SUB-ITEM 77Q1(g): Exhibits
ANNEX A-2 ? FORM OF
AGREEMENT AND PLAN OF
REORGANIZATION, NON-MONEY
MARKET FUNDS
THIS AGREEMENT AND PLAN OF
REORGANIZATION (the ?Agreement?) is
made as of this [14th] day of [July], 2011, by
and between Federated Asset Allocation
Fund, a Massachusetts business trust, with its
principal place of business at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx, 00000 (the
?Federated Trust?), with respect to its
Federated Asset Allocation Fund (the
?Acquiring Fund?), a series of the Federated
Trust, and EquiTrust Series Fund, Inc., a
Maryland Corporation, with its principal
place of business at 0000 Xxxxxxxxxx Xxxxxx,
Xxxx Xxx Xxxxxx, Xxxx 00000 (the
?EquiTrust Fund?), with respect to its
Managed Portfolio, a series of the EquiTrust
Fund (the ?Acquired Fund? and, collectively
with the Acquiring Fund, the ?Funds?).
This Agreement is intended to be, and
is adopted as, a plan of reorganization within
the meaning of Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Internal Revenue Code of 1986, as
amended (the ?Code?) and the Treasury
Regulations promulgated thereunder. The
reorganization will consist of: (i) the transfer
of substantially all of the assets of the
Acquired Fund to the Acquiring Fund in
exchange solely for Class A and Institutional
Shares, no par value per share, of the
Acquiring Fund (?Acquiring Fund Shares?);
(ii) the distribution of Class A Shares of the
Acquiring Fund to the holders of Class A
and Class B Shares of the Acquired Fund;
(iii) the distribution of Institutional Shares of
the Acquiring Fund to the holders of Class I
Shares of the Acquired Fund; and (iv) the
liquidation of the Acquired Fund as provided
herein, all upon the terms and conditions set
forth in this Agreement (the
?Reorganization?).
WHEREAS, the Acquiring Fund and
the Acquired Fund are separate series of the
Federated Trust and the EquiTrust Fund,
respectively, and the Federated Trust and the
EquiTrust Fund are open-end, registered
management investment companies and the
Acquired Fund owns securities that generally
are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund and
the Acquired Fund are authorized to issue
their shares of beneficial interests and
common stock, respectively;
WHEREAS, the Trustees of the
Federated Trust have determined that the
Reorganization, with respect to the
Acquiring Fund, is in the best interests of the
Acquiring Fund and that the interests of the
existing shareholders of the Acquiring Fund
will not be diluted as a result of the
Reorganization;
WHEREAS, the Directors of the
EquiTrust Fund have determined that the
Reorganization, with respect to the Acquired
Fund, is in the best interests of the Acquired
Fund;
NOW, THEREFORE, in consideration
of the premises and of the covenants and
agreements hereinafter set forth, the parties
hereto covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE
ACQUIRED FUND IN EXCHANGE
FOR ACQUIRING FUND
SHARES AND LIQUIDATION OF THE
ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the
terms and conditions contained herein and on
the basis of the representations and
warranties contained herein, the Acquired
Fund agrees to transfer substantially all of its
assets, as set forth in paragraph 1.2, to the
Acquiring Fund. In exchange, the Acquiring
Fund agrees: (i) to deliver to the Acquired
Fund the number of each class of full and
fractional Acquiring Fund Shares,
determined by (a) multiplying the shares
outstanding of each class of shares of the
Acquired Fund (the ?Acquired Fund
Shares?) by (b) the ratio computed by
dividing (x) the net asset value per share of
such class of Acquired Fund Shares
computed in the manner and as of the time
and date set forth in paragraph 2.1 by (y) the
net asset value per share of the
corresponding class of Acquiring Fund
Shares computed in the manner and as of the
time and date set forth in paragraph 2.2.
Holders of Class A and Class B Shares of the
Acquired Fund will receive Class A Shares
of the Acquiring Fund. Holders of the Class I
Shares of the Acquired Fund will receive
Institutional Shares of the Acquiring Fund.
Such transactions shall take place at the
closing on the Closing Date provided for in
paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The
assets of the Acquired Fund to be acquired
by the Acquiring Fund shall consist of all the
assets of the Acquired Fund, including,
without limitation, cash, securities,
commodities, interests in futures and
dividends or interest receivable, owned by
the Acquired Fund, other than any deferred
or prepaid expenses shown as an asset on the
books of the Acquired Fund on the Closing
Date. Such assets not acquired by the
Acquiring Fund shall be excluded from the
calculation of net asset value per share of
each class of the Acquired Fund Shares
under this Agreement.
The Acquired Fund has provided the
Acquiring Fund with its most recent audited
financial statements, which contain a list of
all of the Acquired Fund?s assets as of the
date of such statements. The Acquired Fund
hereby represents that as of the date of the
execution of this Agreement, there have been
no changes in its financial position as
reflected in such financial statements other
than those occurring in the ordinary course
of business in connection with the purchase
and sale of securities, the issuance and
redemption of Acquired Fund Shares and the
payment of normal operating expenses,
dividends and capital gains distributions.
1.3 LIABILITIES TO BE
DISCHARGED. The Acquired Fund will
discharge all of its liabilities and obligations
prior to the Closing Date.
1.4 LIQUIDATION AND
DISTRIBUTION. On or as soon after the
Closing Date as is conveniently practicable:
(a) the Acquired Fund will distribute in
complete liquidation of the Acquired Fund,
pro rata to its shareholders of record,
determined as of the close of business on the
Closing Date (the ?Acquired Fund
Shareholders?), all of the Acquiring Fund
Shares received by the Acquired Fund
pursuant to paragraph 1.1; and (b) the
Acquired Fund will thereupon proceed to
dissolve and terminate as set forth in
paragraph 1.8 below. Such distribution will
be accomplished by the transfer of Acquiring
Fund Shares credited to the account of the
Acquired Fund on the books of the
Acquiring Fund to open accounts on the
share records of the Acquiring Fund in the
name of the Acquired Fund Shareholders,
and representing the respective pro rata
number of Acquiring Fund Shares due such
shareholders. All issued and outstanding
Acquired Fund Shares will simultaneously
be canceled on the books of the Acquired
Fund. The Acquiring Fund shall not issue
certificates representing Acquiring Fund
Shares in connection with such transfer.
After the Closing Date, the Acquired Fund
shall not conduct any business except in
connection with its termination.
1.5 OWNERSHIP OF SHARES.
Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund?s
transfer agent. Acquiring Fund Shares will
be issued simultaneously to the Acquired
Fund, in an amount determined under
paragraph 2.3, to be distributed to Acquired
Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer
taxes payable upon the issuance of Acquiring
Fund Shares in a name other than the
registered holder of the Acquired Fund
Shares on the books of the Acquired Fund as
of that time shall, as a condition of such
issuance and transfer, be paid by the person
to whom such Acquiring Fund Shares are to
be issued and transferred.
1.7 REPORTING RESPONSIBILITY.
Any reporting responsibility of the Acquired
Fund is and shall remain the responsibility of
the Acquired Fund.
1.8 TERMINATION. The Acquired
Fund shall be terminated promptly following
the Closing Date and the making of all
distributions pursuant to paragraph 1.4.
1.9 BOOKS AND RECORDS. All
books and records of the Acquired Fund,
including all books and records required to
be maintained under the Investment
Company Act of 1940 (the ?1940 Act?), and
the rules and regulations thereunder, shall be
available to the Acquiring Fund from and
after the Closing Date and shall be turned
over to the Acquiring Fund as soon as
practicable following the Closing Date.
1.10 SALES CHARGES. Holders of
Class A, Class B or Class I Shares of the
Acquired Fund as of the Closing Date shall
not be subject to any front end or contingent
deferred sales load of the Acquiring Fund on
shares received on the Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ACQUIRED
FUND SHARES. The net asset value per
share of each class of Acquired Fund Shares
shall be the net asset value per share of such
class of Acquired Fund Shares (excluding
any assets excluded from the net asset value
calculation under paragraph 2.1) computed at
the closing of the Closing Date, using the
valuation procedures set forth in the
Federated Trust?s Declaration of Trust and
the Acquiring Fund?s then current prospectus
and statement of additional information, or
such other valuation procedures as shall be
mutually agreed upon by the parties.
2.2 VALUATION OF ACQUIRING
FUND SHARES. The net asset value per
share of each class of Acquiring Fund Shares
shall be the net asset value per share of such
class of Acquiring Fund Shares computed at
the closing on the Closing Date, using the
valuation procedures set forth in the
Federated Trust?s Declaration of Trust and
the Acquiring Fund?s then current prospectus
and statement of additional information, or
such other valuation procedures as shall be
mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The
number of each class of Acquiring Fund
Shares to be issued (including fractional
shares, if any) in exchange for the Acquired
Fund?s assets, shall be determined by
(a) multiplying the shares outstanding of
each class of Acquired Fund Shares by
(b) the ratio computed by (x) dividing the net
asset value per share of such class of
Acquired Fund Shares determined in
accordance with paragraph 2.1 by (y) the net
asset value per share of the corresponding
class of Acquiring Fund Shares determined
in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE.
All computations of value shall be made by
State Street Bank and Trust Company, on
behalf of the Acquiring Fund and the
Acquired Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing
shall occur on or about [July 15], 2011, or
such other date(s) as the parties may agree to
in writing (the ?Closing Date?). All acts
taking place at the closing shall be deemed to
take place at 4:00 p.m. Eastern Time on the
Closing Date unless otherwise provided
herein. The closing shall be held at the
offices of Federated Services Company,
0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, or at such other
time and/or place as the parties may agree.
3.2 CUSTODIAN?S CERTIFICATE.
XX Xxxxxx Xxxxx Bank, N.A., as custodian
for the Acquired Fund (the ?Custodian?),
shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the
Acquired Fund?s portfolio securities, cash,
and any other assets have been delivered in
proper form to the Acquiring Fund on the
Closing Date; and (b) all necessary taxes
including all applicable federal and state
stock transfer stamps, if any, shall have been
paid, or provision for payment shall have
been made, in conjunction with the delivery
of portfolio securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN
TRADING. In the event that on the
scheduled Closing Date, either: (a) the
NYSE or another primary exchange on
which the portfolio securities of the
Acquiring Fund or the Acquired Fund are
purchased or sold, shall be closed to trading
or trading on such exchange shall be
restricted; or (b) trading or the reporting of
trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the
value of the net assets of the Acquiring Fund
or the Acquired Fund is impracticable, the
Closing Date shall be postponed until the
first Friday on which the NYSE is open
following the business day on which trading
is fully resumed and reporting is restored, or
such other business day as the parties hereto
shall agree.
3.4 TRANSFER AGENT?S
CERTIFICATE. EquiTrust Investment
Management Services, Inc., as transfer agent
for the Acquired Fund as of the Closing
Date, shall deliver at the Closing a certificate
of an authorized officer stating that its
records contain the names and addresses of
Acquired Fund Shareholders, and the
number and percentage ownership of
outstanding shares owned by each such
shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and
deliver, or cause EquiTrust Investment
Management Services, Inc., its transfer
agent, to issue and deliver, a confirmation
evidencing Acquiring Fund Shares to be
credited on the Closing Date to the Secretary
of the EquiTrust Fund or provide evidence
satisfactory to the Acquired Fund that the
Acquiring Fund Shares have been credited to
the Acquired Fund?s account on the books of
the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of
sale, checks, assignments, share certificates,
receipts and other documents, if any, as such
other party or its counsel may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES
4.1 REPRESENTATIONS OF THE
ACQUIRED FUND. The EquiTrust Fund,
on behalf of the Acquired Fund, represents
and warrants to the Federated Trust, on
behalf of the Acquiring Fund, as follows:
a)
The Acquired Fund is a separate series
of the EquiTrust Fund, a corporation
duly organized, validly existing, and in
good standing under the laws of the
State of Maryland. The EquiTrust Fund
is registered as an open-end
management investment company under
the 1940 Act, and the EquiTrust Fund?s
registration with the Securities and
Exchange Commission (the
?Commission?) as an investment
company under the 1940 Act is in full
force and effect.
b)
The current prospectus and statement of
additional information of the EquiTrust
Fund conform in all material respects to
the applicable requirements of the
Securities Act of 1933 (the ?1933 Act?)
and the 1940 Act, and the rules and
regulations thereunder, and do not
include any untrue statement of a
material fact or omit to state any
material fact required to be stated or
necessary to make the statements
therein, in light of the circumstances
under which they were made, not
misleading.
c)
The Acquired Fund is not, and the
execution, delivery, and performance of
this Agreement (subject to shareholder
approval) will not result, in violation of
any provision of the EquiTrust Fund?s
Articles of Incorporation or By-Laws or
of any material agreement, indenture,
instrument, contract, lease, or other
undertaking to which the Acquired
Fund is a party or by which it is bound.
d)
The Acquired Fund has no material
contracts or other commitments (other
than this Agreement) that will be
terminated with liability to it before the
Closing Date, except for liabilities, if
any, to be discharged as provided in
paragraph 1.3 hereof.
e)
Except as otherwise disclosed in writing
to and accepted by the Acquiring Fund,
no litigation, administrative proceeding,
or investigation of or before any court
or governmental body is presently
pending or to its knowledge threatened
against the Acquired Fund or any of its
properties or assets, which, if adversely
determined, would materially and
adversely affect its financial condition,
the conduct of its business, or the ability
of the Acquired Fund to carry out the
transactions contemplated by this
Agreement. The Acquired Fund knows
of no facts that might form the basis for
the institution of such proceedings and
is not a party to or subject to the
provisions of any order, decree, or
judgment of any court or governmental
body that materially and adversely
affects its business or its ability to
consummate the transactions
contemplated herein.
f)
The audited financial statements of the
Acquired Fund as of July 31 2010, and
for the fiscal year then ended have been
prepared in accordance with United
States generally accepted accounting
principles, and such statements (copies
of which have been furnished to the
Acquiring Fund) fairly reflect the
financial condition of the Acquired
Fund as of such date, and there are no
known contingent liabilities of the
Acquired Fund as of such date that are
not disclosed in such statements.
g)
The unaudited financial statements of
the Acquired Fund as of January 31,
2011, and for the six months then ended
have been prepared in accordance with
United States generally accepted
accounting principles, and such
statements (copies of which have been
furnished to the Acquiring Fund) fairly
reflect the financial condition of the
Acquired Fund as of such date, and
there are no known contingent liabilities
of the Acquired Fund as of such date
that are not disclosed in such
statements.
h)
Since the date of the financial
statements referred to in paragraph (g)
above, there have been no material
adverse changes in the Acquired Fund?s
financial condition, assets, liabilities or
business (other than changes occurring
in the ordinary course of business), or
any incurrence by the Acquired Fund of
indebtedness maturing more than one
year from the date such indebtedness
was incurred, except as
otherwise disclosed to and accepted
by the Acquiring Fund. For the
purposes of this paragraph (h), a
decline in the net asset
value of the Acquired Fund shall not
constitute a material adverse change.
i)
As of the date hereof, except as
previously disclosed to the Acquiring
Fund in writing, and except as have
been corrected as required by applicable
law, and to the best of the Acquired
Fund?s knowledge, there have been no
material miscalculations of the net asset
value of the Acquired Fund or the net
asset value per share of any class of
shares during the twelve-month period
preceding the date hereof and preceding
the Closing Date, and all such
calculations have been made in
accordance with the applicable
provisions of the 1940 Act.
j)
The minute books and other similar
records of the EquiTrust Fund as made
available to the Acquiring Fund prior to
the execution of this Agreement contain
a true and complete record of all action
taken at all meetings and by all written
consents in lieu of meetings of the
shareholders of the Acquired Fund, the
EquiTrust Fund?s Board of Directors
and committees of the EquiTrust Fund?s
Board of Directors. The stock transfer
ledgers and other similar records of the
Acquired Fund as made available to the
Acquiring Fund prior to the execution
of this Agreement, and as existing on
the Closing Date, accurately reflect all
record transfers prior to the execution of
this Agreement, or the Closing Date, as
applicable, in the shares of the Acquired
Fund.
k)
The EquiTrust Fund has maintained, or
caused to be maintained on its behalf,
all books and records required of a
registered investment company in
compliance with the requirements of
Section 31 of the 1940 Act and rules
thereunder.
l)
All federal and other tax returns and
reports of the Acquired Fund required
by law to be filed, have been filed, and
all federal and other taxes shown due on
such returns and reports have been paid,
or provision shall have been made for
the payment thereof. To the best of the
Acquired Fund?s knowledge, no such
return is currently under audit, and no
assessment has been asserted with
respect to such returns.
m)
All issued and outstanding shares of the
Acquired Fund are duly and validly
issued and outstanding, fully paid and
non-assessable by the Acquired Fund.
All of the issued and outstanding shares
of the Acquired Fund will, at the time of
the Closing Date, be held by the persons
and in the amounts set forth in the
records of the Acquired Fund?s transfer
agent as provided in paragraph 3.4. The
Acquired Fund has no outstanding
options, warrants, or other rights to
subscribe for or purchase any of the
Acquired Fund Shares, and has no
outstanding securities convertible into
any of the Acquired Fund Shares.
n)
At the Closing Date, the Acquired Fund
will have good and marketable title to
the Acquired Fund?s assets to be
transferred to the Acquiring Fund
pursuant to paragraph 1.2, and full right,
power, and authority to sell, assign,
transfer, and deliver such assets
hereunder, free of any lien or other
encumbrance, except those liens or
encumbrances to which the Acquiring
Fund has received notice, and, upon
delivery and payment for such assets,
and the filing of any articles, certificates
or other documents under the laws of
the State of Maryland, the Acquiring
Fund will acquire good and marketable
title, subject to no restrictions on the
full transfer of such assets, other than
such restrictions as might arise under
the 1933 Act, and other than as
disclosed to and accepted by the
Acquiring Fund.
o)
The execution, delivery and
performance of this Agreement have
been duly authorized by all necessary
action on the part of the Acquired Fund.
Subject to approval by the Acquired
Fund shareholders, this Agreement
constitutes a valid and binding
obligation of the Acquired Fund,
enforceable in accordance with its
terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to
or affecting creditors? rights and to
general equity principles.
p)
The information to be furnished by the
Acquired Fund for use in no-action
letters, applications for orders,
registration statements, proxy materials,
and other documents that may be
necessary in connection with the
transactions contemplated herein shall
be accurate and complete in all material
respects and shall comply in all material
respects with federal securities and
other applicable laws and regulations.
q)
From the effective date of the
Registration Statement (as defined in
paragraph 5.7), through the time of the
meeting of the Acquired Fund
shareholders and on the Closing Date,
any written information furnished by
the EquiTrust Fund with respect to the
Acquired Fund for use in the Proxy
Materials (as defined in paragraph 5.7),
or any other materials provided in
connection with the Reorganization,
does not and will not contain any untrue
statement of a material fact or omit to
state a material fact required to be stated
or necessary to make the statements, in
light of the circumstances under which
such statements were made, not
misleading.
r)
The Acquired Fund has qualified and
elected to be treated as a ?regulated
investment company? under the Code (a
?RIC?), as of and since its first taxable
year of operations; and qualifies and
will continue to qualify as a RIC under
the Code for its taxable year ending
upon its liquidation.
s)
No governmental consents, approvals,
authorizations or filings are required
under the 1933 Act, the Securities
Exchange Act of 1934 (the ?1934 Act?),
the 1940 Act or Maryland law for the
execution of this Agreement by the
EquiTrust Fund, for itself and on behalf
of the Acquired Fund, except for the
effectiveness of the Registration
Statement, and the filing of any articles,
certificates or other documents that may
be required under Maryland law, and
except for such other consents,
approvals, authorizations and filings as
have been made or received, and such
consents, approvals, authorizations and
filings as may be required subsequent to
the Closing Date, it being understood,
however, that this Agreement and the
transactions contemplated herein must
be approved by the shareholders of the
Acquired Fund as described in
paragraph 5.2.
4.2 REPRESENTATIONS OF THE
ACQUIRING FUND. The Federated Trust,
on behalf of the Acquiring Fund, represents
and warrants to the EquiTrust Fund, on
behalf of the Acquired Fund, as follows:
a)
The Acquiring Fund is a separate series
of a business trust, duly organized,
validly existing and in good standing
under the laws of the Commonwealth of
Massachusetts.
b)
The Federated Trust is registered as an
open-end management investment
company under the 1940 Act, and the
Federated Trust?s registration with the
Commission as an investment company
under the 1940 Act is in full force and
effect.
c)
The current prospectus and statement of
additional information of the Acquiring
Fund conform in all material respects to
the applicable requirements of the 1933
Act and the 1940 Act and the rules and
regulations thereunder, and do not
include any untrue statement of a
material fact or omit to state any
material fact required to be stated or
necessary to make such statements
therein, in light of the circumstances
under which they were made, not
misleading.
d)
The Acquiring Fund is not, and the
execution, delivery and performance of
this Agreement will not, result in a
violation of the Federated Trust?s
Declaration of Trust or By-Laws or of
any material agreement, indenture,
instrument, contract, lease, or other
undertaking to which the Acquiring
Fund is a party or by which it is bound.
e)
Except as otherwise disclosed in writing
to and accepted by the Acquired Fund,
no litigation, administrative proceeding
or investigation of or before any court
or governmental body is presently
pending or to its knowledge threatened
against the Acquiring Fund or any of its
properties or assets, which, if adversely
determined, would materially and
adversely affect its financial condition,
the conduct of its business or the ability
of the Acquiring Fund to carry out the
transactions contemplated by this
Agreement. The Acquiring Fund knows
of no facts that might form the basis for
the institution of such proceedings and
it is not a party to or subject to the
provisions of any order, decree, or
judgment of any court or governmental
body that materially and adversely
affects its business or its ability to
consummate the transaction
contemplated herein.
f)
The financial statements of the
Acquiring Fund as of July 31, 2010 and
for the fiscal year then ended have been
prepared in accordance with United
States generally accepted accounting
principles, and such
statements (copies of which have been
furnished to the Acquired Funds) fairly
reflect the financial condition of the
Acquiring Fund as of such date, and
there are no known contingent liabilities
of the Acquiring Fund as of such date
that are not disclosed in such
statements.
g)
The unaudited financial statements of
the Acquired Fund as of January 31,
2011, and for the six months then ended
have been prepared in accordance with
United States generally accepted
accounting principles, and such
statements (copies of which have been
furnished to the Acquiring Fund) fairly
reflect the financial condition of the
Acquired Fund as of such date, and
there are no known contingent liabilities
of the Acquired Fund as of such date
that are not disclosed in such
statements.
h)
Since the date of the financial
statements referred to in paragraph (g)
above, there have been no material
adverse changes in the Acquiring
Fund?s financial condition, assets,
liabilities or business (other than
changes occurring in the ordinary
course of business), or any incurrence
by the Acquiring Fund of indebtedness
maturing more than one year from the
date such indebtedness was incurred,
except as otherwise disclosed to and
accepted by the Acquired Fund. For the
purposes of this paragraph (h), a decline
in the net asset value of the Acquiring
Fund shall not constitute a material
adverse change.
i)
All federal and other tax returns and
reports of the Acquiring Fund required
by law to be filed, have been filed, and
all federal and other taxes shown due on
such returns and reports have been paid,
or provision shall have been made for
the payment thereof. To the best of the
Acquiring Fund?s knowledge, no such
return is currently under audit, and no
assessment has been asserted with
respect to such returns.
j)
All issued and outstanding Acquiring
Fund Shares are duly and validly issued
and outstanding, fully paid and non-
assessable by the Acquiring Fund. The
Acquiring Fund has no outstanding
options, warrants, or other rights to
subscribe for or purchase any Acquiring
Fund Shares, and there are no
outstanding securities convertible into
any Acquiring Fund Shares.
k)
The execution, delivery and
performance of this Agreement have
been duly authorized by all necessary
action on the part of the Acquiring
Fund, and this Agreement constitutes a
valid and binding obligation of the
Acquiring Fund, enforceable in
accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency,
reorganization, moratorium, and other
laws relating to or affecting creditors?
rights and to general equity principles.
l)
Acquiring Fund Shares to be issued and
delivered to the Acquired Fund for the
account of the Acquired Fund
Shareholders pursuant to the terms of
this Agreement will, at the Closing
Date, have been duly authorized. When
so issued and delivered, such shares will
be duly and validly issued Acquiring
Fund Shares, and will be fully paid and
non-assessable.
m)
The information to be furnished by the
Acquiring Fund for use in no-action
letters, registration statements, proxy
materials, and other documents that
may be necessary in connection with
the transactions contemplated herein
shall be accurate and complete in all
material respects and shall comply in all
material respects with federal securities
and other laws and regulations.
n)
From the effective date of the
Registration Statement (as defined in
paragraph 5.7), through the time of the
meeting of the Acquired Fund
shareholders and on the Closing Date,
any written information furnished by
the Federated Trust with respect to the
Acquiring Fund for use in the Proxy
Materials (as defined in paragraph 5.7),
or any other materials provided in
connection with the Reorganization,
does not and will not contain any untrue
statement of a material fact or omit to
state a material fact required to be stated
or necessary to make the statements, in
light of the circumstances under which
such statements were made, not
misleading.
o)
The Acquiring Fund has qualified and
elected to be treated as a RIC under the
Code as of and since its first taxable
year of operations; and qualifies and
shall continue to qualify as a RIC under
the Code for its current taxable year.
p)
No governmental consents, approvals,
authorizations or filings are required
under the 1933 Act, the 1934 Act, the
1940 Act or Massachusetts law for the
execution of this Agreement by the
Federated Trust, for itself and on behalf
of the Acquiring Fund, or the
performance of the Agreement by the
Federated Trust, for itself and on behalf
of the Acquiring Fund, except for the
effectiveness of the Registration
Statement, and the filing of any articles,
certificates or other documents that may
be required under Massachusetts law,
and such other consents, approvals,
authorizations and filings as have been
made or received, and except for such
consents, approvals, authorizations and
filings as may be required subsequent to
the Closing Date.
q)
The Acquiring Fund agrees to use all
reasonable efforts to obtain the
approvals and authorizations required
by the 1933 Act, the 1940 Act, and any
state Blue Sky or securities laws as it
may deem appropriate in order to
continue its operations after the Closing
Date.
ARTICLE V
COVENANTS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY
COURSE. The Acquiring Fund and the
Acquired Fund will each operate its
respective business in the ordinary course
between the date of this Agreement and the
Closing Date, it being understood that such
ordinary course of business will include
customary dividends and shareholder
purchases and redemptions.
5.2 APPROVAL OF
SHAREHOLDERS. The EquiTrust Fund
will call a special meeting of the Acquired
Fund shareholders to consider and act upon
this Agreement and to take all other
appropriate action necessary to obtain
approval of the transactions contemplated
herein.
5.3 INVESTMENT
REPRESENTATION. The Acquired Fund
covenants that the Acquiring Fund Shares to
be issued pursuant to this Agreement are not
being acquired for the purpose of making
any distribution, other than in connection
with the Reorganization and in accordance
with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION.
The Acquired Fund will assist the Acquiring
Fund in obtaining such information as the
Acquiring Fund reasonably requests
concerning the beneficial ownership of the
Acquired Fund?s shares.
5.5 FURTHER ACTION. Subject to
the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will
each take or cause to be taken, all action, and
do or cause to be done, all things reasonably
necessary, proper or advisable to
consummate and make effective the
transactions contemplated by this
Agreement, including any actions required to
be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS
AND PROFITS. As promptly as practicable,
but in any case within sixty days after the
Closing Date, the Acquired Fund shall
furnish the Acquiring Fund, in such form as
is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits
of the Acquired Fund for federal income tax
purposes that will be carried over by the
Acquiring Fund as a result of Section 381 of
the Code, and which will be certified by the
EquiTrust Fund?s Treasurer.
5.7 PREPARATION OF
REGISTRATION STATEMENT AND
SCHEDULE 14A PROXY STATEMENT.
The Federated Trust will prepare and file
with the Commission a registration statement
on Form N-14 relating to the Acquiring Fund
Shares to be issued to shareholders of the
Acquired Fund (the ?Registration
Statement?). The Registration Statement on
Form N-14 shall include a proxy statement
and a prospectus of the Acquiring Fund
relating to the transaction contemplated by
this Agreement. The Registration Statement
shall be in compliance with the 1933 Act, the
1934 Act and the 1940 Act, as applicable.
Each party will provide the other party with
the materials and information necessary to
prepare the registration statement on
Form N-14 (the ?Proxy Materials?), for
inclusion therein, in connection with the
meeting of the Acquired Fund?s shareholders
to consider the approval of this Agreement
and the transactions contemplated herein.
5.8 On or before the Closing Date, the
Acquired Fund shall have declared and paid
a dividend or dividends which, together with
all previous such dividends, shall have the
effect of distributing to its shareholders all of
the Acquired Fund?s investment company
taxable income (computed without regard to
any deduction for dividends paid), if any,
plus the excess, if any, of its interest income
excludible from gross income under
Section 103(a) of the Code over its
deductions disallowed under Sections 265
and 171(a)(2) of the Code for all taxable
periods or years ending on or before the
Closing Date, and all of its net capital gains
realized (after reduction for any capital loss
carry forward), if any, in all taxable periods
or years ending on or before the Closing
Date.
5.9 It is the intention of the parties that
the transaction will qualify as a
reorganization within the meaning of
Section 368(a) of the Code. None of the
Federated Trust, EquiTrust, the Acquiring
Funds or the Acquired Fund shall take any
action or cause and action to be taken
(including, without limitation, the filing of
any tax return) that is inconsistent with such
treatment or that results in the failure of the
transaction to qualify as a reorganization
within the meaning of Section 368(a) of the
Code. At or prior to the Closing Date, the
parties to this Agreement will take such
reasonable action, or cause such action to be
taken, as is reasonably necessary to enable
K&L Gates LLP to render the tax opinion
contemplated in this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE ACQUIRED
FUND
The obligations of the Acquired Fund
to consummate the transactions provided for
herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the
obligations to be performed by the Acquiring
Fund pursuant to this Agreement on or
before the Closing Date, and, in addition,
subject to the following conditions:
All representations, covenants, and
warranties of the Acquiring Fund contained
in this Agreement shall be true and correct in
all material respects as of the date hereof and
as of the Closing Date, with the same force
and effect as if made on and as of the
Closing Date. The Acquiring Fund shall have
delivered to the Acquired Fund a certificate
executed in the Acquiring Fund?s name by
the Federated Trust?s President or Vice
President and its Treasurer, in form and
substance satisfactory to the Acquired Fund
and dated as of the Closing Date, to such
effect and as to such other matters as the
Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE ACQUIRING
FUND
The obligations of the Acquiring Fund
to consummate the transactions provided for
herein shall be subject, at its election, to the
performance by the Acquired Fund of all the
obligations to be performed by the Acquired
Fund pursuant to this Agreement, on or
before the Closing Date and, in addition,
shall be subject to the following conditions:
All representations, covenants, and
warranties of the Acquired Fund contained in
this Agreement shall be true and correct in
all material respects as of the date hereof and
as of the Closing Date, with the same force
and effect as if made on and as of such
Closing Date. The Acquired Fund shall have
delivered to the Acquiring Fund on such
Closing Date a certificate executed in the
Acquired Fund?s name by the EquiTrust
Fund?s President or Vice President and the
Treasurer, in form and substance satisfactory
to the Acquiring Fund and dated as of such
Closing Date, to such effect and as to such
other matters as the Acquiring Fund shall
reasonably request.
The Acquired Fund shall have
delivered to the Acquiring Fund a statement
of the Acquired Fund?s assets and liabilities,
together with a list of the Acquired Fund?s
portfolio securities showing the tax costs of
such securities by lot and the holding periods
of such securities, as of the Closing Date,
certified by the Treasurer of the EquiTrust
Fund.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT
TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED
FUND
If any of the conditions set forth below
do not exist on or before the Closing Date
with respect to the Acquired Fund or the
Acquiring Fund, the other party to this
Agreement shall, at its option, not be
required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the
transactions contemplated herein, with
respect to the Acquired Fund, shall have
been approved by the requisite vote of the
holders of the outstanding shares of the
Acquired Fund in accordance with applicable
law and the provisions of the EquiTrust
Fund?s Articles of Incorporation and By-
Laws. Certified copies of the resolutions
evidencing such approval shall have been
delivered to the Acquiring Fund.
Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the
Acquired Fund may waive the conditions set
forth in this paragraph 8.1.
8.2 On the Closing Date, the
Commission shall not have issued an
unfavorable report under Section 25(b) of the
1940 Act, or instituted any proceeding
seeking to enjoin the consummation of the
transactions contemplated by this Agreement
under Section 25(c) of the 1940 Act.
Furthermore, no action, suit or other
proceeding shall be threatened or pending
before any court or governmental agency in
which it is sought to restrain or prohibit, or
obtain damages or other relief in connection
with this Agreement or the transactions
contemplated herein.
8.3 All required consents of other
parties and all other consents, orders, and
permits of federal, state and local regulatory
authorities (including those of the
Commission and of State securities
authorities, including any necessary ?no-
action? positions and exemptive orders from
such federal and state authorities) to permit
consummation of the transactions
contemplated herein shall have been
obtained, except where failure to obtain any
such consent, order, or permit would not
involve a risk of a material adverse effect on
the assets or properties of the Acquiring
Fund or the Acquired Fund, provided that
either party hereto may waive any such
conditions for itself.
8.4 The Registration Statement shall
have become effective under the 1933 Act,
and no stop orders suspending the
effectiveness thereof shall have been issued.
To the best knowledge of the parties to this
Agreement, no investigation or proceeding
for that purpose shall have been instituted or
be pending, threatened or contemplated
under the 0000 Xxx.
8.5 The parties shall have received an
opinion of K&L Gates LLP to the effect that
for federal income tax purposes:
a)
The transfer of substantially all of the
Acquired Fund?s assets to the Acquiring
Fund solely in exchange for Acquiring
Fund Shares (followed by the
distribution of Acquiring Fund Shares
to the Acquired Fund Shareholders in
dissolution and liquidation of the
Acquired Fund) will constitute a
?reorganization? within the meaning of
Section 368(a) of the Code, and the
Acquiring Fund and the Acquired Fund
will each be a ?party to a
reorganization? within the meaning of
Section 368(b) of the Code.
b)
No gain or loss will be recognized by
the Acquiring Fund upon the receipt of
substantially all the assets of the
Acquired Fund solely in exchange for
Acquiring Fund Shares.
c)
No gain or loss will be recognized by
the Acquired Fund upon the transfer of
substantially all the Acquired Fund?s
assets to the Acquiring Fund solely in
exchange for Acquiring Fund Shares or
upon the distribution (whether actual or
constructive) of Acquiring Fund Shares
to Acquired Fund Shareholders in
exchange for their Acquired Fund
Shares.
d)
No gain or loss will be recognized by
any Acquired Fund Shareholder upon
the exchange of its Acquired Fund
Shares for Acquiring Fund Shares.
e)
The aggregate basis of the Acquiring
Fund Shares received by each Acquired
Fund Shareholder pursuant to the
Reorganization will be the same as the
aggregate basis of the Acquired Fund
Shares exchanged therefor. The holding
period of Acquiring Fund Shares
received by each Acquired Fund
Shareholder will include the period
during which the Acquired Fund Shares
exchanged therefor were held by such
shareholder, provided the Acquired
Fund Shares are held by such
shareholder as capital assets at the time
of the Reorganization.
f)
The basis of the Acquired Fund?s assets
acquired by the Acquiring Fund in the
hands of the Acquiring Fund will be the
same as the basis of such assets in the
hands of the Acquired Fund
immediately prior to the
Reorganization. The holding period of
the assets of the Acquired Fund
acquired by the Acquiring Fund in the
hands of the Acquiring Fund will
include the period during which those
assets were held by the Acquired Fund.
Such opinion shall be based on
customary assumptions and such
representations K&L Gates LLP may
reasonably request, and the Acquired
Fund and Acquiring Fund will
cooperate to make and certify the
accuracy of such representations. The
foregoing opinion may state that no
opinion is expressed as to the effect of
the Reorganization on the Acquiring
Fund, the Acquired Fund or any
Acquired Fund Shareholder with
respect to any asset as to which
unrealized gain or loss is required to be
recognized for federal income tax
purposes at the end of a taxable year (or
on the termination or transfer thereof)
under a xxxx-to-market system of
accounting. Notwithstanding anything
herein to the contrary, neither the
Acquiring Fund nor the Acquired Fund
may waive the conditions set forth in
this paragraph 8.5.
ARTICLE IX
EXPENSES
All fees and expenses associated with
the Acquiring Fund?s and Acquired Fund?s
participation in the Reorganization
contemplated in this Agreement will be paid
by Federated Investment Management
Company, EquiTrust Investment
Management Services, Inc. and/or their
affiliates, as agreed separately among them.
Reorganization expenses include, without
limitation: (a) expenses associated with the
preparation and filing of the Proxy Materials;
(b) postage; (c) printing; (d) accounting fees;
(e) legal fees incurred by each Fund;
(f) solicitation costs of the transaction;
(g) fees and expenses incurred by the
EquiTrust Fund?s Trustees in connection
with any special Board meetings held in
contemplation of the Reorganizations;
(h) tail insurance coverage for the EquiTrust
Fund?s Directors; and (i) other related
administrative or operational costs.
Notwithstanding the foregoing, fees and
expenses shall in any event be paid by the
party directly incurring such fees and
expenses if and to the extent that the
payment of such fees and expenses by
Federated Investment Management
Company, EquiTrust Investment
Management Services, Inc. and/or their
affiliates would result in disqualification of
such party as a RIC.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF
WARRANTIES
10.1 The Federated Trust, on behalf of
the Acquiring Fund, and the EquiTrust Fund,
on behalf of the Acquired Fund, agree that
neither party has made to the other party any
representation, warranty and/or covenant not
set forth herein, and that this Agreement
constitutes the entire agreement between the
parties.
10.2 Except as specified in the next
sentence set forth in this paragraph 10.2, the
representations, warranties, and covenants
contained in this Agreement or in any
document delivered pursuant to or in
connection with this Agreement, shall not
survive the consummation of the transactions
contemplated hereunder. The covenants to be
performed after the Closing Date, shall
continue in effect beyond the consummation
of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by
the mutual agreement of the Federated Trust
and the EquiTrust Fund. In addition, either
the Federated Trust or the EquiTrust Fund
may at its option terminate this Agreement at
or before the Closing Date due to:
a)
a breach by the other of any
representation, warranty, or agreement
contained herein to be performed at or
before the Closing Date, if not cured
within 30 days;
b)
a condition herein expressed to be
precedent to the obligations of the
terminating party that has not been met
and it reasonably appears that it will not
or cannot be met; or
c)
a determination by a party?s Board, as
appropriate, that the consummation of
the transactions contemplated herein is
not in the best interest of the EquiTrust
Fund or the Federated Trust,
respectively, and notice given to the
other party hereto.
In the event of any such termination, in
the absence of willful default, there shall be
no liability for damages on the part of any of
the Acquiring Fund, the Acquired Fund, the
Federated Trust, the EquiTrust Fund, or their
respective Trustees, Directors or officers, to
the other party or its Trustees, Directors or
officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended,
modified, or supplemented in such manner as
may be mutually agreed upon in writing by
the officers of the EquiTrust Fund and the
Federated Trust as specifically authorized by
their respective Boards; provided, however,
that following the meeting of the Acquired
Fund shareholders called by the Acquired
Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have
the effect of changing the provisions for
determining the number of Acquiring Fund
Shares to be issued to the Acquired Fund
shareholders under this Agreement to the
detriment of such shareholders without their
further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS;
GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
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.
This Agreement may be executed in
any number of counterparts, each of which
shall be deemed an original.
This Agreement shall be governed by
and construed in accordance with the laws of
the Commonwealth of Pennsylvania.
This Agreement shall bind and inure to
the benefit of the parties hereto and their
respective successors and assigns, but,
except as provided in this paragraph, no
assignment or transfer hereof or of any rights
or obligations hereunder shall be made by
any party without the written consent of the
other party. Nothing herein expressed or
implied is intended or shall be construed to
confer upon or give any person, firm, or
corporation, other than the parties hereto and
their respective successors and assigns, any
rights or remedies under or by reason of this
Agreement.
It is expressly agreed that the
obligations of the Acquiring Fund hereunder
shall not be binding upon any of the
Trustees, shareholders, nominees, officers,
agents, or employees of the Federated Trust
personally, but shall bind only the Federated
Trust property of the Acquiring Fund, as
provided in the Declaration of Trust of the
Federated Trust. The execution and delivery
of this Agreement have been authorized by
the Trustees of the Federated Trust on behalf
of the Acquiring Fund and signed by
authorized officers of the Federated Trust,
acting as such. Neither the authorization by
such Trustees nor the execution and delivery
by such officers shall be deemed to have
been made by any of them individually or to
impose any liability on any of them
personally, but shall bind only the Federated
Trust property of the Acquiring Fund as
provided in the Federated Trust?s
Declaration of Trust.
It is expressly agreed that the
obligations of the Acquired Fund hereunder
shall not be binding upon any of the
Directors, shareholders, nominees, officers,
agents, or employees of the EquiTrust Fund
personally, but shall bind only the property
of the Acquired Fund, as provided in the
Articles of Incorporation of the EquiTrust
Fund. The execution and delivery of this
Agreement have been authorized by the
Directors of the EquiTrust Fund on behalf of
the Acquired Fund and signed by authorized
officers of the EquiTrust Fund, acting as
such. Neither the authorization by such
Directors nor the execution and delivery by
such officers shall be deemed to have been
made by any of them individually or to
impose any liability on any of them
personally, but shall bind only the property
of the Acquired Fund as provided in the
EquiTrust Fund?s Articles of Incorporation.
IN WITNESS WHEREOF, the parties
have duly executed this Agreement, all as of
the date first written above.
INTERMEDIATE
MUNICIPAL
TRUST
on behalf of its
portfolio,
Federated
Intermediate
Municipal Trust
[Signature], [Title]
EQUITRUST
SERIES FUND,
INC.
on behalf of its
portfolio,
Managed Portfolio
[Signature], [Title]
