Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 15th day of April, 2004, by and between Phoenix Investment Trust 97 (the
"Investment Trust 97"), a Delaware Statutory Trust with its principal place of
business at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, on behalf of the
Phoenix Small Cap Value f/k/a Phoenix-Hollister Small Cap Value Fund (the
"Surviving Series"), a portfolio series thereof, and the Phoenix Trust (formerly
known as the Phoenix-Xxxxx Trust) (the "Phoenix Trust"), a Delaware Statutory
Trust with a principal place of business at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, on behalf of the Phoenix Appreciation Fund f/k/a
Phoenix-Hollister Appreciation Fund (the "Merging Series"), a portfolio series
thereof. For the purposes hereof, all references in this Agreement to action
taken by the Surviving Series or the Merging Series shall be deemed to refer to
action taken by the Investment Trust 97 or the Phoenix Trust, on behalf of the
respective portfolio series and all references to the "Trust(s)" shall
collectively refer to the Investment Trust 97 and the Phoenix Trust.
RECITALS
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code") and the
regulations thereunder. The reorganization (the "Reorganization") will consist
of the transfer of all or substantially all of the assets of the Merging Series
to the Surviving Series in exchange solely for corresponding Class A, Class B
and Class C shares of beneficial interest in the Surviving Series (the
"Surviving Series Shares"), the assumption by the Surviving Series of all
liabilities of the Merging Series, and the distribution of the Surviving Series
Shares to the shareholders of the Merging Series in complete liquidation of the
Merging Series as provided herein, all upon the terms and conditions hereinafter
set forth in this Agreement.
The Merging Series and the Surviving Series are separate series of
Phoenix Trust and Investment Trust 97, respectively, which are open-end,
registered investment companies of the management type. The Merging Series owns
securities that generally are assets of the character in which the Surviving
Series is permitted to invest. The Trustees of the Investment Trust 97,
including a majority of the trustees thereof who are not interested persons, as
such term is defined pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act") have determined that participation in the Reorganization is in
the best interests of the Surviving Series and its shareholders and that the
interests of the existing shareholders of the Surviving Series would not be
diluted as a result of effecting this transaction.
The Trustees of the Phoenix Trust, including a majority of the trustees
thereof who are not interested persons, as such term is defined pursuant to the
1940 Act, have also determined that participation in the Reorganization is in
the best interests of the Merging Series and its shareholders and that the
interests of the existing shareholders of the Merging Series would not be
diluted as a result of effecting this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE MERGING SERIES TO THE SURVIVING SERIES IN
EXCHANGE FOR THE SURVIVING SERIES SHARES, THE ASSUMPTION OF ALL MERGING
SERIES LIABILITIES AND THE LIQUIDATION OF THE MERGING SERIES.
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1.1 Subject to the requisite approval of the Merging Series
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Merging Series
agrees to transfer all of the Merging Series' assets, as set forth in paragraph
1.2, to the Surviving Series, and the Surviving Series agrees in exchange
therefor: (i) to deliver to the Merging Series the number of full and fractional
Surviving Series Shares, determined by dividing the value of the Merging Series'
net assets, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Surviving Series Share, computed in
the manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all liabilities of the Merging Series, as set forth in paragraph 1.3.
Such transactions shall take place on the next business day following the
closing provided for in paragraph 3.1 (the "Closing Date").
1.2 The assets of the Merging Series to be acquired by the Surviving
Series shall consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests, and dividends or
interest receivable, that are owned by the Merging Series, and any deferred or
prepaid expenses shown as an asset on the books of the Merging Series on the
Closing Date (collectively, the "Assets").
1.3 The Merging Series will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Surviving Series
shall also assume all of the liabilities of the Merging Series, whether accrued
or contingent, known or unknown, existing at the Valuation Date, as defined in
paragraph 2.1 (collectively, the "Liabilities"). On or as soon as practicable
prior to the Closing Date, the Merging Series will declare and pay to its
shareholders of record one or more dividends and/or other distributions so that
it will have distributed substantially all (and in no event less than 98%) of
its investment company taxable income and realized net capital gain, if any, for
the current taxable year through the Closing Date.
1.4 Immediately after the transfer of Assets provided for in
paragraph 1.1, the Merging Series will distribute to the Merging Series'
shareholders of record, determined as of immediately after the close of business
on the Closing Date (the "Merging Series Shareholders"), on a pro rata basis,
the Surviving Series Shares received by the Merging Series pursuant to paragraph
1.1, and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to the Merging Series' shares, by the transfer of the
Surviving Series Shares then credited to the account of the Merging Series on
the books of the Surviving Series to open accounts on the share records of the
Surviving Series in the names of the Merging Series Shareholders. The aggregate
net asset value of Surviving Series Shares to be so credited to Merging Series
Shareholders shall be equal to the aggregate net asset value of the Merging
Series' shares owned by such shareholders on the Closing Date. All issued and
outstanding shares of the Merging Series will simultaneously be canceled on the
books of the Merging Series.
1.5 Ownership of Surviving Series Shares will be shown on the books
of the Surviving Series or its transfer agent, as defined in paragraph 3.3.
1.6 Any reporting responsibility of the Merging Series including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Merging Series.
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2. VALUATION
2.1 The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures
established by the Surviving Series' Board of Trustees, which shall be described
in the then-current prospectus and statement of additional information with
respect to the Surviving Series.
2.2 The net asset value of Surviving Series Shares shall be the net
asset value per share computed as of the Valuation Date, using the valuation
procedures established by the Surviving Series' Board of Trustees which shall be
described in the Surviving Series' then-current prospectus and statement of
additional information.
2.3 The number of Surviving Series Shares to be issued (including
fractional shares, if any) in exchange for the Assets shall be determined by
dividing the value of the net assets with respect to the shares of the Merging
Series determined using the same valuation procedures referred to in paragraph
2.1, by the net asset value of a Surviving Series Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Phoenix Equity
Planning Corporation, in its capacity as financial agent for both the Investment
Trust 97 and the Phoenix Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be April 16, 2004, or such other date as
the parties may agree. All acts taking place at the closing of the transaction
(the "Closing") shall be deemed to take place simultaneously as of immediately
after the close of business on the Closing Date unless otherwise agreed to by
the parties. The close of business on the Closing Date shall be as of 4:00 p.m.,
Eastern Time. The Closing shall be held at the offices of the Phoenix Life
Insurance Company, Xxx Xxxxxxxx Xxx, Xxxxxxxx, XX 00000 or at such other time
and/or place as the parties may agree.
3.2 The Phoenix Trust shall direct The Bank of New York, as
custodian for the Merging Series (the "Custodian"), to deliver, on the next
business day after the Closing, a certificate of an authorized officer stating
that (i) the Assets have been delivered in proper form to the Surviving Series,
and (ii) all necessary taxes in connection with the delivery of the Assets,
including all applicable federal and state stock transfer stamps, if any, have
been paid or provision for payment has been made. The Merging Series' portfolio
securities represented by a certificate or other written instrument shall be
presented for examination by the Custodian to State Street Bank and Trust
Company, as the custodian for the Surviving Series, no later than on the next
business day following the Closing Date, and shall be transferred and delivered
by the Merging Series on the next business day following the Closing Date for
the account of the Surviving Series duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. The Custodian shall
deliver on the next business day following the Closing Date by book entry, in
accordance with the customary practices of such depositories and the Custodian,
the Merging Series' portfolio securities and instruments deposited with a
securities depository, as defined in Rule 17f-4 under the 1940 Act. The cash to
be transferred by the Merging Series shall be delivered by wire transfer of
federal funds on the next business day following the Closing Date.
3.3 The Phoenix Trust shall direct Phoenix Equity Planning
Corporation (the "Transfer Agent"), on behalf of the Merging Series, to deliver
on the next business day following the Closing, a certificate by an authorized
officer stating that its records contain the names and addresses of the Merging
Series Shareholders, and the number and percentage ownership of outstanding
shares owned by each such shareholder immediately prior to the Closing. The
Surviving Series shall issue and deliver a confirmation evidencing the Surviving
Series Shares to be credited on the Closing Date to the Secretary of the
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Surviving Series, or provide evidence satisfactory to the Merging Series that
such Surviving Series Shares have been credited to the Merging Series' account
on the books of the Surviving Series. At the Closing, each party shall deliver
to the other such bills of sale, checks, assignments, share certificates, if
any, receipts or other documents as such other party or its counsel may
reasonably request.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Surviving Series or the Merging Series shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading on
such Exchange or elsewhere shall be disrupted so that, in the judgment of the
Board of Trustees of the Trusts, accurate appraisal of the value of the net
assets of the Surviving Series or the Merging Series, respectively, is
impracticable, the Closing Date shall be postponed until the first Friday after
the day when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Phoenix Trust, on behalf of the Merging Series, represents
and warrants to the Investment Trust 97 as follows:
(a) The Merging Series is duly organized as a series of the
Phoenix Trust, which is a Statutory Trust duly organized, validly existing and
in good standing under the laws of the State of Delaware, with power under the
Phoenix Trust's Agreement and Declaration of Trust, as amended ("Declaration of
Trust"), to own all of its Assets and to carry on its business as it is now
being conducted;
(b) The Phoenix Trust is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act, and the
registration of shares of the Merging Series under the Securities Act of 1933,
as amended ("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by the Merging Series
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act and such as may be required by state securities laws;
(d) The current prospectus and statement of additional
information of the Merging Series conforms or conformed at the time of its use
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, and does
not or did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) On the Closing Date, the Phoenix Trust, on behalf of the
Merging Series, will have good and marketable title to the Assets and full
right, power and authority to sell, assign, transfer and deliver such Assets
hereunder free of any liens or other encumbrances, and upon delivery and payment
for such Assets, the Investment Trust 97, on behalf of the Surviving Series,
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to the Surviving Series;
(f) The Merging Series is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Phoenix Trust's Declaration of Trust or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Phoenix Trust, on behalf of the Merging Series, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture,
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instrument, contract, lease, judgment or decree to which the Phoenix Trust, on
behalf of the Merging Series, is a party or by which it is bound;
(g) All material contracts or other commitments of the Merging
Series (other than this Agreement and certain investment contracts, including
options, futures and forward contracts) will terminate without liability to the
Merging Series on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted
by the Investment Trust 97, on behalf of the Surviving Series, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Phoenix Trust, on behalf of the Merging Series, or any of its properties or
assets that, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Phoenix Trust, on behalf
of the Merging Series, knows of no facts or circumstances, which, individually
or in the aggregate, with the passage of time or the giving of notice (or both)
would 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 which materially and adversely affects its business or its
ability to consummate the transactions herein contemplated or that does or could
lead to a claim under existing directors and officers errors and omissions
coverage;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the Merging
Series at December 31, 2002, have been audited by PricewaterhouseCoopers, LLP
("PwC"), independent accountants, and are in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and such statements present
fairly, in all material respects, the financial condition of the Merging Series
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Merging Series required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(j) Since December 31, 2002, there has not been any material
adverse change in the Merging Series' financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Merging Series of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Surviving Series. For the purposes of this subparagraph (j),
a decline in net asset value per share of the Merging Series due to declines in
market values of securities in the Merging Series' portfolio, the discharge the
Liabilities, or the redemption of Merging Series' shares by shareholders of the
Merging Series shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns,
dividend reporting forms and other tax-related reports of the Merging Series
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Merging Series' knowledge, no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(l) For each taxable year of its operation (including the
taxable year ending on the Closing Date), the Merging Series has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to compute and has
computed (or will compute) its federal income tax under Section 852 of the Code,
and will have distributed all of its investment company taxable income and net
capital gain (as defined in the Code) that has accrued through the Closing Date,
and before the Closing Date will have declared dividends sufficient
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to distribute all of its investment company taxable income and net capital gain
for the period ending on the Closing Date;
(m) All issued and outstanding shares of the Merging Series
are, and on the Closing Date will be, duly and validly issued and outstanding,
will be fully paid and non-assessable and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act and state securities laws.
All of the issued and outstanding shares of the Merging Series will, at the time
of Closing, be held by the persons and in the amounts set forth in the records
of the Transfer Agent, on behalf of the Merging Series, as provided in paragraph
3.3. Except for (x) the right of Class B shares of the Merged Series to
automatically convert into Class A shares of the Merged Series seven years after
purchase, or (y) in connection with any automatic dividend reinvestment plan
available to the Merged Series' shareholders, The Merging Series does not have
outstanding any options, warrants or other rights to subscribe for or to
purchase any of the shares of the Merging Series, nor is there outstanding any
security convertible into any of the Merging Series shares;
(n) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Phoenix Trust, on behalf of
the Merging Series, and, subject to the approval of the shareholders of the
Merging Series, this Agreement will constitute a valid and binding obligation of
the Merging Series, 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;
(o) The information to be furnished by the Merging Series for
use in registration statements, proxy materials and other documents filed or to
be filed with any federal, state or local regulatory authority (including the
NASD), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with Federal securities and other laws and regulations
thereunder applicable thereto;
(p) The proxy statement of the Merging Series (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Merging Series, will, on the
effective date of the Registration Statement and on the Closing Date (i) 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 materially
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Surviving Series for use therein, and
(ii) comply in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder; and
(q) Any person who acts as legal counsel for the disinterested
directors of the Phoenix Trust is an independent legal counsel as such term is
defined under applicable law.
4.2 The Investment Trust 97, on behalf of the Surviving Series,
represents and warrants as follows:
(a) The Surviving Series is duly organized as a series of the
Investment Trust 97, which is a Statutory Trust duly organized, validly existing
and in good standing under the laws of the State of Delaware with power under
the Investment Trust 97's Declaration of Trust to own all of its assets and to
carry on its business as it is now being conducted;
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(b) The Investment Trust 97 is a registered investment company
classified as a management company of the open-end type, and its registration
with the Commission as an investment company under the 1940 Act and the
registration of shares of the Surviving Series under the 1933 Act, is in full
force and effect;
(c) No consent, approval, authorization or order of any court
or governmental authority is required for the consummation by the Surviving
Series of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional
information of the Surviving Series conforms or conformed at the time of its use
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 and does not
or did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) On the Closing Date, the Investment Trust 97, on behalf of
the Surviving Series, will have good and marketable title to the Surviving
Series' assets, free of any liens of other encumbrances, except those liens or
encumbrances as to which the Merging Series has received notice and necessary
documentation at or prior to the Closing;
(f) The Surviving Series is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Investment Trust 97's Declaration of Trust or By-Laws
or of any agreement, indenture, instrument, contract, lease or other undertaking
to which the Investment Trust 97, on behalf of the Surviving Series, is a party
or by which it is bound, or (ii) the acceleration of any obligation, or the
imposition of any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Investment Trust 97, on behalf of the
Surviving Series, is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted
by the Phoenix Trust, on behalf of the Merging Series, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Investment Trust 97, on behalf of the Surviving Series, or any of the
Surviving Series' properties or assets that, if adversely determined, would
materially and adversely affect the Surviving Series' financial condition or the
conduct of the Surviving Series' business. The Investment Trust 97, on behalf of
the Surviving Series, knows of no facts or circumstances which, individually or
in the aggregate, with the passage of time or the giving of notice (or both)
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 which materially and adversely affects the Surviving Series'
business or the Surviving Series' ability to consummate the transactions herein
contemplated or that does or could lead to a claim under existing directors and
officers errors and omissions coverage;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Surviving Series at August 31, 2003, have been audited by PwC, independent
accountants, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Merging Series) present
fairly, in all material respects, the financial condition of the Surviving
Series as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Surviving Series required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of such
date not disclosed therein;
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(i) Since August 31, 2003, there has not been any material
adverse change in the Surviving Series' financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Surviving Series of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Merging Series. For purposes of this subparagraph (i), a
decline in net asset value per share of the Surviving Series due to declines in
market values of securities in the Surviving Series' portfolio, the discharge of
Surviving Series' liabilities, or the redemption of Surviving Series Shares by
shareholders of the Surviving Series, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Surviving Series
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Surviving Series' knowledge no such
return is currently under audit and no assessment has been asserted with respect
to such returns;
(k) For each taxable year of its operation (including the
taxable year including the Closing Date), the Surviving Series has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company has been eligible to compute and has computed (or
will compute) its federal income tax under Section 852 of the Code;
(l) All issued and outstanding shares of the Surviving Series
are, and on the Closing Date will be, duly and validly issued and outstanding,
will be fully paid and non-assessable and have been offered and sold in every
state and the District of Columbia in compliance in all material respects with
applicable registration requirements of the 1933 Act. Except for (x) the right
of Class B shares of the Merged Series to automatically convert into Class A
shares of the Surviving Series seven years after purchase, or (y) in connection
with any automatic dividend reinvestment plan available to the Surviving Series'
shareholders, the Surviving Series does not have outstanding any options,
warrants or other rights to subscribe for or purchase any shares of the
Surviving Series, nor is there outstanding any security convertible into any
shares of the Surviving Series;
(m) The execution, delivery and performance of this Agreement
will have been fully authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Investment Trust 97, on
behalf of the Surviving Series, and this Agreement will constitute a valid and
binding obligation of the Investment Trust 97, on behalf of the Surviving
Series, enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) Surviving Series Shares to be issued and delivered to the
Merging Series, for the account of the Merging Series Shareholders, pursuant to
the terms of this Agreement, will on the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued Surviving
Series Shares, and will be fully paid and non-assessable;
(o) The information to be furnished by the Investment Trust 97
for use in the registration statements, proxy materials and other documents
filed or to be filed with any federal, state or local regulatory authority
(including the NASD) that may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete in all material respects and
shall comply in all material respects with Federal securities and other laws and
regulations applicable thereto;
(p) That insofar as it relates to the Surviving Series, the
Registration Statement relating to the Surviving Series Shares issuable
hereunder, and the Proxy Statement to be included in the Registration Statement,
and any amendment or supplement to the foregoing, will, from the effective date
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of the Registration Statement through the date of the meeting of shareholders of
the Merging Series contemplated therein (i) 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 provided, however, that the
representations and warranties in this subparagraph (p) shall not apply to
statements in or omissions from the Registration Statement made in reliance upon
and in conformity with information that was furnished by the Merging Series for
use therein, and (ii) comply in all material respects with the provisions of the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder;
(q) The majority of the Trustees of the Investment Trust 97
are not interested persons of the Investment Trust 97, and those directors
select and nominate any of the disinterested directors of the Investment Trust
97; and
(r) Any person who acts as legal counsel for the disinterested
directors of the Investment Trust 97 is an independent legal counsel as such
term is defined under applicable law.
5. COVENANTS OF THE INVESTMENT TRUST 97 AND THE PHOENIX TRUST,
ON BEHALF OF THE SURVIVING SERIES AND THE MERGING SERIES, RESPECTIVELY
5.1 The Surviving Series and the Merging Series each will operate
its business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distribution that may be advisable.
5.2 The Phoenix Trust will call a meeting of the shareholders of
the Merging Series to consider and act upon this Agreement and to take all other
reasonable action necessary to obtain approval of the transactions contemplated
herein.
5.3 The Investment Trust 97 covenants that the Surviving Series
Shares to be issued hereunder are not being acquired for the purpose of making
any distribution thereof, other than in accordance with the terms of this
Agreement.
5.4 Subject to the provisions of this Agreement, the Trusts 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.
5.5 As soon as is reasonably practicable after the Closing, the
Merging Series will make a liquidating distribution to its shareholders
consisting of the Surviving Series Shares received at the Closing.
5.6 The Phoenix Trust will provide the Investment Trust 97 with
information reasonably necessary for the preparation of a registration statement
on Form N-14 to the Merged Series (the "Registration Statement"), such
Registration statement to consist of, without limitation, a prospectus and Proxy
Statement.
5.7 The Phoenix Trust, on behalf of the Merging Series, covenants
that it will, from time to time, as and when reasonably requested by the
Investment Trust 97, on behalf of the Surviving Series, execute and deliver or
cause to be executed and delivered all such assignments and other instruments,
and will take or cause to be taken such further action as the Investment Trust
97, on behalf of the Surviving Series, may reasonably deem necessary or
desirable in order to carry out the intent and purpose of this
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Agreement to vest in and confirm (a) the Phoenix Trust's, on behalf of the
Merging Series', title to and possession of the Surviving Series Shares to be
delivered hereunder, and (b) the Investment Trust 97's on behalf of the
Surviving Series', title to and possession of all the Assets.
5.8 The Surviving Series will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act and the 1940 Act as
may be necessary in order to continue its operations after the Closing Date.
5.9 (a) Subject to governing law, until the fifth anniversary of
the Closing Date, the Investment Trust 97, on behalf of itself and any successor
thereto by reason of merger, reorganization, sale or other similar transaction,
shall: (a) continue that certain joint insured bond referred to as Investment
Management Insurance Policy No. 000-00-00 issued by American International
Specialty Lines Insurance Company (such policy, or any replacement thereof
during the operative period referenced above shall hereafter be referred to as
the "D&O/E&O Insurance"), or such greater insurance as the Investment Trust 97
and all other requisite parties to such joint insured bond shall reasonably
determine; and (b) maintain those indemnity provisions as provided in the
current Declaration of Trust of the Investment Trust 97 and By-Laws applicable
with regard to the proper and lawful activities of a trustee (the "Indemnity").
(b) In the event that the D&O/E&O Insurance shall be
terminated during the period transpiring from the Closing Date until the fifth
anniversary thereof, then the Investment Trust 97, individually or together with
one or more parties to the above referenced joint insured bond, will use its
best efforts to procure a directors' and officers errors and omissions insurance
policy for the benefit of the Trustees of the Phoenix Trust, among others, for
claims made against such Trustees during the period stated above, on not less
than substantially the same terms and conditions, including, without limitation,
exclusions from coverage, retention limits and limitations of liability, as
exist for the benefit of such Trustees under the D&O/E&O Insurance Policy
existing as of the Closing Date.
(c) The D&O/E&O Insurance and Indemnity shall apply equally to
the trustees of the Phoenix Trust (constituted as of the date of this Agreement)
as they apply to the trustees of the Investment Trust 97.
(d) Nothing in this Paragraph 5.9 shall be construed as
imposing an obligation on the Investment Trust 97 to take any action to the
extent such action would be prohibited by governing law or the exercise of the
fiduciary duties of the board of trustees of the Investment Trust 97.
(e) In the event that the D&O/E&O Insurance shall be
terminated during the period transpiring from Closing until the fifth
anniversary thereof, and the Investment Trust 97 shall fail or be unwilling to
fulfill its obligations pursuant to clause (b) of this Paragraph 5.9, then
Phoenix Investment Counsel, Inc, the adviser to the Investment Trust 97,
individually or together with one or more parties to the above referenced joint
insured bond, will use its best efforts to procure a directors' and officers
errors and omissions insurance policy for the benefit of the Trustees of the
Phoenix Trust, among others, for claims made against such Trustees during the
period stated above, on not less than substantially the same terms and
conditions, including, without limitation, exclusions from coverage, retention
limits and limitations of liability, as exist for the benefit of such Trustees
under the D&O/E&O Insurance Policy existing as of the Closing Date. The
foregoing notwithstanding, in no event shall Phoenix Investment Counsel, Inc.,
nor any of its affiliates, subsidiaries, parent companies, officers, employees
or directors, in any way be liable or otherwise obligated to directly or
indirectly indemnify or hold harmless the Trustees of the Phoenix Trust for any
loss, cost or liability (including attorneys fees) arising in connection with
the subject transaction or with regard to any claims or causes of action as
might have been subject to possible
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coverage pursuant to the above described coverage whether or not such coverage
is available in accordance with the terms of this clause.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING SERIES
The obligations of the Phoenix Trust, on behalf of the Merging Series,
to consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Investment Trust 97, on behalf of the
Surviving Series, 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 Investment Trust 97,
on behalf of the Surviving Series, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
6.2 The Investment Trust 97, on behalf of the Surviving Series,
shall have performed all of the covenants and complied with all of the
provisions required by this Agreement to be performed or complied with by the
Investment Trust 97, on behalf of the Surviving Series, on or before the Closing
Date; and
6.3 The Merging Series and the Surviving Series shall have agreed
on the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES
The obligations of the Investment Trust 97, on behalf of the Surviving
Series, to complete the transactions provided for herein shall be subject, at
its election, to the performance by the Phoenix Trust, on behalf of the Merging
Series, of all of 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 Phoenix Trust, on
behalf of the Merging Series, 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 Phoenix Trust, on behalf of the Merging Series, shall have
delivered to the Surviving Series a statement of the Assets and the Liabilities,
as of the Closing Date, certified by the Treasurer or any Assistant Treasurer of
the Phoenix Trust;
7.3 The Phoenix Trust, on behalf of the Merging Series, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by Phoenix Trust, on behalf
of the Merging Series, on or before the Closing Date;
7.4 The Merging Series and the Surviving Series shall have agreed
on the number of full and fractional Surviving Series Shares to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1; and
7.5 The Merging Series shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
p.m. Eastern time on the Closing Date; and
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(ii) any undistributed investment company taxable income and net realized
capital gains from any period to the extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING SERIES AND
THE MERGING SERIES
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Phoenix Trust, on behalf of the
Merging Series, or the Investment Trust 97, on behalf of the Surviving Series,
the other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Merging Series in accordance with the provisions of the Phoenix
Trust's Declaration of Trust, and applicable Delaware law and the 1940 Act.
Notwithstanding anything herein to the contrary, neither the Phoenix Trust nor
the Investment Trust 97 may waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall
be pending or, to each Trust's knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated herein;
8.3 All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities deemed necessary
by the Phoenix Trust or the Investment Trust 97 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 Surviving Series or the Merging Series, provided that either party hereto
may for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under
the 1933 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; and
8.5 The parties shall have received the signed opinion of Shearman
& Sterling LLP, addressed to the parties hereto and Phoenix Investment Counsel,
Inc. in the form agreed upon by the parties hereto, substantially to the effect
that, based upon certain facts, and the Officer's Certificate, the transaction
contemplated by this Agreement, will for federal income tax purposes, qualify as
a tax free reorganization described in Section 368(a) of the Code. The delivery
of such opinion is conditioned upon receipt of an Officer's Certificate
substantially in the form agreed upon by the parties.
9. BROKERAGE FEES AND EXPENSES
9.1 The Phoenix Trust, on behalf of the Merging Series, and the
Investment Trust 97, on behalf of the Surviving Series, represent and warrant to
each other that there are no brokers or finders entitled to receive any payments
in connection with the transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization arising
from and after approval by each respective board of trustees, will be borne by
Phoenix Investment Partners, Ltd. The costs of the Reorganization shall include,
but not be limited to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, preparation of the Registration Statement, printing
and distributing the Surviving Series' prospectus and the Merging Series' proxy
materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
12
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Phoenix Trust and the Investment Trust 97 have not made
any representation, warranty or covenant not set forth herein, and 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. The covenants to be performed after the Closing shall survive the
Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party: (i) by mutual agreement of the parties,
or (ii) either party if the Closing shall not have occurred on or before June
30, 2004, unless such date is extended by mutual agreement of the parties, or
(iii) either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or officers,
except for any such material breach or intentional misrepresentation, as to each
of which all remedies at law or in equity of the party adversely affected shall
survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the
Phoenix Trust and the Investment Trust 97; provided, however, that following the
meeting of the shareholders of the Merging Series called by the Phoenix Trust
pursuant to paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions for determining the number of the Surviving
Series Shares to be issued to the Merging Series Shareholders under this
Agreement to the detriment of such shareholders without their further approval.
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
facsimile, personal service or prepaid or certified mail addressed to the
parties hereto at their principal place of business.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
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.
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14.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
principles of conflicts of laws.
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 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 It is expressly agreed that the obligations of the Phoenix
Trust hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Phoenix Trust personally, but
shall bind only the trust property of the Merging Series, as provided in the
Declaration of Trust of the Phoenix Trust. The execution and delivery by such
officers of the Phoenix Trust shall not 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 Merging Series as provided in the
Declaration of Trust of the Phoenix Trust. The Phoenix Trust is a series company
with multiple series, and the Phoenix Trust has entered into this Agreement on
behalf of one such series, the Merging Series. With respect to any obligation of
the Phoenix Trust arising hereunder, the Investment Trust 97 and the Surviving
Series shall look for payment or satisfaction of such obligations solely to the
assets and property of the Merging Series.
14.6 It is expressly agreed that the obligations of the Investment
Trust 97 hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents or employees of the Investment Trust 97 personally,
but shall bind only the trust property of the Surviving Series, as provided in
the Declaration of Trust of the Investment Trust 97. The execution and delivery
by such officers of the Investment Trust 97 shall not 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 Surviving Series as
provided in the Declaration of Trust of the Investment Trust 97. The Investment
Trust 97 is a series company with two portfolio series, and the Investment Trust
97 has entered into this Agreement on behalf of one such series, the Surviving
Series. With respect to any obligation of the Investment Trust 97 arising
hereunder, the Phoenix Trust and the Merging Series shall look for payment or
satisfaction of such obligations solely to the assets and property of the
Surviving Series.
14.7 Except as specifically provided herein, the sole remedy of a
party hereto for a breach of any representation or warranty made in this
Agreement by the other party shall be an election by the non-breaching party not
to complete the transactions contemplated herein as set forth in Sections 6 and
7.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and its seal to be
affixed thereto and attested by its Secretary or Assistant Secretary.
Attest: PHOENIX INVESTMENT TRUST 97, ON BEHALF OF
THE PHOENIX SMALL CAP VALUE FUND
/s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. XxXxxxxxxx
------------------------------ ---------------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxxxx X. XxXxxxxxxx
Assistant Secretary
Title: President
------------------------------------
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Attest: PHOENIX TRUST, ON BEHALF OF THE PHOENIX
APPRECIATION FUND
/s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
----------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
Assistant Secretary
Title: Executive Vice President
------------------------------------
Attest: PHOENIX TRUST, ON BEHALF OF THE
PHOENIX-OAKHURST STRATEGY FUND
/s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
----------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
Assistant Secretary
Title: Executive Vice President
------------------------------------
Agreed and accepted with respect to
Paragraphs 5.9(e) and 14.7
this 15th day of April, 2004.
PHOENIX INVESTMENT COUNSEL, INC.
By:/s/ Xxxx X. Xxxxx
--------------------------
Name Xxxx X. Xxxxx
Title Vice President and Clerk
Agreed and accepted with respect to
Paragraphs 9.2 and 14.7
this 15th day of April, 2004.
PHOENIX INVESTMENT PARTNERS, LTD.
By:/s/ Xxxx X. Xxxxx
--------------------------
Name Xxxx X. Xxxxx
Title Vice President and Secretary
15
