AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this ____ day of _____________, by and between Federated Equity Funds, a
Massachusetts business trust, with its principal place of business at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX, 00000 (the "Federated Trust"), with respect to
its series, the Federated Capital Appreciation Fund (the "Acquiring Fund"), and
The Advisors' Inner Circle Fund, a Massachusetts business trust, with its
principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 (the
"Trust"), with respect to its series, the CB Core Equity Fund (the "Acquired
Fund" and, collectively with the Acquiring Fund, the "Funds"). Except for the
Acquired Fund and the Acquiring Fund, no other series of the Trust or the
Federated Trust, respectively, are parties to this Agreement.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of: (i) the transfer
of all of the assets of the Acquired Fund in exchange for Institutional Shares,
no par value per share, of the Acquiring Fund ("Acquiring Fund Shares"); and
(ii) the distribution of the Acquiring Fund Shares to the holders of Shares of
the Acquired Fund (the "Acquired Fund Shares") and the liquidation of the
Acquired Fund as provided herein, all upon the terms and conditions set forth in
this Agreement (the "Reorganization").
WHEREAS, each of the Acquiring Fund and the Acquired Fund is a separate
series of the Federated Trust and the Trust, respectively, and the Federated
Trust and the Trust are each open-end, registered management investment
companies and the Acquired Fund owns securities that generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, each of the Acquiring Fund and the Acquired Fund are authorized
to issue their shares of beneficial interest;
WHEREAS, the Trustees of the Federated Trust have determined that the
Reorganization, with respect to the Acquiring Fund, is in the best interests of
the Federated Trust and its series, the Acquiring Fund, and that the interests
of the existing shareholders of the Acquiring Fund will not be diluted as a
result of the Reorganization;
WHEREAS, the Trustees of the Trust have determined that the
Reorganization, with respect to the Acquired Fund, is in the best interests of
the Trust and its series, the Acquired Fund, and that the interests of the
existing shareholders of the Acquired Fund will not be diluted as a result of
the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE*I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND SHARES
AND LIQUIDATION OF THE ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein
and on the basis of the representations and warranties contained herein, the
Acquired Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to the Acquiring Fund. In exchange, the Acquiring Fund agrees: (i) to
deliver to the Acquired Fund the number of full and fractional Acquiring Fund
Shares, determined by (a) multiplying the Acquired Fund Shares outstanding by
(b) the ratio computed by dividing (x) the net asset value per share of the
Acquired Fund Shares by (y) the net asset value per share of the Acquiring Fund
Shares computed in the manner and as of the time and date set forth in paragraph
2.2. Holders of the Acquired Fund Shares will receive Acquiring Fund Shares.
Such transactions shall take place at the closing on the Closing Date provided
for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Acquired Fund to be
acquired by the Acquiring Fund shall consist of property having a value equal to
the total net assets of the Acquired Fund including, without limitation, cash,
securities, commodities, interests in futures and dividends or interest
receivable, owned by the Acquired Fund and any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the Closing Date.
The Trust has provided the Federated Trust with the most recent audited
financial statements of the Acquired Fund, which contain a list of all of the
Acquired Fund's assets as of the date of such statements. The Acquired Fund
hereby represents that as of the date of the execution of this Agreement, there
have been no changes in its financial position as reflected in such financial
statements other than those occurring in the ordinary course of business in
connection with the purchase and sale of securities, the issuance and redemption
of Acquired Fund shares and the payment of normal operating expenses, dividends
and capital gains distributions.
1.3 LIABILITIES TO BE DISCHARGED. The Acquired Fund will discharge all
of its liabilities and obligations prior to the Closing Date, including as
contemplated by paragraph 6.5 below.
1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date
as is conveniently practicable: (a) the Acquired Fund will distribute in
complete liquidation of the Acquired Fund, pro rata to its shareholders of
record, determined as of the close of business on the Closing Date (the
"Acquired Fund Shareholders"), all of the Acquiring Fund Shares received by the
Acquired Fund pursuant to paragraph 1.1; and (b) the Acquired Fund will
thereupon proceed to dissolve and terminate as set forth in paragraph 1.8 below.
Such distribution will be accomplished by the transfer of Acquiring Fund Shares
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 in the name of the
Acquired Fund Shareholders, and representing the respective pro rata number of
Acquiring Fund Shares due such shareholders. All issued and outstanding
Acquired Fund Shares will simultaneously be canceled on the books of the
Acquired Fund. The Acquiring Fund shall not issue certificates representing
Acquiring Fund Shares in connection with such transfer. After the Closing Date,
the Acquired Fund shall not conduct any business except in connection with its
termination.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund's transfer agent. Acquiring Fund Shares
will be issued simultaneously to the Acquired Fund, in an amount equal in value
to the aggregate net asset value of the Acquired Fund Shares, to be distributed
to Acquired Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the 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 REPORTING RESPONSIBILITY. Any reporting responsibility of the
Acquired Fund is and shall remain the responsibility of the Acquired Fund.
1.8 TERMINATION. The Acquired Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
paragraph 1.4.
1.9 BOOKS AND RECORDS. All books and records of the Acquired Fund,
including all books and records required to be maintained under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations thereunder,
shall be available to the Acquiring Fund from and after the Closing Date and
shall be turned over to the Acquiring Fund on or as soon as practicable
following the Closing Date.
ARTICLE*II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Acquired Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets at
the closing on the Closing Date, using the valuation procedures set forth in the
Federated Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information or such other valuation
procedures as shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of Acquiring
Fund Shares shall be the net asset value per share computed at the closing on
the Closing Date, using the valuation procedures set forth in the Federated
Trust's Declaration of Trust and the Acquiring Fund's then current prospectus
and statement of additional information, or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the Acquired Fund's
assets, shall be determined by (a) multiplying the shares outstanding of the
Acquired Fund by (b) the ratio computed by (x) dividing the net asset value per
share of the Acquired Fund Shares by (y) the net asset value per share of the
Acquiring Fund Shares determined in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations of value determined in
accordance with Paragraph 2.2 shall be made by State Street Bank and Trust
Company, on behalf of the Acquiring Fund and the Acquired Fund.
ARTICLE*III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on or about May 9, 2008, or
such other date(s) as the parties may agree to in writing (the "Closing Date").
All acts taking place at the closing shall be deemed to take place at 4:00 p.m.
Eastern Time on the Closing Date unless otherwise provided herein. The closing
shall be held at the offices of Federated Services Company, 0000 Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such other time and/or place as the
parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. Union Bank of California, as custodian for
the Acquired Fund (the "Custodian"), shall deliver at the Closing a certificate
of an authorized officer stating that: (a) the Acquired Fund's portfolio
securities, cash, and any other assets have been delivered in proper form to the
Acquiring Fund on the Closing Date; and (b) if applicable, all necessary taxes
including all applicable federal and state stock transfer stamps, if any, shall
have been paid, or provision for payment shall have been made, in conjunction
with the delivery of portfolio securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the
scheduled Closing Date, either: (a) the NYSE or another primary exchange on
which the portfolio securities of the Acquiring Fund or the Acquired Fund are
purchased or sold, shall be closed to trading or trading on such exchange shall
be restricted; or (b) trading or the reporting of trading on the NYSE or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date shall be postponed until the next Friday (which is a business day and which
is not the last Friday of the month) when trading is fully resumed and reporting
is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. Citigroup Fund Services, LLC, as
transfer agent for the Acquired Fund as of the Closing Date, shall deliver at
the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of Acquired Fund Shareholders, and the number
and percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver or
cause State Street Bank and Trust Company, its transfer agent, to issue and
deliver a confirmation evidencing Acquiring Fund Shares to be credited on the
Closing Date to the Secretary of the Trust or provide evidence satisfactory to
the Acquired Fund that the 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,
share certificates, receipts and other documents, if any, as such other party or
its counsel may reasonably request.
ARTICLE*IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND. The Trust, on behalf of the
Acquired Fund, represents and warrants to the Federated Trust, on behalf of the
Acquiring Fund, as follows:
a) The Acquired Fund is a legally designated, separate series of a statutory
trust duly organized and validly existing under the laws of The
Commonwealth of Massachusetts.
b) The Trust is registered as an open-end management investment company
under the 1940 Act, and the Trust's registration with the Securities and
Exchange Commission (the "Commission") as an investment company under the
1940 Act is in full force and effect.
c) The current prospectus and statement of additional information of the
Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations thereunder, and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
d) The Trust and the Acquired Fund are not in violation, and the execution,
delivery, and performance of this Agreement (subject to shareholder
approval) will not result in a violation, of any provision of the Trust's
Declaration of Trust or By-Laws or of any material agreement, indenture,
instrument, contract, lease, or other undertaking to which the Acquired
Fund is a party or by which it is bound.
e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement) that will be terminated with liability to it before
the Closing Date, except for liabilities, if any, to be discharged as
provided in paragraph 1.3 hereof.
f) Except as otherwise disclosed in writing to and accepted by the Acquiring
Fund, no litigation, administrative proceeding, or investigation by or
before any court or governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any of its properties
or assets, which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business, or the
ability of the Acquired Fund to carry out the transactions contemplated
by this Agreement. The Acquired Fund knows of no facts that might form
the basis for the institution of such proceedings and is not a party to
or subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially and adversely affects its
business or its ability to consummate the transactions contemplated
herein.
g) The financial statements of the Acquired Fund as of October 31, 2007, and
for the fiscal year then ended have been prepared in accordance with
generally accepted accounting principles, and audited by Ernst & Young
LLP, independent registered public accounting firm, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly
reflect the financial condition of the Acquired Fund as of such date, and
there are no known contingent liabilities of the Acquired Fund as of such
date that are not disclosed in such statements.
h) Since the date of the financial statements referred to in paragraph (g)
above, there have been no material adverse changes in the Acquired Fund's
financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business), or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date
such indebtedness was incurred, except as otherwise disclosed to and
accepted by the Acquiring Fund. For the purposes of this paragraph (h),
a decline in the net asset value of the Acquired Fund shall not
constitute a material adverse change.
i) As of the date hereof, except as previously disclosed to the Acquiring
Fund in writing, and except as have been corrected as required by
applicable law, and to the best of the Acquired Fund's knowledge, there
have been no material miscalculations of the net asset value of the
Acquired Fund or the net asset value per share during the twelve-month
period preceding the date hereof and preceding the Closing Date, and all
such calculations have been made in accordance with the applicable
provisions of the 1940 Act.
j) The minute books and other similar records of the Acquired Fund as made
available to the Acquiring Fund prior to the execution of this Agreement
contain a true and complete record of all action taken at all meetings
and by all written consents in lieu of meetings of the shareholders of
the Acquired Fund and of the Acquired Fund, the Acquired Fund's Board of
Trustees and committees of the Acquired Fund's Board of Trustees. The
stock transfer ledgers and other similar records of the Acquired Fund as
made available to the Acquiring Fund prior to the execution of this
Agreement, and as existing on the Closing Date, accurately reflect all
record transfers prior to the execution of this Agreement, or the Closing
Date, as applicable, in the shares of the Acquired Fund.
k) The Acquired Fund has maintained, or caused to be maintained on its
behalf, all books and records required of a registered investment company
in compliance with the requirements of Section 31 of the 1940 Act and
rules thereunder.
l) All federal and other tax returns and reports of the Acquired Fund
required by law to be filed prior to the date hereof have been filed (and
all federal or other tax returns and reports of the Acquired Fund
required by law to be filed from and after the date hereof to the Closing
Date will be filed), and all federal and other taxes shown due on such
returns and reports have been paid, or provision shall have been made for
the payment thereof. To the best of the Acquired Fund's knowledge, no
such return is currently under audit, and no assessment has been asserted
with respect to such returns.
m) All issued and outstanding shares of the Acquired Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquired Fund. All of the issued and outstanding shares of the Acquired
Fund will, at the time of the Closing Date, be held by the persons and in
the amounts set forth in the records of the Acquired Fund's transfer
agent as provided in paragraph 3.4. The Acquired Fund has no outstanding
options, warrants, or other rights to subscribe for or purchase any of
the Acquired Fund shares, and has no outstanding securities convertible
into any of the Acquired Fund shares.
n) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2, and full right, power, and authority to
sell, assign, transfer, and deliver such assets hereunder, free of any
lien or other encumbrance, and, upon delivery and payment for such
assets, and the filing of any articles, certificates or other documents
under the laws of The Commonwealth of Massachusetts, the Acquiring Fund
will acquire good and marketable title, subject to no restrictions on the
full transfer of such assets, other than such restrictions as might arise
under the 0000 Xxx.
o) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Acquired Fund.
Subject to approval by the Acquired Fund Shareholders, this Agreement
constitutes 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.
p) The information to be furnished by the Acquired Fund for use in no-action
letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with
the transactions contemplated herein shall not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make the statements, in light of
the circumstances under which such statements were made, not misleading
and shall comply in all material respects with the federal securities
laws and other applicable laws and regulations.
q) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Trust with respect to the Acquired Fund for use in the Proxy
Materials (as defined in paragraph 5.7), or any other materials provided
in connection with the Reorganization, does not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make the statements, in light of
the circumstances under which such statements were made, not misleading.
r) The Acquired Fund has elected to be taxed as and has qualified as a
"regulated investment company" under the Code (a "RIC"), as of and since
its first taxable year; has been a RIC under the Code at all times since
the end of its first taxable year when it so qualified; and qualifies and
will continue to qualify as a RIC under the Code for its taxable year
ending upon its liquidation and has computed its federal income tax under
Section 852 of the Code.
s) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the
"1934 Act"), the 1940 Act or Massachusetts law for the execution of this
Agreement by the Trust, for itself and on behalf of the Acquired Fund,
except for the effectiveness of the Registration Statement, and the
filing of any articles, certificates or other documents that may be
required under Massachusetts law, and except for such other consents,
approvals, authorizations and filings as have been made or received, and
such consents, approvals, authorizations and filings as may be required
subsequent to the Closing Date, it being understood, however, that this
Agreement and the transactions contemplated herein must be approved by
the shareholders of the Acquired Fund as described in paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Federated Trust, on
behalf of the Acquiring Fund, represents and warrants to the Trust, on behalf of
the Acquired Fund, as follows:
a) The Acquiring Fund is a legally designated, separate series of a business
trust, duly organized and validly existing under the laws of The
Commonwealth of Massachusetts.
b) The Federated Trust is registered as an open-end management investment
company under the 1940 Act, and the Federated Trust's registration with
the Commission as an investment company under the 1940 Act is in full
force and effect.
c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated or
necessary to make such statements therein, in light of the circumstances
under which they were made, not misleading.
d) The Acquiring Fund is not in violation, and the execution, delivery and
performance of this Agreement will not result in a violation, of the
Federated Trust's Declaration of Trust or By-Laws or of any material
agreement, indenture, instrument, contract, lease, or other undertaking
to which the Acquiring Fund is a party or by which it is bound.
e) Except as otherwise disclosed in writing to and accepted by the Acquired
Fund, no litigation, administrative proceeding or investigation by or
before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties
or assets, which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business or the
ability of the Acquiring Fund to carry out the transactions contemplated
by this Agreement. The Acquiring Fund knows of no facts that might form
the basis for the institution of such proceedings and it is not a party
to or subject to the provisions of any order, decree, or judgment of any
court or governmental body that materially and adversely affects its
business or its ability to consummate the transaction contemplated
herein.
f) The financial statements of the Acquiring Fund as of October 31, 2007,
and for the fiscal year then ended have been prepared in accordance with
generally accepted accounting principles, and such statements (copies of
which have been furnished to the Acquired Fund) fairly reflect the
financial condition of the Acquiring Fund as of such date, and there are
no known contingent liabilities of the Acquiring Fund as of such date
that are not disclosed in such statements.
g) Since the date of the financial statements referred to in paragraph (f)
above, there have been no material adverse changes in the Acquiring
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any incurrence
by the Acquiring Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For the purposes of this paragraph
(g), a decline in the net asset value of the Acquiring Fund shall not
constitute a material adverse change.
h) All federal and other tax returns and reports of the Acquiring Fund
required by law to be filed prior to the date hereof have been filed and
all federal and other tax returns and reports of the Acquiring Fund
required by law to be filed from and after the date hereof to the Closing
Date will be filed. All federal and other taxes shown due on such
returns and reports have been paid or provision shall have been made for
their payment. To the best of the Acquiring Fund's knowledge, no such
return is currently under audit, and no assessment has been asserted with
respect to such returns.
i) All issued and outstanding Acquiring Fund Shares are duly and validly
issued and outstanding, fully paid and non-assessable by the Acquiring
Fund. The Acquiring Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any Acquiring Fund Shares, and there
are no outstanding securities convertible into any Acquiring Fund Shares.
j) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Acquiring Fund, and
this Agreement constitutes 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.
k) 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, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable and no
shareholder of the Federated Trust has any preemptive right to
subscription or purchase in respect thereof.
l) The information to be furnished by the Acquiring Fund for use in
no-action letters, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions
contemplated herein shall not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
or necessary to make the statements, in light of the circumstances under
which such statements were made, not misleading and shall comply in all
material respects with the federal securities laws and other applicable
laws and regulations.
m) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Federated Trust with respect to the Acquiring Fund for use in the
Proxy Materials (as defined in paragraph 5.7), or any other materials
provided in connection with the Reorganization, does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the statements,
in light of the circumstances under which such statements were made, not
misleading.
n) The Acquiring Fund has elected to be taxed and has qualified as a RIC
under the Code as of and since its first taxable year; has been a RIC
under the Code at all times since the end of its first taxable year when
it so qualified; and qualifies and will continue to qualify as a RIC
under the Code for its current taxable year and has computed its federal
income tax under Section 852 of the Code.
o) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or Massachusetts
law for the execution of this Agreement by the Federated Trust, for
itself and on behalf of the Acquiring Fund, or the performance of the
Agreement by the Federated Trust, for itself and on behalf of the
Acquiring Fund, except for the effectiveness of the Registration
Statement, and the filing of any articles, certificates or other
documents that may be required under Massachusetts law, and such other
consents, approvals, authorizations and filings as have been made or
received, and except for such consents, approvals, authorizations and
filings as may be required subsequent to the Closing Date.
p) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and
any state Blue Sky or securities laws as it may deem appropriate in order
to continue its operations after the Closing Date.
ARTICLE*I
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and the Acquired
Fund will each operate its respective business in the ordinary course between
the date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends, shareholder
purchases and redemptions and such selling and purchasing of securities and
other changes as are contemplated by the Acquiring Fund's operations. No party
shall take any action that would, or reasonably would be expected to, result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of
the Acquired Fund Shareholders to consider and act upon this Agreement and to
take all other appropriate action necessary to obtain approval of the
transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will assist the
Acquiring Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Acquired Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will each take or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including any actions required to be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within sixty days after the Closing Date, the Acquired Fund shall
furnish 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 that will be carried over by the Acquiring Fund as a
result of Section 381 of the Code, and which will be certified by the Trust's
Treasurer.
5.7 PREPARATION OF FORM N-14. The Federated Trust will prepare and
file with the Commission a registration statement on Form N-14 relating to the
Acquiring Fund Shares to be issued to shareholders of the Acquired Fund (the
"Registration Statement"). The Registration Statement on Form N-14 shall
include a proxy statement and a prospectus of the Acquiring Fund relating to the
transaction contemplated by this Agreement. The Registration Statement shall be
in compliance with the 1933 Act, the 1934 Act and the 1940 Act, as applicable.
Each party will provide the other party with the materials and information
necessary to prepare the registration statement on Form N-14 (the "Proxy
Materials"), for inclusion therein, in connection with the meeting of the
Acquired Fund's Shareholders to consider the approval of this Agreement and the
transactions contemplated herein.
5.8 FINAL DIVIDEND. On or before the Closing Date, the Acquired Fund
shall declare and pay a dividend or dividends which, together with all previous
such dividends, shall have the effect of distributing to its shareholders all of
the Acquired Fund's investment company taxable income (computed without regard
to any deduction for dividends paid), if any, plus the excess, if any, of its
interest income excludible from gross income under Section 103(a) of the Code
over its deductions disallowed under Sections 265 and 171(a)(2) of the Code for
all taxable periods or years ending on or before the Closing Date, and all of
its net capital gains realized (after reduction for any capital loss carry
forward), if any, in all taxable periods or years ending on or before the
Closing Date.
5.9 TAX-FREE REORGANIZATION. It is the intention of the parties that
the transaction will qualify as a reorganization within the meaning of Section
368(a) of the Code. Neither the Trust, the Federated Trust, the Acquired Fund
nor the Acquiring Fund shall take any action or cause any action to be taken
(including, without limitation the filing of any tax return) that is
inconsistent with such treatment or results in the failure of the transaction to
qualify as a reorganization within the meaning of Section 368(a) of the Code.
At or prior to the Closing Date, the parties to this Agreement will take such
reasonable action, or cause such action to be taken, as is reasonably necessary
to enable Xxxx Xxxxx LLP to render the tax opinion contemplated in the
Agreement.
5.10 REASONABLE EFFORTS. Each of the Trust, the Federated Trust, the
Acquired Fund and the Acquiring Fund shall use its reasonable efforts to fulfill
or obtain the fulfillment of the conditions precedent to effect the transactions
contemplated by this Agreement.
5.11 AUTHORIZATIONS. The Acquiring Fund agrees to use all reasonable
efforts to obtain the approvals and authorizations required by the 1933 Act, the
1940 Act and any state blue sky or securities laws as it may deem appropriate in
order to operate in the normal course of business after the Closing Date.
ARTICLE*II
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by the Acquiring Fund
pursuant to this Agreement on or before the Closing Date and, in addition,
subject to the following conditions:
6.1 TRUE REPRESENTATIONS AND WARRANTIES. All representations,
covenants, and warranties of the Acquiring Fund contained in this Agreement
shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, with the same force and effect as if made on and as of the
Closing Date. The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in the Acquiring Fund's name by the Federated 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 such effect and as to such other matters as the Acquired Fund shall
reasonably request.
6.2 CORPORATE DOCUMENTS. The Acquiring Fund also
shall have delivered (or caused to be delivered) to the Acquired Fund, as
required by the Acquired Fund or its counsel, the following documents in the
name of the Acquiring Fund by the Federated Trust or by its officers, counsel or
service providers (as applicable): secretary's or assistant secretary's
certificate, copies of custodian and transfer agent instructions, custodian and
transfer agent acknowledgements of transfer or certificates, and other opinion,
certificate or document mutually agreed as necessary or appropriate to
consummate the reorganization under this Agreement.
6.3 CORPORATE OPINION. The Acquiring Fund shall have delivered on the
Closing Date a corporate opinion of Xxxx Xxxxx LLP, counsel to the Acquiring
Fund, in a form reasonably satisfactory to the Acquired Fund and its counsel,
dated as of the Closing Date, covering due existence, status as a series of the
Federated Trust, due authority, due authorization of the Federated Trust's
actions in connection with the delivery of validly issued, fully paid and non-
assessable shares of the Acquiring Fund to the Trust, registration status of the
Federated Trust, required approvals, enforceability, litigation, and material
compliance of the Registration Statement with relevant legal requirements, and
such other matters as reasonably requested by the Acquired Fund or its counsel.
Such opinion may rely on officer's and public official certifications and shall
be based on such customary assumptions and qualifications, and such
representations, as Xxxx Xxxxx LLP typically requests when providing similar
opinions.
6.4 FEES AND EXPENSES. All fees and expenses
associated with the participation of the Acquired Fund in the Reorganization
shall have been or, when due, will be paid in full by CB Investment Managers,
LLC (the "CB Adviser"), Federated Equity Management Company of Pennsylvania (the
"Federated Adviser") and/or their affiliates, as agreed separately between them.
6.5 SIDE LETTER. The side letter, dated February
, 2008 and in a form reasonably satisfactory to the Trust, by and between
the Trust, on behalf of the Acquired Fund, and the CB Adviser, which relates to
this Agreement and is being executed contemporaneously with this Agreement,
shall continue to remain in full force and effect.
ARTICLE*III
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by the Acquired Fund
pursuant to this Agreement, on or before the Closing Date and, in addition,
shall be subject to the following conditions.
7.1 TRUE REPRESENTATIONS AND WARRANTIES. All representations,
covenants, and warranties of the Acquired Fund contained in this Agreement shall
be true and correct in all material respects as of the date hereof and as of the
Closing Date, with the same force and effect as if made on and as of such
Closing Date. The Acquired Fund shall have delivered to the Acquiring Fund on
such Closing Date a certificate executed in the Acquired Fund's name by the
Trust's President or Vice President and the Treasurer or Assistant Treasurer, in
form and substance satisfactory to the Acquiring Fund and dated as of such
Closing Date, to such effect and as to such other matters as the Acquiring Fund
shall reasonably request.
7.2 STATEMENT OF ASSETS AND LIABILITIES. The Acquired Fund shall have
delivered to the Acquiring Fund a statement of the Acquired Fund's assets and
liabilities, together with a list of the Acquired Fund's portfolio securities
showing the tax costs of such securities by lot and the holding periods of such
securities, as of the Closing Date, certified by the Treasurer of the Trust.
7.3 CORPORATE DOCUMENTS. The Acquired Fund also shall have delivered
(or caused to be delivered) to the Acquiring Fund, as required by the Acquiring
Fund or its counsel, the following documents in the name of the Acquired Fund by
the Trust or by its officers, counsel or service providers (as applicable): A
xxxx of sale and assignment, treasurer's certificate, chief financial officer
certificate, secretary's or assistant secretary's certificate, copies of
custodian and transfer agent instructions, custodian and transfer agent
acknowledgements of transfer or certificates, tax representation certificates,
and any opinion, certificate or document mutually agreed as necessary or
appropriate to consummate the reorganization under this Agreement.
7.4 CORPORATE OPINION. The Acquired Fund shall have delivered on the
Closing Date a corporate opinion of Xxxxxx, Xxxxx & Bockius LLP, counsel to the
Acquired Fund, in a form reasonably satisfactory to the Acquiring Fund and its
counsel, dated as of the Closing Date covering due existence, status as a series
of the Trust, due authority, registration status of the Trust, required
approvals, enforceability, litigation, and material compliance of the
Registration Statement with relevant legal requirements, and such other matters
as reasonably requested by the Acquiring Fund or its counsel. Such opinion may
rely on officer's and public official certifications and shall be based on such
customary assumptions and qualifications, and such representations, as Xxxxxx,
Xxxxx & Xxxxxxx LLP typically requests when providing similar opinions.
7.5 FEES AND EXPENSES. All fees and expenses
associated with the participation of the Acquiring Fund in the Reorganization
contemplated by this Agreement shall have been or, when due will be, paid in
full by CB Adviser, the Federated Adviser and/or their affiliates, as agreed
separately between them.
ARTICLE*IV
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 SHAREHOLDER VOTE. This Agreement and the transactions contemplated
herein, with respect to the Acquired Fund, shall have been approved by the
requisite vote of the holders of the outstanding shares of the Acquired Fund in
accordance with applicable law and the provisions of the Trust's Declaration of
Trust and By-Laws. Certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may
waive the conditions set forth in this paragraph 8.1.
8.2 ORDERS AND PROCEEDINGS. On the Closing Date, the Commission shall
not have issued an unfavorable report under Section 25(b) of the 1940 Act, or
instituted any proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act.
Furthermore, no action, suit or other proceeding shall be threatened or 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 CONSENTS. All required 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 securities authorities,
including any necessary "no-action" positions and exemptive orders from such
federal and state authorities) to permit consummation of the transactions
contemplated herein 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 the Acquiring Fund or the Acquired Fund,
provided that either party hereto may waive any such conditions for itself.
8.4 EFFECTIVE REGISTRATION STATEMENT. The Registration Statement shall
have become effective under the 1933 Act, and no stop orders suspending the
effectiveness thereof shall have been issued. To the best knowledge of the
parties to this Agreement, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated under the 0000
Xxx.
8.5 The parties shall have received an opinion of Xxxx Xxxxx LLP
substantially to the effect that for federal income tax purposes:
a) The transfer of all of the Acquired Fund's assets to the Acquiring Fund
solely in exchange for Acquiring Fund Shares (followed by the
distribution of Acquiring Fund Shares to the Acquired Fund Shareholders
in dissolution and liquidation of the Acquired Fund) will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
the Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
b) No gain or loss will be recognized by the Acquiring Fund upon the receipt
of the assets of the Acquired Fund solely in exchange for Acquiring Fund
Shares.
c) No gain or loss will be recognized by the Acquired Fund upon the transfer
of the Acquired Fund's assets to the Acquiring Fund solely in exchange
for Acquiring Fund Shares or upon the distribution (whether actual or
constructive) of Acquiring Fund Shares to Acquired Fund Shareholders in
exchange for their Acquired Fund Shares.
d) No gain or loss will be recognized by any Acquired Fund Shareholder upon
the exchange of its Acquired Fund Shares for Acquiring Fund Shares.
e) The aggregate tax basis of the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the same
as the aggregate tax basis of the Acquired Fund Shares held by it
immediately prior to the Reorganization. The holding period of Acquiring
Fund Shares received by each Acquired Fund Shareholder will include the
period during which the Acquired Fund Shares exchanged therefor were held
by such shareholder, provided the Acquired Fund Shares are held as
capital assets at the time of the Reorganization.
f) The tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization. The holding period of the
assets of the Acquired Fund in the hands of the Acquiring Fund will
include the period during which those assets were held by the Acquired
Fund.
g) Pursuant to Section 381 of the Code and Treasury Regulations thereunder,
the Acquiring Fund will succeed to and take into account the items of the
Acquired Fund described in Section 381(c) of the Code, subject to the
provisions and limitations specified in Sections 381, 382, 383 and 384 of
the Code and the regulations thereunder.
Such opinion shall reference this Agreement, and the documents
referenced herein, and shall be based on customary assumptions and such
representations as Xxxx Xxxxx LLP may reasonably request, and the Acquired Fund
and Acquiring Fund will cooperate to make and certify the accuracy of such
representations. The foregoing opinion may state that no opinion is expressed
as to the effect of the Reorganization on the Acquiring Fund, the Acquired Fund
or any Acquired Fund Shareholder with respect to any asset as to which
unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a xxxx-to-market system of accounting. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may
waive the conditions set forth in this paragraph 8.5.
ARTICLE*I
EXPENSES
9.1 All fees and expenses incurred directly in connection with the
consummation of the Reorganization and the transactions contemplated by this
Agreement will be borne by the investment adviser to the Acquiring Fund and the
Acquired Fund as agreed between them, without regard to whether the
Reorganization is consummated, provided, however, that the Acquiring Fund shall
bear expenses associated with the qualification of Acquiring Fund Shares for
sale in the various states. Reorganization expenses include, without
limitation: (a) expenses associated with the preparation and filing of the
Proxy Materials; (b) postage; (c) printing; (d) accounting fees; (e) legal fees
incurred by each Fund; (f) solicitation costs of the transaction; and (g) other
related administrative or operational costs. The CB Adviser agrees that all
such fees and expenses so borne and paid by the investment adviser of either
Fund, as the case may be, shall be paid directly by such investment adviser to
the relevant providers of services or other payees in accordance with the
principles set forth in the Internal Revenue Service Rev. Ruling 73-54, 1973-1
C.B. 187. Fees and expenses not incurred directly in connection with the
consummation of the transactions contemplated by this Agreement will be borne by
the party incurring such fees and expenses. Notwithstanding the foregoing,
expenses will in any event be paid by the party directly incurring such expenses
if and to the extent that the payment by the other party of such expenses would
result in the disqualification of the Acquired Fund or the Acquiring Fund, as
the case may be, as a "regulated investment company" within the meaning of
Section 851 of the Code. Acquired Fund shareholders will pay their respective
expenses, if any, incurred in connection with the transactions contemplated by
this Agreement. Neither the Acquired Fund nor the Acquiring Fund will pay the
Acquiring Fund shareholders' expenses, if any.
ARTICLE*II
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Federated Trust, on behalf of the Acquiring Fund, and the
Trust, on behalf of the Acquired Fund, agree that neither party has made to the
other party any representation, warranty and/or covenant not set forth herein,
and that this Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in this
paragraph 10.2, the representations, warranties, and covenants contained in this
Agreement or in any document delivered pursuant to or in connection with this
Agreement, shall not survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing Date, shall continue
in effect beyond the consummation of the transactions contemplated hereunder.
ARTICLE*III
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Federated Trust and the Trust. In addition, either the Federated Trust or the
Trust may at its option terminate this Agreement at or before the Closing Date
due to:
a) a breach by the other of any representation, warranty, or agreement
contained herein to be performed at or before the Closing Date, if not
cured within 30 days;
b) a condition herein expressed to be precedent to the obligations of the
terminating party that has not been met and it reasonably appears that it
will not or cannot be met; or
c) a determination by a party's Board of Trustees, as appropriate, that the
consummation of the transactions contemplated herein is not in the best
interest of the Trust or the Federated Trust, respectively, and notice
given to the other party hereto.
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of any of the
Acquiring Fund, the Acquired Fund, the Federated Trust, the Trust, or their
respective Trustee or officers, to the other party or its Trustee or officers.
ARTICLE*I
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the officers of the Trust
and the Federated Trust as specifically authorized by their respective Board of
Trustees; provided, however, that following the meeting of the Acquired Fund
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 for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
ARTICLE*II
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
13.1 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.
13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
13.5 It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Federated Trust personally, but shall bind
only the Trust property of the Acquiring Fund, as provided in the Declaration of
Trust of the Federated Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of the Federated Trust on behalf of the
Acquiring Fund and signed by authorized officers of the Federated Trust, acting
as such. Neither the authorization by such Trustees nor the execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the Trust property of the Acquiring Fund as provided in the Federated
Trust's Declaration of Trust.
13.6 It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
Trust property of the Acquired Fund, as provided in the Declaration of Trust of
the Trust. The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust on behalf of the Acquired Fund and signed by
authorized officers of the Trust, acting as such. Neither the authorization by
such Trustees nor the execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the Trust property of the Acquired Fund as
provided in the Trust's Declaration of Trust.
1
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as
of the date first written above.
THE ADVISORS' INNER CIRCLE FUND
on behalf of its portfolio,
CB Core Equity Fund
______________________
Xxxxxxx Xxxx, Secretary
FEDERATED EQUITY FUNDS
on behalf of its portfolio,
Federated Capital Appreciation Fund
______________________
Xxxx X. XxXxxxxxx, Secretary
CB Adviser agrees to the provisions of
Article IX and paragraphs 6.4, 6.5 and
7.5 herein:
CB INVESTMENT MANAGERS, LLC
______________________, Officer
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