concerning certain tax-related matters with respect to the
Acquired Fund; and
7.5 The Board of Trustees of the Acquired Fund shall have determined that the
Reorganization is in the best interests of the Acquired Fund and, based upon
such determination, shall have approved this Agreement and the transactions
contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does 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 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Fund's shareholders in accordance
with the provisions of the Acquired Fund's Declaration of Trust and By-Laws, and
certified copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders 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 The Acquiring Fund's Registration Statement on Form N-14 shall have become
effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement 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 Xxxxxx Xxxxxx Xxxxxxxxx Xxxx
and Xxxx LLP, satisfactory to the Acquired 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
Shareholders in exchange for their Acquired Fund Shares and the termination of
the Acquired Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code.
8.6 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
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 50% of the expenses incurred in connection with the Reorganization
(including, but not limited to, the preparation of the proxy statement and
solicitation expenses). Each of the Acquired Fund and the Acquiring Fund agrees
to pay 25% of the expenses incurred in connection with the Reorganization
(including, but not limited to, the preparation of the proxy statement and
solicitation expenses).
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund each agrees 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.
10.2 The representations and warranties contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith shall not survive
the consummation of the transactions contemplated hereunder.
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
shareholders;
(d) by resolution of the Acquired 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 Acquired Fund's
shareholders; or
(e) if the transactions contemplated by this Agreement shall not have occurred
on or prior to June 30, 2006 or such other date as the parties may mutually
agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund, the Acquiring Fund, the Acquired Fund
or the Acquired Fund, or the trustees or officers of the Acquired Fund, or the
Acquiring 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 Fund; provided, however, that following the
meeting of the Acquired Fund's shareholders called by the Acquired Fund 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 Shareholders under
this Agreement to their detriment 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
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund and the
Acquiring Fund at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
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
internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
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 Fund shall not be binding upon any of their respective trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
to the 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 the Declaration
of Trust of the Acquired Fund, respectively. The execution and delivery of this
Agreement have been authorized by the trustees of the Acquiring Fund and of the
Acquired Fund and this Agreement has been executed by authorized officers of the
Acquiring Fund and the Acquired Fund, acting as such, and neither such
authorization by such trustees 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 property of the
Acquiring Fund and the Acquired Fund, as the case may be, as provided in the
trust instruments of the Acquiring Fund and the Declaration of Trust of the
Acquired Fund, respectively.
* * * * *
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: PIONEER SMALL COMPANY FUND
By: /s/Xxxxxxxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Assistant Secretary Title: Executive Vice President
Attest: PIONEER SMALL CAP VALUE FUND
By: /s/Xxxxxxxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Assistant Secretary Title: Executive Vice President
