EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this 26th
day of February, 2003, by and between Xxxx Xxxxxxx Variable Series Trust I, a
Massachusetts business trust (the "Trust II"), with its principal place of
business at Xxxx Xxxxxxx Xxxxx, X.X. Xxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000, on
behalf of its series _______________________ (the "Acquiring Fund") and Xxxx
Xxxxxxx Declaration Trust, a Massachusetts business trust (the "Trust") with its
principal place of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, on behalf of its series _________________________ (the "Acquired Fund").
The Acquiring Fund and the Acquired Fund are sometimes referred to collectively
herein as the "Funds" and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of "reorganization,"
as such term is used in Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization will consist of: (1) the transfer of
all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely
for (A) the issuance of shares of beneficial interest of the Acquiring Fund (the
"Acquiring Fund Shares") to the Acquired Fund and (B) the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund, followed by (2)
the distribution by the Acquired Fund, on or promptly after the Closing Date
hereinafter referred to, of the Acquiring Fund Shares to the shareholders of the
Acquired Fund in liquidation and termination of the Acquired Fund as provided
herein, all upon the terms and conditions set forth in this Agreement.
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 ASSUMPTION OF
LIABILITIES AND ISSUANCE OF ACQUIRING FUND SHARES; LIQUIDATION OF THE
ACQUIRED FUND
1.1 The Acquired Fund will transfer all of its assets (consisting, without
limitation, of portfolio securities and instruments, dividends and
interest receivables, cash and other assets), as set forth in the
statement of assets and liabilities referred to in Paragraph 7.2 hereof
(the "Statement of Assets and Liabilities"), to the Acquiring Fund free
and clear of all liens and encumbrances, except as otherwise provided
herein, in exchange for (i) the assumption by the Acquiring Fund of the
known and unknown liabilities of the Acquired Fund, including the
liabilities set forth in the Statement of Assets and Liabilities (the
"Acquired Fund Liabilities"), which shall be assigned and transferred to
the Acquiring Fund by the Acquired Fund and assumed by the Acquiring
Fund, and (ii) delivery by the Acquiring Fund to the Acquired Fund, for
distribution pro rata by the Acquired Fund to its shareholders in
proportion to their respective ownership of shares of beneficial interest
of the Acquired Fund, as of the close of business on April 25, 2003
[April 30, 2003 for V.A. Financial Industries Fund] (the "Closing Date"),
of a number of the Acquiring Fund Shares having an aggregate net asset
value equal to the value of the assets, less such liabilities (herein
referred to as the "net value of the assets") assumed, assigned and
delivered, all determined as provided in Paragraph 2.1 hereof and as of a
date and time as specified therein. Such transactions shall take place at
the closing provided for in Paragraph 3.1 hereof (the "Closing"). All
computations with respect to the Acquiring Fund shall be provided by
State Street Bank and Trust Company (the "Acquiring Fund's Custodian"),
as custodian and pricing agent for the Acquiring Fund and, and with
respect to the Acquired Fund by the Bank of New York (the "Acquired
Fund's Custodian).
1.2 The Acquired Fund has provided the Acquiring Fund with a list of the
current securities holdings of the Acquired Fund as of the date of
execution of this Agreement. The Acquired Fund reserves the right to sell
any of these securities (except to the extent sales may be limited by
representations made in connection with issuance of the tax opinion
provided for in paragraph 8.6 hereof) but will not, without the prior
approval of the Acquiring Fund, acquire any additional securities other
than securities of the type in which the Acquiring Fund is permitted to
invest.
1.3 The Acquiring Fund and the Acquired Fund shall each bear its own expenses
in connection with the transactions contemplated by this Agreement.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Acquired Fund will liquidate and distribute pro
rata to shareholders of record (the "Acquired Fund shareholders"),
determined as of the close of regular trading on the New York Stock
Exchange on the Closing Date, the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Such liquidation and
distribution will be accomplished by the transfer of 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 in the names of the Acquired Fund shareholders and
representing the respective pro rata number of Acquiring Fund Shares due
such shareholders. The Acquiring Fund shall not issue certificates
representing Acquiring Fund Shares in connection with such exchange.
1.5 The Acquired Fund shareholders holding certificates representing their
ownership of shares of beneficial interest of the Acquired Fund shall
surrender such certificates or deliver an affidavit with respect to lost
certificates in such form and accompanied by such surety bonds as the
Acquired Fund may require (collectively, an "Affidavit"), to Xxxx Xxxxxxx
Signature Services, Inc. prior to the Closing Date. Any Acquired Fund
share certificate which remains outstanding on the Closing Date shall be
deemed to be canceled, shall no longer evidence ownership of shares of
beneficial interest of the Acquired Fund and shall evidence ownership of
Acquiring Fund Shares. Unless and until any such certificate shall be so
surrendered or an Affidavit relating thereto shall be delivered,
dividends and other distributions payable by the Acquiring Fund
subsequent to the Liquidation Date with respect to Acquiring Fund Shares
shall be paid to the holder of such certificate(s), but such shareholders
may not redeem or transfer Acquiring Fund Shares received in the
Reorganization. The Acquiring Fund will not issue share certificates in
the Reorganization.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund Shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
1.7 The existence of the Acquired Fund shall be terminated as promptly as
practicable following the Liquidation Date.
1.8 Any reporting responsibility of the Trust, including, but not limited to,
the responsibility for filing of regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission (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 Trust.
2. VALUATION
2.1 The net asset values of the Acquiring Fund Shares and the net values of
the assets and liabilities of the Acquired Fund to be transferred shall,
in each case, be determined as of the close of business (4:00 p.m. Boston
time) on the Closing Date. The net asset values of the Acquiring Fund
Shares shall be computed by the Acquiring Fund's Custodian in the manner
set forth in the Acquiring Fund's Declaration of Trust as amended and
restated (the "Declaration"), or By-Laws and the Acquiring Fund's
then-current prospectus and statement of additional information and shall
be computed in each case to not fewer than four decimal places. The net
values of the assets of the Acquired Fund to be transferred shall be
computed by the Acquired Fund's Custodian by calculating the value of the
assets transferred by the Acquired Fund and by subtracting therefrom the
amount of the liabilities assigned and transferred to and assumed by the
Acquiring Fund on the Closing Date, said assets and liabilities to be
valued in the manner set forth in the Acquired Fund's then current
prospectus and statement of additional information and shall be computed
in each case to not fewer than four decimal places.
2.2 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 dividing the value of the Acquired Fund's assets less the
liabilities assumed by the Acquiring Fund, by the Acquiring Fund's net
asset value per share, all as determined in accordance with Paragraph 2.1
hereof.
2.3 All computations of value shall be made by each Custodian in accordance
with its regular practice as pricing agent for its respective Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be April 25, 2003 [April 30, 2003 for V.A.
Financial Industries Fund] or such other date on or before December 31,
2003 as the parties may agree. The Closing shall be held as of 5:00 p.m.
at the offices of the Trust, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, or at such other time and/or place as the parties may agree.
3.2 Portfolio securities that are not held in book-entry form in the name of
the Acquired Fund's Custodian as record holder for the Acquired Fund
shall be presented by the Acquired Fund to the Acquiring Fund's Custodian
for examination no later than five business days preceding the Closing
Date. Portfolio securities which are not held in book-entry form shall be
delivered by the Acquired Fund to the Acquiring Fund's 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's Custodian in book-entry form on
behalf of the Acquired Fund shall be delivered to the Acquiring Fund by
the Acquiring Fund's Custodian by recording the transfer of beneficial
ownership thereof on its records. The cash delivered shall be in the form
of currency or by the Acquiring Fund's Custodian crediting the Acquiring
Fund's account maintained with the Acquiring Fund's Custodian with
immediately available funds.
3.3 In the event that on the Closing Date (a) the New York Stock Exchange
shall be closed to trading or trading thereon shall be restricted or (b)
trading or the reporting of trading on said Exchange 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 first business day after the day when
trading shall have been fully resumed and reporting shall have been
restored; provided that if trading shall not be fully resumed and
reporting restored on or before December 31, 2003, this Agreement may be
terminated by the Acquiring Fund or by the Acquired Fund upon the giving
of written notice to the other party.
3.4 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 of the Acquired Fund
shareholders and the number of outstanding shares of beneficial interest
of the Acquired Fund owned by each such shareholder, all as of the close
of business on the Closing Date, certified by its Treasurer, Secretary or
other authorized officer (the "Shareholder List"). 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 The Trust on behalf of the Acquired Fund represents, warrants and covenants
to the Acquiring Fund as follows:
(a) The Trust is a business trust, duly organized, validly existing and in
good standing under the laws of The Commonwealth of Massachusetts and
has the power to own all of its properties and assets and, subject to
approval by the shareholders of the Acquired Fund, to carry out the
transactions contemplated by this Agreement. Neither the Trust nor the
Acquired Fund is 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 Trust 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 Trust is a registered investment company classified as a management
company and its registration with the Commission as an investment
company under the Investment Company Act of 1940, as amended (the "1940
Act"), is in full force and effect. The Acquired Fund is a diversified
series of the Trust;
(c) The Trust and the Acquired Fund are not, and the execution, delivery and
performance of their obligations under this Agreement will not result,
in violation of any provision of the Trust's Declaration of Trust, as
amended and restated (the "Trust's Declaration") or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking
to which the Trust or the Acquired Fund is a party or by which it is
bound;
(d) Except as otherwise disclosed in writing and accepted by the Acquiring
Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust or the Acquired Fund or any of
the Acquired Fund's properties or assets. The Trust knows of no facts
which might form the basis for the institution of such proceedings, and
neither the Trust nor the Acquired Fund is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects the Acquired Fund's business
or its ability to consummate the transactions herein contemplated;
(e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement or agreements for the purchase of securities entered
into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated without
liability to the Acquired Fund at or prior to the Closing Date;
(f) The audited statement of assets and liabilities, including the schedule
of investments, of the Acquired Fund as of December 31, 2002 and the
related statement of operations (copies of which have been furnished to
the Acquiring Fund), present fairly in all material respects the
financial condition of the Acquired Fund as of December 31, 2002 and the
results of its operations for the period then ended in accordance with
generally accepted accounting principles consistently applied, and there
were no known actual or contingent liabilities of the Acquired Fund as
of the respective dates thereof not disclosed therein;
(g) Since December 31, 2002, there has not been any material adverse change
in the Acquired Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of
business, or any incurring 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;
(h) At the date hereof and by the Closing Date, all federal, state and other
tax returns and reports, including information returns and payee
statements, of the Acquired Fund required by law to have been filed or
furnished by such dates shall have been filed or furnished, and all
federal, state and other taxes, interest and penalties shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and 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 or reports;
(i) Each of the Acquired Fund and its predecessors has qualified as a
regulated investment company for each taxable year of its operation and
the Acquired Fund will qualify as such as of the Closing Date with
respect to its taxable year ending on the Closing Date;
(j) The authorized capital of the Acquired Fund consists of an unlimited
number of shares of beneficial interest, no par value. All issued and
outstanding shares of beneficial interest of the Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and nonassessable by the Trust. All of the issued and
outstanding shares of beneficial interest of the Acquired Fund will, at
the time of Closing, be held by the persons and in the amounts set forth
in the Shareholder List submitted to the Acquiring Fund pursuant to
Paragraph 3.4 hereof. The Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of
its shares of beneficial interest, nor is there outstanding any security
convertible into any of its shares of beneficial interest;
(k) At the Closing Date, the Acquired Fund will have good and marketable
title to the assets to be transferred to the Acquiring Fund pursuant to
Paragraph 1.1 hereof, and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery
and payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the Securities
Act of 1933, as amended (the "1933 Act");
(l) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Trust on behalf of
the Acquired Fund, and this Agreement constitutes a valid and binding
obligation of the Trust and the Acquired Fund enforceable in accordance
with its terms, subject to the approval of the Acquired Fund's
shareholders;
(m) 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 shall be accurate and complete and
shall comply in all material respects with federal securities and other
laws and regulations thereunder applicable thereto;
(n) The proxy statement of the Acquired Fund (the "Proxy Statement") to be
included in the Registration Statement referred to in Paragraph 5.7
hereof (other than written information furnished by the Acquiring Fund
for inclusion therein, as covered by the Acquiring Fund's warranty in
Paragraph 4.2(m) hereof), on the effective date of the Registration
Statement, on the date of the meeting of the Acquired Fund shareholders
and on the Closing Date, shall 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 under which such statements were made, not misleading;
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated by this Agreement;
(p) All of the issued and outstanding shares of beneficial interest of the
Acquired Fund have been offered for sale and sold in conformity with all
applicable federal and state securities laws;
(q) The prospectus of the Acquired Fund, dated May 1, 2002 (the "Acquired
Fund Prospectus"), previously furnished to the Acquiring Fund, does 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 misleading; and
(r) The Acquired Fund Tax Representation Certificate to be delivered by the
Acquired Fund to the Acquiring Fund at Closing pursuant to Section 7.5
(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 The Trust II on behalf of the Acquiring Fund represents, warrants and
covenants to the Acquired Fund as follows:
(a) The Trust II is a business trust duly organized, validly existing and in
good standing under the laws of The Commonwealth of Massachusetts and
has the power to own all of its properties and assets and to carry out
the Agreement. Neither the Trust II nor the Acquiring Fund is 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 Trust II 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 Trust II is a registered investment company classified as a
management company and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect. The
Acquiring Fund is a diversified series of the Trust II;
(c) The prospectus (the "Acquiring Fund Prospectus") and statement of
additional information of the Acquiring Fund, dated September 19, 2002
[for VST Financial Industries Fund, dated March 17, 2003],
repsectively, and any amendments or supplements thereto on or prior to
the Closing Date, and the Registration Statement on Form N-14 to be
filed in connection with this Agreement (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 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder, the Acquiring Fund
Prospectus does not 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 misleading and the
Registration Statement will not include any untrue statement of
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 misleading;
(d) At the Closing Date, the Trust II on behalf of the Acquiring Fund will
have good and marketable title to the assets of the Acquiring Fund;
(e) The Trust II and the Acquiring Fund are not, and the execution, delivery
and performance of their obligations under this Agreement will not
result, in a violation of any provisions of the Trust II's Declaration,
or By-Laws or of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Trust II or the Acquiring Fund is a
party or by which the Trust II or the Acquiring Fund is bound;
(f) Except as otherwise disclosed in writing and accepted by the Acquired
Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust II or the Acquiring Fund or any
of the Acquiring Fund's properties or assets. The Trust II knows of no
facts which might form the basis for the institution of such
proceedings, and neither the Trust II 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 and adversely affects the
Acquiring Fund's business or its ability to consummate the transactions
herein contemplated;
(g) The audited statement of assets and liabilities, including the schedule
of investments, of the Acquiring Fund as of December 31, 2002 and the
related statement of operations (copies of which have been furnished to
the Acquired Fund) present fairly in all material respects the financial
condition of the Acquiring Fund as of December 31, 2002 and the results
of its operations for the period then ended in accordance with generally
accepted accounting principles consistently applied, and there were no
known actual or contingent liabilities of the Acquiring Fund as of the
respective dates thereof not disclosed therein;
(h) Since December 31, 2002 there has not been any material adverse change
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 Trust II on behalf of the Acquiring
Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as disclosed to and accepted by the
Acquired Fund;
(i) Each of the Acquiring Fund and its predecessors has qualified as a
regulated investment company for each taxable year of its operation and
the Acquiring Fund will qualify as such as of the Closing Date;
(j) The authorized capital of the Trust II consists of an unlimited number
of shares of beneficial interest, no par value per share. All issued and
outstanding shares of beneficial interest of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and nonassessable by the Trust II. The Acquiring Fund does
not have outstanding any options, warrants or other rights to subscribe
for or purchase any of its shares of beneficial interest, nor is there
outstanding any security convertible into any of its shares of
beneficial interest;
(k) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action on the part of the Trust II on behalf
of the Acquiring Fund, and this Agreement constitutes a valid and
binding obligation of the Acquiring Fund enforceable in accordance with
its terms;
(l) The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement, when so issued and
delivered, will be duly and validly issued shares of beneficial interest
of the Acquiring Fund and will be fully paid and nonassessable by the
Trust II;
(m) The information to be furnished by 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 shall be accurate and complete and
shall comply in all material respects with federal securities and other
laws and regulations applicable thereto;
(n) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated by the Agreement, except for the
registration of the Acquiring Fund Shares under the 1933 Act and the
1940 Act; and
(o) The Acquiring Fund Tax Representation Certificate to be delivered by the
Acquiring Fund to the Acquired Fund 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 TRUST II ON BEHALF OF THE ACQUIRING FUND AND THE TRUST ON
BEHALF OF THE ACQUIRED FUND
5.1 Except as expressly contemplated herein to the contrary, the Trust on
behalf of the Acquired Fund and the Trust II on behalf of Acquiring Fund,
will operate their respective businesses in the ordinary course between
the date hereof and the Closing Date, it being understood that such
ordinary course of business will include customary dividends and
distributions and any other distributions necessary or desirable to avoid
federal income or excise taxes.
5.2 The Trust will call a meeting of the Acquired Fund shareholders to
consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
5.3 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.
5.4 The Trust on behalf of the Acquired Fund will provide such information
within its possession or reasonably obtainable as the Trust II on behalf
of the Acquiring Fund requests concerning the beneficial ownership of the
Acquired Fund's shares of beneficial interest.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and the
Acquired Fund each shall take, or cause to be taken, all action, and do
or cause to be done, all things reasonably necessary, proper or advisable
to consummate the transactions contemplated by this Agreement.
5.6 The Trust on behalf of the Acquired Fund shall furnish to the Trust II on
behalf of the Acquiring Fund on the Closing Date the Statement of Assets
and Liabilities of the Acquired Fund as of the Closing Date, which
statement shall be prepared in accordance with generally accepted
accounting principles consistently applied and shall be certified by the
Acquired Fund's Treasurer or Assistant Treasurer. As promptly as
practicable but in any case within 60 days after the Closing Date, the
Acquired Fund shall furnish to the Acquiring Fund, in such form as is
reasonably satisfactory to the Trust II, 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 as a result of Section 381 of the Code, and which
statement will be certified by the President of the Acquired Fund.
5.7 The Trust II on behalf of the Acquiring Fund will prepare and file with
the Commission the Registration Statement in compliance with the 1933 Act
and the 1940 Act in connection with the issuance of the Acquiring Fund
Shares as contemplated herein.
5.8 The Trust on behalf of the Acquired Fund will prepare a Proxy Statement,
to be included in the Registration Statement in compliance with the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the 1940 Act and the rules and regulations thereunder (collectively,
the "Acts") in connection with the special meeting of shareholders of the
Acquired Fund to consider approval of this Agreement.
5.9 Neither the Acquired Fund nor the Acquiring Fund shall take any action
that is inconsistent with the representations set forth in, with respect
to the Acquired Fund, the Acquired Fund Tax Representation Certificate,
and with respect to the Acquiring Fund, the Acquiring Fund Tax
Representation Certificate, to the extent such action would prevent the
reorganization from qualifying as a "reorganization" under Section 368(a)
of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST ON BEHALF OF THE ACQUIRED
FUND
The obligations of the Trust on behalf of the Acquired Fund to complete the
transactions provided for herein shall be, at its election, subject to the
performance by the Trust II on behalf of 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:
6.1 All representations and warranties of the Trust II on behalf of the
Acquiring Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the
Closing Date; and
6.2 The Trust II on behalf of the Acquiring Fund shall have delivered to the
Acquired Fund a certificate executed in its name by the Trust II's
President or Vice President and its Treasurer or Assistant Treasurer, in
form and substance satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties of
the Trust II on behalf of the Acquiring Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to
such other matters as the Trust on behalf of the Acquired Fund shall
reasonably request.
6.3 The Acquiring Fund shall have delivered to the Acquired Fund an Acquiring
Fund Tax Representation Certificate substantially in the form attached to
this Agreement as Annex A concerning certain tax-related matters with
respect to the Acquiring Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST II ON BEHALF OF THE
ACQUIRING FUND
The obligations of the Trust II on behalf 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
conditions:
7.1 All representations and warranties of the Trust II on behalf of the
Acquired Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the
Closing Date with the same force and effect as if made on and as of the
Closing Date;
7.2 The Trust on behalf of the Acquired Fund shall have delivered to the
Trust II on behalf of the Acquiring Fund the Statement of Assets and
Liabilities of the Acquired Fund, 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 Treasurer or
Assistant Treasurer of the Trust;
7.3 The Trust on behalf of the Acquired Fund shall have delivered to the
Trust II on behalf of the Acquiring Fund on the Closing Date a
certificate executed in the name of the Acquired Fund by a President or
Vice President and a Treasurer or Assistant Treasurer of the Trust, in
form and substance satisfactory to the Trust II on behalf of the
Acquiring Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Fund in this Agreement are
true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to
such other matters as the Trust II on behalf of the Acquiring Fund shall
reasonably request;
7.4 At or prior to the Closing Date, the Acquired Fund's investment adviser,
or an affiliate thereof, shall have made all payments, or applied all
credits, to the Acquired Fund required by any applicable contractual
expense limitation; and
7.5 The Acquired Fund shall have delivered to the Acquiring Fund an Acquired
Fund Tax Representation Certificate substantially in the form attached to
this Agreement as Annex B concerning certain tax-related matters with
respect to the Acquired Fund.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST II ON BEHALF OF
THE ACQUIRING FUND AND THE TRUST ON BEHALF OF THE ACQUIRED FUND
The obligations hereunder of the Trust II on behalf of the Acquiring Fund and
the Trust on behalf of the Acquired Fund are each subject to the further
conditions that on or before the Closing Date:
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares
of beneficial interest of the Acquired Fund in accordance with the
provisions of the Trust's Declaration 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 Trust
II on behalf of the Acquiring Fund;
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 changes 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 their "no-action" positions) deemed necessary by the
Trust or the Trust II 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 the Acquiring Fund or the Acquired Fund, provided that either party
hereto may waive any such conditions for itself;
8.4 The Registration Statement shall have become effective under the 1933 Act
and the 1940 Act and no stop orders suspending the effectiveness thereof
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 1933 Act
or the 1940 Act;
8.5 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; and
8.6 The parties shall have received an opinion of Xxxx and Xxxx LLP,
satisfactory to the Trust on behalf of the Acquired Fund and the Trust II
on behalf of the Acquiring Fund, substantially to the effect that for
federal income tax purposes the acquisition by the Acquiring Fund of all
of the assets of the Acquired Fund solely in exchange for the issuance of
Acquiring Fund Shares to the Acquired Fund and the assumption of all of
the Acquired Fund 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 shareholders of the Acquired Fund in
exchange for their shares of beneficial interest of the Acquired Fund and
the termination of the Acquired Fund, will constitute a "reorganization"
within the meaning of Section 368(a) of the Code. Notwithstanding
anything herein to the contrary, neither the Trust nor the Trust II may
waive the conditions set forth in this Paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust II on behalf of the Acquiring Fund, and the Trust on behalf of
the Acquired Fund each represent and warrant to the other that there are
no brokers or finders entitled to receive any payments in connection with
the transactions provided for herein.
9.2 The Acquiring Fund and the Acquired Fund shall each be liable solely for
its own expenses incurred in connection with entering into and carrying
out the provisions of this Agreement whether or not the transactions
contemplated hereby are consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust II on behalf of the Acquiring Fund, and the Trust on behalf of
the Acquired Fund agree that neither party has made any representation,
warranty or covenant not set forth herein or referred to in Paragraph 4
hereof and that this Agreement constitutes the entire agreement between
the parties.
10.2 The representations, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated
hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Trust II,
on behalf of the Acquiring Fund, and the Trust on behalf of 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 Trust II'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; or
(d) by resolution of the Trust'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.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Trust II, the Acquiring Fund, the Trust, or
the Acquired Fund, or the Trustees or officers of the Trust II or the
Trust, but 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 by the authorized officers of the Trust and the Trust II.
However, following the meeting of shareholders of the Acquired Fund held
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 the detriment of such shareholders without their further
approval; provided that nothing contained in this Article 12 shall be construed
to prohibit the parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be in writing and shall be given by prepaid telegraph,
telecopy or certified mail addressed to the Acquiring Fund at Xxxx Xxxxxxx
Xxxxx, X.X. Xxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxx,
Esq. or to the Acquired Fund at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Xxxxx X. Xxxxx, Esq., and, in either case, with copies to Xxxx
and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxx, Esq.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts.
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 any party without the prior 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.
14.5 All persons dealing with the Trust or the Trust II must look solely to
the property of the Trust or the Trust II, respectively, for the
enforcement of any claims against the Trust or the Trust II as the
Trustees, officers, agents and shareholders of the Trust or the Trust II
assume no personal liability for obligations entered into on behalf of
the Trust or the Trust II, respectively. None of the other series of the
Trust or the Trust II shall be responsible for any obligations assumed by
or on behalf of the Acquired Fund or the Acquiring Fund, respectively,
under this Agreement.
[Remainder of Page Intentionally Blank]
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 has caused its corporate seal to be affixed hereto.
-----------------------------
OF XXXX XXXXXXX VARIABLE SERIES TRUST I
By:
-----------------------------------------
Name:
Title
XXXX XXXXXXX DECLARATION TRUST on behalf of
--------------------------------
By:
------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive Officer
Annex A
-------
TAX REPRESENTATION CERTIFICATE OF
[ACQUIRING FUND]
This certificate is being delivered in connection with the transaction to
be effected pursuant to the Agreement and Plan of Reorganization (the
"Agreement") made as of ____________, 2003 between Xxxx Xxxxxxx Variable Series
Trust I on behalf of __________________ ("Acquiring Fund") and Xxxx Xxxxxxx
Declaration Trust on behalf of __________________ ("Acquired Fund"). Pursuant to
the Agreement, Acquiring Fund will acquire all of the assets of Acquired Fund in
exchange solely for (i) the assumption by Acquiring Fund of certain liabilities
of Acquired Fund (the "Acquired Fund Liabilities") and (ii) the issuance of
shares of beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to
Acquired Fund, followed by the distribution by Acquired Fund, in liquidation of
Acquired Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund
and the termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Xxxx Xxxxxxx Variable Series Trust I, after
consulting with its tax advisors regarding the meaning of and factual support
for the following representations, on behalf of Acquiring Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meaning ascribed to them in the Agreement.
1. Acquiring Fund is a series of the Xxxx Xxxxxxx Variable Series Trust I,
a business trust established under the laws of the Commonwealth of
Massachusetts.
2. Neither Acquiring Fund nor any person treated as related to Acquiring
Fund under Treasury Regulation Section 1.368-1(e)(3) or by virtue of being a
partnership of which Acquiring Fund or a related person is a partner (a "Related
Person") has any plan or intention to redeem or otherwise reacquire any of the
Acquiring Fund Shares received by shareholders of Acquired Fund in the
transaction except in the ordinary course of Acquiring Fund's business in
connection with its legal obligation under Section 22(e) of the Investment
Company Act of 1940, as amended, as a registered open-end investment company to
redeem its own shares (which obligation is not in connection with, modified in
connection with, or in any way related to the transaction).
3. After the transaction, Acquiring Fund will continue the historic
business of Acquired Fund or will use all or a significant portion of the
historic assets of Acquired Fund in a business. For this purpose, Acquiring Fund
shall be treated as conducting the business and holding the assets of certain
related entities, as described in Treasury Regulation Section 1.368-1(d)(4).
4. Acquiring Fund has no plan or intention to sell or otherwise dispose of
any assets of Acquired Fund acquired in the transaction, except for dispositions
made in the ordinary course of its business.
5. Each of the funds of the Xxxx Xxxxxxx Variable Series Trust I, including
Acquiring Fund, will bear a portion of the expenses of the Acquired Fund solely
and directly related to the transaction in accordance with Rev. Rul. 73-54,
1973-1 C.B. 187. The shareholders of Acquiring Fund and Acquired Fund will bear
their respective expenses, if any, in connection with the transaction.
6. There is no indebtedness between Acquiring Fund and Acquired Fund.
7. Acquiring Fund has elected to be treated as a regulated investment
company under Subchapter M of the Code, has qualified for the special tax
treatment afforded regulated investment companies under the Code for each
taxable year since inception, qualifies for such treatment as of the date of the
transaction, and intends to qualify for such treatment after the transaction.
8. Acquiring Fund meets the requirements of a regulated investment company
as defined in Section 368(a)(2)(F) of the Code.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Fund does not now and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. Acquiring Fund will not pay cash in lieu of fractional shares in
connection with the transaction.
12. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of such Acquired Fund Liabilities, the issuance of such Acquiring
Fund Shares, and the payment of a portion of Acquired Fund's expenses solely and
directly related to the transaction in accordance with Rev. Rul. 73-54, 1973-1
C.B. 187.
13. Acquired Fund shareholders will be in control (within the meaning of
Sections 368(a)(2)(H)(i) and 304(c) of the Code, which provide that control
means the ownership of shares possessing at least 50% of the total combined
voting power of all classes of shares that are entitled to vote or at least 50%
of the total value of shares of all classes) of Acquiring Fund after the
transaction.
14. The principal business purposes of the transaction are to combine the
assets of Acquiring Fund and Acquired Fund in order to improve distribution and
capitalize on potential economies of scale in expenses.
15. No Acquired Fund shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund shareholder for Acquired Fund shares such
shareholder may have purchased or for other obligations such shareholder may
have incurred.
16. Acquiring Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in the Acquiring Fund.
The undersigned officer of Xxxx Xxxxxxx Variable Series Trust I is
authorized to make all of the representations set forth herein, and the
undersigned is authorized to execute this certificate on behalf of the Acquiring
Fund. The undersigned recognizes that Xxxx and Xxxx LLP will rely upon the
foregoing representations in evaluating the United States federal income tax
consequences of the transaction. If, prior to the date of the transaction, any
of the representations set forth herein ceases to be accurate in any material
respect, the undersigned agrees to deliver to Xxxx and Xxxx LLP immediately a
written notice to that effect.
-------------------------------
ON BEHALF OF THE
-------------------------------------
By:
------------------------
Name:
------------------------
Title:
------------------------
Dated: _______________, 2003
Annex A
-------
TAX REPRESENTATION CERTIFICATE OF
XXXX XXXXXXX FINANCIAL INDUSTRIES FUND
This certificate is being delivered in connection with the transaction to be
effected pursuant to the Agreement and Plan of Reorganization (the "Agreement")
made as of ____________ , 2003 between Xxxx Xxxxxxx Variable Series Trust I
("Acquiring Trust") on behalf of Xxxx Xxxxxxx Financial Industries Fund
("Acquiring Fund") and Xxxx Xxxxxxx Declaration Trust on behalf of Xxxx Xxxxxxx
V.A. Financial Industries Fund ("Acquired Fund"). Pursuant to the Agreement,
Acquiring Fund will acquire all of the assets of Acquired Fund in exchange
solely for (i) the assumption by Acquiring Fund of certain liabilities of
Acquired Fund (the "Acquired Fund Liabilities") and (ii) the issuance of shares
of beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to
Acquired Fund, followed by the distribution by Acquired Fund, in liquidation of
Acquired Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund
and the termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Acquiring Trust, after consulting with its tax
advisors regarding the meaning of and factual support for the following
representations, on behalf of Acquiring Fund, hereby certifies and represents
that the following statements are true, complete and correct and will be true,
complete and correct on the date of the transaction and thereafter as relevant.
Unless otherwise indicated, all capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Agreement.
1. Acquiring Fund is a series of Acquiring Trust, a business trust
established under the laws of the Commonwealth of Massachusetts. Acquiring Fund
was newly organized solely for the purpose of effecting the transaction and
continuing thereafter to operate as a regulated investment company. Prior to the
transaction, the Acquiring Fund did not and will not engage in any business
activities or hold any assets. There shall be no issued and outstanding shares
of the Acquiring Fund prior to the Closing Date other than those issued to Xxxx
Xxxxxxx Life Insurance Company or one of its affiliates.
2. Neither Acquiring Fund nor any person treated as related to Acquiring
Fund under Treasury Regulation Section 1.368-1(e)(3) or by virtue of being a
partnership of which Acquiring Fund or a related person is a partner (a "Related
Person") has any plan or intention to redeem or otherwise reacquire any of the
Acquiring Fund Shares received by shareholders of Acquired Fund in the
transaction except in the ordinary course of Acquiring Fund's business in
connection with its legal obligation under Section 22(e) of the Investment
Company Act of 1940, as amended, (the "1940 Act") as a registered open-end
investment company to redeem its own shares (which obligation is not in
connection with, modified in connection with, or in any way related to the
transaction).
3. After the transaction, Acquiring Fund will continue the historic
business of Acquired Fund or will use a significant portion of the historic
assets of Acquired Fund in a business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose of
any assets of Acquired Fund acquired in the transaction, except for dispositions
made in the ordinary course of its business.
5. The investment adviser of Acquiring Fund will pay any and all expenses
of Acquired Fund solely and directly related to the transaction in accordance
with Rev. Rul. 73-54, 1973-1 C.B. 187. The shareholders of Acquiring Fund and
Acquired Fund will bear their respective expenses, if any, in connection with
the transaction.
6. There is no indebtedness between Acquiring Fund and Acquired Fund.
7. Acquiring Fund will elect to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), and will qualify for the special tax treatment afforded regulated
investment companies under the Code for all taxable years ending after the date
of the transaction.
8. Acquiring Fund meets the requirements of a regulated investment company
as defined in Sections 368(a)(2)(F) (including, without limitation, Section
368(a)(2)(F)(ii)) and 851 of the Code.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Fund does not now and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. Acquiring Fund will not pay cash in lieu of fractional shares in
connection with the transaction.
12. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of these Acquired Fund Liabilities and the issuance of these
Acquiring Fund Shares.
13. Acquired Fund shareholders will be in control (within the meaning of
Sections 368(a)(2)(H)(i) and 304(c) of the Code, which provide that control
means the ownership of shares possessing at least 50% of the total combined
voting power of all classes of shares that are entitled to vote or at least 50%
of the total value of shares of all classes) of Acquiring Fund after the
transaction.
14. The principal business purpose of the transaction is to reduce expenses
while maintaining the benefit of the same investment strategy and portfolio
management team.
15. No Acquired Fund shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund shareholder for Acquired Fund shares such
shareholder may have purchased or for other obligations such shareholder may
have incurred.
16. Acquiring Fund has no outstanding warrants, options, convertible securities
or any other type of right pursuant to which any person could acquire stock in
the Acquiring Fund.
* * * * *
The undersigned officer of Acquiring Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Fund. The undersigned recognizes that
Xxxx and Xxxx LLP will rely upon the foregoing representations in evaluating the
United States federal income tax consequences of the transaction. If, prior to
the date of the transaction, any of the representations set forth herein ceases
to be accurate in any material respect, the undersigned agrees to deliver to
Xxxx and Xxxx LLP immediately a written notice to that effect.
XXXX XXXXXXX VARIABLE SERIES TRUST I,
ON BEHALF OF
XXXX XXXXXXX FINANCIAL INDUSTRIES FUND
By:
-------------------------------------
Name:
---------------------------
Title:
---------------------------
Dated: _____________
Annex B
-------
TAX REPRESENTATION CERTIFICATE OF
[ACQUIRED FUND]
This certificate is being delivered in connection with the transaction to
be effective pursuant to the Agreement and Plan of Reorganization (the
"Agreement") made as of ___________ , 2003 between Xxxx Xxxxxxx Variable Series
Trust I on behalf of _________________________ ("Acquiring Fund") and Xxxx
Xxxxxxx Declaration Trust on behalf of _____________________ ("Acquired Fund").
Pursuant to the Agreement, Acquiring Fund will acquire all of the assets of
Acquired Fund in exchange solely for (i) the assumption by Acquiring Fund of
certain liabilities of Acquired Fund (the "Acquired Fund Liabilities") and (ii)
the issuance of shares of beneficial interest of Acquiring Fund (the "Acquiring
Fund Shares") to Acquired Fund, followed by the distribution by Acquired Fund,
in liquidation of Acquired Fund, of the Acquiring Fund Shares to the
shareholders of Acquired Fund and the termination of Acquired Fund (the
foregoing together constituting the "transaction").
The undersigned officer of Xxxx Xxxxxxx Declaration Trust, after
consulting with its tax advisors regarding the meaning of and factual support
for the following representations, on behalf of Acquired Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and thereafter
as relevant. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meaning ascribed to them in the Agreement.
1. Acquired Fund is a series of Xxxx Xxxxxxx Declaration Trust, a business
trust established under the laws of the Commonwealth of Massachusetts.
2. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares received by each shareholder that holds shares of Acquired
Fund (the "Acquired Fund Shares") will be approximately equal to the fair market
value of the Acquired Fund Shares surrendered by such shareholder, and the
aggregate consideration received by Acquired Fund shareholders in exchange for
their Acquired Fund Shares will be approximately equal to the fair market value
of all of the outstanding Acquired Fund Shares immediately prior to the
transaction. No property other than Acquiring Fund Shares will be distributed to
shareholders of Acquired Fund in exchange for their Acquired Fund Shares, nor
will any such shareholder receive cash or other property as part of the
transaction.
3. There is no plan or intention on the part of any shareholder of Acquired
Fund that owns beneficially 5% or more of the Acquired Fund Shares and, to the
best knowledge of management of Acquired Fund, there is no plan or intention on
the part of the remaining shareholders of Acquired Fund, in connection with the
transaction, to engage in any transaction with Acquired Fund, Acquiring Fund, or
any person treated as related to Acquired Fund or Acquiring Fund under Treasury
Regulation Section 1.368-1(e)(3) or by virtue of being a partnership of which
Acquired Fund, Acquiring Fund, or a related person is a partner involving the
sale, redemption, exchange, transfer, pledge, or other disposition resulting in
a direct or indirect transfer of the risks of ownership (a "Sale") of any of the
Acquired Fund Shares or any of the Acquiring Fund Shares to be received in the
transaction that, considering all Sales, would reduce the aggregate ownership of
the Acquiring Fund Shares by former Acquired Fund shareholders to a number of
shares having a value, as of the date of the transaction, of less than fifty
percent (50%) of the value of all of the formerly outstanding Acquired Fund
Shares as of the same date. All Sales involving shares of Acquired Fund and
Acquiring Fund held by Acquired Fund shareholders that have occurred or will
occur in connection with the transaction are taken into account for purposes of
this representation. No such Sale that is in connection with the transaction
has, to the best knowledge of management of Acquired Fund, occurred on or prior
to the date of the transaction.
4. Acquired Fund assets transferred to Acquiring Fund will comprise at
least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
Acquired Fund immediately prior to the transaction. For purposes of this
representation, amounts used by Acquired Fund to pay all redemptions and
distributions (except for redemptions in the ordinary course of business upon
demand of a shareholder that Acquired Fund is required to make as an open-end
investment company pursuant to Section 22(e) of the Investment Company Act of
1940, as amended, and regular, normal dividends) made by Acquired Fund
immediately preceding the transaction are taken into account as assets of
Acquired Fund held immediately prior to the transaction.
5. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of such Acquired Fund Liabilities, the issuance of such Acquiring
Fund Shares and the payment of a portion of Acquired Fund's expenses solely and
directly related to the transaction in accordance with Rev. Rul. 73-54, 1973-1
C.B. 187.
6. The Acquired Fund Liabilities assumed by Acquiring Fund plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business and are associated with
the assets transferred. Acquired Fund does not have any liabilities of any kind
other than the Acquired Fund Liabilities assumed by Acquiring Fund.
7. The adjusted basis and the fair market value of the Acquired Fund assets
transferred to Acquiring Fund will equal or exceed the sum of the Acquired Fund
Liabilities assumed by Acquiring Fund plus the amount of liabilities, if any, to
which the transferred assets are subject.
8. Substantially all of the Acquired Fund assets transferred to Acquiring
Fund will be Acquired Fund's historic business assets, i.e., assets not acquired
by Acquired Fund as part of or in contemplation of the transaction.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives, and its other properties, if any, pursuant to the
transaction and will be liquidated promptly thereafter.
10. Acquired Fund will not pay any expenses incurred by its shareholders in
connection with the transaction.
11. There is no indebtedness between Acquiring Fund and Acquired Fund.
12. Acquired Fund has elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), has qualified for the special tax treatment afforded regulated
investment companies under the Code for each taxable year since inception, and
qualifies for such treatment for its taxable year ending on the closing date of
the transaction.
13. Acquired Fund meets the requirements of a regulated investment company
as defined in Section 368(a)(2)(F) of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Fund shareholders will be in control (within the meaning of
Sections 368(a)(2)(H)(i) and 304(c) of the Code, which provide that control
means the ownership of shares possessing at least 50% of the total combined
voting power of all classes of shares that are entitled to vote or at least 50%
of the total value of shares of all classes) of Acquiring Fund after the
transaction.
16. Acquired Fund shareholders will not have dissenters' or appraisal
rights in the transaction.
17. The principal business purposes of the transaction are to combine the
assets of Acquiring Fund and Acquired Fund in order to improve distribution and
capitalize on potential economies of scale in expenses.
[Signatures appear on following page]
The undersigned officer of Xxxx Xxxxxxx Declaration Trust is authorized
to make all of the representations set forth herein, and the undersigned is
authorized to execute this certificate on behalf of the Acquired Fund. The
undersigned recognizes that Xxxx and Xxxx LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction. If, prior to the date of the transaction, any of the
representations set forth herein ceases to be accurate in any material respect,
the undersigned agrees to deliver to Xxxx and Xxxx LLP immediately a written
notice to that effect.
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ON BEHALF OF THE
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By:
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Name:
----------------------
Title:
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Dated: ______________ , 2003
Annex B
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TAX REPRESENTATION CERTIFICATE OF
XXXX XXXXXXX V.A. FINANCIAL INDUSTRIES FUND
This certificate is being delivered in connection with the transaction to be
effected pursuant to the Agreement and Plan of Reorganization (the "Agreement")
made as of ___________, 2003 between Xxxx Xxxxxxx Variable Series Trust I
("Acquiring Trust") on behalf of Xxxx Xxxxxxx Financial Industries Fund
("Acquiring Fund") and Xxxx Xxxxxxx Declaration Trust on behalf of Xxxx Xxxxxxx
V.A. Financial Industries Fund ("Acquired Fund"). Pursuant to the Agreement,
Acquiring Fund will acquire all of the assets of Acquired Fund in exchange
solely for (i) the assumption by Acquiring Fund of certain liabilities of
Acquired Fund (the "Acquired Fund Liabilities") and (ii) the issuance of shares
of beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to
Acquired Fund, followed by the distribution by Acquired Fund, in liquidation of
Acquired Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund
and the termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Xxxx Xxxxxxx Declaration Trust, after consulting with
its tax advisors regarding the meaning of and factual support for the following
representations, on behalf of Acquired Fund, hereby certifies and represents
that the following statements are true, complete and correct and will be true,
complete and correct on the date of the transaction and thereafter as relevant.
Unless otherwise indicated, all capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Agreement.
1. Acquired Fund is a series of Xxxx Xxxxxxx Declaration Trust, a business
trust established under the laws of the Commonwealth of Massachusetts.
2. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares received by each shareholder that holds shares of Acquired
Fund (the "Acquired Fund Shares") will be approximately equal to the fair market
value of the Acquired Fund Shares surrendered by such shareholder, and the
aggregate consideration received by Acquired Fund shareholders in exchange for
their Acquired Fund Shares will be approximately equal to the fair market value
of all of the outstanding Acquired Fund Shares immediately prior to the
transaction. No property other than Acquiring Fund Shares will be distributed to
shareholders of Acquired Fund in exchange for their Acquired Fund Shares, nor
will any such shareholder receive cash or other property as part of the
transaction.
3. There is no plan or intention on the part of any shareholder of Acquired
Fund that owns beneficially 5% or more of the Acquired Fund Shares and, to the
best knowledge of management of Acquired Fund, there is no plan or intention on
the part of the remaining shareholders of Acquired Fund, in connection with the
transaction, to engage in any transaction with Acquired Fund, Acquiring Fund, or
any person treated as related to Acquired Fund or Acquiring Fund under Treasury
Regulation Section 1.368-1(e)(3) or by virtue of being a partnership of which
Acquired Fund, Acquiring Fund, or a related person is a partner involving the
sale, redemption, exchange, transfer, pledge, or other disposition resulting in
a direct or indirect transfer of the risks of ownership (a "Sale") of any of the
Acquired Fund Shares or any of the Acquiring Fund Shares to be received in the
transaction that, considering all Sales, would reduce the aggregate ownership of
the Acquiring Fund Shares by former Acquired Fund shareholders to a number of
shares having a value, as of the date of the transaction, of less than fifty
percent (50%) of the value of all of the formerly outstanding Acquired Fund
Shares as if the same date . All Sales involving shares of Acquired Fund and
Acquiring Fund held by Acquired Fund shareholders that have occurred or will
occur in connection with the transaction are taken into account for purposes of
this representation. No such Sale that is in connection with the transaction
has, to the best knowledge of management of Acquired Fund, occurred on or prior
to the date of the transaction. As diversified open-end investment companies,
both Acquired Fund and Acquiring Fund are and will be obligated to redeem their
outstanding shares upon the request of the shareholder, at the then net asset
value.
4. Immediately following the transaction, Acquiring Fund will possess the
same assets and liabilities as those possessed by Acquired Fund immediately
prior to the transaction, except for assets used to pay expenses incurred in
connection with the transaction and assets distributed to shareholders in
redemption of their shares immediately preceding the transaction which, together
with transaction expenses, constitute less than 1% of the fair market value of
the assets of Acquired Fund.
5. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of such Acquired Fund Liabilities and the issuance of such Acquiring
Fund Shares.
6. The Acquired Fund Liabilities assumed by Acquiring Fund plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business and are associated with
the assets transferred. Acquired Fund does not have any liabilities of any kind
other than the Acquired Fund Liabilities assumed by the Acquiring Fund.
7. The adjusted basis and the fair market value of the Acquired Fund assets
transferred to Acquiring Fund will equal or exceed the sum of the Acquired Fund
Liabilities assumed by Acquiring Fund plus the amount of liabilities, if any, to
which the transferred assets are subject.
8. Substantially all of the Acquired Fund assets transferred to Acquiring
Fund will be Acquired Fund's historic business assets, i.e., assets not acquired
by Acquired Fund as part of or in contemplation of the transaction.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives, and its other properties, if any, pursuant to the
transaction and will be liquidated promptly thereafter.
10. Acquired Fund will not pay any expenses incurred by its shareholders in
connection with the transaction.
11. There is no indebtedness between Acquiring Fund and Acquired Fund.
12. Acquired Fund has elected to be treated as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), has qualified for the special tax treatment afforded regulated
investment companies under the Code for each taxable year since inception, and
qualifies for as such treatment for its taxable year including the closing date
of the transaction.
13. Acquired Fund meets the requirements of a regulated investment company
as defined in Sections 368(a)(2)(F) (including, without limitation, Section
368(a)(2)(F)(ii)) and 851 of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Fund does not pay compensation to any shareholder-employee.
16. Acquired Fund shareholders will be in control (within the meaning of
Sections 368(a)(2)(H)(i) and 304(c) of the Code, which provide that control
means the ownership of shares possessing at least 50% of the total combined
voting power of all classes of shares that are entitled to vote or at least 50%
of the total value of shares of all classes) of Acquiring Fund after the
transaction.
17. Acquired Fund shareholders will not have dissenters' or appraisal
rights in the transaction.
18. The principal business purpose of the transaction is to reduce expenses
while maintaining the benefit of the same investment strategy and portfolio
management team.
* * * * *
The undersigned officer of Xxxx Xxxxxxx Declaration Trust is authorized
to make all of the representations set forth herein, and the undersigned is
authorized to execute this certificate on behalf of Acquired Fund. The
undersigned recognizes that Xxxx and Xxxx LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction. If, prior to the date of the transaction, any of the
representations set forth herein ceases to be accurate in any material respect,
the undersigned agrees to deliver to Xxxx and Xxxx LLP immediately a written
notice to that effect.
XXXX XXXXXXX DECLARATION TRUST,
ON BEHALF OF
XXXX XXXXXXX V.A. FINANCIAL INDUSTRIES FUND
By:
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Name:
---------------------------------
Title:
---------------------------------
Dated: _____________, 2003
